We've commented in this blog in the past about the viability of classes that have been conditionally certified under the FLSA and that many are ultimately decertified. Another case underscores the importance of the distinction between conditionally certified classes under the FLSA and those that survive a motion to decertify. This case also underscores the fact that even jurisdictions viewed as plaintiff-friendly in class litigation can be persuaded that individual circumstances will destroy a class.
In Beauperthuy v. 24 Hour Fitness USA, Inc.pdf., the United States District Court for the Northern District of California considered the overtime claims of both hourly and salaried employees at a large fitness chain. The case was somewhat unusual for an action filed in California in that the plaintiffs pursued their federal FLSA overtime claims rather than their California state law claims. The hourly plaintiffs contended that they were denied overtime as a result of time-keeping policies that forced them to work off the clock, limits by various stores on the amount of time that could be incurred in certain tasks, and a company policy that resulted in overtime being paid late. The salaried plaintiffs, primarily different types of managers, contended that they were misclassified as exempt for overtime purposes. Citing the lenient standard used by courts under the two-step procedure judicially created for FLSA claims, the court conditionally certified both classes in 2007. Nearly 800 hourly class members and over 400 managers opted into the litigation. After extensive discovery following the grant of conditional certification, the defendant moved to decertify.
On February 24, 2011, the court issued a careful 41-page decision decertifying both classes. While noting that it had conditionally certified the classes under a less rigorous standard, the plaintiffs' claims could not survive decertification under the "similarly situated" standard required by section 16(b) of the FLSA, 29 U.S.C. § 216(b). More specifically, while the plaintiffs had pointed to what appeared to be uniform policies, those policies had in fact changed on many occasions, leading to what the court called a "hodgepodge" of policies whose evaluation the class would require. It also noted variations in the manner in which individual locations and managers applied the policies, such that the actual duties and time spent by the individual class members varied. It rejected the use of subclasses of various types of employees, finding that variations also existed within the various "silos" the plaintiffs had described. The court was also persuaded that fairness and procedural considerations weighed against the class as their claims would require individual treatment.
Thus, after five years of litigation, the court decertified the class.
The Bottom Line: Conditional certification may only give the plaintiffs a false sense of victory, with considerable resources required at equally considerable risk at the decertification stage. Still, conditional certification presents a real risk to defendants of a psychological defeat and the likelihood of further protracted litigation.