NOT FOR PUBLICATION
Plaintiff Jennifer Hearn — the putative representative of a class composed of assistant managers (ASMs) employed at Rite Aid pharmacies — appeals the trial judge's denial of class certification. Because the record demonstrates the presence of common issues of fact and law, the trial judge erred in permitting the inevitable minor differences in each ASM's work experiences to override the efficient disposition of the larger common issues through class certification. Moreover, the judge disregarded the policy favoring the class action device, particularly in instances where class members likely do not have sufficient financial resources to pursue their claims on an individual basis against a defendant possessing superior resources.
On August 7, 2006, plaintiff filed a complaint against Rite Aid Corporation and Rite Aid of New Jersey (hereafter collectively "Rite Aid") alleging violations of the New Jersey Wage and Hour Law (WHL),
In May 2010, plaintiff moved for class certification and a few months later moved to amend the class definition to include co-managers of Brooks/Eckerd, an entity purchased by Rite Aid in 2007. Plaintiff relied upon the certifications of twelve former ASMs. In August 2010, Rite Aid filed a cross-motion to strike the twelve certifications, claiming they conflicted with deposition testimony taken from the certifying individuals. On September 13, 2010, defendants also moved for an order striking plaintiff's motion to amend the class definition to include co-managers employed by Brooks/Eckerd. By order entered on November 1, 2010, the trial judge denied: class certification; plaintiff's motion to amend the class definition; and defendants' motions to strike.
We granted plaintiff leave to appeal the denial of class certification and granted defendant leave to cross-appeal the denial of its motions. We now reverse the denial of class certification and remand for further proceedings in conformity with this opinion.
In determining whether the trial judge mistakenly exercised his discretion,
The class action device — an exception to the rule that litigation is conducted by and on behalf of individually-named parties — furthers the goals of judicial economy, cost-efficiency, and convenience, and provides a vehicle for the consistent treatment of class members.
In addition, the action must fit one of three alternative class action types. Applicable here,
In order to make a predominance and superiority finding, a court must consider
In determining whether the class representative has established predominance, courts should consider: the number and significance of common questions; whether the benefits of a class action outweigh the problems of individual actions; and whether there is a common nucleus of operative facts.
In determining "superiority," a court must consider other available options for adjudication.
At the certification stage, the court is not entitled to decide the ultimate factual issues but must accept as true all the allegations in the complaint.
Plaintiff's claim is based on the WHL, which provides that an employee shall be paid one-and-one-half times his or her salary for any hours worked beyond forty hours per week, but a person employed in a "bona fide executive, administrative, or professional capacity" is not entitled to overtime pay,
At the time of the trial judge's ruling,
Until recently, state regulations did not define managerial duties. In
Management duties are defined by reference to the following factors:
In Marx, the plaintiffs alleged that managers of the defendant's restaurants spent substantial time doing non-managerial tasks, such as waiting on tables and washing dishes, and therefore should not have been exempt from the WHL. 380
In Marx, we followed the test developed in
In light of these principles, we consider the nature of plaintiff's claim and whether the trial judge abused his discretion in denying class certification here.
We conclude that the trial judge erred in denying class certification. Viewed in the manner required by the principles outlined above, plaintiff met the requirements for certification. The certifying individuals all alleged that more than forty percent of their time was spent on non-managerial tasks. In addition, these other ASMs, like plaintiff, engaged in many of the same tasks expected of hourly workers, such as opening and closing the store, arranging the shelves according to "planograms," which was Rite Aid's depiction of how shelves should look, greeting the delivery truck and stocking the shelves. Plaintiff provided sufficient evidence to support the claim that ASMs were not engaged in training subordinates but were required to do non-managerial tasks because stores were understaffed. Many ASMs certified or testified at their deposition that they performed janitorial work because there was nobody else available to do these tasks, and that the store's finances did not allow for sufficient hiring of subordinate staff. Thus, ASMs did not perform the non-managerial tasks because they were teaching subordinates; they often performed those tasks because there were no other staff members available. In fact, when ASMs were on duty during the night at stores that were open twenty-four hours, even fewer staff members were available and night ASMs often supervised only one other employee or were alone in the store.
The trial judge denied certification in part because he viewed the putative class members as having "widely divergent" experiences. In addition, because the judge relied on the fact that some of the certifications filed in support of the class departed from what the certifying individual testified to at his or her deposition, we are required to explore the factual evidence submitted in support of class certification in some detail. We start with plaintiff's own experiences, and then discuss the experiences of other members of the putative class.
In May 2001, while a high school student, plaintiff began working as an hourly employee at Rite Aid's Hopatcong store. She was paid $6.50 per hour. At that time, plaintiff was required to stock shelves, clean the store, work the cash register, "face" products on shelves (i.e., orient products in the correct direction), operate the one-hour photo service and return items back to their proper location. In December 2004, when she was twenty-one years old, plaintiff was promoted to supervisor and was trained by her manager to: get change for the cash registers; void sales; accept returns; issue refunds; reorganize the cosmetics aisle; operate the one-hour photo service; count the cash-register drawers at the end of the night; order inventory; open and close the store; open part of the safe; accept deliveries from vendors for products such as milk and soda; perform overrides, recalls and price changes; and arrange resets of shelves according to a planogram. Plaintiff's hourly pay increased to $10 per hour when she became a supervisor.
In January 2006, plaintiff was promoted to ASM and was no longer paid hourly, receiving instead a weekly salary of $600. Plaintiff worked fifty hours per week but received no overtime pay. As an ASM, plaintiff continued her supervisory duties, but she also began making bank deposits and was taught how to approve payroll.
When the store manager was not present, plaintiff assigned work to subordinates and was authorized to call an associate to come to work when an employee called out sick. She was not permitted to assign overtime work to hourly employees. Plaintiff's duties were similar to the key cashiers, but she also supervised them and, unlike them, could accept returns for more than $100. When the store manager or other ASM was absent, employees sometimes called plaintiff at home. She gave associates feedback on the proper performance of their tasks, told cashiers when to fill the racks, instructed employees to follow the dress code, monitored other employees' breaks and made sure employees returned to work on time. Plaintiff was not, however, involved with performance reviews for other employees.
In support of class certification, plaintiff offered the experiences of other former ASMs: Agnes Hendrickson, Georgia Caruso, Paul Banko, Madelyn Palm, Richard Guellich, Zachary Robertson, Lisa Wolfe, Helen Anderson, Jeanette Herrmann, Robert Lynch, Christian Murdock, Carolyn Mitchell and Catherine DeSilva. We consider the facts presented as to each.
Agnes Hendrickson was an ASM in Camden from 2005 to 2008. She typically worked more than fifty hours per week, was not paid overtime and spent the majority of her time performing non-managerial tasks such as: walk-throughs, receiving shipments, stocking shelves, merchandising, product pricing, customer service, cashiering, paperwork, and janitorial work.
Georgia Caruso worked for Rite Aid for approximately twenty years and was a night ASM from 1998 to 2008. Her responsibilities included: disciplining and training employees, assigning work, and recommending termination when an employee displayed poor work habits. As a night ASM, Caruso was often the only employee in the store with the exception of the pharmacist. Generally, she did not have more than one employee to supervise, but she did play a role in hiring employees by discussing with them job expectations and explaining their duties after they were hired. Caruso handled employee scheduling; determined whether to accept returns without a receipt; and, unlike hourly employees, had access to the safe.
Caruso conceded that even though her certification asserted that ASMs generally were involved with manual labor, she also, in fact, handled non-manual tasks such as customer complaints, termination of employees, and filling out performance reviews. Caruso maintained, however, that she spent only twenty percent of her time on managerial tasks. She believed that daytime ASMs spent more time than night ASMs on managerial tasks because more employees were present during the day. She listed the five most important functions of her job as: overseeing sales, monitoring the physical condition of the store, maintaining security at night, attending to customer service issues and training employees. However, most customer service questions did not require the exercise of discretion but rather involved showing customers the locations of items. Caruso also engaged in non-managerial duties, such as stocking shelves, cleaning and dusting interior areas of the store, cleaning the parking lots, emptying the trash, changing the letters on the marquee sign and performing other janitorial tasks. Caruso also was empowered to instruct employees to unload delivery trucks, but because they did not always comply, she sometimes would have to do that job herself, which involved strenuous physical labor in the middle of the night on a weekly basis.
Paul Banko was an ASM from July 1998 until March 2007 in Rite Aid stores in Millville, Pleasantville, Sicklerville, and Atco. He generally worked fifty hours per week, but sometimes as many as fifty-six hours per week. He spent two hours per day on managerial activities such as making bank deposits, invoicing, paying bills online, handling customer issues, voiding sales, and approving refunds. As an ASM, Banko's responsibilities varied widely depending on the store in which he worked. In one store, when the store manager was not present, Banko was the highest-ranking employee for approximately eighteen hours per week. In Pleasantville, Banko worked nights and was the highest-ranking employee on duty the entire time, even though he supervised only one or two cashiers. When the store manager was not present, instructions were left as to what should be done during the day although Banko would ask employees to complete tasks that he thought needed to be performed.
Banko spent approximately two hours per day doing janitorial work and ninety percent of his time on other non-managerial tasks such as cashiering, changing the marquee sign, cleaning, and straightening items on shelves. He played no role in hiring or firing employees, although he reported employee disciplinary infractions to the store manager. Banko did note when a qualified applicant submitted an application and advised the store manager to interview the candidate.
During his deposition, Banko contradicted some of the information contained in his earlier certification and did not know why certain information had been included. For example, Banko disagreed with the statement that he physically removed merchandise from delivery trucks and that his paperwork and reports did not require any discretion, creativity or independent analysis. Although he agreed with the statement in his certification that ASMs were "given little latitude to exercise independent judgment," he also stated that he exercised judgment with respect to customer complaints and employee misconduct.
Banko noted that some hourly employees also performed managerial tasks, such as making deposits, handling customer complaints, and voiding transactions. Even though Banko was authorized to assign tasks to subordinates, he often performed the same tasks.
Richard Guellich was trained to be an ASM in the Perth Amboy store and worked fifty hours per week. He was uncertain about when his relationship with Rite Aid began. At one point, he left Rite Aid's employ but later returned and held various positions in different Rite Aid stores. As a result, his ability to define his experiences was somewhat limited. When he worked in Linden as an ASM, he was the highest-ranking employee in the store forty-five to fifty-five percent of the time and often supervised only one employee. However, in Hackensack, a large, high-volume store, Guellich was the highest-ranking employee only about ten to fifteen percent of the time.
Because of budget constraints, some of the stores he worked in were understaffed; in those stores, Guellich was often required to perform more non-managerial tasks than in others. He prioritized the work and was authorized to assign routine tasks to hourly employees, which included sweeping the floor, stocking the shelves, and making price changes. Guellich, however, only had subordinate employees about fifty to sixty percent of the time; he waxed and washed floors, and took out garbage, if subordinates were not available.
According to Guellich, store managers gave ASMs varying degrees of control. Guellich estimated that he spent thirty percent of his time performing managerial tasks, but bank deposits and arranging the work schedule for hourly employees could be accomplished quickly and often took less time than non-managerial labor. Every fifteen to thirty minutes, Guellich walked through the store to ensure that employees were doing their jobs. He had authority to discipline employees and to terminate them, but he used that power with discretion and collaborated with the store manager on those decisions. He did not have input with employee appraisals and did not participate in hiring. Guellich believed only management personnel could take the deposits to the bank, and understood that he had no latitude with respect to merchandising decisions because Rite Aid was very strict in that regard, although he conceded he had some latitude with respect to other management decisions.
At his deposition, Guellich disagreed with the statement in his certification that he worked an average of sixty hours per week and stated that he did not know where that estimate came from. He also disagreed with the statement in his certification that he engaged in carpentry.
Lisa Wolfe worked at the Browns Mills store from February 2002 until 2007. Within a year, she was promoted to ASM and remained in that position until she left Rite Aid. As an ASM, Wolfe worked fifty hours per week, spending twenty-five percent of her time on managerial duties. When deliveries were due, she came to work at 3:00 a.m. with one of the cashiers. She only made orders or handled the schedule when the store manager was away. Although the store manager was the person who assigned tasks to hourly employees, Wolfe was authorized to discipline employees, enforce the dress code, and instruct employees on specific tasks. She gave hiring input to the store manager, trained new employees on the cash register, opened and closed the store, responded to security concerns and supervised employee purchases. Wolfe used discretion in disciplining employees, hiring, and handling customer complaints. She spent most of her time at the cash register.
Jeanette Herrmann worked as an ASM from 1998 until July 2008 in Carteret, Edison, Highland Park and Somerset. As an ASM, Herrmann unloaded the delivery truck because she viewed it as her responsibility and she did not have the budget to hire help.
Herrmann worked fifty hours per week as an ASM. Most of the time, she was the highest-ranking employee in the store. Herrmann could issue written warnings to employees, instruct them on their duties, and make recommendations to store managers regarding terminating employees. Herrmann stated that she could send employees home for infractions of the dress code. And she handled customer complaints and reconciled the cash registers at the end of the day.
Herrmann stated that, as an ASM, she tried to enhance sales, promote cooperation among the employees, improve security, and stay more involved in office duties. In some stores,
Herrmann considered non-managerial tasks to include: arranging the shelves according to planograms, effectuating price changes, buffing floors, and cleaning bathrooms. She considered office work to be managerial and work performed in the store, i.e., "floor time," to be predominantly non-managerial. However, at her deposition, Herrmann conceded that some tasks performed while working the floor were managerial in nature, such as voiding items, accepting returns without receipts, and supervising employees. Herrmann asserted that eighty percent of her time was spent working the floor, twenty percent in the office, and a total of thirty-five percent of her time, whether in the office or on the floor, was spent on managerial tasks.
Herrmann stated at her deposition that she did not review her certification before signing it and acknowledged that some of its statements were incorrect. Although her certification stated otherwise, Herrmann noted that she did use independent judgment in handling customer complaints, making work assignments, prioritizing work, and determining whether to provide a refund.
Carolyn Mitchell began working for Rite Aid in 1996. After about a year as a cashier, she was promoted to ASM in Willingboro and eventually transferred to Edgewater Park, where she remained until leaving Rite Aid's employ in May 2009. Mitchell generally worked fifty hours per week but sometimes longer. When working as a night ASM, Mitchell was generally the highest-ranking employee in the store, but when she worked the day shift, she was only the highest-ranking employee for about twenty hours per week.
As an ASM, Mitchell: ensured that proper deliveries were made to the store; participated in promotion decisions; prepared the payroll; supervised hourly employees; performed cash register audits; trained new employees; adjusted the work schedule if necessary; handled customer complaints; took responsibility for theft and security issues; ordered merchandise from vendors; and made bank deposits.
Mitchell disagreed with statements in her certification that she spent ninety-five percent of her time performing non-managerial work and that she did not use discretion. In fact, she asserted in her deposition that she exercised discretion in handling customer complaints and in evaluating the strengths of, and in disciplining, employees. Although she insisted she spent most of her time on non-managerial work, Mitchell did not recall providing plaintiff's counsel with a specific percentage at the time her certification was prepared.
Catherine DeSilva worked for Rite Aid from March 2000 until September 2006. She began as a cashier in Bayville and was later promoted to supervisor, becoming responsible for opening the store, turning off the alarm, rolling up the windows, getting the cash-register drawers ready for the morning, counting the money in the safe, performing an accounting of all the registers and the lottery machine at the end of the day, making deposits, cleaning the store, locking the doors and securing the alarm.
In March 2003, DeSilva was promoted to ASM and transferred to Forked River. There, DeSilva was responsible for checking sales figures every day and scanning the invoices of vendors. She only approved payroll or organized the employee schedule if the store manager was on vacation. The store manager shared responsibilities in ensuring that deliveries were properly received, stocking shelves, operating the photo department, supervising lottery sales, making required price changes, setting the shelves according to planograms, making deposits and counting the drawers. DeSilva had no input with regard to hiring, employee appraisals, or discipline of employees, and she did not attend management meetings. She performed considerable janitorial work and worked close to sixty hours per week. DeSilva considered her management duties to be opening and closing the store, filling the duties of the store manager in his absence, making bank deposits, ensuring the store appearance was appropriate, receiving merchandise from vendors, and improving employee work habits.
Rite Aid forcefully attacks the certifications of the witnesses discussed above, many of which were nearly identical to each other and which were occasionally contradicted by deposition testimony. Most of the certifications included the following statement:
Banko and Mitchell later stated at their depositions that they did exercise discretion and did not know why this language was included in their certifications. In addition, Guellich, Herrmann and Mitchell did not agree with the statements in their certifications regarding the percentage of time spent in non-managerial work and corrected this at their depositions.
In responding to the motion for class certification, Rite Aid provided the depositions of: Dale Dudik, a representative of Rite Aid's human resources department who had previously been employed by Brooks/Eckerd; and Michelle Stahl, Rite Aid's senior human resources director. Dudik stated that ASM job responsibilities varied from store to store, and there was no company policy regarding how much time ASMs should spend in various tasks. Some ASMs were viewed as exempt from the WHL and some were not, and co-managers (the title that was retained by certain employees after the purchase of Brooks/Eckerd) were almost always non-exempt hourly workers. Dudik testified that ASMs: used discretion to interpret the dress-code requirements; might participate in budget decisions; executed weekly sales advertisement and price changes; and had some flexibility to mark down an item when the item neared its expiration date. Dudik conceded that management personnel performed many of the same tasks as non-managerial employees, but he did not know how much time an ASM typically spent on managerial tasks and, thus, could not contradict the estimates made by the putative class members as to the amount of non-managerial tasks in which they engaged as ASMs.
Similarly, Stahl asserted that store managers typically did not work at the same time and there was no uniformity in the way ASMs spent their time. Rite Aid did not advise ASMs regarding the amount of time they should spend in non-managerial tasks and Stahl did not know who determined whether an ASM should be viewed as exempt from the WHL.
Defendants also submitted certifications of nine current store managers and ASMs, including Dawn Williams, Melissa Darischuk, Jeanette Smith, Angela McCarron, Kenneth Delahanty, Lisa Britten, Leslie Dickens, Sherry Scott, and Amity Lemasters. These employees certified they were responsible for employee discipline, theft prevention, safety and security, reviewing financial reports, customer service, truck deliveries, ordering and managing inventory, reviewing job applications, and training employees. Many of these store managers and ASMs asserted that as of August 2010, they would no longer be salaried ASMs but would be paid hourly instead. Although none alleged he or she spent less than forty percent of his or her time on non-managerial tasks, many stated that they supervised other employees even while performing menial work. Williams, however, asserted that she spent forty percent of her time in the office performing managerial tasks, while the rest of her time was spent on the floor. Darischuk spent eighty percent of her time effectuating price changes and mark downs, conforming to planograms, ordering inventory, and facing the shelves. Smith spent as much as twenty-two hours per week working on planograms and opening and closing the store. Lemasters spent thirty percent of her time on planograms, price changes and product recalls and an additional five hours per week working the cash register.
The trial judge held that because of the diverse work experiences expressed in the certifications, Rite Aid would not be able to prove through common proofs that ASMs should have been exempt. Rather, the judge believed an individual inquiry would be required for each ASM. In his written opinion, the judge referred to the "widely variant work experiences" of ASMs, and relied on Rite Aid's claim that "stores do not define the responsibilities of exempt ASMs uniformly" in concluding "whether management was the `primary duty' [of an ASM] is an individualized inquiry."
To be sure, the factual record suggests that the experiences of the putative class members varied. But all asserted that a significant percentage of their time was spent on non-managerial tasks. They all described extensive time spent on janitorial work, facing and stocking the shelves, and unloading merchandise from the delivery truck — tasks that were also performed by hourly employees and were not managerial. The judge also found significant that many ASMs were the highest ranking employee in the store for long periods. This, however, is not by itself indicative of managerial status. For example, a secretary could be alone in an office all day, or a janitor could be alone cleaning a building, circumstances that do not transform their positions into "managerial" positions. To be managerial, the position must include: supervision of at least two other employees; discretionary activities, 29
The trial judge was charged with performing a rigorous analysis of the record to determine whether the requirements for class certification were met.
In considering these questions, the trial judge was required, but mistakenly failed, to provide plaintiff with the benefit of all reasonable inferences.
The judge's decision also mistakenly omitted consideration of the fact, as both
We, thus, reverse and remand for the entry of an order certifying the class of ASMs employed by Rite Aid from May 14, 2006 to present.
Plaintiff also argues that the trial judge erred in denying leave to amend the class definition to include the co-managers of Brooks/Eckerd who became ASMs when employed by Rite Aid. The judge held only that because the class certification was being denied there was no basis for amending the definition of the class. In remanding, we expect that the trial judge will reconsider this particular issue in light of the above.
Rite Aid has argued in its cross-appeal that the judge erred by not striking
Rite Aid argues that the certifications were not based on personal knowledge because some witnesses later stated that their certifications contained statements they had not made. For example, Banko disagreed with some of the information in his certification; in particular, he did not know why his certification included information that he physically removed merchandise from delivery trucks or that his paperwork and reports did not involve the use of discretion, creativity or independent analysis. Palm also disagreed with the statement in her certification that ASMs spent the majority of their time performing manual labor. Guellich asserted that he did not know where information in his certification about the amount of time he spent in non-managerial work came from; he also disagreed with the statement in his certification that he engaged in carpentry.
The judge did not abuse his discretion in permitting the certifications to remain in the record. The certifications were properly executed; despite the fact that some certifying parties may have contradicted parts of their certifications, there was no cause to disregard those or any other certifications. Moreover, the disputed portions were addressed in the witnesses' depositions. The judge was presented with all the information provided by both the certifications and the depositions of these witnesses. The judge was certainly entitled to disregard those portions of the certifications that were starkly contradicted by the later depositions.
We affirm in part and reverse in part. To summarize, the order denying class certification is reversed and the order denying Rite Aid's motion to strike certifications is affirmed. The matter is remanded for further consideration of whether the class definition should be amended to include former Brooks/Eckerd co-managers.
We do not retain jurisdiction.