The United States District Court for the Northern District of Georgia has issued a very good decision for employers opposing conditional certification of FLSA minimum wage and overtime cases.
In Beecher v. Steak N Shake Operations.pdf, Case No. 1:11-CV-4102-ODE (N.D. Ga. Sept. 27, 2012), the plaintiffs were employees of company-owned Steak N Shake restaurants working in non-exempt hourly roles. The employees included workers in positions such as cooks, dishwashers, and hourly supervisors, as well as tipped employees such as servers. They contended that the company unlawfully failed to pay minimum wage and overtime in large part due to company-wide policies that discouraged store managers from incurring overtime costs. They argued that as a result of these policies, store managers would alter their time records to deduct time they had worked, and sought conditional certification of a nationwide class of hourly Steak N Shake employees.
The court noted the lower standard for conditional certification, but still found no basis to grant even conditional certification of the proposed class. First, the court accepted the plaintiffs’ showing that the company stores shared structures, positions, handbooks, and systems to report hours and tips, but found that such a showing was not enough. Instead, the court found, the plaintiffs’ claims would require a review of what happened at each individual store. Indeed, because there were entirely legitimate reasons why a time record might be modified (e.g. a waitress inverts numbers on the tips she received; correction in computer “glitches” in reporting credit card tips; an employee forgets to clock out, etc.), the court concluded that resolution of the plaintiffs’ claims would require review of roughly two million different payroll corrections.
The court also found other issues with the proposed class. While the plaintiffs sought to represent a nationwide class covering 400 restaurants and 65,000 employees, there were only 23 plaintiffs had actually opted in, suggesting a lack of interest in pursuing the claims. Most of the plaintiffs, in fact, worked at four stores in a single market near Atlanta, Georgia, and all but one worked in Georgia.
Interestingly, although the court did not cite the decision in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ___ (2011), it further concluded that “there is not enough glue to hold this proposed class together.” This suggests that the court considered that the reasoning of Dukes does apply in FLSA collective actions, a holding that may prove of use in future cases.
The Bottom Line: Particularly in cases involving alleged failure to pay for all hours worked, a number of courts will continue to deny even motions for conditional certification.