McEarchen et al v. Urban Outfitters, Inc.

Filing 277

ORDER ADOPTING REPORT AND RECOMMENDATION: For the reasons set forth above, the Court adopts Judge Orenstein's thorough and well-reasoned R&R(Doc. No. 268 ). It is hereby ordered that the plaintiffs' motion for final certification is denied , and, accordingly, that Urban's motion to decertify the collective action is granted. (Doc. No. 242 ). In addition, the statute of limitations is hereby tolled for sixty (60) days following the issuance of this Memorandum and Order.This case is re-committed to Magistrate Judge Orenstein for all further pre-trial proceedings. Ordered by Judge Roslynn R. Mauskopf on 9/6/2017. (Taronji, Robert)

UNITED STATES DIST RJCT COURT
EASTERN DISTRJCT OF NEW YORK

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JEFFREY MCEARCHEN; DANIEL LAWSON; and
T HOMAS C. WOLFE,
Plaintiffs,
- against -

ORDER ADOPTING REPORT
AND RECOMMENDATION
I 3-CV-3569 (RRM) (JO)

URBAN OUTFITTERS, INC.,
Defendant.

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ROSL YNN R. MAUSKOPF, United States District Judge.
Plaintiffs Jeffrey McEarchen, Dani el Lawson, and Thomas C. Wolfe, each of whom was
employed as a Department Manager ("DM") by defendant Urban Outfitters, Inc. (" Urban"),
accuse Urban of violating federal and state wage laws by misclassifying them and other DMs as
manageri al employees who are exempt from premium wage requirements for overtime hours.

(See generally Compl. (Doc. No. I ); Am Compl. (Doc. No. 13)); see 29 U.S.C § 20 1, el seq. (the
Fair Labor Standards Act, or "FLSA"); New York Labor Law ("NYLL") § 650, el seq. Earl y in
the case, the Court conditionally certified a co llective action under the FLSA. See McEarchen v.

Urban Ouljilters, Inc., 20 14 WL 470 11 64 (E.D.N.Y. Sept. 23, 2014); see also 29 U.S.C. § 2 16.
The plainti ffs now seek final certifi cati on of a collective of "all persons who are or were
formerly employed by [Urban] in the United States at any time since June 24, 20 10 . . . as DMs
and individuals holding comparable salaried positi ons[.]" (Mem. Supp. Cert. (Doc. No. 244);
Am. Comp!.

at~

20.) Urban seeks to decertify the coll ective action. (Mem. Opp. Cert. (Doc.

No. 248).)
T hi s Court referred the matter of certification to Magistrate Judge James Orenstein, who
issued a Report and Recommendation ("R&R") concluding that the collective action should be

decertified. (R&R (Doc. No. 268).) Objections originally were due March 24, 2017. (Id. at 20.)
However, at the plaintiffs' request, the Court extended the time to fil e objections to April 21 ,
20 17. (Mot. Ext. Time (Doc. No. 269).) On March 24, 20 17, the plaintiffs filed a letter with the
Court confirming that they would fil e objections by the new deadline. (P l. 4/24/17 Letter (Doc.
No. 27 1).) However, on April 2 1, 20 17 - the date of the extended deadline - the plaintiffs fi led
another letter with the Court, this time stating that they would not fi le any objections to Judge
Orenstein ' s R&R. (Pl. 4/2 1/17 Letter (Doc. No. 272) at 1.) The plaintiffs stated that they agreed
not to fil e objections in exchange for Urban ' s agreement to a 60-day toll on the statute of
limitations, in order to allow the plai ntiffs' counsel sufficient time to adequate ly inform each of
the 165 opt-in plaintiffs of their legal rights and options. (Id. ) Because the plaintiffs did not file
obj ections by the deadline, the Court has reviewed the R&R for pl ain error. Finding none, the
Comt hereby adopts the R&R in its entirety, and the co ll ective action is decertified. In addition,
the statute of limitations is tolled until sixty (60) days after the issuance of this Memorandum and
Order.

ST AND ARD OF REVIEW
When reviewing an R&R, a district court "may accept, reject, or modify, in whole or in
part, the find ings or recommendations made by the magistrate judge." 28 U. S.C. § 636(b)(l)(C).
When a party rai ses an obj ection to an R&R, "the court is required to conduct a de nova review
of the contested sections." See Pizarro v. Bart/ell, 776 F. Supp. 815, 817 (S.D.N.Y . 199 1).
Portions to which no party has objected are reviewed for clear error. See Morrill v. Sllyker

Corp., 973 F. Supp. 2d 177, 181 (E.D.N .Y. 2013); Price v. City ofNew York, 797 F. Supp. 2d
2 19, 223 (E.D.N. Y. 20 11 ). T he Court will find clear error only where, upon a review of the
entire record , it is left with the definite and fi rm conviction that a mistake has been committed.

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..

See Fed. R. Civ. P. 72(a); Nielsen v. New York City Dep 't of Educ., No. 04-CV-2182 (NGO)
(LB), 2007 WL 1987792, at* I (E.D.N.Y. July 5, 2007) (" [T]he district court must affirm the
decision of the magistrate judge unless the district court on the entire evidence is left with the
definite and firm conviction that a mistake has been committed.")

DISCUSSION
Where, as here, discovery is complete, a court must determine whether to decertify a
collective action based on "whether . . . the plaintiffs who have opted in are in fact 'similarly
situated' to the named plaintiffs." Myers v. Hertz Co1 ., 624 F.3d 537, 555 (2d Cir. 20 10). If
p
they are not, the collective action may be decertified and the opt-in plaintiffs' claims dismissed
without prejudice. Id.
In determining whether plaintiffs are similarly situated, " [i]t is well established that
[being] similarly situated does not require that plaintiffs ' positions be identical." Stevens v.

HMSHost Corp., No. 10-CV-357 1 (ILG) (VVP), 2014 WL 4261410, at *5 (E.D.N.Y. Aug. 27,
20 14) (internal quotation marks and ci tation omitted). Courts in this circuit generally consider
three factors in comparing the respective situations of named and opt-in plaintiffs: " (l) the
disparate factual and employment settings of the indiv idual plaintiffs; (2) the defenses available
to defendants which appear to be individual to each plaintiff; and (3) fa irness and procedural
considerations that counsel for or against maintaining a collective action." Id.; Gardner v. W.

Beef Prop., Inc., No. 07-CV-2345 (NGO) (JMA), 20 13 WL 1629299, at *3 (E.D.N.Y. Mar. 25,
2013) (report and recommendation) adopted, 20 13 WL 1632657 (E.D.N.Y. Apr. 16, 20 13);

Ayers v. SGS Control Servs. , Inc., No. 03-CV-9077 (RMB), 2007 WL 646326, at *5 (S.D.N.Y.
Feb. 27, 2007). The determination to decertify a collective action is "extremely fact-dependent

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and appears to be largely in the Court's discretion." Gardner, 2013 WL 1629299, at *4 (internal
quotation marks and citations omitted).
Here, on balance, the requis ite factors listed above support Judge Orenstein 's
recommendation. First, the record reflects significant variations among the named and opt-in
plaintiffs, as to both the amount of exempt work they performed and the level of managerial
authority they exerci sed. (R&R at I 0-16.) Second, those variations make it unduly difficult for
Urban to counter the claims against it using "representative" proof. (Id. at 16-17); see Stevens,
2014 WL 426 1410, at *7 ("Defendants cannot be expected to come up with ' representative
proof' when the plaintiffs cannot reasonably be said to be representative of each other" (internal
citation omitted)). Third, the differences in the various plaintiffs' duties and levels of authority
would require inefficient mini-trial s for over a hundred claimants, such that a collective action
would not enhance fairness or procedural economy. (Id. at 17- 18.) Thus, pursuant to 28 U.S.C.

§ 636(b) and Federal Rule of Civil Procedure 72, the Court has reviewed the R&R for clear error
and, finding none, concurs with the R&R in its entirety. See Covey v. Simonton, 481 F. Supp. 2d
224, 226 (E. D.N.Y. 2007).
In co llective actions, the statute of limitations resumes after a court's determination to
decertify a c lass. See Collective Actions Under the Fair Labor Standards Act, 7B Fed. Prac. &
Proc. Civ. § 1807 (3d ed.). In order to avoid prejud ice to opt-in plaintiffs, courts may toll the
statute of limitati ons in FLSA collective actions that have been decertified , and they often do so
in cases involving many opt-in plaintiffs. See, e.g., Scalf v. Chipotle Mexican Grill, Inc., No. 12CV-8333 (ALC) (SN), 20 17 Dist. LEXIS 59753, *29 (S.D.N.Y. Apri l 18, 2017) (tolling claims
of several hundred opt-in plaintiffs for 90 days); Reyes v. Texas Ezpawn, L.P., 2007 WL 10 1808
(S.D . Tex. 2007) (tolling claims of 82 opt-in plaintiffs for 30 days). In th is case, the parties have

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agreed to a 60-day toll of the statute of limitations to allow the plaintiffs' counsel sufficient time
to adequately inform each of the 165 opt-in plaintiffs of their legal rights and options. (PI.
4/21/17 Letter at 1.) In light of the complexity of the case, and in order to avoid prejudice to the
opt-in plaintiffs, the toll is granted.
CONCLUSION

For the reasons set forth above, the Court adopts Judge Orenstein's thorough and wellreasoned R&R. (R&R (Doc. No. 268).) It is hereby ordered that the plaintiffs' motion for final

certification is denied, and, accordingly, that Urban's motion to decertify the collective action is
granted. (Doc. No. 242.) In addition, the statute of limitations is hereby tolled for sixty (60)
days following the issuance of this Memorandum and Order.

This case is re-committed to Magistrate Judge Orenstein for all further pre-trial
proceedings.

so ORDERED.

Dated: Brooklyn, New York

s/Roslynn R. Mauskopf
ROSLYNN R. MAUSKOPF

United States District Judge