Meyer v. Panera Bread Co.

          MEMORANDUM OPINION AND ORDER

          G. MICHAEL HARVEY, UNITED STATES MAGISTRATE JUDGE

         As relevant here, Plaintiffs Alan Meyer and David Cornelius have brought this putative collective action pursuant to the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and the District of Columbia Minimum Wage Act (“DCMWA”), D.C. Code § 32-1001 et seq. Plaintiffs, who were assistant managers at two restaurants owned by Defendant Panera, LLC (“Defendant” or “Panera”), claim that they and other assistant managers employed by Defendant were misclassified as exempt employees under the FLSA and DCMWA and therefore were illegally denied overtime wages for hours that they worked in excess of forty hours per week. Plaintiffs further allege that Defendant failed to keep accurate records of the time that Plaintiffs worked and failed to keep required payroll records, and that all of these violations were willful.

         Plaintiffs have filed a Motion for Conditional Certification and Court-Authorized Notice Pursuant to Section 216(b) of the FLSA and the DCMWA.^[1] ECF No. 36. The motion is ripe for adjudication.^[2] For the reasons that follow, the undersigned will grant in part and deny in part Plaintiffs' motion for conditional certification.

         I. BACKGROUND

         Plaintiffs filed their original complaint on March 29, 2017. ECF No. 1. On January 30, 2018, Plaintiffs filed their original motion for conditional certification (ECF No. 11) and Defendant filed a motion to dismiss Plaintiffs' original complaint (ECF No. 10). On May 17, 2018, Plaintiffs, with Defendant's consent, filed the operative Amended Complaint (ECF No. 29), which substituted Panera, LLC, as the defendant for Panera Bread Co., and “clarif[ied] the scope of the proposed collectives.” ECF No. 30 at 1. According to the Amended Complaint, Defendant is a Delaware corporation operating hundreds of restaurants in the United States and Canada, and which had an annual revenue of over $2.5 billion in 2015. ECF No. 29, ¶¶ 3, 30-31. Plaintiffs allege that they were employed as assistant managers at two different Panera Bread restaurants: Mr. Meyer worked at a location in Washington, D.C., from April 2015 until October 2015; Mr. Cornelius worked at a location in Birmingham, Alabama, from October 2013 until September 2015. Id., ¶¶ 19-20, 25-26. Plaintiffs assert that, as assistant managers of restaurants operated by Defendant, they “predominantly perform[ed] non-managerial work” but were nevertheless classified as exempt from the overtime provisions of the FLSA (and, in Mr. Meyers' case, the D.C. Wage Laws). Id., ¶¶ 2, 5-7, 22, 28, 36. They further contend that each of them regularly worked more than forty hours per week and, as a consequence of their misclassification, did not receive overtime pay. Id., ¶¶ 21, 27.

         The Amended Complaint also alleges that Defendant “has the power to control the terms and conditions of employment for Plaintiffs and those similarly situated, including with respect to their compensation and classification as exempt or non-exempt employees”; that it “maintained control, oversight, and direction over Plaintiffs and similarly situated employees”; and that it “applies the same employment policies, practices, and procedures to all [assistant managers].” Id., ¶¶ 33-35. Plaintiffs contend that Defendant's violations of the FLSA and the DCMWA were willful. Id., ¶¶ 71-72.

         As relevant here, the Amended Complaint alleges a collective under the FLSA consisting of all similarly situated assistant managers

whom Defendant classified as exempt from overtime requirements, who worked more than 40 hours per week for Defendant in the United States-excluding New York, New Jersey, [California, ]^[3] and Massachusetts-at any time between March 25, 2014 and the date of final judgment in this matter, and who elect to join this action (the “FLSA Collective”).

Id., ¶ 39 (footnote omitted). It further alleges a collective under the DCMWA consisting of all similarly situated assistant managers classified as exempt, who worked more than 40 hours per week for Defendant in Washington, D.C., from March 25, 2014, through February 27, 2015, and who elect to join the action (the “DCMWA Collective”).^[4] Id., ¶ 40.

         After the Amended Complaint was filed, the Court denied as moot Defendant's motion to dismiss the original complaint. Minute Order dated May 21, 2018; see, e.g., Gray v. D.C. Pub. Sch., 688 F.Supp.2d 1, 6 (D.D.C. 2010) (collecting cases holding that a motion to dismiss directed to a complaint is mooted when an amended complaint is filed); Nader v. Democratic Nat. Comm., 590 F.Supp.2d 164, 167 n.2 (D.D.C. 2008), aff'd, No. 09-7004, 2009 WL 4250599 (D.C. Cir. Oct. 30, 2009). Plaintiffs' original motion for conditional certification was similarly denied as moot. Minute Order dated May 21, 2018; see, e.g., Lawrence v. Maxim Healthcare Servs., Inc., No. 1:12CV2600, 2013 WL 12178607, at *1 (N.D. Ohio Apr. 26, 2013) (denying as moot motion for conditional certification filed prior to amended complaint that changed definition of collective); see also In re Amazon Fulfillment Ctr. Fair Labor Standards Act (FLSA) and Wage and Hour Litig., No. 14-MD-2504, 2014 WL 3695750, at *1 (W.D. Ky. July 14, 2014) (noting that plaintiffs in one constitutive case in multidistrict litigation “repeatedly mooted their conditional certification motion [by] amend[ing] the complaint prior to any court determination”); Lytle v. Lowes Home Ctrs., Inc., No. 8:12-cv-1848, 2014 WL 103463, at *6 (M.D. Fla. Jan. 10, 2014) (“Based upon the filing of [the] Second Amended Complaint, the Court denied as moot [the] Motion for Conditional Certification in order to promote accuracy in the filings and clarity of the record.”).

         Plaintiffs thereafter filed a renewed Motion for Conditional Certification on June 5, 2018. ECF No. 36 at 2. That motion requests conditional certification of the FLSA Collective and the DCMWA Collective, as well as ancillary relief, including authorizing notice to potential collective members. The motion is supported by declarations from nine former employees of Defendant (ECF Nos. 36-5 through 36-11 and 36-19 through 36-20), two of which Defendant has sought to strike, contending that the declarations are “a sham.”^[5] ECF No. 21-1 at 1. The Court's denial of Defendant's motion to strike is the subject of a Memorandum Opinion and Order filed contemporaneously with this one.

         II. DISCUSSION

         A. Legal Standard

         Both the FLSA and the DCMWA require employers to pay their workers the minimum wage and, if the employee works more than forty hours in a workweek, overtime compensation. 29 U.S.C. § 207(a)(1); D.C. Code § 32-1003. Both statutes also empower employees to bring actions on their own behalf and on behalf of other employees “similarly situated” in a collective action. 29 U.S.C. § 216(b); D.C. Code § 32-1308(a)(1)(C)(iii); see also Dinkel v. MedStar Health, Inc., 880 F.Supp.2d 49, 52 (D.D.C. 2012). “D.C. law permits DCMWA . . . claims to be brought ‘[c]onsistent with the collective action procedures of the Fair Labor Standards Act.'” Stephens v. Farmers Rest. Grp., 291 F.Supp.3d 95, 106 (D.D.C. 2018). Unlike classes formed pursuant to Rule 23 of the Federal Rules of Civil Procedure, in which “potential class members are parties to the suit unless they affirmatively opt out, ” in a wage and hour collective action, “only plaintiffs who affirmatively opt in can benefit from the judgment or be bound by it.” Damassia v. Duane Reade, Inc., 250 F.R.D. 152, 161 (S.D.N.Y. 2008) (quoting Lachapelle v. Owens-Illinois, Inc., 513 F.2d 286, 289 (5th Cir. 1975)); see also Munoz v. Big Valley, Inc., 915 F.Supp.2d 46, 48 (D.D.C. 2013).

         Courts in this Circuit and others have implemented a two-stage inquiry for determining when a collective action is appropriate. Stephens, 291 F.Supp.3d at 105. The first stage, referred to as “conditional certification, ” requires the Court to determine whether it is appropriate “to send notice to potential opt-in plaintiffs who may be ‘similarly situated' to the named plaintiffs with respect to whether [an] FLSA violation has occurred.” Dinkel, 880 F.Supp.2d at 52-53 (quoting Myers v. Hertz Corp., 624 F.3d 537, 555 (2d Cir. 2010)). “If conditional certification is granted, then the matter proceeds as a collective action through the close of discovery, at which time the defendant may move for ‘decertification,' prompting a ‘more searching' inquiry into whether putative class members are in fact ‘similarly situated.'” Stephens, 291 F.Supp.3d at 105 (quoting Ayala v. Tito Contractors, 12 F.Supp.3d 167, 170 (D.D.C. 2014)).

         At issue here is the first stage-conditional certification. This initial stage requires that the plaintiff make only a “modest factual showing sufficient to demonstrate that [he] and potential plaintiffs together were victims of a common policy or plan that violated the law.” Castillo v. P&R Enters., Inc., 517 F.Supp.2d 440, 445 (D.D.C. 2007) (quoting Chase v. AIMCO Props., 374 F.Supp.2d 196, 200 (D.D.C. 2005)). The bar at this stage is quite low. Ayala, 12 F.Supp.3d at 170 (collecting cases). The plaintiff must present, through the allegations in his pleadings and any affidavits submitted with the motion, “some evidence, ‘beyond pure speculation,' of a factual nexus between the manner in which the employer's alleged policy affected [a plaintiff] and the manner in which it affected other employees.” Id. (quoting Symczyk v. Genesis HealthCare Corp., 656 F.3d 189, 193 (3d Cir. 2011)). At this early juncture, the Court accepts as true the plaintiff's factual allegations set forth in his complaint.^[6] See Id. at 169. Furthermore, the court should draw all reasonable inferences in the plaintiff's favor at this initial stage. See, e.g., Jeong Woo Kim v. 511 E. 5th St., LLC, 985 F.Supp.2d 439, 446 (S.D.N.Y. 2013).

         “[D]efendants may not thwart conditional certification merely by contradicting plaintiff's claims, even if defendants provide ‘voluminous documentation' purporting to show that no violations occurred.” Stephens, 291 F.Supp.3d at 105 (quoting Bhumithanarn v. 22 Noodle Market Corp., No. 14-cv-2625, 2015 WL 4240985, at *4 (S.D.N.Y. July 13, 2015) (finding defendants' reliance on affidavits and payroll logs submitted in opposition to motion for conditional certification “misplaced at th[e] [conditional certification] stage of the proceedings”)). Rather, courts should “refrain from resolving factual disputes and deciding matters going to the merits, ” id. (quoting Dinkel, 880 F.Supp.2d at 53), because as noted above, “[p]laintiffs at this stage must make only a modest factual showing that they, along with the proposed class members, were subject to the same policies that violated the FLSA, ” Bhumitharnan, 2015 WL 4240985, at *4; see also Friscia, 2018 WL 3122330, at *7 (“[A]t th[e] [conditional certification] stage, [the plaintiff] needs to show only that ‘similarly situated plaintiffs do in fact exist.'” (quoting Zavala v. Wal Mart Stores, 691 F.3d 527, 536 n.4 (3d Cir. 2012))

         B. Conditional Certification of FLSA Collective

         The FLSA requires employers to pay their employees a wage equal to one and one-half times their regular wage after the employee has worked more than 40 hours during a work week. 29 U.S.C. § 207(a)(1). However, employers do not have to pay overtime wages to individuals “employed in a bona fide executive, administrative, or professional capacity.” 29 U.S.C. § 213(a)(1). Rather, such employees are classified as “exempt” from the overtime provisions of the statute. Plaintiffs' core allegations assert that Defendant misclassified assistant managers at its restaurants as exempt from the FLSA's overtime provisions (presumably pursuant to the executive exemption) although Defendant was aware (and, indeed, required) those employees to perform primarily non-managerial work, therefore entitling them to overtime pay for the hours they worked over 40 per week. ECF No. 29, ¶ 2; ECF No. 36-1 at 14-15. Plaintiffs seek conditional certification of a collective that includes assistant managers classified as exempt from the FLSA's overtime provisions who worked more than 40 hours in a week at Panera restaurants operated by Defendant. The putative collective is nationwide, with the exception of employees in New York, New Jersey, California, and Massachusetts. In support of their motion, Plaintiffs have filed, among other things, declarations from assistant managers at Panera restaurants in Washington, D.C. (ECF No. 36-5 (Alan Meyer)), Alabama (ECF No. 36-6 (David Cornelius); ECF No. 36-8 (Steven Willms)), Virginia (ECF No. 36-7 (Chelsea Romano)), Massachusetts (ECF No. 36-9 (Joseph Whitfield)), New Jersey (ECF No. 36-10 (Jacqueline Friscia)), North Carolina (ECF No. 36-19 (Michele Thomas)), and Wisconsin (ECF No. 36-20 (Elizabeth Tymus)); a declaration from a general manager and training manager in New Jersey (ECF No. 36-11 (Diana Manrique)); a declaration from the vice president of human resources for Panera (ECF No. 36-12 (Jaynanne Calaway-Habeck)); and nearly-identical assistant manager job postings from Alabama, California, Georgia, Illinois, Indiana, Kentucky, Michigan, Minnesota, Missouri, New Jersey, New York, North Carolina, Pennsylvania, Tennessee, and Washington (ECF No. 36-4).

         The declarations from the assistant managers are very similar to each other, and assert that the declarants were assistant managers categorized as exempt employees by Defendant, that they regularly worked more than 40 hours per week, and that they were not paid overtime wages for the number of hours over 40 that they worked per week. ECF No. 36-5, ¶¶ 1, 4-5; ECF No. 36-6, ¶¶ 1, 5-6; ECF No. 36-7, ¶¶ 1, 2-3; ECF No. 36-8, ¶¶ 1, 4-5; ECF No. 36-9, ¶¶ 1, 4-5; ECF No. 36-10, ¶¶ 2, 8, 12; ECF No. 36-19, ¶¶ 1, 7-8; ECF No. 36-20, ¶¶ 1, 6-7. They further aver that the majority of their training was geared toward learning the non-managerial tasks performed by non-exempt employees, that the majority of their work time was spent on such non-managerial tasks while the general managers performed the managerial work, and that directives as to the management of the restaurants-including budgets, prices, restaurant layouts, marketing and promotion strategies, hours of operation, and dress code-came from Panera's corporate headquarters, sometimes filtered through regional directors. ECF No. 36-5, ¶¶ 2-3, 6-15; ECF No. 36-6, ¶¶ 2-4, 7-15; ECF No. 36-7, ¶¶ 5-14^[7]; ECF No. 36-8, ¶¶ 2-3, 6-16; ECF No. 36-9, ¶¶ 2-3, 7-16; ECF No. 36-10, ¶¶ 3-7, 14-15; ECF No. 36-19, ¶¶ 2-4, 9-17; ECF No. 36-20, ¶¶ 2-5, 8-18. Some of the assistant manager declarants also state that they either observed other assistant managers performing the same non-managerial work as they, themselves, did, or learned through speaking with other assistant managers that their mix of duties was similar. ECF No. 36-5, ¶¶ 16- 17 (two other assistant managers at District of Columbia restaurant at which declarant worked, and others at another District of Columbia location); ECF No. 36-7, ¶ 4 (one other assistant manager at the restaurant at which declarant worked); ECF No. 36-10, ¶¶ 16, 18 (an unidentified number of assistant managers at various locations in New Jersey); ECF No. 36-19, ¶¶ 18 (four other assistant managers at two North Carolina restaurants at which declarant worked); ECF No. 36-20, ¶¶ 19 (two other assistant managers at Wisconsin restaurant at which declarant worked, and another assistant manager at location at which declarant trained). Each of the assistant manager declarants states that, in order to comply with Panera's practice of “strictly control[ling] labor costs, ” hourly workers were often sent home and assistant managers were required to complete those non-exempt workers' job duties. ECF No. 36-5, ¶ 7; ECF No. 36-6, ¶ 8; ECF No. 36-7, ¶ 6; ECF No. 36-8, ¶¶ 7-8; ECF No. 36-9, ¶ 8; ECF No. 36-10, ¶ 9; ECF No. 36-19, ¶ 10; ECF No. 36-20, ¶¶ 9-10. The general manager declarant asserts similar facts-that she observed assistant managers at a number of New Jersey locations performed primarily non-managerial work without being eligible for overtime pay, and that corporate headquarters established the policies and procedures to be followed in the restaurants. ECF No. 36-11, ¶¶ 4-5, 8-10, 12-13.

         Panera's vice-president of human resources asserts that, in 2016, Defendant reclassified assistant managers from exempt employees to hourly non-exempt in response to “the federal government's publication of a final rule that would have substantially increased the salary level requirement for employees to be classified as exempt from the [FLSA's] minimum wage and overtime requirements.” ECF No. 36-12, ¶ 5. Plaintiffs point out that although Defendant allegedly reclassified assistant managers as non-exempt and began paying them overtime, the duties performed by assistant managers did not change, thus suggesting that the original classification as exempt was improper. ECF No. 36-1 at 11 n.2.

         Plaintiffs have thus presented evidence that the assistant managers in the putative collective were classified as exempt from the FLSA's overtime provisions although the bulk of the work that they performed was non-managerial. They have further presented evidence that assistant managers regularly worked more than 40 hours per week. That is, Plaintiffs have presented evidence that their classification as exempt was improper under the statute, and that they should been paid overtime wages for any hours they worked over 40 per week. However, Plaintiffs do not allege that it was Defendant's official policy that assistant managers perform primarily non-managerial duties. Therefore, “to obtain conditional certification, [they] must make a modest factual showing that they were subject to a common ‘de facto illegal policy, '” by “providing evidence of ‘some identifiable nexus which binds the named plaintiffs and potential class members together as victims of a particular practice.'” Costello v. Kohl's Ill., Inc., No. 13-CV-1359, 2014 WL 4377931, at *4 (S.D.N.Y. Sept. 4, 2014) (quoting Jenkins v. TJX Cos., 853 F.Supp.2d 317, 322 (E.D.N.Y. 2012)). Although it is a close call, Plaintiffs have cleared the low bar that is applied at this juncture.

         Plaintiffs have presented evidence through declarations that Panera's corporate headquarters exerted significant control over the operations of its restaurants. They have indicated that the ordinary management hierarchy-regional director, general manager, assistant manager- tended to require that assistant managers perform non-managerial duties, as the bulk of the managerial duties were reserved, at the restaurant level, to the general manager. Moreover, they have linked the performance of these non-managerial duties to a corporate policy of strictly controlling labor costs. And they have done so through declarations from employees working in seven different states around the country, as well as job postings from fifteen states.^[8]

         This case is therefore similar to Costello. In that case, the plaintiffs sought conditional certification of a nationwide collective of assistant store managers who were allegedly misclassified as exempt by a company that operated over 1, 000 stores. Costello, 2014 WL 4377931, at *1. After engaging in discovery related to the motion for dissemination of court-authorized notice to the putative collective, the plaintiffs presented evidence “from only six [assistant store managers] who have worked across the country and consents to sue from six additional [assistant store managers]” from various states in the country. Id. at *6. The evidence, which comprised deposition testimony from opt-in plaintiffs based on their “observations and discussions within the stores that they worked and communications with other [assistant store managers] at districtwide meetings, ” that assistant store managers “engage[d] primarily in non-managerial duties.” Id. at *5. For example, one plaintiff testified that she had spoken to assistant managers at various stores who complained that they could not “get anything done” because they were always performing non-managerial tasks, such as being “on a register” or “in customer service.” Id. There was also testimony that assistant store managers had “to pick up the slack” for hourly wage-earners-that is, perform the duties of hourly wage-earners-due to budgetary concerns at the corporate level. Id. at *6. The district court rejected the plaintiffs' argument that the fact that they had presented evidence from assistant store managers in more than 3 states “mandated” conditional certification, noting that “the probity of drawing . . . an inference [of a common illegal policy or plan] will turn in part on the number of plaintiffs from whom the Court has evidence compared to the size of the pool of potential opt-in plaintiffs.” Id. Finding the “number and geographic dispersion of the [assistant store managers] who ha[d] opted in to [the] action” to “weigh only slightly in favor of conditional certification, ” the district court nevertheless conditionally certified the collective and authorized nationwide notice in light of the presentation of a “substantive theory”-that is, the budgetary concerns that led to the necessity that assistant store managers perform non-managerial duties-that “tie[d] Plaintiffs' claims to a policy or practice that affected [assistant store managers] nationwide.” Id.

         So it is here. Plaintiffs' eight declarations from seven states have indicated that Defendant's corporate policy of cutting labor costs “affected [assistant managers] nationwide, ” id., causing them to spend a majority of their time performing non-managerial duties.^[9] Those declarations also aver that assistant managers regularly worked more than 40 hours per week but were not paid overtime. Other evidence (such as job postings from fifteen states) indicate that Defendant had uniform expectations of assistant managers. Moreover, courts other than the court in Costello have conditionally certified nationwide collective actions based on a similar quantum of evidence. See, e.g., Indergit v. Rite Aid Corp., Nos. 08 Civ. 9361, 08 Civ. 11364, 2010 WL 2465488, at *1, 5-6 (S.D.N.Y. June 16, 2010) (conditionally certifying nationwide collective based on evidence that corporate management exercised control over operation of retail branches and that store managers were classified as exempt across the country, as well as affidavits from three store managers that they did not perform primarily managerial duties and that they were subject to “a corporate nationwide program to reduce the amount of overtime compensation paid to non-exempt employees” by requiring exempt employees to perform non-managerial duties); see also Essex v. Children's Place, Inc., Civil Action No. 15-5621, 2016 WL 4435675, at *6 (D.N.J. Aug. 16, 2016) (“Here, the evidence establishes that [store managers] from seven different states performed similar non-managerial duties for a majority of the time they spent working, worked more than forty hours per week, and did not receive overtime compensation.”); Briggs v. PNC Fin. Servs. Grp., Inc., No. 15-CV-10447, 2016 WL 1043429, at *4 (N.D. Ill. Mar. 16, 2016) (“[F]ive former [assistant branch managers] spanning five different PNC branches and states state that they, and other [assistant branch managers] across the nation, regularly worked more than forty hours a week, performed similar non-exempt work, and were not compensated appropriately. These declarations not only support that [assistant branch managers'] duties and expectations are uniform, but also that they allegedly ‘were victims of a common policy or plan that violated' the ...