Mariseli Gomez Bell v. PNC Bank
Filing
Filed opinion of the court by Judge Rovner. AFFIRMED. Michael S. Kanne, Circuit Judge; Ilana Diamond Rovner, Circuit Judge and Theresa L. Springmann,* District Court Judge. (*The Honorable Theresa L. Springmann, of the Northern District of Indiana, sitting by designation.) [6688907-1] [6688907] [14-3018]
Case: 14-3018
Document: 51
Filed: 08/31/2015
Pages: 36
In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 14-3018
MARISELI GOMEZ BELL,
Plaintiff-Appellee,
v.
PNC BANK, NATIONAL ASSOCIATION,
Defendant-Appellant.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 12-C-1274 — Thomas M. Durkin, Judge.
____________________
ARGUED MARCH 31, 2015 — DECIDED AUGUST 31, 2015
____________________
KANNE and ROVNER,
SPRINGMANN, District Judge.*
Before
Circuit
Judges,
and
ROVNER, Circuit Judge. Mariseli Gomez Bell alleged that
her former employer, PNC Bank, failed to pay her overtime
*The
Honorable Theresa L. Springmann, of the Northern District of Indiana, sitting by designation.
Case: 14-3018
Document: 51
Filed: 08/31/2015
2
Pages: 36
No. 14-3018
wages in violation of the Fair Labor Standards Act, 29 U.S.C.
§§ 201–262, the Illinois Minimum Wage Law, 820 ILCS 105/1105/15 and the Illinois Wage Payment and Collection Act,
820 ILCS 115/1-115/15. Bell claims that the failure was not an
isolated incident, but rather part of a policy or practice of
PNC that affected many other employees. Consequently she
successfully moved the district court to certify a class of
plaintiffs. We affirm.
I.
The district court set forth an extensive and thorough recitation of the facts in this case, from which we borrow liberally. Bell worked as a senior banker at the PNC branch at
Broadway and Berwyn Streets in Chicago from June 1, 2009,
through May 31, 2011. Bell submitted an affidavit from
which the district court extracted facts about her knowledge
of PNC’s overtime policies and practices. R. 65, apx.1–7. In
her affidavit, Bell states that she was evaluated, in part, on
the basis of how many new accounts she brought into the
bank, and in order to generate new accounts she needed to
spend “significant” time outside of her regular work hours
visiting prospective clients. Some of the assignments to visit
prospective clients came from Greg Bolden, a PNC vice president who did not work at the Broadway and Berwyn
branch. The overtime work was necessary, she asserted, because the branch was understaffed and could not spare her
absence, including, at times, during her lunch breaks.
According to Bell, when she submitted time cards reflecting overtime work, her branch manager, Letticia Flores, rejected the time cards and told Bell that PNC “would not
Case: 14-3018
No. 14-3018
Document: 51
Filed: 08/31/2015
Pages: 36
3
permit the overtime.” R. 65, apx.3.1 Flores also submitted an
affidavit describing her personal knowledge of PNC’s overtime policies and practices. Flores is now deceased and cannot be cross-examined, but in her affidavit, Flores states that
her supervisor, Christina Romis, a PNC regional manager,
told her that “PNC would not permit [Flores] to report overtime for the branch,” and “PNC expected its employees to
handle their outside-the-branch work on their own time,
without reporting any extra hours that they worked.” Id.,
apx.10. Bell also averred that Romis told her that PNC
“would not permit overtime to be reported by employees.”
Id., apx.3. PNC, however, has always had written policies
prohibiting off-the-clock work and requiring payment for
overtime hours.
In January 2011, Margaret Alvarez, an Employee Relations Investigator for PNC, contacted Bell to ask whether she
had ever worked unpaid overtime hours, and Bell confirmed
that she had. According to Bell, Alvarez told her that PNC
“would not pay for hours that [Bell] could not support with
documents.” Id., apx.4. On July 31, 2011, after Bell had resigned from PNC, she received an electronic deposit in her
checking account for $1,392.89. Later, Bell learned through
communications related to this litigation, that through this
payment PNC intended to compensate her for 68.15 unpaid
overtime hours. Bell believes that this payment is insufficient
1
Citations are to the record cites from the district court. Due to various
anomalies in the electronic docketing system and procedures regarding
the unsealing of documents in this court, (see Seventh Circuit Operating
Procedure 10(b)), the record does not appear in one location on our
docket. Instead it appears at R. 11, 12, 13 and 20 in our docket. To avoid
confusion, therefore, we cite to the district court record.
Case: 14-3018
4
Document: 51
Filed: 08/31/2015
Pages: 36
No. 14-3018
to compensate her for the actual number of overtime hours
she worked for PNC in 2009 and 2010.
In addition to Bell’s and Flores’ affidavits, the district
court considered PNC’s own investigation reports documenting complaints of unpaid overtime. The reports show
that in addition to Bell, two other employees at the same
branch complained that they were not paid for overtime
hours that they worked. One employee, Ernest Ward,
claimed that he was not paid for 45.61 hours of overtime and
that he was discouraged from submitting overtime records.
PNC’s investigation into Ward’s claims revealed that Flores
did not want employees at her bank working overtime and,
instead, offered Ward permission to leave work early on another day as compensation. R. 66, apx.276–77. After the investigation, PNC paid Ward for 50.18 hours of overtime.
According to the PNC investigator, on July 3, 2013, PNC
began to investigate whether Ward “enable[d] branch employees to falsify bank referral reports.” R. 73–1, pp.6–7. The
next day, Ward filed a lawsuit against PNC for failure to pay
overtime wages. See Ward v. PNC Bank, N.A., No. 13 C 95
(N.D. Ill., dismissed Sept. 25, 2014). PNC fired Ward on February 14, 2013.
PNC’s investigation reports also show that another employee at Bell’s branch, Tess Claveria, claimed that Flores
refused to allow overtime claims and instead directed
Claveria to leave work early on a later day in an attempt to
compensate Claveria for the overtime hours. Claveria also
claimed that she was deprived of her full lunch hour on certain occasions. Claveria sought compensation for overtime
hours, and PNC determined that it only owed her payment
for 8.02 overtime hours. Alvarez stated that PNC’s analysis
Case: 14-3018
No. 14-3018
Document: 51
Filed: 08/31/2015
Pages: 36
5
of teller electronic journals, alarm codes, log-in and log-out
reports, and payroll reports for the dates Claveria reported
unpaid overtime or missed meal periods showed that
Claveria provided inconsistent statements about the time
she worked. On December 26, 2012, PNC began to investigate claims that Claveria “entered false information that enabled her to receive credit for unearned referrals and/or unearned incentive pay.” R. 73–1, p.6. Claveria opted into this
lawsuit on January 23, 2013, and PNC fired her on February
14, 2013.
PNC eventually fired branch manager Flores as a result
of its investigations into allegations of unpaid overtime. Bell
testified that after Flores was fired, her new “manager [told
Bell] that if [Bell] was working overtime to go ahead and report it.” R. 65, apx.53 (145:17–23).
PNC produced all of its internal investigation reports detailing any direct or indirect complaints of unpaid overtime
in Illinois for the relevant time period. The reports disclose
that nearly ninety percent of PNC’s Illinois branches have
never had any complaints about unpaid overtime. They also
show that some employees at other branches complained to
PNC Employee Relations that they worked overtime hours
for which they were not paid. PNC produced a table compiling these complaints and listing any overtime compensation
PNC paid as a result of its internal investigations. R. 65,
apx.153–58. Bell’s counsel compared PNC’s table to the investigation reports themselves and created a list of complaints found in the investigation reports that were not included in PNC’s table, and a list of employees who worked
overtime but were not paid. R. 65, apx.159–161. The district
court reviewed PNC’s table, Bell’s counsel’s list, and the in-
Case: 14-3018
6
Document: 51
Filed: 08/31/2015
Pages: 36
No. 14-3018
vestigation reports themselves and created a summary compilation of what the evidence revealed regarding complaints
of unpaid overtime made by employees at each branch included in the class Bell seeks to certify. The district court
compiled the following facts:
• At the Algonquin branch, an employee alleged that he
was not paid when he arrived early to work or when he
traveled to customer locations to pass out flyers. R. 66,
apx.302, apx.308–09. The employee also stated, however,
that the branch manager had never told him not to record
overtime. Id. p. apx.308. Other employees at the branch stated that the employee purposefully arrived to work early so
he could leave early. Id. p. apx.309. PNC told the employee
he would need to provide documentation for any time for
which he had not been paid, and the employee agreed that
he would provide this if he could. Id., apx.302. The employee
was fired for other misconduct unrelated to recording time,
id. at apx.301–03, and the employee never requested payment for unpaid hours.
• At a Bloomington branch on Market Street & JC Parkway, an employee alleged that the branch manager planned
to shift overtime hours to the following week to avoid paying overtime rates. R. 66, apx.314. PNC contacted the manager, and he denied having said that he intended to shift
hours in this manner and promised to clarify with the
branch staff that overtime hours would not be shifted. Id.
• At the Bolingbrook branch, a branch manager was informed that two employees had taken home information
about new PNC products to study. When an employee noted
that employees should receive overtime pay for such work,
the branch manager said, “Bolingbrook does not have this
Case: 14-3018
No. 14-3018
Document: 51
Filed: 08/31/2015
Pages: 36
7
issue.” R. 66, apx.319–20. The manager was disciplined. Id.,
apx.321. The two employees did not request overtime pay,
but PNC paid each of them an hour of overtime. R. 65,
apx.155. Another employee stated that on rare occasions she
did not record that she left work ten minutes late. R. 66,
apx.328. PNC’s records do not reflect that this employee requested overtime compensation for this time or that PNC
paid her any such compensation.
• At the Buffalo Grove branch, several employees reported that the branch manager told employees that “PNC
does not allow overtime and overtime would only be paid to
employees who were deserving of it.” R. 66, apx.364. The
manager also told employees to take extra paid vacation rather than paying overtime. Id. PNC investigated the manager, R. 66, apx.362, and paid seven employees a total of 148.45
hours of overtime. R. 65, apx.154.
• At the Carpentersville branch, an employee initially alleged that she had been denied a lunch break. The investigation revealed that the employee had formerly been allowed
to take her lunch break late in the afternoon so she could
pick up her son, but had been told she could no longer do
this because it violated PNC policy. The employee confirmed that she was fully compensated for her lunch break
and was not owed additional pay. R. 66, apx.418.
• At a Chicago branch at 18th & Clark, an employee reported that her practice was to enter all of her time for the
week at the beginning of the week and then adjust for any
differences that occurred as the week progressed. R. 66,
apx.424. She reported that on some occasions she worked
past the time she had initially recorded but failed to adjust
the time. Id. The employee stated that her branch manager
Case: 14-3018
8
Document: 51
Filed: 08/31/2015
Pages: 36
No. 14-3018
never advised her not to record all the time she worked. Id.,
apx.424–25. PNC investigated whether the employee was
owed any additional pay and determined that she was not.
R. 65, apx.154.
• At a Chicago branch at 35th & State, an employee alleged that she worked through lunch breaks, but she also
stated that she always recorded the time she worked, and
she did not allege that PNC had failed to pay her overtime
she was owed. R. 66, apx.438. PNC’s investigation revealed
that the branch manager thought the employee was exempt
from overtime pay, and the manager was issued a warning
for this mistake. Id.
• At a Chicago branch at 87th & Cottage Grove, an employee reported that the branch manager “made [the employee] feel as though she was not allowed to enter overtime
on her time card,” but “never specifically directed her not to
enter overtime.” R. 66, apx.475. PNC fired the manager due
to “extensive discrepancies in the time [the employee] entered as compared to the time she was logged into her computer” over a three-month period, and the manager was “ultimately responsible” for errant time reporting. Id. PNC paid
the employee for 251.6 hours of overtime as a result of its investigation. R. 65, apx.154. PNC’s investigator’s notes also
show that another employee alleged that her lunch breaks
were frequently interrupted due to inadequate staffing.
R. 66, apx.487. PNC’s records do not reflect that this employee’s allegations were addressed.
• At a Chicago branch at LaSalle & Kinzie, the assistant
branch manager reported that some employees had not reported overtime because “they may have been told there
was ‘no overtime.’ ” R. 67, apx.545. One employee reported
Case: 14-3018
No. 14-3018
Document: 51
Filed: 08/31/2015
Pages: 36
9
that he did not always record his overtime because “he did
not want the branch to incur overtime.” Id. Both employees
stated that the branch manager communicated the importance of recording their time accurately, and no one had
ever told them to enter time inaccurately. Id. Another employee consistently worked overtime and failed to record it,
despite the manager telling the employee not to stay late and
to accurately record his time if he did stay late. Id., apx.540.
Alvarez states that this employee was paid for all hours
worked. R. 73–1, p.7 (ID#1036), but PNC’s list of overtime
paid does not show that the employee was paid. R. 65,
apx.154.
• At a Chicago branch in Lincoln Park, an employee
admitted that she sometimes interrupted her lunch break to
assist customers. She did not allege that she was owed unpaid overtime or that her supervisor required her to interrupt her lunch break. R. 67, apx.557.
• At a Chicago branch at Madison & Leavitt, an employee admitted that he sometimes interrupted his lunch
break to assist customers and would take additional lunch
break time to compensate. He did not allege that he was
owed unpaid overtime or that his supervisor required him
to interrupt his lunch break. R. 67, apx.564.
• At a Chicago branch at North & Homan, several employees stated that the branch manager had interrupted their
lunch breaks. R. 67, apx.570–71. The manager was disciplined with a verbal warning. Id. at apx.571. None of the
employees sought payment for unpaid off-the-clock hours,
and PNC did not pay for any. R. 65, apx.157.
Case: 14-3018
10
Document: 51
Filed: 08/31/2015
Pages: 36
No. 14-3018
• At a Chicago branch at State & Huron, an employee
alleged that he had not been paid for work he did at home.
R. 67, apx.577. The employee was advised that he was not
permitted to work at home without approval of his manager.
Id. The employee was paid for 0.30 hours of overtime. R. 65,
apx.154.
• Bell cites hand written notes of PNC investigators and
alleges that these notes show that in 2009 at the Downers
Grove branch on 75th Street, “employees reported that management refused to permit employees to record time for
work performed before the bank opened,” R. 64, p.5 (citing
R. 67, apx.583–84, apx.588, apx.593), and that “[e]mployees
were not paid for pre-shift work.” R. 64, p.7 (citing R. 67,
apx.583–85). The district court, however, could not decipher
the hand-written notes. Alvarez stated that the investigation
at the Downers Grove branch did not involve an allegation
of unpaid overtime, but rather allegations that employees
were arriving to work late but recording their time as if they
had arrived on time. R. 73–9, pp.8–9 (ID#1096-97). The district court noted that Alvarez did not cite any documents in
the record to support these statements, nor did she explain
why she would have personal knowledge of the investigation at the Downers Grove branch.
• At the Elgin branch, an employee stated that “there
used to be a rumor that the policy was if you had an outage
and you did not find it you did not get paid for the time you
took to look for the outage.” R. 67, apx.599. The employee
described this as an “unofficial rule.” Id. The employee,
however, also stated that he had recently attended a meeting
at which a person from the PNC legal department explained
that all overtime was to be paid. Id. The employee also stated
Case: 14-3018
No. 14-3018
Document: 51
Filed: 08/31/2015
Pages: 36
11
that he has always been paid overtime, despite the rumor of
an unofficial policy. Another employee initially alleged that
she thought the branch manager told her not to record overtime, but that she missed a meeting at which the manager
instructed the employees to record all overtime accurately.
Id., apx.599–600. The employee initially thought she was
owed 200 hours of overtime pay but later clarified that she
was owed less than $200 of overtime pay. Id., apx.600. The
employee agreed that she was in fact owed 3.45 hours of
overtime, id., and PNC paid this. R. 65, apx.154.
• At the Fox Lake branch, an anonymous employee reported that the branch manager required employees to report to work five minutes early and not record that time.
R. 67, apx.612–13. PNC investigators spoke with two other
employees at the branch and they said that the manager had
never given such an instruction. Id. No employees requested
payment for unpaid overtime, and PNC did not pay for any.
R. 65, apx.154.
• At the Loves Park branch, several employees reported
that a former branch manager instructed them not to record
overtime, but that their current manager instructed them to
report any overtime they worked. R. 67, apx.623. Alvarez
stated that the Employee Relations department repeatedly
asked the employees to report any overtime they were
owed, but the employees failed to do so. R. 73–1 ¶ 46.
• At the North Aurora branch, employees reported that
the branch manager required them to arrive at work five
minutes prior to the start of their shifts but not record these
five minute periods. R. 67, apx.652–53. The manager was
fired, id. at apx.653, and seven employees were each paid between 1.75 and 2.75 hours of overtime. R. 65, apx.155.
Case: 14-3018
12
Document: 51
Filed: 08/31/2015
Pages: 36
No. 14-3018
• At the Orland Park West branch, an employee was
suspected of under-reporting her time. R. 67, apx.670. The
employee admitted that she under-reported her time to hide
her inability to work efficiently. Id., apx.670–71. PNC paid
the employee 1.25 hours of overtime. R. 65, apx.155.
• At the Park Ridge branch, an employee reported a single instance of her manager telling her to record a lunch
break she did not take in order to avoid overtime and allow
the employee to take an extra paid break the following week.
R. 67, apx.676–77. PNC told the manager this violated PNC
policy. Id., apx.677. The employee did not request payment
for unpaid overtime, and PNC did not pay for any. R. 65,
apx.157.
• At a Rockford branch on Riverside Boulevard, an employee reported that the branch manager “requested” that
employees take extra time off rather than report overtime.
R. 67, apx.702. PNC investigators spoke with three employees at the branch and all three said they had never been instructed not to report overtime. One employee skipped
lunches without the manager's knowledge, and PNC paid
that employee 2.75 hours of overtime. R. 65, apx.154. Another employee alleged that the manager had asked him to
complete reports at home without overtime pay, but the employee indicated that he refused to do so. R. 67, apx.693.
• At the Schaumburg branch, in the course of a separate
investigation, PNC learned that an employee had interrupted her lunch on several occasions to assist customers. R. 67,
apx.714. PNC paid the employee 1 hour of overtime. R. 65,
apx.155. Another employee stated that he also sometimes
interrupted his lunch break to assist customers, but the employee stated that he would always complete his lunch break
Case: 14-3018
No. 14-3018
Document: 51
Filed: 08/31/2015
Pages: 36
13
at some point during the day. R. 67, apx.714. Both employees
stated that the decision to interrupt their lunch breaks was
their own. Id.
• At the West Aurora branch, during a review of the
branch's records, the PNC Employee Relations investigator
noticed that an employee had worked every day from March
7, 2011, through March 18, 2011. R. 67, apx.726. The employee stated that “she thinks nothing of it if she comes into the
branch to help out for a few minutes, and that she does not
expect to get paid.” Id. at apx.725. The manager advised the
employee that she must record all her time. Id. PNC’s investigation report notes that the employee would be paid overtime for the unreported time, R. 67, apx.725, but PNC’s list of
overtime payments contains no record that the employee
was paid. R. 65, apx.156.
• At the Wheaton–Danada branch, two employees reported that the branch manager “reacted in a negative manner when they entered overtime on their time sheets.” R. 67,
apx.738. Both employees also reported that “they had inaccurately recorded their time on a number of occasions in order to make it appear as though they had only worked 40
hours per week.” Id. at apx.731. After an investigation into
the amount of overtime pay PNC owed the two employees,
PNC paid one employee for 39 hours of overtime and 27 additional hours of regular pay, and the other employee for 1.6
hours of overtime and 1.6 additional hours of regular pay.
R. 65, apx.154.
In addition to the incidents recorded in PNC's investigation reports, Bell submitted an affidavit from James Cobb, a
manager of PNC's DePaul branches, in which he states that
he had borrowed “more than 37[PNC] employees … from
Case: 14-3018
14
Document: 51
Filed: 08/31/2015
Pages: 36
No. 14-3018
branches all over the Chicago region” to staff “table days,”
which are PNC promotional events. R. 65, apx.14. Cobb attached to his affidavit a list of 37 employees he says he “borrowed.” R. 65, apx.15. Cobb learned that his spouse, Ernest
Ward (who as the Court has already noted, filed a related
suit against PNC), had worked for him during a table day
but had not recorded this time on his time card at the
Broadway and Berwyn branch where Ward worked. Cobb
expressed concern to a PNC Employee Relations representative that he did not know whether the thirty-seven employees had been paid for their overtime through their branch
offices. Cobb claimed that he was told to ignore the issue
and that PNC would not investigate. Alvarez, on the other
hand, testified that she talked to PNC payroll personnel who
told her that all thirty-seven of the employees in question
had been properly paid. Alvarez did not provide business
records to support this assertion. And, at least according to
Cobb’s affidavit, Ernest Ward was not paid for his overtime.
PNC contends that it has a written overtime policy that
explicitly requires payment of time and a half for any time
worked over forty hours in any work week. It contends that
pursuant to this policy, it “has paid overtime at every branch
in the putative class every year during the class period.”
R. 72, p.6. Specifically, according to Alvarez, “PNC has paid
overtime to non-exempt branch employees at every branch
in the putative class during each year from 2009 to October
2013 for a total of $432,290.85 for approximately 17,673 hours
of overtime.” R. 73–1, p.4, (ID#1031). Alvarez, however, did
not submit or reference any business records to the district
court to support this assertion nor did she explain how she
had personal knowledge of those facts. The district court,
therefore, did not consider those assertions. This may have
Case: 14-3018
No. 14-3018
Document: 51
Filed: 08/31/2015
Pages: 36
15
been an incorrect conclusion, as evidence given by affidavit
could suffice to resolve disputes before deciding whether to
certify a class. See Szabo v. Bridgeport Machs., Inc., 249 F.3d
672, 676 (7th Cir. 2001) (For class certification purposes, a
judge need not accept the plaintiff’s assertion that she met
the requirements of Rule 23 as conclusive; instead “the judge
would receive evidence (if only by affidavit) and resolve the
disputes before deciding whether to certify the class.”). On
the other hand, an affidavit must be based on personal
knowledge. Fed. R. Civ. P. 56(c)(4); Cocroft v. HSBC Bank
USA, N.A., No. 14-1460, 2015 WL 4597537, at *4 (7th Cir.
July 31, 2015). As we discuss in a moment, the burden is on
the proposed plaintiff class to prove eligibility for class
certification, and so the importance of the affidavit may not
be significant. If the district court finds it necessary, it can
explore the issue further upon remand.
The district court also noted that even if PNC had business records to support Alvarez’s statements that PNC paid
all of the overtime due, those records would not negate the
evidence in the record that PNC’s management had denied
compensation for overtime work on a number of occasions.
The district court found that the evidence showed that PNC
often paid overtime only after initially failing to do so. It
then noted that if PNC willfully failed to pay overtime, PNC
would be liable not merely for actual overtime wages, but
also for additional damages under both Illinois law and the
Fair Labor Standards Act. See 820 ILCS 105/12; 29 U.S.C.
§§216, 260.
Despite PNC’s alleged written policy and the evidence
that PNC has paid some overtime and disciplined branch
managers who had prevented employees from properly re-
Case: 14-3018
Document: 51
Filed: 08/31/2015
16
Pages: 36
No. 14-3018
cording overtime, Bell contends that the evidence in the record demonstrates that PNC has an unofficial policy of frequently denying proper compensation to its non-exempt
employees who have worked overtime. In the district court
Bell argued that this evidence constituted a sufficient basis to
certify a class that the plaintiff proposed as follows (in relevant part):
All people residing in Illinois who:
(a) Were employed by PNC Bank (or any of its
predecessors) on a full-time basis at any point
during the Class Period;
(b) Were classified by PNC Bank as nonexempt from the overtime laws; and
(c) Worked in one of the 27 Certified Branches.
R. 63, p.2 (ID#929).
Bell listed 27 branches at which she contended there was
proof of an unofficial policy or practice of denying overtime.
Id. at p.2-3 (ID#929-930); Order, p.13.2
Bell contended that the class-wide proceedings would resolve PNC’s liability for the following common questions:
As a question of fact, did PNC Bank have an
unofficial policy or practice that required employees class-wide to work off-the-clock overtime hours (that is, an unofficial policy or prac-
2
Bell initially sought to bring claims on behalf of a putative class of nonexempt employees of PNC’s Illinois retail bank branches. After a year of
discovery, Bell moved under Rule 23 to certify a narrower class of all
non-exempt employees at 27 Illinois branches of PNC.
Case: 14-3018
Document: 51
Filed: 08/31/2015
No. 14-3018
Pages: 36
17
tice that prohibited employees from reporting
overtime hours)?
As a question of fact, did PNC Bank have a
policy or practice that PNC Bank investigations
would not fairly lead to full pay for employees
for overtime work?
As a mixed question of law and fact, were
those policies and practices unlawful and
harmful to employees in the 27 Illinois branches that are in the class?
As a matter of law, is PNC Bank’s written policy on overtime a defense?
As a mixed question of law and fact, has the
plaintiff shown that PNC Bank’s conduct was
willful?
As a mixed question of law and fact, has PNC
Bank proven that its conduct was undertaken
in good faith?
As a question of fact, did PNC Bank’s conduct
make it more difficult for class members to calculate the number of off-the-clock hours that
they worked?
As a mixed question of law and fact, when calculating overtime pay for class members, does
the Fluctuating Workweek doctrine apply?
R. 63, pp. 3–4 (ID#930-931).
In the district court, PNC argued that (1) the class did not
meet the requirements of Rule 23(a) requiring numerosity,
commonality, typicality and adequacy of representation;
Case: 14-3018
18
Document: 51
Filed: 08/31/2015
Pages: 36
No. 14-3018
(2) Bell could not demonstrate that common questions of law
or fact predominated over individual claims as required by
Rule 23(b)(3); (3) the class was insufficiently defined and
(4) conditional certification of a collective action under the
Fair Labor Standards Act was not warranted.
The district court certified a class of employees from
twenty-six PNC branches in Illinois, excluded employees
from two proposed branches (the DePaul branch and the
Naperville branch) and including, instead, employees from
another branch (the Oak Park branch). The district court
concluded that whether PNC has an unofficial policy or
practice that requires employees to work off-the-clock overtime hours was a question common to the class. The court
below also concluded that Bell’s proposed class met the requirements for numerosity, typicality, and adequacy of representation, and these conclusions are not contested on appeal. Finally, the court concluded that the common issues
predominated over any individual questions.
On appeal, PNC asks this court to address only the following two issues:
(1) whether the district court abused its discretion in certifying a class without requiring the
plaintiff to prove the existence of an unwritten
policy to satisfy Rule 23’s commonality and
predominance requirements, and
(2) Whether the district court abused its discretion in certifying a class by treating individualized liability issues as damages issues.
We address each of these in turn, keeping in mind that
we review class certification orders for an abuse of discretion
Case: 14-3018
Document: 51
Filed: 08/31/2015
No. 14-3018
Pages: 36
19
which can occur when a district court commits legal error or
makes clearly erroneous factual findings. Reliable Money Order, Inc. v. McKnight Sales Co., Inc., 704 F.3d 489, 498 (7th Cir.
2013). Our review is deferential, but exacting: “A class may
only be certified if the trial court is satisfied, after a rigorous
analysis, that the prerequisites” for class certification have
been met. CE Design, Ltd. v. King Architectural Metals, Inc.,
637 F.3d 721, 723 (7th Cir. 2011). The party seeking certification bears the burden of demonstrating that certification is
proper by a preponderance of the evidence. Messner v.
Northshore Univ. HealthSystem, 669 F.3d 802, 811 (7th Cir.
2012).
II.
We addressed many of these same issues regarding
commonality and predominance within the last few weeks
in our decision in Chicago Teachers Union, Local 1 v. Bd. of Ed.,
No. 14-2843, 2015 WL 4667904 (7th Cir. August 7, 2015). We
summarize our general explanation of class action requirements here, and refer the reader to that decision for a more
nuanced and detailed discussion. Id.
Because a class action is an exception to the usual rule
that only a named party before the court can have her claims
adjudicated, the class representative must be part of the class
and possess the same interest and suffer the same injury.
Wal-Mart Stores v. Dukes, 131 S. Ct. 2541, 2550 (2011); Chicago
Teachers Union, 2015 WL 4667904, at *3. The general gatekeeping function of Federal Rule 23(a) ensures that a class
format is an appropriate procedure for adjudicating a particular claim by requiring that the class meet the following
requirements:
Case: 14-3018
Document: 51
Filed: 08/31/2015
20
Pages: 36
No. 14-3018
(1) the class is so numerous that joinder of all
members is impracticable (numerosity);
(2) there are questions of law or fact common
to the class (commonality);
(3) the claims or defenses of the representative
parties are typical of the claims or defenses of
the class (typicality); and
(4) the representative parties will fairly and adequately protect the interests of the class (adequacy of representation).
Fed. R. Civ. P. 23(a) (parentheticals ours).
In addition to meeting these requirements, the class must
satisfy one of the four conditions in Rule 23(b). In this case,
the plaintiffs sought certification under Rule 23(b)(3), the
rule that applies to class actions when the purported class
seeks monetary damages. Federal Rule 23(b)(3) allows for
class certification when “questions of law or fact common to
the class members predominate over any questions affecting
individual members” and when a “class action is superior to
other available methods for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3).
A. Commonality
Because Rule 23(a) provides a gate-keeping function for
all class actions, ordinarily we would begin there and only
turn our attention to Rule 23(b) after we were certain that all
of Rule 23(a)’s requirements had been met. In this case, however, the question of commonality and predominance overlap in ways that make them difficult to analyze separately;
consequently much of our discussion applies to both issues.
Case: 14-3018
Document: 51
Filed: 08/31/2015
No. 14-3018
Pages: 36
21
See Chicago Teachers Union, 2015 WL 4667904, at *13. Nevertheless, we focus first on teasing out the question of commonality.
Although a court need only find a single common question of law or fact (Wal-Mart, 131 S. Ct. at 2556), the mere occurrence of all plaintiffs suffering as a result of a violation of
the same provision of law is not enough. Id. at 2551; Chicago
Teachers Union, 2015 WL 4667904, at *4. Suchanek v. Strum
Foods, Inc., 764 F.3d 750, 755 (7th Cir. 2014). The claims must
depend upon a common contention that is capable of classwide resolution. Wal-Mart, 131 S. Ct. at 2551; Chicago Teachers
Union, 2015 WL 4667904, at *4. In this context, class-wide
resolution means that determining the truth or falsity of the
common contention will resolve an issue that is central to
the validity of each claim. Wal-Mart, 131 S. Ct. at 2551. The
majority in Wal-Mart summed this up by stating:
What matters to class certification … is not the
raising of common ‘questions'—even in
droves—but, rather the capacity of a classwide
proceeding to generate common answers apt to
drive the resolution of the litigation. Dissimilarities within the proposed class are what
have the potential to impede the generation of
common answers.
Id. at 2551 (emphasis in original) (internal citations omitted).
In Wal-Mart, the Supreme Court emphasized that it was
looking for “some glue holding the alleged reasons for all
those decisions together, … [such] that examination of all the
class members’ claims for relief will produce a common answer to the crucial question why was I disfavored.” Id. at 2552
(emphasis in original).
Case: 14-3018
22
Document: 51
Filed: 08/31/2015
Pages: 36
No. 14-3018
Bell proposes that the common question is as follows:
Did PNC have an unofficial policy or practice that required
employees class-wide to work off-the-clock overtime hours?
PNC argues that before the district court could properly certify a class based on the unofficial policy theory, Bell was required to actually prove—not merely allege—the existence
of such a policy. In this sense, PNC seems to agree that the
question posed is common to all parties. After all, commonality is satisfied when “determination of [the] truth or falsity
will resolve an issue that is central to the validity of each one
of the claims in one stroke.” Wal-Mart, 131 S. Ct. at 2551.
Why would the plaintiffs need to prove the truth of their allegation that PNC has an unofficial policy of refusing to pay
overtime if it was not central to the validity of each one of
the claims? PNC, however, alleges that the answer to this
question will not resolve the question “in one stroke,” but
we disagree for reasons we will explain below when we discuss the issue of predominance. And in fact, in a similar
case, this Circuit has already concluded that a proposed class
of bank employees maintained a common claim that the
bank enforced an unlawful, unwritten policy of denying
employees earned overtime compensation and that “[t]his
unofficial policy is the common answer that potentially
drives the resolution of this litigation.” Ross v. RBS Citizens,
N.A., 667 F.3d 900, 909 (7th Cir. 2012), cert. granted, judgment
vacated, 133 S. Ct. 1722 (2013).3 PNC argues that Ross can be
3
On appeal, the Supreme Court granted certiorari, vacated, and remanded the Ross decision. See RBS Citizens, N.A. v. Ross, 133 S. Ct. 1722
(2013) (“Judgment vacated, and case remanded to the United States
Court of Appeals for the Seventh Circuit for further consideration in
light of Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013).”). The case settled
before the Seventh Circuit could address the Supreme Court's order. See
Case: 14-3018
Document: 51
Filed: 08/31/2015
No. 14-3018
Pages: 36
23
distinguished because the “district court weighed the evidence and concluded that the plaintiffs had proven the existence of an unofficial policy.” PNC Brief, p.24 (emphasis in
original). PNC does not cite to a particular page of the Ross
order to support this contention, and, in fact, the district
court’s language in Ross suggests that the mounting evidence proved not that the bank had the policy, but that the
common question would predominate over individual issues:
The court concludes, however, that the number
of people making the same allegations across
branches, managers, positions, and time frames
has reached a point from which it may be inferred
that the common issue of whether a company-wide
policy existed to deny overtime will predominate
over the variations in methods used to accomplish the alleged policy. The complexity of
proof is a problem plaintiffs will have to address in presenting their case on the merits but
it does not negate predominance of the central,
common issue.
Tamas v. Family Video Movie Club, Inc., No. 11 C 1024, 2013 WL 4080649, at
*6 (N.D. Ill. Aug. 13, 2013). As the district court explained, the Supreme
Court’s order, however, does not negate the precedential authority or
persuasiveness of the holding and reasoning in Ross, as orders granting
certiorari, vacating, and remanding are not reversals and do not indicate
that the lower court’s decision was erroneous. See Order, pp.19-20, n.7.
Case: 14-3018
24
Document: 51
Filed: 08/31/2015
Pages: 36
No. 14-3018
Ross v. RBS Citizens, N.A., No. 09-CV-5695, 2010 WL 3980113,
at *6 (N.D. Ill. Oct. 8, 2010) (emphasis ours), affirmed, 667
F.3d 900 (2012).
We need not spend too much time analyzing whether the
district court in Ross did or did not come to a conclusion
about the merits of the question, because our case law is
clear that such proof is not required, only that it “is capable of
proof at trial through evidence that is common to the class rather than individual to its members.” Messner v. Northshore
Univ. HealthSystem, 669 F.3d 802, 818 (7th Cir. 2012).
Cases in which low-level managers use their given discretion to make individual decisions without guidance from
an overarching company policy do not satisfy commonality
because the evidence varies from plaintiff to plaintiff. See
Wal-Mart, 131 S. Ct. 2553–55; Bolden v. Walsh Constr. Co.,
688 F.3d 893, 896 (7th Cir. 2012). Bell, on the other hand, has
offered evidence that the denial of overtime pay came from a
broader company policy and not from the discretionary decisions of individual managers. Bell proffered evidence that
she was told not to record overtime. Her branch manager,
Letticia Flores submitted an affidavit that stated that PNC
regularly required off-the-clock work. And at least one regional manager, Christina Romis, told branch managers not
to record overtime worked by their employees. Moreover
the court chronicled plentiful evidence suggesting that many
employees worked overtime without proper compensation.
We conclude therefore, that the question “Did PNC have
an unofficial policy or practice that required employees
class-wide to work off-the-clock overtime hours?” is indeed
a common one that is capable of class-wide resolution. Our
Case: 14-3018
Document: 51
No. 14-3018
Filed: 08/31/2015
Pages: 36
25
discussion of predominance that follows will add further
fodder to this conclusion.
B. Predominance
Even after a proposed class has met the requirements of
Rule 23(a), however, a Rule 23(b)(3) class must also demonstrate that “questions of law or fact common to the class
members predominate over any questions affecting individual members.” Fed. R. Civ. P. 23(b)(3). (The Rule 23(b)(3) requirement regarding superiority is not at issue in this appeal). The burden is on the plaintiffs to demonstrate, by a
preponderance of the evidence, that they have met each requirement of Rule 23. Messner, 669 F.3d at 811.
To support its contention that Bell was required to actually prove—not merely allege—the existence of such a policy,
PNC cites to the part of the Wal-Mart decision that states,
that “a party seeking class certification … must be prepared
to prove that there are in fact sufficiently numerous parties,
common questions of law or fact, etc.” PNC Brief, p.17, citing
Wal-Mart, 131 S. Ct. at 2551 (emphasis by PNC).
PNC, however, has conflated two inquiries. A proposed
class of plaintiffs must prove the existence of a common question, and one that predominates over individual questions,
but it need not prove that the answer to that question will be
resolved in its favor. On this point, the Supreme Court in
Amgen could not have been more clear: “Rule 23(b)(3) requires a showing that questions common to the class predominate, not that those questions will be answered, on the merits, in favor of the class.” Amgen Inc. v. Ct. Ret. Plans and
Trust Funds, 133 S. Ct. 1184, 1191 (2013). “[T]he office of a
Rule 23(b)(3) certification ruling is not to adjudicate the case;
Case: 14-3018
26
Document: 51
Filed: 08/31/2015
Pages: 36
No. 14-3018
rather, it is to select the method best suited to adjudication of
the controversy fairly and efficiently.” Id. at 1191; Chicago
Teachers Union, 2015 WL 4667904, at *14. The Seventh Circuit
has been as unequivocally clear as the Supreme Court in
Amgen, warning that “In conducting this analysis, the court
should not turn the class certification proceedings into a
dress rehearsal for the trial on the merits.” See Messner,
669 F.3d at 811; See also Schleicher v. Wendt, 618 F.3d 679, 685
(7th Cir. 2010); Kohen v. Pac. Inv. Mgmt. Co., 571 F.3d 672, 677
(7th Cir. 2009); Payton v. County of Kane, 308 F.3d 673, 677
(7th Cir. 2002). In sum, the proposed class must prove compliance with Rule 23, and need not prove the merits of the
underlying common question. The very language of the quotations from the Supreme Court and this court upon which
the plaintiff relies unequivocally support this notion. The
court in Wal-Mart stated that, “A party seeking class certification must affirmatively demonstrate his compliance with
the Rule [23]—that is, he must be prepared to prove that
there are in fact sufficiently numerous parties, common
questions of law or fact, etc.” Wal-Mart, 131 S. Ct. at 2551
(emphasis ours). The language of our decision in Messner is
the same: “[p]laintiffs bear the burden of showing that a
proposed class satisfies the Rule 23 requirements. Messner,
669 F.3d at 811. (emphasis ours).
Thus, the default rule is that a court may not resolve merits questions at the class certification stage. “Rule 23 grants
courts no license to engage in free-ranging merits inquiries
at the certification stage. Merits questions may be considered
to the extent—but only to the extent—that they are relevant
to determining whether the Rule 23 prerequisites for class
certification are satisfied. Amgen, 133 S. Ct. at 1194–95. See
also Halliburton Co. v. Erica P. John Fund, Inc., 134 S. Ct. 2398,
Case: 14-3018
No. 14-3018
Document: 51
Filed: 08/31/2015
Pages: 36
27
2407 (2014) (finding that price impact evidence “does not
bear on the question of predominance under Rule 23(b)(3),
and is thus appropriately considered only on the merits after
the class has been certified.”); Schleicher, 618 F.3d at 685 (7th
Cir. 2010) (“a court may take a peek at the merits before certifying a class, … [but] this peek must be limited to those aspects of the merits that affect the decisions essential under
Rule 23.”).
This does not mean, however, that on issues affecting
class certification, a court must simply assume the truth of
the matters as asserted by the plaintiff. If there are material
factual disputes that bear on the requirements for class certification, the court must “receive evidence if only by affidavit and resolve the disputes before deciding whether to
certify the class.” Szabo v. Bridgeport Machs., Inc., 249 F.3d
672, 676 (7th Cir. 2001). And so, for example, a judge might
need to determine if a class really has 10,000 members as a
plaintiff alleges or only 10, as alleged by defendants. Id. This
is what the Wal-Mart court meant when it said that Rule 23
“does not set forth a mere pleading standard.” Wal-Mart,
131 S. Ct. at 2551. Plaintiffs bear the burden of showing that
a proposed class satisfies the Rule 23 requirements, but they
need not make that showing to a degree of absolute certainty. Messner, 669 F.3d at 811.
In other words, a court weighing class certification must
walk a balance between evaluating evidence to determine
whether a common question exists and predominates, without weighing that evidence to determine whether the plaintiff class will ultimately prevail on the merits. The distinction
between proving evidence of a common question that predominates and proving evidence of the merits can be
Case: 14-3018
28
Document: 51
Filed: 08/31/2015
Pages: 36
No. 14-3018
demonstrated by comparing two opinions from this Circuit.
In Mejdrech v. Met-Coil Sys. Corp., 319 F.3d 910, 911 (7th Cir.
2003), the plaintiffs proposed a common question as to
whether the defendant leaked chemicals in violation of law,
and whether those chemicals reached the soil and groundwater beneath the homes of the class members. The plaintiffs
in that case presented a theory backed by credible evidence
that there was a single source of contamination by a single
defendant and the claim was that a container containing
harmful chemicals leaked and contaminated the water supply, thus harming the plaintiffs. Id. at 911. The plaintiffs did
not prove that the container leaked, nor that the ground water was contaminated, but rather presented sufficient evidence of a theory that was common to the class and predominated over individual issues. Id. at 911–12. In contrast, in
Parko, property owners attempted to certify a class of homeowners who claimed that the groundwater under their
homes had been contaminated by chemicals from a particular defendant and its predecessors and subsidiaries. Parko v.
Shell Oil Co., 739 F.3d 1083, 1084 (7th Cir. 2014). But unlike in
Mejdrech, the plaintiffs did not set forth any evidence that
any particular defendant was the source of the pollution,
that the groundwater was even polluted, that it provided a
source of water for the plaintiffs, and that the plaintiffs experienced any diminution in property value. Id. at 1085–86. In
other words, it was “not even clear that the plaintiffs had
identified a common issue.” Id. at 1086 (emphasis in original).
In this case the district court sifted through voluminous
evidence that pointed to a common question as to whether
PNC had an unwritten practice or policy that required employees class-wide to work off-the-clock overtime hours. In
fact, the district court went so far as to lean toward an analy-
Case: 14-3018
Document: 51
Filed: 08/31/2015
No. 14-3018
Pages: 36
29
sis of the merits stating that “there is evidence in the record
to the contrary [of PNC’s claim] that supports Bell’s contention that PNC has an ‘unofficial policy or practice that required employees class-wide to work off-the-clock overtime
hours.’” Order, p.17. Bell and Flores both stated that Christina Romis, a PNC regional manager, told them that PNC had
a policy against paying for overtime work. R. 65, apx.3, 10.
PNC’s investigation reports reveal that employees from at
least six other branches alleged that their managers told
them that PNC had an unofficial policy against compensating overtime work. See R. 66, apx.364 (Buffalo Grove); R. 67,
apx.599 (Elgin); R. 66, apx.475 (87th & Cottage Grove); R. 67,
apx.623 (Loves Park); R. 67, apx.652–53 (North Aurora); R.
67, apx.738, 731 (Wheaton–Danada).
PNC makes a convincing argument that the answer to
Bell’s alleged common question will not resolve a key issue
for all plaintiffs. PNC asserts that if the answer to the question “Does PNC have an unofficial policy of denying overtime pay?” is “no,” then over 250 employees at 26 different
branches are left with nothing in common and each class
member must prove his or her claim individually. As the
court noted in Amgen, a common question predominates
over individual claims if “a failure of proof on the [common
question] would end the case” and the whole class “will
prevail or fail in unison.” Amgen, 133 S. Ct. at 1191. And, in
the context of commonality, the Wal-Mart court stated that a
common question is one in which the answer to the question
“will resolve an issue that is central to the validity of each
one of the claims in one stroke.” Wal-Mart, 131 at 2551.
If, to make a prima facie showing on a given
question, the members of a proposed class will
Case: 14-3018
Document: 51
30
Filed: 08/31/2015
Pages: 36
No. 14-3018
need to present evidence that varies from
member to member, then it is an individual
question. If the same evidence will suffice for
each member to make a prima facie showing,
then it becomes a common question.
Messner, 669 F.3d at 815.
PNC argues that if a court determines that PNC does not,
in fact, have the alleged unwritten policy, then “resolution of
that issue would have no bearing whatsoever on these individual claims.” (PNC reply brief, p.12). Each class member
who chooses to bring a claim for unpaid overtime, PNC argues, would still be required to prove each element of the
off-the-clock claim: that they worked overtime, that their
manager knew or had reason to know of the work, and that
it caused them to work more than 40 hours in a week.
PNC, however, misunderstands the nature of the proposed class’ claim. The class’ claim is that they have been
denied overtime pay because of an unofficial policy that either prohibited or discouraged PNC employees from seeking overtime pay. If, on the merits, the district court were to
determine that there was no such unofficial policy (and indeed it is possible, as we make no contentions about the prospects of victory on the merits, see Chicago Teachers Union,
2015 WL 4667904, at *14) then all of the class members’
claims would fail in unison. They may have an individual
claim that remains, but it would be based on an entirely different legal theory. Instead, the individual claim would be
one by individual Employee A alleging that her manager,
Manager B, forced her to work off-the-clock without pay.
Case: 14-3018
No. 14-3018
Document: 51
Filed: 08/31/2015
Pages: 36
31
Thus the class claim that PNC had an unofficial policy
that left it liable under the Fair Labor Standards Act and Illinois law would prevail or fail for the class as a whole. “In no
event will the individual circumstances of particular class
members bear on the inquiry.” Amgen, 133 S. Ct. at 1191. It
makes no difference to the class claim as a whole how many
hours of off-the-clock work each employee worked or the
intent of the manager. These would be issues for the portion
of the suit in which individual damages are assessed—an
issue we will discuss below. In other words, “[a] failure of
proof on the common question … ends the litigation and thus
will never cause individual questions of reliance or anything
else to overwhelm questions common to the class.” Amgen,
133 S. Ct. at 1196.
It is true that the alleged violations were eventually
“cured” for many employees—in many cases PNC eventually paid employees for overtime work, or disciplined or terminated non-complying managers. But PNC’s efforts to cure
errors does not resolve all of the questions regarding liability. Even when cured, the evidence could leave a court resolving the case on the merits to resolve whether (a) the efforts to cure were necessary because of a previous unwritten
policy, (b) a good faith violation absolved PNC of liability,
(3) the violations were willful and thus exposed PNC to
greater liability, (4) PNC’s written policy is a defense.
The rules for class certification work as well in PNC’s favor as they do in Bell’s. Class certification “provides a single
proceeding in which to determine the merits of the plaintiffs’
claims, and therefore protects the defendant from inconsistent adjudications.” 5 Moore's Federal Practice §23.02
(1999). If the district court finds that PNC did not have the
Case: 14-3018
Document: 51
32
Filed: 08/31/2015
Pages: 36
No. 14-3018
alleged unwritten policy, then all of the plaintiffs’ claims fail
and the class would be decertified.
This is not an unknown process. When the class is decertified, the suit becomes an individual action, leaving the individual plaintiffs to file their claims on their own. See, e.g.,
Culver v. City of Milwaukee, 277 F.3d 908, 913–14 (7th Cir.
2002). Rule 23(e) which requires that notice of a proposed
dismissal be given to all members of the class anticipates just
such a scenario so that class members know that the statute
of limitations, that had been tolled during the pendency of
the class action, will begin running again. Id. at 914.
C. Individualized relief
The fact that the plaintiffs might require individualized
relief or not share all questions in common does not preclude certification of a class. Chicago Teachers Union, 2015 WL
4667904, at *11; In re IKO Roofing Shingle Prods. Liab. Litig.,
757 F.3d 599, 602 (7th Cir. 2014) (commonality of damages is
not required in class action suit); Pella Corp. v. Saltzman, 606
F.3d 391, 394 (7th Cir. 2010) (the need for individual proof
alone does not necessarily preclude class certification); Arreola v. Godinez, 546 F.3d 788, 801 (7th Cir. 2008); Allen v. Int’l
Truck and Engine Corp., 358 F.3d 469, 471–72 (7th Cir. 2004).
Rule 23(b) requires only common evidence and common
methodology, not common results. Messner, 669 F.3d 802.
“Neither Rule 23 nor any gloss that decided cases have added to it requires that every question be common. It is routine
in class actions to have a final phase in which individualized
proof must be submitted.” Suchanek, 764 F.3d at 756. See also
Johnson v. Meriter Health Servs. Employee Ret. Plan, 702 F.3d
364, 369 (7th Cir. 2012) (In a 23(b)(2) class action, “a declaration is a permissible prelude to a claim for damages.”).
Case: 14-3018
No. 14-3018
Document: 51
Filed: 08/31/2015
Pages: 36
33
If the class prevails in demonstrating that PNC had an
unofficial policy or practice that required employees classwide to work off-the-clock overtime hours, scores of separate trials might be necessary to determine which class
members were actually adversely affected by the policy and
if they were, what loss each class member sustained. At least
it will not be necessary in each of those trials to determine
whether PNC had an illegal policy of denying pay for offthe-clock work. This is precisely parallel to our conclusion in
McReynolds v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,
672 F.3d 482, 491 (7th Cir. 2012) (“[S]hould the claim of disparate impact prevail in the class-wide proceeding, hundreds of separate trials may be necessary to determine which
class members were actually adversely affected by one or
both of the practices and if so what loss each class member
sustained … But at least it wouldn’t be necessary in each of
those trials to determine whether the challenged practices
were unlawful.”) See also Jamie S. v. Milwaukee Pub. Sch.,
668 F.3d 481, 505–06 (7th Cir. 2012) (Rovner, J. dissenting)
(describing a second step process in class action litigation in
which adversarial proceedings were held to determine
which potential class members had been harmed by an illegal employment rule).
If the district court finds that PNC has an official policy
of denying overtime pay, it is likely that a certain number of
class members were not harmed by the policy because they
never worked beyond their forty-hour week. This alone does
not preclude class certification. Plaintiffs need not prove that
every member of the proposed class has been harmed before
the class can be certified. Suchanek, 764 F.3d at 757. A class
will often include persons who have not been injured by the
defendant's conduct, but this possibility or, indeed inevita-
Case: 14-3018
34
Document: 51
Filed: 08/31/2015
Pages: 36
No. 14-3018
bility, does not preclude class certification. Kohen, 571 F.3d at
677 (7th Cir. 2009). “If very few members of the class were
harmed, that is an argument not for refusing to certify the
class but for certifying it and then entering a judgment that
would largely exonerate” the defendant. Suchanek, 764 F.3d
at 757–58 (internal citations omitted). “If, however, a class is
defined so broadly as to include a great number of members
who for some reason could not have been harmed by the defendant’s allegedly unlawful conduct, the class is defined too
broadly to permit certification.” Messner, 669 F.3d at 824. The
important distinction then is “between class members who
were not harmed and those who could not have been
harmed.” Id. at 825. For example, in this case, managerial
employees who are exempt from overtime hour laws could
not have been harmed by the policy. Those employees who
could have been harmed by the policy, but were, in fact, not
harmed, can be excluded during a later determination on the
merits.
For example, as described in Jamie S., after this court declared that United Airlines “no married female flight attendant” rule violated Title VII’s ban on sex discrimination,
any woman who had lost her position because of the rule
became entitled to relief. But these class members were difficult to identify. Many had silently resigned their positions in
contemplation of the rule rather than formally protesting or
waiting for the airline to discharge them, so there was no
record as to why any particular female flight attendant left.
Consequently, adversarial hearings were held before special
masters in order to establish whether each claimant in fact
left her position because of the illegal rule. See Jamie S.,
668 F.3d at 505–06 (Rovner, J. dissenting) (describing facts
and processes from McDonald v. United Air Lines, Inc., 587
Case: 14-3018
No. 14-3018
Document: 51
Filed: 08/31/2015
Pages: 36
35
F.2d 357 (7th Cir. 1978) and Sprogis v. United Air Lines, Inc.,
444 F.2d 1194 (7th Cir. 1971)).
PNC assumes that Rule 23 requires every class action to
resolve all liability issues for every class member. “Rule
23(b)(3), however, does not require a plaintiff seeking class
certification to prove that each element of her claim is susceptible to classwide proof.” Amgen, 133 S. Ct. at 1196. And
our cases demonstrate that commonality as to every issue is
not required for class certification. In Suchanek, we determined that the question as to whether coffee packaging misled consumers was common despite the fact that individual
consumers saw different packaging and may have been
harmed to varying extents or not at all. Suchanek, 764 F.3d at
757. In IKO, we upheld certification of a class despite the fact
that different plaintiffs had different experiences with the
sub-standard roofing tiles. IKO, 757 F.3d at 601–02. And in
Pella, we certified a class despite the fact that plaintiffs’ experiences with defective Pella windows may have been caused
by many individual variances such as specific conditions
and installation, noting that the fact that class members still
must prove individual issues of causation and damages
would not prevent class certification. Pella Corp., 606 F.3d at
394.
It is true that some employees have been made whole as
a result of the PNC investigation. It is entirely possible,
however, that these employees were still injured and could
collect damages beyond their actual wages. Under both Illinois law and the Fair Labor Standards Act, a good faith violation does not absolve the employer of liability. 820 ILCS
105/12; 29 U.S.C. §§216, 260. Nor does an agreement between
the employee and the employer to work for less than the re-
Case: 14-3018
36
Document: 51
Filed: 08/31/2015
Pages: 36
No. 14-3018
quired wage. 820 ILCS 105/12(a). Both Illinois law and the
Fair Labor Standards Act distinguish between willful violations and violations made in good faith for purposes of determining the extent of an employer’s liability. 820 ILCS
105/12; 29 U.S.C. §§216, 260. Whether or not PNC had an unlawful policy denying required compensation is relevant to
whether PNC willfully denied overtime pay to its employees, or whether such denials occurred despite a good faith
attempt to comply with the statute. These questions are, in
turn, relevant to the extent of damages under Illinois law
and the Fair Labor Standards Act. See 820 ILCS 105/12;
29 U.S.C. §§216, 260. In short, many issues remain unanswered and the district court was correct to conclude that a
class action would be an appropriate and efficient pathway
to resolution.
The district court properly considered each of the issues
and did not abuse its discretion in certifying the class. The
decision of the district court is therefore AFFIRMED.
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?