United States District Court, District of Columbia
ALAN MEYER and DAVID CORNELIUS, Individually and on behalf of all others similarly situated, Plaintiffs,
v.
PANERA BREAD CO., Defendant.
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 ...