Taylor v. Autozone, Inc.

Filing 319

ORDER granting 312 Plaintiffs' motion to confirm collective class certification. Signed by Senior Judge Frederick J Martone on 11/10/2014.(ALS)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Michael L. Taylor; Dilawar Khan; Volena)
Glover-Hale; Manuel Montoya, on behalf)
of themselves and other persons similarly)
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situated,
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Plaintiffs,
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vs.
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AutoZone Inc., a Tennessee corporation;)
AutoZone Inc., a Nevada corporation;)
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AutoZoners LLC,
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Defendants.
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No. CV-10-8125-PCT-FJM
ORDER

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Before the court is plaintiffs’ motion to confirm collective certification (doc. 312),
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defendants’ response (doc. 317), and plaintiffs’ reply (doc. 318).
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I.
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On May 24, 2011, we conditionally certified a class of current and former AutoZone
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Store Managers whom AutoZone classifies as exempt from the overtime pay requirement
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under the executive exemption of the Fair Labor Standards Act, 29 U.S.C. § 213(a)(1) (doc.
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67). We also granted summary judgment in favor of AutoZone, concluding that it had
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established that the Store Manager position meets each element of the FLSA executive
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exemption. See 29 C.F.R. § 541.100(a); (doc. 278). On appeal, the United States Court of
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Appeals for the Ninth Circuit reversed and remanded for trial, concluding that “conflicting

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evidence” prevents disposition of Plaintiffs’ FLSA claims as a matter of law. Plaintiffs now

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move to confirm certification of the plaintiffs’ claims as a collective action.

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II.

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The Fair Labor Standards Act (“FLSA”) requires that employers pay their employees

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time and a half for hours worked in excess of forty hours per week, unless the employees fall

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into one of the statutory exemptions. 29 U.S.C. § 207(a)(1). Exempt employees include

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“any employee employed in a bona fide executive . . . capacity.” Id. § 213(a)(1). The FLSA

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authorizes collective actions against an employer “by any one or more employees for and in

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behalf of himself or themselves and other employees similarly situated.” 29 U.S.C. § 216(b).

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A collective action allows for the “efficient resolution in one proceeding of common issues

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of law and fact arising from the same alleged activity.” Hoffmann-LaRoche, Inc. v. Sperling,

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493 U.S. 165, 170, 110 S. Ct. 482, 486 (1989).

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Applying a two-tiered approach, we have already conditionally certified a class of

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Store Managers and notice was given (doc. 67 as amended by doc. 87). Subsequently, 1,476

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current or former AutoZone Store Managers opted into this action under 29 U.S.C. § 216(b).

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At step two–the decertification stage–we apply a more rigorous analysis, with the benefit of

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a more fully developed record, to determine whether the plaintiffs are “similarly situated”

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to justify proceeding as a collective action. Plaintiffs must “provide substantial evidence to

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demonstrate” that they are “similarly situated” to the individuals whom they intend to

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represent. Reed v. County of Orange, 266 F.R.D. 446, 449 (C.D. Cal. 2010); Anderson v.

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Cagle’s, Inc., 488 F.3d 945, 953 (11th Cir. 2007).

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Similar does not mean identical. Grayson v. K Mart Corp., 79 F.3d 1086, 1096 (11th

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Cir. 1996). “The FLSA does not require class members to hold identical positions.” Morgan

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v. Family Dollar Stores, Inc., 551 F.3d 1233, 1261-62 (11th Cir. 2008). Instead, a named

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plaintiff may show that putative plaintiffs are similarly situated when their claims are

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“unified by common theories of defendants’ statutory violation, even if the proofs of these

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theories are inevitably individualized and distinct.” O’Brien v. Ed Donnelly Enters., 575
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F.3d 567, 585 (6th Cir. 2009).

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Although the “similarly situated” requirement is more stringent at the second stage,

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it remains less stringent than the requirement that common questions predominate in

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certifying class actions under Rule 23, Fed. R. Civ. P. “All that need be shown . . . is that

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some identifiable factual or legal nexus binds together the various claims of the class

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members in a way that hearing the claims together promotes judicial efficiency and comports

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with the broad remedial policies underlying the FLSA.” Hutton v. Bank of America, 2007

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WL 5307976, at * 1 (D. Ariz. Mar. 31, 2007); O’Brien, 575 F.3d at 585 (Plaintiffs are

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similarly situated when “they suffer from a single, FLSA-violating policy, and when proof

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of that policy . . . proves a violation as to all the plaintiffs.”). On the other hand, “where

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there appears to be substantially different employment experiences among the various

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[claimants], the procedural advantages of a collective action cannot be realized.” Hernandez

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v. United Auto Credit Corp., 2010 WL 1337702, *5 (N.D. Cal. April 2, 2010).

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III.

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In determining whether plaintiffs are “similarly situated,” we consider factors such

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as (1) disparate factual and employment settings of the individual plaintiffs; (2) whether

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defendants’ various defenses will require individual proof; and (3) fairness and procedural

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considerations. Leuthold v. Destination Am., Inc., 224 F.R.D. 462, 467 (N.D. Cal. 2004).

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Ultimately, the issue is whether plaintiffs are similarly situated such that the key elements

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of the FLSA claim can be addressed through representational proof.

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The executive exemption applies to an employee (1) who is compensated on a salary

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basis of not less than $455 per week; (2) whose primary duty is management; (3) who

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“customarily and regularly directs the work of two or more other employees”; and (4) who

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“has the authority to hire or fire other employees or whose suggestions and recommendations

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. . . are given particular weight.” 29 C.F.R. § 541.100(a). The primary duty analysis is based

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on the totality of the circumstances, “with the major emphasis on the character of the

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employee’s job as a whole.” 29 C.F.R. § 541.700(a).

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AutoZone argues that the propriety of the Store Managers’ exempt executive
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classification hinges on the “intensely factual nature” of their individual job duties, which

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would require individualized scrutiny, resulting in hundreds of mini-trials, and that without

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this individualized scrutiny, it will be deprived of its ability to present legitimate defenses

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to the asserted claims. We disagree.

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A.

Disparate Factual and Employment Settings of the Individual Class

Members

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When comparing the factual and employment settings of class members as part of a

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similarly situated inquiry, we consider factors such as whether plaintiffs had differing job

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titles or duties, worked in different geographic locations, worked under different supervisors,

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or allege different types of violative conduct. Reed, 266 F.R.D. at 450.

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AutoZone’s nationwide stores are operated in a highly standardized manner. The

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country is divided into geographical divisions, regions, and districts, with each district

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containing between 8 and 10 stores, with an average of 8 to 11 employees in each store.

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Each region has a Regional Manager, and each district has a District Manager who directly

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supervises the Store Manager in each of the stores within a district.

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AutoZone admits that it does not classify Store Managers based on individual

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performance, but instead classifies every Store Manager as exempt under the executive

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exemption.1 AutoZone’s own documents treat the Store Manager position, company-wide,

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as a singular job category with consistent essential features. Though not dispositive, this

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common classification supports a conclusion that class members are similarly situated.

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“[C]ourts have long found that comprehensive uniform policies detailing the job duties and

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responsibilities of employees carry great weight for certification purposes.” In re Wells

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Fargo Home Mortg. Overtime Pay Litig., 571 F.3d 953, 958 (9th Cir. 2009) (applying the

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more rigorous Fed. R. Civ. P. 23(b)(3) analysis).

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Every Store Manager has the same job title and same job description. Each Store

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AutoZone does not classify California Store Managers as exempt and therefore these
Managers are not included in the conditionally certified class.
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Manager receives a base salary and no paid overtime regardless of hours worked. Each is

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subject to the same corporate labor model that capitalizes on Store Manager’s exempt status

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by transferring non-managerial duties to Store Managers to perform during unpaid overtime

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hours.

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Store Managers are also alike in that all hiring and firing authority rests with the

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District and Regional Managers, and not the Store Managers. Initial job applications are

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processed by a computerized eHire system. A Store Manager follows a preset script in

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interviewing a prospective employee, filing out a checklist, and submitting the form to the

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District Manager who then evaluates and hires candidates. (Doc. 265 ¶¶ 15(d), 18, 21). All

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Store Managers are similar in their inability to authorize raises or promotions, to close stores

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in emergencies, or to make any decisions concerning pricing or inventory. (Doc. 265 ¶

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13(j)). A computerized store management system allows District Managers to closely

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monitor store sales, set individual employee’s schedules, and generate task lists. (Doc. 265

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¶¶ 6(c)(e), 13(f)-(g)).

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Plaintiffs’ legal claims—that defendants violated the FLSA by improperly classifying

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all Store Managers as exempt “executives” even though their primary duty was not serving

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as an executive—are substantially similar for all Plaintiffs. Representational proof may

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establish among other things (1) AutoZone’s universal classification of Store Managers with

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the same job duties; (2) the average amount of time Store Managers spend on managerial

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versus non-managerial duties; (3) restrictions on Store Manager’s authority to manage stores;

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(4) the amount of supervision of Store Managers by District Managers; and (5) Store

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Managers’ limited authority to give pay raises or promotions, or to close stores in

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emergencies, or choose vendors.

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The uniformity results in large part from AutoZone’s companywide policies

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concerning job descriptions and job duties, as well as the standardization, automation, and

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centralized tracking and control of their day-to-day activities.

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employment experience is therefore substantially similar regardless of geographical location.

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Based on testimony of several individual Store Managers, AutoZone contends that too
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A Store Manager’s

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many disparities exist between class members’ actual employment experiences to permit a

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finding that Store Managers are universally misclassified. For example, AutoZone cites to

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two Store Managers who testified that they do not believe that they were “in charge” of their

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stores. However, an individual Store Manager’s own estimation of his primary duties, or

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whether he believed he was “in charge” of the store, is not dispositive of his primary duties

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as a Store Manager. AutoZone’s focus on an individualized analysis ignores the FLSA’s

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“major emphasis on the character of the employee’s job as a whole.” 29 C.F.R. § 541.700(a).

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Defendants also rely on a survey circulated to the opt-in class members by Plaintiffs’

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expert, David Lewin, Ph.D., along with an “expert analysis” of the answers received from

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1,057 of those solicited. Defendants contend that the survey results illustrate why the

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plaintiffs’ class claim is not amenable to representative proof, and in fact suggest that at least

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a substantial percentage of the class was properly classified as exempt. But “[j]ust because

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the inquiry is fact-intensive does not preclude a collective action where plaintiffs share

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common job traits.” Morgan, 551 F.3d at 1263. While some AutoZone Store Managers may

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report different experiences, there is no evidence that Store Managers’ jobs differ in essential

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character.

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It is indisputable that the putative class members share uniform job traits and

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responsibilities, compensation incentives, training, and evaluation criteria. Slight variations

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among individual Store Manager’s experiences are not enough to preclude a collective action

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under the FLSA. It will be up to the jury to weigh the evidence to determine whether the

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essential character of the Store Manager’s job is executive or non-executive, but the essential

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character of the job can be established by representational proof.

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B.

Individualized Defenses

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The second factor we consider on decertification is whether AutoZone asserts

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defenses that would require individualized proof. Reed, 266 F.R.D. at 460. Defendants

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contend that, because there are significant differences among the job duties of the putative

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class members, defenses to the Plaintiffs’ claim will require individualized proof. This is

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essentially the same argument that the class members’ job duties differ. Again, the FLSA
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does not require class members to hold identical positions. The “major emphasis [is] on the

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character of the employee’s job as a whole.” 29 C.F.R. § 541.700(a).

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We have already concluded that the putative class members are similarly situated with

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respect to the essential character of their job duties. Therefore, an individualized assessment

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of each Store Manager’s job duties, and accordingly AutoZone’s defenses, is not necessary.

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C.

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In evaluating the third factor, we consider the primary objectives of a collective

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action: (1) to lower plaintiffs’ costs through the pooling of resources, and (2) to limit the

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controversy to one proceeding so as to efficiently resolve common issues of law and fact

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Fairness and Manageability

without prejudice to either party. Reed, 266 F.R.D. at 462.

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Here there exists a significant, identifiable factual and legal nexus that binds together

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the various claims of the class members in a way that hearing the claims together promotes

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judicial efficiency and comports with the broad remedial policies underlying the FLSA.

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Hutton v. Bank of Am., 2007 WL 5307976, at *1 (D. Ariz. Mar. 31, 2007).

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All potential plaintiffs were affected identically by defendants’ decision to classify the Store

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Managers as exempt from the overtime pay requirement. A policy or practice that is

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common to all potential Plaintiffs is a strong factor in favor of certification. Moreover, the

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evidence demonstrates that a Store Manager’s primary duties, as well as their authority to

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hire and fire are substantially similar to each other, such that proceeding as a collective

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action is both efficient and fair. Plaintiffs have sufficiently shown a factual nexus between

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all Store Managers to justify proceeding as a collective action.
III. CONCLUSION

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IT IS ORDERED GRANTING Plaintiffs’ motion to confirm collective class
certification (doc. 312).
DATED this 10th day of November, 2014.

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