Daniels v. Aeropostale West, Inc et al

Filing 37

ORDER GRANTING CONDITIONAL CERTIFICATION OF FLSA COLLECTIVE ACTION by Judge William Alsup [granting 25 Motion to Certify Class]. (whasec, COURT STAFF) (Filed on 4/24/2013)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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For the Northern District of California

United States District Court

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PORTIA DANIELS, on behalf of herself
and all others similarly situated,
No. C 12-05755 WHA
Plaintiff,

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v.
AÉROPOSTALE WEST, INC., a Delaware
corporation, AÉROPOSTALE, INC., a
Delaware corporation, and DOES 1 through
10, inclusive,

ORDER GRANTING
CONDITIONAL
CERTIFICATION OF FLSA
COLLECTIVE ACTION

Defendants.
/
INTRODUCTION

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In this failure-to-pay-overtime action, plaintiff moves for conditional certification of a

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collective action under the FLSA. To the extent stated below, plaintiff’s motion is GRANTED.

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STATEMENT
Plaintiff Portia Daniels was employed for four years by defendant Aéropostale West,

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Inc., as a non-exempt store manager (Compl. ¶ 13). Defendants are a nationwide, shopping

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mall-based specialty retailer of casual apparel and accessories (id. at ¶ 15). Within the last three

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years of plaintiff’s employment, she allegedly consistently worked in excess of forty hours per

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week without getting paid the appropriate overtime compensation under the FLSA, and she

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received several non-discretionary bonuses that were not included in her regular rate of pay

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when she worked overtime (id. at ¶ 14). Defendants use a uniform payroll system for all of their

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employees nationwide that calculates the employees’ rate of pay, hours worked, and earnings

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paid (Br. 4). Plaintiff alleges that defendants had a uniform, nationwide practice of failing to

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include earned bonus amounts into non-exempt store employees’ regular rate of pay for overtime

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purposes, which violated the FLSA (id. at 2).

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In March 2011, defendants’ employees in California commenced a civil action in the

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Los Angeles Superior Court asserting California wage-and-hour claims (La Tina Sankey v.

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Aéropostale, Inc., No. BC457468) (id. at 2, 6). There, Plaintiff La Tina Sankey included a claim

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for failure to include bonus payments in the regular rate of pay for overtime hours California

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management employees worked during the time period between March 2007 to the present
(Schumacher Decl. ¶ 2). Plaintiff’s counsel there are counsel here, too (id. at ¶¶ 2–3). One year

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For the Northern District of California

United States District Court

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after commencing Sankey, defendants sent a letter to its employees referencing the Sankey action

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(Dkt. No. 25-1 at 74). The letter stated that defendants had conducted their own investigation

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and found that overtime was potentially under-calculated at times, for which they were enclosing

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a check and a detailed spreadsheet for the amount of the adjustment (ibid.). The Sankey action

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was certified as a class action in December 2012 (Favarote Decl. ¶ 4).

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Prior to July 2011, defendants’ calculation for overtime payment failed to include

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non-discretionary bonuses into the regular rate of pay for purposes of calculating overtime

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and failed to perform the calculations properly, thereby under-calculating the overtime pay

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of its non-exempt employees (Br. 7). To correct this, defendants instituted a new process for

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calculating the bonus-related overtime pay (ibid.).

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In November 2012, plaintiff filed the present collective action claim against defendants

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alleging that defendants violated the FLSA by failing to include non-discretionary bonus

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amounts into non-exempt store employees’ regular rate of pay for overtime purposes (id. at 4).

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A hearing on the present motion was held on April 18, 2013, which was attended by counsel.

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ANALYSIS

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Collective actions under the FLSA are governed by 29 U.S.C. 216(b), which provides

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that one or more employees may bring a collective action “on behalf of himself or themselves
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and other employees similarly situated.” The distinctive feature of a collective action, setting it

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apart from Rule 23 class actions, is that the members of a collective action must “opt-in” by

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providing written consent in order to become party plaintiffs. 29 U.S.C. 216(b). The Supreme

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Court has held that district courts have discretion over FLSA collective actions. Hoffmann-La

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Roche v. Sperling, 493 U.S. 164, 169 (1989). To certify a collective action, plaintiffs bear the

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burden of showing that the proposed lead plaintiff and the proposed collective action group are

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“similarly situated.” Leuthold v. Destination Am., Inc., 224 F.R.D. 462, 466 (N.D. Cal. Aug. 16,

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2004) (Judge Vaughn Walker). Neither the FLSA nor our court of appeals has defined the term

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“similarly situated.”
Here, plaintiff seeks conditional certification of a FLSA collective action because

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For the Northern District of California

United States District Court

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defendants had an alleged uniform and nationwide practice of failing to include bonuses into

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the regular rate of pay for overtime purposes for non-exempt employees. Pursuant to 29 C.F.R.

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778.209(a), this is a violation of the FLSA. After oral argument, however, it became clear that

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the main issue is not whether defendants completely failed to pay, but whether they failed to

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pay in a timely manner. This order holds that, to the extent stated below, plaintiff’s motion for

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conditional certification is GRANTED.

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1.

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To certify a collective action, the majority of courts follow a two-step approach.

CONDITIONAL CERTIFICATION: NOTICE STAGE.

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Leuthold, 224 F.R.D. at 466. First, they must decide whether the potential class should be

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given notice of the action. Id. at 467. Second, they must permit the defendant to move to

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decertify the class once discovery is complete and the case is ready to be tried. Ibid.

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Here, plaintiff is at the first step — seeking conditional certification to give notice of the

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action to potential plaintiffs. In the initial “notice stage,” courts determine whether a collective

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action should be certified for the purpose of sending notice of the action to potential class

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members. Gerlach v. Wells Fargo & Co., 2006 WL 824652, at *2 (N.D. Cal. Mar. 28, 2006)

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(Judge Claudia Wilken). This decision is based on the pleadings and affidavits submitted by

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the parties. Adams v. Inter-Con Sec. Sys., Inc., 242 F.R.D. 530, 536 (N.D. Cal. Apr. 11, 2007)

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(Judge Marilyn Hall Patel). Due to the limited amount of evidence, courts make this
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determination under a fairly lenient standard which typically results in conditional class

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certification. Ibid. Courts have held that conditional certification requires only that the plaintiff

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make substantial allegations that the putative class members were subject to a single illegal

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policy, plan or decision. Ibid. (internal quotations and citations omitted). The plaintiff must

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show that there is some factual basis beyond the mere averments in her complaint for the class

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allegations. Ibid. (internal quotations and citations omitted).

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In the instant action, plaintiff seeks conditional certification of “all current and former

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employees of Aéropostale classified as non-exempt, who have worked overtime for Aéropostale

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in the United States or Puerto Rico at any time within the Collective Action Period and
received a non-discretionary bonus” (Compl. ¶ 20, Br. 4). The collective action period begins

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For the Northern District of California

United States District Court

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November 9, 2009 — three years prior to the filing of the complaint (ibid.). Plaintiff argues

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that she has made her prima facie case for collective relief by alleging that she falls under the

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uniform non-exempt job classification of the FLSA collective action members, there was a

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common payroll system and methodology for calculating overtime, defendants had a common

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practice to pay performance-related bonuses, the proposed collective action members worked

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overtime during the period in which the bonuses were earned, and defendants applied a common

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policy of denying certain overtime pay by not including the non-discretionary bonuses into the

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proposed collective action members’ regular rate of pay (Br. 14).

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As evidence, plaintiff points to her declaration in which she states that she did not

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receive an overtime pay adjustment to reflect the bonuses she earned during her employment

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with defendants (Daniels Decl. ¶ 4). Plaintiff also includes her earnings statements showing

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the bonuses she earned and the overtime she worked (Daniels Decl. Exhs. G–J). To prove

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defendants’ uniform policy, plaintiff relies on statements from defendants’ director of payroll,

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Mr. Rawle Boatswain, derived from a deposition conducted for the Sankey litigation. Plaintiff

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argues that defendants use a software program, data, and methodology to calculate the overtime

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pay of all employees nationwide, and as such, any errors in the calculations or formulas would

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affect all employees (Br. 17). Moreover, plaintiff provides a letter from defendants dated

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March 22, 2012, that was sent to employees stating that as a result of the Sankey litigation,
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defendants learned that overtime pay was potentially under-calculated (Dkt. No. 25-1 at 74).

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Along with the letter, defendants enclosed a check and a detailed spreadsheet for the overtime

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pay adjustment (ibid.). The day before the hearing, plaintiff filed a FLSA consent form signed

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by a different current or former non-exempt employee of defendants’, signed September 14,

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2012 (Dkt. No. 35 at 4).

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As attachments to Director Boatswain’s declaration, defendants provide plaintiff’s

Exhs. A at 8, B at 16). However, Director Boatswain does concede that plaintiff did not receive

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an overtime adjustment for the overtime she worked in May 2011, which he points to have been

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an “inadvertent mistake” (Boatswain Decl. ¶ 10). At the April 18 hearing, defendants’ counsel

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For the Northern District of California

earnings statements showing that plaintiff was paid an overtime adjustment (Boatswain Decl.

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United States District Court

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confirmed that plaintiff, as of now, has not yet received the overtime adjustment due to her for

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May 2011. Director Boatswain also states in his declaration that since at least November 2009,

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the nationwide practice has been to pay overtime on bonuses as an overtime adjustment and in

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2011, the error of failing to pay overtime on earned bonuses in states in which double time is

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earned was corrected (Boatswain Decl. ¶¶ 8–9).

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Plaintiff has met the fairly lenient standard of providing sufficient evidence to show that

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there was a uniform, nationwide policy of failing to pay non-exempt employees the appropriate

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overtime compensation in a timely manner. In other words, potential plaintiffs may have been

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under-compensated as early as November 2009 but failed to receive their corresponding

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overtime adjustment until 2011 or later, when defendants discovered the error during the Sankey

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litigation. Accordingly, the motion for conditional certification at the notice stage is GRANTED.

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2.

PRODUCTION OF CONTACT INFORMATION.

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The Supreme Court has authorized “the discovery of the names and addresses” of

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employees to send notices. Hoffman-La Roche, 493 U.S. at 170. Other employee information

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such as alternate addresses, email addresses, social security numbers, telephone numbers,

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employee numbers, office locations, and job titles have also been permitted for discovery.

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See Lewis v. Wells Fargo & Co., 669 F. Supp. 2d 1124, 1130 (N.D. Cal. 2009) (Judge Claudia

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Wilken); Hill v. R+L Carriers, Inc., 690 F. Supp. 2d 1001, 1010 (N.D. Cal. 2010) (Judge

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Claudia Wilken).
Plaintiff requests an electronic list of the collective action members along with their last

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known addresses, telephone numbers, e-mail addresses, dates of employment, location(s) of

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employment, and employee numbers so that the proposed notice and opt-in form can be sent

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to them via first-class mail (Br. 21). Defendants are ORDERED to release, WITHIN FIFTEEN DAYS

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OF THIS ORDER,

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employment, and employee numbers to plaintiff. Employee e-mail addresses and telephone

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numbers are unnecessary for first-class mail delivery. Plaintiff shall bear the full cost of the
notice and use the contact information solely to send out the notice.
COLLECTIVE ACTION NOTICE AND OPT-IN FORM.

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For the Northern District of California

United States District Court

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the names, last known mailing addresses, dates of employment, location(s) of

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The Supreme Court has held that employees need to receive “accurate and timely notice

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concerning the pendency of the collective action, so that they can make informed decisions

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about whether to participate.” Hoffman-La Roche, 493 U.S. at 170. Moreover, “trial courts

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must take care to avoid even the appearance of judicial endorsement of the merits of the action”

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when overseeing the notice-giving process. Id. at 174. Plaintiff has provided a copy of her

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proposed notice, and defendants have provided a redlined version of the proposed notice

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indicating their amendments. Each proposed amendment by defendants will be addressed

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in turn.

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First, defendants argue that the language indicating that the Court has expressed no

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opinion about the merits of the claims asserted should be placed beneath the title of the case

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(Opp. 16–17). This order agrees. The statement should be in bold and at the top of the

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front page below the court caption to make the Court’s neutrality clear to potential plaintiffs.

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Adams, 242 F.R.D. at 540.

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Second, defendants argue that the proposed notice should include language stating that

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potential plaintiffs may be required to pay certain fees and/or costs pursuant to the prosecution

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of the collective action (Opp. 17). This order agrees. Information that informs potential

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plaintiffs that they share in liability should be included to present to potential plaintiffs a fair

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statement of their rights. Adams, 242 F.R.D. at 540 (internal quotations and citations omitted).

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Third, defendants argue that the proposed notice should include language stating that

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potential plaintiffs may be required to provide deposition testimony or courtroom testimony

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(Opp. 17). This order agrees. It is appropriate to include language informing potential plaintiffs

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of possible obligations in the event they elect to opt-in. Sanchez v. Sephora USA, Inc., 2012

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WL 2945753, at *7 (N.D. Cal. July 18, 2012) (Judge Saundra Brown Armstrong); Luque v.

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AT&T Corp., 2010 WL 4807088, at *7 (N.D. Cal. Nov. 19, 2010) (Judge Charles Breyer).

the word “conditional” in the title so it reads “notice of court conditional certification;” (2) in the

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For the Northern District of California

Fourth, as to additional minor edits: (1) on the first page, include defendants’ edit adding

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United States District Court

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“Introduction” section, in the first paragraph, include defendants’ edit adding “The Court

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conditionally certified the Lawsuit to proceed as a ‘collective action’ on behalf of all non-exempt

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employees who were employed by Aéropostale West Inc. and/or Aéropostale Inc. in the United

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States and Puerto Rico from November 9, 2009 to the present;” (3) in the “Introduction” section,

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in the second paragraph, include defendants’ edits deleting “improperly,” deleting “(those

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earning overtime pay),” and deleting “contests all claims that have been asserted and;” (4) in the

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“Effect of Joining this Lawsuit” section, include all of defendants’ edits (as indicated above);

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(5) in the “If You Choose Not to Join This Lawsuit” section, include defendants’ edits adding

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“if you do not wish to be part of this lawsuit, then do not return the attached ‘consent to join’

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form” in capital letters, and delete the last line “You do not have to complete and mail the

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‘Consent to Join’ form if you do not wish to join this Lawsuit;” and (6) in the “No Retaliation

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Permitted” section, include defendants’ edit changing “anyone” to “Aéropostale West, Inc. or

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Aéropostale, Inc.”

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4.

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Defendants submitted evidentiary objections to plaintiff’s declaration (Dkt. No. 29)

EVIDENTIARY OBJECTIONS.

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and to plaintiff’s counsel’s declaration (Dkt. No. 30). All objections are OVERRULED because:

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(1) this order does not rely on information provided in paragraph three of plaintiff’s declaration;

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(2) the information provided in paragraph four of plaintiff’s declaration consists of plaintiff’s
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personal knowledge and belief; (3) the information on class certification in the Sankey action

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provided in paragraph four of plaintiff’s counsel’s declaration was confirmed at oral argument,

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and (4) this order relies on the letter sent by Aéropostale, not on the statements provided in

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paragraph seven of plaintiff’s counsel’s declaration.

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CONCLUSION
To the extent stated above, plaintiff’s motion for conditional certification of a collective

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action under the FLSA is GRANTED. The collective class of potential plaintiffs consists of

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all current and former employees of Aéropostale classified as non-exempt who have worked

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overtime for Aéropostale in the United States or Puerto Rico at any time within the last three
years — since November 9, 2009 — and received a non-discretionary bonus. Defendants shall

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For the Northern District of California

United States District Court

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release, within fifteen days of this order, the names, last known mailing addresses, telephone

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numbers, dates of employment, location(s) of employment, and employee numbers to plaintiff.

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Plaintiff shall incorporate the aforementioned changes into its notice and mail the notice to all

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potential plaintiffs via first-class mail. Plaintiff shall bear the full cost of the notice. Plaintiff

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and counsel may use the information solely to send out the notice. If a class member contacts

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counsel, then counsel may follow up.

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IT IS SO ORDERED.

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Dated: April 24, 2013.

WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

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