Varela et al v. North Shore-Long Island Jewish Health System et al
Filing
445
MEMORANDUM AND ORDER: For the reasons stated in the attached: Defendants' motion to decertify Plaintiffs' conditionally certified class (Dkt. 388) is GRANTED; Plaintiffs' motion for Rule 23 and FLSA final certification (Dkt. 39 2) is DENIED; Plaintiffs' motion to strike the expert report of Dr. Joseph Krock (Dkt. 389) is DENIED; Defendants' motion to strike the Rule 23 Affirmation of Sarah E. Cressman (Dkt. 390) is DENIED as moot; and Defendants' motion for s anctions (Dkt. 391) against Plaintiffs and their counsel is DENIED. Accordingly, the class is decertified, the claims of the opt-in plaintiffs are dismissed without prejudice, and the named Plaintiffs have the option of pursuing their claims on individual bases. The parties shall meet and confer and submit a joint letter to the Court by July 1, 2014 as to how the parties plan to proceed. Ordered by Judge Pamela K. Chen on 6/5/2014. (Galeotti, Matthew)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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CLAUDIA DESILVA, et al.,
on behalf of themselves and all other employees
similarly situated,
Plaintiffs,
MEMORANDUM & ORDER
10-CV-1341 (PKC) (WDW)
-againstNORTH SHORE-LONG ISLAND JEWISH
HEALTH SYTEM, INC., et al.,
Defendants.
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PAMELA K. CHEN, United States District Judge:
Plaintiffs bring this putative class and collective action against Defendant North Shore–
Long Island Jewish Health System, Inc. and associated organizations (“Defendants” or “LIJ”) for
failure to pay wages and overtime compensation in violation of the Fair Labor Standards Act, 29
U.S.C. §§ 201 et seq. (“FLSA”) and parallel provisions of the New York Labor Law (“NYLL”).
On March 8, 2012, Judge Bianco, then-presiding,1 conditionally certified the matter as an FLSA
collective action and authorized notice to potential individual plaintiffs. (Dkt. 212.) After notice
issued, 1,196 Plaintiffs2 opted in to the action. (Dkt 392-1 (“Pl. Cert. Mem.”) at 3.) Following
discovery, on the basis of a voluminous evidentiary record, LIJ moved, on October 14, 2013, to
decertify the collective action. On the same date, Plaintiffs moved for Rule 23 class certification,
1
This case was reassigned to the undersigned on May 7, 2013.
2
The parties dispute the number of proper opt-in plaintiffs. Plaintiffs assert that 1,196
employees have opted in to this lawsuit. (Pl. Cert. Mem. at 3.) Defendants contend that 1,051
plaintiffs have opted in. (Dkt. 388-1 at 14-15.) The difference is negligible with respect to
collective and class certification, and the Court adopts Plaintiffs’ figure, 1,196, for purposes of
this motion only.
1
in addition to final FLSA collective action approval. (Dkt. 392.) Each party also submitted a
motion to strike a supporting document offered by the opposing party, and in addition,
Defendants moved for sanctions against Plaintiffs and their counsel. (Dkts. 389-391.) The Court
held oral argument on the motions on December 12, 2013.
After a thorough review of the vast record and careful consideration of the parties’
arguments, the Court concludes that Plaintiffs have failed to demonstrate that they are similarly
situated to the degree necessary to maintain an FLSA collective action.
In the time since this
action was initially filed, mounting precedent supports the proposition that LIJ’s timekeeping
system and system-wide overtime compensation policies are lawful under the FLSA. Given the
evolving caselaw, in order to maintain a collective action, Plaintiffs are required to demonstrate
that LIJ’s lawful policies are or were consistently and systematically violated in such a way that
would be possible to generalize across the 1,196 opt-in Plaintiffs in this case. Plaintiffs have
failed to do so. In fact, discovery has borne out the opposite. The record demonstrates that
Plaintiffs work or worked in a wide variety of departments at a vast array of locations and held a
diverse collection of positions.
As a result, Plaintiffs’ job duties differed and their
compensation—or lack thereof—for overtime work performed during meal breaks likewise
differed accordingly. Analyzing each Plaintiff’s unique employment situation would require the
kind of individualized inquiry that is antithetical to collective action treatment. See, e.g., Zivali
v. AT & T Mobility, LLC, 784 F. Supp. 2d 456, 459 (S.D.N.Y. 2011) (citing Hinojos v. Home
Depot, Inc., 06–CV–00108, 2006 WL 3712944, at *3 (D. Nev. Dec. 1, 2006). Moreover,
Defendants offer a number of plausible, highly individualized defenses in an attempt to combat
Plaintiffs’ varied factual allegations. Accordingly, the Court finds that the presentation of
purportedly representative evidence would hinder, rather than advance, considerations of
2
procedure and fairness. See, e.g., Zivali, 784 F. Supp. 2d at 459; Beauperthuy v. 24 Hour Fitness
USA, Inc., 772 F. Supp. 2d 1111, 1131 (N.D. Cal. 2011) (“Ultimately, the decision whether to
proceed as a collective or class action turns on whether this device is the superior way of
resolving a controversy.”); Johnson v. Big Lots Stores, Inc., 561 F. Supp. 2d 567, 574 (E.D. La.
2008) (“[T]he more dissimilar plaintiffs are and the more individuated [defendant’s] defenses
are, the greater doubts there are about the fairness of a ruling on the merits—for either side—that
is reached on the basis of purportedly representative evidence.”). Therefore, decertification is
warranted.
For largely the same reasons, common issues do not predominate, and Plaintiffs’ motion
for Rule 23 class certification is therefore denied. Plaintiffs’ motion to strike the expert report of
Dr. Joseph Krock (the “Report”) is denied because the limited propositions from the Report on
which the Court relies are relevant, permissible, and uncontroverted.
Because the Court does
not rely on the Rule 23 Affirmation of Sarah E. Cressman, Defendants’ motion to strike that
affirmation is denied as moot. Finally, although Plaintiffs have engaged in questionable tactics
and conduct in pursuing this case, the Court, exercising its discretion, declines to impose Rule 11
sanctions on Plaintiffs and their counsel.
I.
Background3
3
The Court considers the instant motion in the context of the entire procedural history of
this case, which is discussed briefly here and, as relevant, elsewhere in this Memorandum &
Order. On August 23, 2010, Plaintiffs first moved for conditional certification of the FLSA
claims alleged in their amended complaint (Dkt. 100). On the same day, Defendants moved to
dismiss the Amended Complaint (Dkt. 98), and thereafter moved to dismiss the Plaintiffs’
Second Amended Complaint (Dkt. 145). By Order dated March 16, 2011, the Court granted
Defendants’ motion to dismiss Plaintiffs’ FLSA and NYLL claims—along with their claims
under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 et seq.
(“ERISA”), the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961 et seq.
(“RICO”), and various state common law claims. DeSilva v. N. Shore-Long Island Jewish
Health Sys., Inc., 770 F. Supp. 2d 497, 548 (E.D.N.Y. 2011) (Bianco, J.) (“DeSilva I”). Plaintiffs
3
Named Plaintiffs in this action are or were LIJ employees at various locations throughout
the North Shore-Long Island Jewish Health System (“LIJ Health System”) during the time
period relevant to this litigation. DeSilva II, 2012 WL 748760 at *1. Defendants are health care
facilities and officials involved in the LIJ Health System. (TAC ¶ 15.) Managers at LIJ
locations use a timekeeping system called “Kronos,” or colloquially “myTime,” to track
employee time worked. (Dkt. 394-1 (“myTime Training Manual”) at 5, 7, 59-86.) The program
enables managers to enter employees’ schedules into the system, and employees verify their
hours by “badging” (swiping a security badge) in and out. (Id. at 5 (“Employees swipe at the
Badge Reader and the time is collected and sent to myTime”); Dkt. 395-2 (“Bosco Dep.”) at
51:14-53:10.)
Employees do not badge in and out for meal periods; rather, Kronos is
programmed to automatically deduct a half-hour meal period for employees who work six or
more hours in a single day. (Dkt. 417 (myTime Rules for Managers) at 10; Bosco Dep. 54:457:22.) Employees are paid for their scheduled shift hours minus the automatic meal deduction,
unless a manager cancels the automatic meal deduction in Kronos to add time worked during a
meal period to the employee’s time card. (Dkt. 395-1 (myTime policy document).) Moreover,
only supervisors have the ability to approve overtime and adjust the employee’s work hours and
pay accordingly. (myTime Training Manual at 38.) Plaintiffs allege that, as a result of the
subsequently filed a Third Amended Complaint (“TAC”) (Dkt. 163) and renewed their motion
for conditional certification (Dkt. 164). Thereafter, Defendants moved to dismiss the claims in
Plaintiffs’ TAC, except as to Plaintiffs’ re-pled FLSA and NYLL claims. The Court granted
Defendants’ motion on March 7, 2012. DeSilva v. N. Shore-Long Island Jewish Health Sys.,
Inc., 3310-CV-1341, 2012 WL 748760, *2, n. 2 (E.D.N.Y. Mar. 7, 2012) (Bianco, J.) (“DeSilva
II”).
4
myTime system and policy, they were not compensated for meals and breaks, despite working
through those breaks, in violation of the FLSA. (TAC ¶¶ 100, 103, 105-06, 111.) 4
II.
FLSA § 216(b) Certification
Courts in this Circuit use a two-step method in assessing whether to certify a collective
action. Myers v. Hertz Corp., 624 F.3d 537, 554 (2d Cir. 2010). At the conditional certification
stage, Judge Bianco found Plaintiffs’ allegations sufficient to satisfy the “modest factual
showing” required at that stage to determine whether the named plaintiffs and potential opt-in
plaintiffs “together were victims of a policy or plan that violated the [FLSA].” Hoffmann v.
Sbarro, Inc., 982 F. Supp. 249, 261 (S.D.N.Y. 1997); see also Chowdhury v. Duane Reade, Inc.,
06-CV-2295 (GEL), 2007 WL 2873929, *2 (S.D.N.Y. Oct. 2, 2007). He certified the following
class for an FLSA collective action:
“Hourly employees involved in direct patient care
responsibilities whose scheduled hours include a deduction for an unpaid meal break and who
would have had to report performing work during meal breaks in order to be paid for such
work.” 5 (Dkt. 212.)
4
In the TAC, Plaintiffs also allege that they suffered unpaid pre- and post-schedule work
and training time (TAC ¶¶ 118, 127-135). However, Plaintiffs did not present argument about
these categories of unpaid work in their motion to conditionally certify this collective action
(Dkt. 100), nor did Judge Bianco include such categories in his order conditionally certifying the
instant class. (Dkt. 112) (conditionally certifying for collective action “[h]ourly employees
involved in direct patient care responsibilities whose scheduled hours include a deduction for an
unpaid meal break and who would have had to report performing work during meal breaks in
order to be paid for such work.” (emphasis added)). Thus, the Court considers these claims
waived. However, even were the Court to consider those collective and class allegations, both
the Court’s analysis and conclusions regarding the meal break deduction would apply with equal
force to preclude collective action and certification on these claims.
5
Judge Bianco granted Plaintiffs’ motion for reasons stated on the record during a
conference on March 8, 2012. The transcript is attached at Dkt. 394.
5
Now at the second stage, on LIJ’s post-discovery motion for decertification, the Court
must apply heightened scrutiny in determining whether Plaintiffs are similarly situated for the
purposes of the FLSA. 6 Myers, 624 F.3d at 555 (“At the second stage, the district court will, on
a fuller record, determine whether a so-called ‘collective action’ may go forward by determining
whether the plaintiffs who have opted in are in fact ‘similarly situated’ to the named plaintiffs.”);
see also Jacobs v. N.Y. Foundling Hosp., 483 F. Supp. 2d 251, 265 (E.D.N.Y. 2007) (noting that
second-stage certification requires the court to exercise “a more heightened scrutiny” in
determining whether the potential plaintiffs are similarly situated); Zivali, 784 F. Supp. 2d at
460 (citing Damassia v. Duane Reade, Inc., 04-CV-8819, 2006 WL 2853971, at *3 (S.D.N.Y.
Oct. 5, 2006)). Although the Second Circuit has yet to endorse a set of criteria appropriate for
consideration on a motion for decertification, district courts generally analyze whether the
following factors counsel for or against maintaining a collective action: “(1) disparate factual and
employment settings of the individual plaintiffs; (2) defenses available to defendants which
appear to be individual to each plaintiff; and (3) fairness and procedural considerations.”
Laroque v. Domino’s Pizza, LLC, 557 F. Supp. 2d 346, 352 (E.D.N.Y. 2008) (quoting Guzman v.
VLM, Inc., 07-CV-1126, 2007 WL 2994278, at *3 (E.D.N.Y. Oct. 11, 2007)); see also, e.g.,
Zivali, 784 F. Supp. 2d at 460; Ayers v. SGS Control Servs., Inc., 03–CV–9077, 2007 WL
6
Opining on collective action certification under § 216(b) of the FLSA, the Second Circuit
has noted, “district courts of this Circuit appear to have coalesced around a two-step method, a
method which, while [] not required by the terms of FLSA or the Supreme Court’s cases, [] is
sensible. The first step involves the court making an initial determination to send notice to
potential opt-in plaintiffs who may be ‘similarly situated’ to the named plaintiffs with respect to
whether a FLSA violation has occurred.” Myers, 624 F.3d at 554-55 (listing cases). “The court
may send this notice after plaintiffs make a ‘modest factual showing’ that they and potential optin plaintiffs ‘together were victims of a common policy or plan that violated the law.’” Id. at 555
(quoting Sbarro, 982 F. Supp. at 261). The standard of proof at this first stage is set necessarily
low because it merely allows plaintiffs to discover “whether ‘similarly situated’ plaintiffs do in
fact exist.” Id.
6
646326, at *5 (S.D.N.Y. Feb. 27, 2007). If the court concludes that the plaintiffs are similarly
situated, the action proceeds collectively; if not, “the class is decertified, the claims of the opt-in
plaintiffs are dismissed without prejudice, and the class representative may proceed on his or her
own claims.” Zivali, 784 F. Supp. 2d at 460 (citing Lee v. ABC Carpet & Home, 236 F.R.D. 193,
197 (S.D.N.Y. 2006)).
*
*
*
Here, LIJ’s official time-keeping and overtime compensation policies, as written, comply
with the FLSA. Consequently, Plaintiffs have failed to identify any unlawful system-wide policy
or practice that was applied uniformly to each of the named Plaintiffs. Cf. White v. Baptist
Mem’l Health Care Corp., 08-2478, 2011 WL 1883959 (W.D. Tenn. May 17, 2011) aff’d, 699
F.3d 869 (6th Cir. 2012) (“To bind together otherwise differently situated employees, an alleged
common policy must potentially violate the FLSA.”) To the contrary, Plaintiffs contend the
alleged FLSA violations arise from a hodgepodge of procedures implemented in varying ways
by different managers across numerous departments and locations. As a result, a determination
on the merits is not susceptible to generalized proof; it would require individualized inquiries
regarding the procedures in place at each department, and the conduct of individual managers
and employees. For those reasons, decertification of Plaintiffs’ collective action is warranted.
A.
Legality of LIJ’s Compensation Policies
To the extent Plaintiffs assert that a collective action is appropriate due to Defendants’
common policy of automatically deducting 30 minutes per employee shift for lunch, their
argument fails because, as courts in this circuit have recognized, automatic meal deduction
policies are not per se illegal. See, e.g., Wolman v. Catholic Health Sys. of Long Island, Inc.,
2012 WL 566255, at *7 (E.D.N.Y. Feb.16, 2012); see also Ellis v. Common Wealth Worldwide
7
Chauffeured Transp. of NY, LLC, 10-CV-1741 DLI JO, 2012 WL 1004848, at * 9-10 (E.D.N.Y.
Mar. 23, 2012). Without more, a legal automatic meal deduction for previously scheduled
breaks cannot serve as the common bond around which an FLSA collective action may be
formed. See, e.g., White, 2011 WL 1883959 at *8 (the defendant’s “mere adoption of a system
that, by default, deducts meal breaks from its employees’ compensation does not constitute a
unified policy of FLSA violations capable of binding together the Opt-in Plaintiffs”); Camesi v.
Univ. of Pittsburgh Med. Ctr., No. 09–85J, 2011 WL 6372873, *5 (W.D. Pa. Dec. 20, 2011) (the
defendant’s “implementation of an automatic deduction policy does not, in and of itself, warrant
final certification”); Camilotes v. Resurrection Health Care Corp., 286 F.R.D. 339, 350 (N.D.
Ill. 2012) (same) (collecting cases). Though not controlling, the sheer number of district courts
that have decertified “automatic deduction” collective actions in the context of hospital breaks,
and the rationales on which they have relied, are persuasive. See, e.g., Camilotes, 286 F.R.D. at
351 (decertifying collective action in the context of automatic deduction policy at hospital);
Kuznyetsov v. W. Penn Allegheny Health Sys., Inc., 10-CV-948, 2011 WL 6372852, 2011 WL
6372852 (same); Camesi, 2011 WL 6372873; White, 2011 WL 1883959 (same); Frye v. Baptist
Mem’l Hosp., Inc., No. 07–2708, 2010 WL 3862591, *3 (W.D. Tenn. Sept. 27, 2010), aff’d 495
F. App’x. 669, 2012 WL 3570657 (6th Cir. Aug. 21, 2012) (same).
An employer’s timekeeping policies are legal as long as they “allow[] for the complete
and accurate recording of all time worked.” Zivali, 784 F. Supp. 2d at 461. Here, Plaintiffs
concede that LIJ’s formal policies and procedures made it at least possible for employees to
receive proper compensation.
LIJ’s relevant overarching polices were “to ensure that pay
received by health system employees accurately reflects each employee’s time worked” and “to
provide eligible health system employees with an opportunity to take rest periods and meal
8
breaks during the course of a workday.” (Santiago Decl. Exs. 5, 6. 7) Employees were required
to review their facility’s timekeeping policies and participate in timekeeping training. (Dkt. 3881 at 7-8, n. 15 (incorporating accompanying exhibits).) Supervisors were trained to provide
employees opportunities for meal and rest breaks, and to ensure employees were compensated
for all time worked, including how to provide proper pay when employees worked, in whole or
in part, through meal periods. (Id. at n. 16 (incorporating accompanying exhibits).)
Perhaps in recognition of the precedent mounting against them, Plaintiffs now argue that
it is not merely the “auto-deduct” policy itself that violates the FLSA, but Defendants’
implementation of the automatic deduction policy.8 Specifically, Plaintiffs have pivoted from an
“auto-deduct” policy to an “overtime approval” policy as the basis for their FLSA claim. (Dkt.
403 at 12) (“Plaintiffs here are not relying on an argument that defendants’ auto-deduct policy, in
and of itself, is illegal . . . .”) Plaintiffs’ new argument is essentially that three of Defendants’
separate policies converge to form a single FLSA violation: (1) automatically deducting meal
time; (2) relying on employees to report missed meal period work; and (3) paying only for
reported time that is approved by a manager.
7
The declaration of Arlene Santiago is located at Dkt. 388-7 at ECF 136. (Citations to
“ECF” pages refer to the page numbering of the Electronic Court Filing (“ECF”) system, and not
the document’s internal page numbers.) Exhibit 5 to the Santiago Decl. is a copy of LIJ’s “Meal
Times and Rest Periods Policy.” Exhibit 6 to the Santiago Decl. is a copy of LIJ’s “Overtime
Policy.” (Santiago Decl. ¶¶ 8, 9.)
8
Plaintiffs’ counsel, Thomas & Solomon LLP, has filed at least a dozen similar class
actions, Lundy v. Catholic Health Sys. of Long Island Inc., 711 F.3d 106, 110 (2d Cir. 2013),
many of which are cited in this Memorandum & Order; none of which have succeeded. Thus,
the Court finds Plaintiffs’ counsel’s lack of success is as likely a motivation for the switch as
Plaintiffs’ stated reason, which is that “plaintiffs have discovered that [LIJ’s] pay policies are
even worse than they initially thought.” (Dkt. 403 at 1.)
9
The problems with Plaintiffs’ new collective action theory are three-fold. First, Plaintiffs
“approval policy” class was never conditionally certified, and only raised for the first time, in the
long history of this case, in Plaintiffs’ certification-related briefs. As discussed supra, Judge
Bianco conditionally certified a collective action for “[h]ourly employees involved in direct
patient care responsibilities whose scheduled hours include a deduction for an unpaid meal break
and who would have had to report performing work during meal breaks in order to be paid for
such work.” (Dkt. 212.) Thus, the “approval policy” class that Plaintiffs now seek to have
finally certified was never conditionally certified. While conditional certification may not be an
absolute prerequisite to final certification, it would be unfair and inefficient to allow Plaintiffs to
change their legal theory after obtaining conditional certification, sending notice to potential
class members, and conducting discovery based on that theory. This is especially so where, as
here, Plaintiffs knew, or should have known, the facts giving rise to their new theory at the
outset, namely that compensation for work performed during a meal break had to be approved by
a supervisor.
Second, Plaintiffs’ latest iteration of the “auto-deduct” policy theory is no more
persuasive than the original. Tacking the “reporting policy” and “approval policy” onto the
lawful “auto-deduct” policy is not enough to convert LIJ’s legal compensation scheme into a
FLSA violation. While “meal periods are compensable under the FLSA when employees during
a meal break perform duties predominantly for the benefit of the employer,” Reich v. S. New
Eng. Telecomms. Corp., 121 F.3d 58, 65 (2d Cir. 1997), the FLSA does not prescribe any
particular form of recordkeeping. See, e.g., 29 C.F.R. § 516.1(a) (“No particular order or form of
records is prescribed by the regulations in this part.”). Moreover, though an employer may not
prevent an employee from reporting overtime work that he or she actually performed, there is no
10
specific prohibition against requiring an employee to report having worked in order to receive
pay for time worked. See Kuebel v. Black & Decker Inc., 643 F.3d 352, 35-57 (2d Cir. 2011).
There is also no legal requirement that employers contemporaneously record time worked.
Zivali, 784 F. Supp. 2d at 461. It simply cannot be the case that merely establishing a process
for an employee to report overtime worked transforms a legal policy, namely “auto-deduct,” into
an illegal one. See e.g., White v. Baptist Mem’l Health Care Corp., 699 F.3d at 876 (citation
omitted) (holding that when an employer merely sets up a “reasonable process for an employee
to report uncompensated time,” it “is not liable for non-payment if the employee fails to follow
the established process.”) It would be impossible for an organization as large as LIJ to keep
track of their employees’ extemporaneously performed overtime without the employees
notifying a manager or personally amending their time charts to reflect overtime worked.
Third, Plaintiffs’ new “approval policy” theory makes the relevant inquiry even more
individualized and further cuts against their argument that Plaintiffs were subject to a systemwide policy. See, e.g., Blaney v. Charlotte–Mecklenburg Hosp. Auth., 10–CV–592–FDW–DSC,
2011 WL 4351631, *7 (W.D.N.C. Sept. 16, 2011) (denying certification of a FLSA collective
action where “Defendant ha[d] established that many of the alleged common policies the
Plaintiffs complain of are actually left to the decentralized discretion of the individual units and
their exempt and non-exempt management staff.”) As the certification-related motions are
currently before the Court, the Court focuses on the individualized inquiries raised by Plaintiffs’
collective and class action theory.
*
*
*
Because Plaintiffs were not subject to a uniform illegal compensation policy, they cannot
point to a common violation of law that binds the purported collective action. Absent a unifying
11
illegal policy, Plaintiffs must demonstrate that they are factually similarly situated or that the
employer’s practice was to systematically disregard its own legal policy. See, e.g., White, 2011
WL 1883959 at *9-10 (“Where an employer’s formal policy is to compensate employees for all
time worked, courts have generally required a showing that the employer’s common or uniform
practice was to not follow its formal, written policy.”) Moreover, for those arguments to be
pertinent to certification, Plaintiffs must demonstrate that the illegal practices about which they
complain are sufficiently uniform and pervasive as to warrant class treatment, i.e., that these
violations can be generalized across the 1,196 opt-in Plaintiffs in this case such that collective
treatment would further procedural and fairness considerations. See Zivali, 784 F. Supp. 2d at
463. They have not.
1. Factual and Employment Settings
Plaintiffs have not demonstrated that they had similar job duties or were subjected to the
same system-wide meal break policies. Rather, the evidence points to an extremely wide range
of compensation practices across facilities in the context of varied employment settings. Each
facility had “discretion to independently establish their own tailored . . . practices on meal and
rest breaks, overtime authorization, and timekeeping within the requirements of federal law.”
(Dkt. 388-4, Exs. 6, 7 (“Bosco Decl.” at Ex. 7 ¶ 5).) The opt-in Plaintiffs worked in 395
departments in 39 business units at 59 locations within the LIJ Health System. (Dkt. 388-9
(“Krock Dec.”) ¶ 69.) They held 235 different positions during the claim period, were comprised
of both union and non-union members, worked on and off-site, and had varying degrees of
patient responsibility. (Id. at 24; Dkt. 388-11, Ex. 59 (“Hall Dep.”) 185:9-16, 329:25-330:4 (had
direct patient care duties as off-site field nurse and on-site nurse manager, but not when working
as floor nurse); Dkt. 388-8, Ex. 45 (“Abrams-Brown Dep.”) 19:1-20:22, 31:8-10 (did not provide
12
direct patient care as non-unionized RN manager); Dkt. 388-9 (“Hayes Dep.”) 73:25-74 (almost
all work was done off-site).) Even those involved in direct patient care often performed very
different tasks involving varying levels of patient interaction. (Hall Dep. 329:25-330:23; Dkt.
388-9, Ex. 73 (“Viola Dep.”) 35:7-11, 36:5-7, 36:18-37:17; Dkt. 388-8, Ex. 56 (“Green Dep.”)
57:4-21.) As a result of their varied duties, Plaintiffs scheduled their meal breaks differently.
(See Dkt. 388-1 at n. 10-14 (incorporating accompanying exhibits).) These variations militate
against proceeding as a collective action because whether and when Plaintiffs took meal breaks,
and the frequency with which they took them depended upon their particular work environment
and their job duties. See, e.g., Camilotes, 286 F.R.D. at 347 (citing White, 2011 WL 1883959 at
*7 (“Differences in the Opt-in Plaintiffs’ job duties are highly relevant to their claims that they
worked during meal breaks without compensation because their job duties dictated whether and
why they experienced missed or interrupted meal breaks.”); Kuznyetsov, 2011 WL 6372852 at *5
(“Job duties are highly relevant in terms of how, why and whether the employees were
compensated properly for missed or interrupted meal breaks.”).
In addition, Plaintiffs recorded their time using different methods.
Some Plaintiffs
testified that they “badge” or “punch” in and out, creating a log of the time that they started
work, left for a meal period, returned from a meal period, and ended work. (Dkt. 388-9, Ex. 62
(“Iwasiuk Dep.”) 198:3-22; Dkt. 388-9, Ex. 74 (“Weisenbach Dep.”) 35:20-36:5; Dkt. 388-9, Ex.
76 (“Yang Dep.”) 67:9-68:1; Dkt. 388-8, Ex. 48 (“Bharat Dep.”) 100:3-101:2.)
Those
employees would then claim credit for time worked during their meal periods in different ways;
some included a handwritten notation on their punch card, while others were required to notify a
supervisor who would make the notation for the employee. (Dkt. 388-9, Ex. 63 (“Kohler Dep.”)
13
51:10-15; Yang Dep. 87:23-88:7; 89:19-90:7; Dkt. 388-8, Ex. 54 (“Fisher Dep.”) 44:19-24; Dkt.
388-7, Ex. 21 (“Norr Decl.”) ¶ 20.)
The means by which Plaintiffs were required notify supervisors that they had worked
during a lunch period also varied. For some, informal notification sufficed; others had to fill out
an approval form. (Dkt. 388-1 at n. 34-37 (compiling testimony describing various methods of
notifying supervisors).) Still other employees, who recorded all of their time on handwritten
time sheets, were required to account precisely for their time in/out during meal periods, while
others who also hand-recorded their hours, were not. (Weisenbach Dep. 35:20-36:5; Dkt. 388-9,
Ex. 65 (“Perniciaro Dep.”) 22:17-23:20; Dkt. 388-9, Ex. 68 (“Ross Dep.”) 34:7-35:2; 54:1357:11; Dkt. 388-4, Ex. 10 (“Doyle Decl.”) ¶ 34.) Most, but not all, of the above systems required
a supervisor to transpose the net hours worked by an employee, as initially recorded by the
individual employee, onto a “master time sheet” for the unit or department each week. (Dkt.
388-4, Ex. 14 (“Goffin Decl.”) ¶ 14; Dkt. 388-4 (“Goldberg Dep.”) 30:14-19; Weisenbach Dep.
23:13-25:19; Dkt. 388-7, Ex. 32 (“Wiggins Decl.”) ¶ 15.)
Taken together, these factual
variations demonstrate that Defendants did not uniformly implement the overtime reporting or
approval policies, but rather allowed each department individually to implement those policies in
a way that addressed the particular needs of the department. See, e.g, White, 2011 WL 1883959
at *1 (decertifying automatic meal deduction collective action where, in implementing the
automatic meal deduction policy, each of the defendants’ departments were “free to formulate . .
. procedure[s] that work[ed] best for its employees”); Camesi, 2011 WL 6372873 at *7
(decertifying automatic meal deduction collective action, in part, because “[s]ome employees
would not have a scheduled time for meal breaks and would take them when they could, other
14
employees had regularly scheduled 30–minute breaks, and others had scheduled breaks that
could not always be followed”).
The methods through which Plaintiffs could recover automatically deducted meal periods
to accurately reflect hours worked varied greatly.
First, a Plaintiff may have received
compensatory time off, rather than overtime pay, in exchange for working through a meal break.
(Dkt. 388-7, Ex. 26 (“Sabatino Decl. I”) ¶ 11; Dkt. 388-7, Ex. 27 (“Sabatino Decl. II”) ¶ 18; Dkt.
388-4 (“Bentson Decl.”) ¶ 14; Dkt. 388-7, Ex. 28 (“Salvo Decl.”) ¶ 15; Dkt. 388-4, Ex. 8
(“Cenac Decl.”) ¶ 10.) Second, after receiving a paycheck, an employee who noticed missing
overtime may have complained to the appropriate LIJ supervisor, human resources department,
or her union representative, and subsequently received the overtime compensation on a later
paycheck. (Kohler Dep. 100:3-101:11; Yang Dep. 73:8-75:7; Dkt. 388-9, Ex. 64 (“Lambdin
Dep.”) 177:23-178:14; Weisenbach Dep. 54:22-55:8; Dkt. 388-9, Ex. 69 (“Sabatino Dep.”)
85:20-86:2.) Third, a Plaintiff may have combined two unpaid 15-minute rest breaks with one
30-minute paid break to take an hour-long break, and then treated only a half-hour as unpaid
time. (Dkt. 388-8, Ex. 55 (“Gaines Dep.”) 108:13-109:1; Dkt. 388-8, Ex. 50 (“Casaceli Dep.”)
130:8-131:10; Dkt. 388-8, Ex. 55 (“Correa-Tiernan Dep.”) 132:5-7; Viola Dep. 39:11-23,
113:14-22.)
While they did so by different methods, it is clear that LIJ employees were able to
recover compensation for overtime worked. LIJ paid out more than $551 million in overtime
compensation between March 24, 2007 and February 24, 2013, the period relevant to Plaintiffs’
FLSA claim, (Krock Dec. ¶ 58.9.3), a fact which “strongly suggests” LIJ managers honored
plaintiffs’ request for meal and rest break adjustments when properly requested. See Zivali, 784
F. Supp. 2d at 467. On the basis of this record, the Court cannot conclude that LIJ had any
15
uniform business practice across its many locations that intended to prevent employees from
receiving compensation for all of the time that they worked.
2. Individualized Defenses
The second relevant factor is the extent to which Defendants will assert individualized
defenses. When the employer’s defenses are highly individualized as to each Plaintiff, “this
factor weighs heavily against proceeding . . . as [an FLSA] collective action.” Zivali, 784 F.
Supp. 2d at 467-68.
LIJ’s defenses appear to be specific to individual Plaintiffs or groups of Plaintiffs. For
example, in order for Plaintiffs to prevail on their claims, they must demonstrate that LIJ had
actual or constructive knowledge of the meal-period work performed. See Kuebel, 643 F.3d at
361 (“To establish liability under the FLSA on a claim for unpaid overtime, a plaintiff must
prove that he performed work for which he was not properly compensated, and that the employer
had actual or constructive knowledge of that work”); see also Wolman, 853 F. Supp. 2d at 301
(“[I]t is the failure to compensate an employee who worked with the employer’s knowledge
through an unpaid meal break . . . that potentially violates the FLSA.”); Zivali, 784 F. Supp. 2d at
468 (citing Singh v. City of New York, 418 F. Supp. 2d 390, 397 (S.D.N.Y. 2005)). Where, as
here, there is no uniform policy or practice, “plaintiffs will have to demonstrate that each
individual manager had actual or constructive knowledge that plaintiffs were performing off-theclock work without proper compensation.” Zivali, 784 F. Supp. 2d at 468; see also Kuebel, 643
F.3d at 361.
Plaintiffs’ testimony suggests that the knowledge of each individual manager regarding
employees’ unpaid work varied widely. Some knew, or should have known, that not all meal
period work was properly compensated, while others may not have been aware that Plaintiffs
16
were performing such work.
(Perniciaro Dep. 105:11-16 (does not recall complaining to
supervisory staff or HR); Bharat Dep. 37:19-39:3 (spoke to his supervisor about breaks); Green
Dep. 94:23-95:8 (same); Iwasiuk Dep. 133:20-134:17 (complained about not getting overtime);
Yang Dep. 90:18-92:2, 99:8-101:11 (did not report all hours worked, but was paid for all the
hours she reported).)
In addition, Defendants intend to argue that Plaintiffs’ proposed collective action includes
exempt employees, who, by definition, are not eligible for overtime. Rams v. Baldor Specialty
Foods, Inc., 687 F.3d 554, 556 (2d Cir. 2012) (exempt employees are not entitled to overtime
pay”); Young v. Cooper Cameron Corp., 586 F.3d 201, 204 (2d Cir. 2009) (“employee[s]
employed in a bona fide . . . professional capacity are exempt from the FLSA’s overtime
requirements”) (citation and internal quotation marks omitted). Here, a significant portion—
perhaps as many as 547—of the conditionally certified class of 1,196 employees are or were
classified as exempt under the FLSA. (Krock Dec. ¶ 58.9.1.) Plaintiffs argue that no unique
inquiry is required because “exempt classification” is “based on the individual’s job title, not any
individualized inquiry into the job duties of any particular [P]laintiff.”
(Dkt. 403 at 18.)
However, as the Second Circuit has held, “FLSA regulations are explicit that the determination
of an employee’s exemption status must be based on the specific employee’s actual primary
duties, not on his or her title or position.” Gold v. New York Life Ins. Co., 730 F.3d 137, 145 (2d
Cir. 2013); see also Myers, 624 F.3d at 549 (“[T]he exemption inquiry requires examination of
the duties that the employee actually performs.”) (quoting 29 C.F.R. § 541.700(a)).
Furthermore, LIJ may defend against Plaintiffs’ claims by demonstrating that certain offduty work was de minimis. “The de minimis doctrine permits employers to disregard, for
purposes of the FLSA, otherwise compensable work ‘[w]hen the matter in issue concerns only a
17
few seconds of work beyond the scheduled working hours.’” Singh v. City of New York, 524
F.3d 361, 370-71 (2d Cir. 2008) (quoting Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680,
692 (1946); Reich, 121 F.3d at 64 (excluding “infrequent interruptions of a short duration” from
FLSA calculation); see also 29 C.F.R. § 785.47. For example, where, as here, an employee
involved in direct patient care needed to tend to a patient for a few extra moments or minutes, the
“extent to which work was de minimis, [] will necessarily vary widely according to the particular
situation of each individual plaintiff.” Zivali, 784 F. Supp. 2d at 468.
With these and other arguments available to Defendants, it is clear that their potential
defenses will be highly fact specific and therefore weigh against proceeding with this case as a
collective action.
3. Fairness and Procedural Considerations
Finally, the Court turns to whether fairness and procedural considerations counsel for or
against decertification. In doing so, the Court considers “whether a collective action would
lower costs to the plaintiffs through the pooling of resources, efficiently resolve common issues
of law and fact, and coherently manage the class in a manner that will not prejudice any party.”
Jason v. Falcon Data Com, Inc., 09-CV-03990 JG ALC, 2011 WL 2837488 (E.D.N.Y. July 18,
2011). Due to the many highly individualized factual issues this case presents, fairness and
procedural considerations weigh significantly against proceeding collectively. See White, 2011
WL 1883959 at *14 (“Because [the plaintiff] has not shown that the Opt-in Plaintiffs are
similarly situated . . . there is no judicial economy to be gained by allowing their claims to
proceed collectively.
The only possible results are unfairness to [the defendant] and
manageability problems for the Court.”)
18
Plaintiffs argue that a collective action “will undoubtedly lower the costs to [P]laintiffs
through the pooling of resources” and that common questions of law and fact could be more
efficiently resolved in a collective action as opposed to numerous individual proceedings. (Dkt.
403 at 30.) On the first score, Plaintiffs may be correct. However, cost savings “do[] not
override the negative effects that certification is very likely to have on the fairness and
manageability of the proceedings.” Camilotes, 286 F.R.D. at 353; see also Camesi, 2011 WL
6372873 at *9 (balancing “the reduced litigation costs to individual plaintiffs with the potential
effects that final certification may have on the fairness of the adjudication and the interests of
manageability and judicial efficiency”). With respect to efficiency, Plaintiffs have not offered a
manageable trial plan. Though Plaintiffs contend that “[a]djudication of the FLSA claims on a
collective basis is easily manageable here,” they do not say what the plan is, let alone provide
specifics. (Dkt. 403 at 32.) As in other hospital “auto-deduct” cases that have been decertified,
here Plaintiffs’ “counsel generally suggest that the various individualized inquiries could be
handled through representative testimony, bifurfacation or subclassification, [yet] they offer no
meaningful explanations of how this could be accomplished.” Camesi, 2011 WL 6372873 at *9.
At this stage, Plaintiffs needed to provide more than bare assurances regarding trial
manageability; it was incumbent on them to account for the rampant factual differences
discussed supra and to demonstrate how this case could be tried fairly, based on common proof.
They have utterly failed to do so.
The Court finds that the testimony Plaintiffs would offer would not be representative and
could not fairly be extrapolated across the 1,196 individuals who have opted into this action. As
another district court addressing non-payment of worked meal periods summarized the problem:
As is no doubt evident, the [plaintiffs’] experiences concerning their meal breaks
are diverse. In truth, whether Plaintiffs missed a meal break and reported it varies
19
from assignment to assignment and from [plaintiff] to [plaintiff]. Attempting to
generalize a [plaintiff’s] experience using a representative sample would be a
highly inaccurate method of determining the validity of Plaintiffs’ claims. It is
senseless to proceed as a collective action when Plaintiffs’ experiences regarding
missed meals vary from day to day, and from individual to individual. Even more
troubling is that [the defendant] will not have an opportunity to meaningfully
cross examine opt-in Plaintiffs concerning their meal breaks, which will produce
unfairness on both sides.
Reed v. County of Orange, 266 F.R.D. 446, 450 (C.D. Cal. 2010) (“[d]ecertification is
appropriate where plaintiffs are subject to varying work conditions in different work locations or
under different supervisors,” and where “the disparity between Plaintiffs’ factual and
employment settings as to . . . their meal breaks result[] in highly individualized questions of fact
that make proceeding as a collective action impractical and prejudicial to the parties”).
If the Court were to follow Plaintiffs’ approach, it would be left in the untenable position
of either having to hold, in effect, 1,196 mini-trials, or depriving Defendants of their due process
right to present its full defense. See Zivali, 784 F. Supp. 2d at 469. The Court declines to do so.
*
*
*
In sum, the three factors relevant to deciding the certification/decertification issue—
disparateness of the factual and employment settings of the individual plaintiffs, whether the
defenses
available
to
Defendants
are
individualized,
and
fairness
and
procedural
considerations—all favor decertification. Plaintiffs have failed to show that they were subject to
any unlawful uniform policy or practice at LIJ or that there existed at LIJ any uniform policy or
practice that resulted in systematic FLSA violations across the potential 1,196 member plaintiff
class. Accordingly, the collective action that was conditionally certified under the FLSA is
hereby decertified.
III.
Plaintiffs’ Motion for Rule 23 Class Certification
Plaintiffs move to certify the following class under Rule 23. (Dkt. 392.)
20
“The class plaintiffs seek to certify through this motion includes all current and
former hourly employees of North Shore-LIJ who were subject to the approval
pay policy and denied compensation for work performed during unpaid,
automatically deducted meal periods and before and after their scheduled shifts
because that additional time worked was not approved for payment by a manager
or supervisor, divided into the following two subclasses: (1) employees who used
the Kronos timekeeping system, which was implemented system-wide beginning
in or about 2010; and (2) employees who worked at Manhasset, Southside,
Huntington, Plainview, Syosset or in the LIJ Nursing Departments, prior to the
implementation of Kronos at those locations.” (Dkt. 392-1 at 4.)9
A number of district courts in this Circuit have observed that the second-stage “similarly
situated” analysis under FLSA § 216(b) is “considerably less stringent than the requirement of
Fed. R. Civ. P. (“FRCP”) 23(b)(3) that common questions ‘predominate.’” Ayers, 2007 WL
646326, at *4 (quoting Rodolico v. Unisys Corp., 199 F.R.D. 468, 481 (E.D.N.Y. 2001)); see
also Perkins v. S. New England Tele. Co., 669 F. Supp. 2d 212, 218 (D. Conn. 2009). For
largely the same reasons that Plaintiffs’ FLSA claim does not warrant collective treatment,
Plaintiffs’ inadequate compensation claims, under the FLSA and NYLL, 10 are also inappropriate
for class certification under Rule 23. In short, Plaintiffs have not met their burden of showing
that common questions of law and fact predominate over individualized factual inquiries under
Rule 23(b)(3), nor have they established that the case is manageable as a class action.
*
*
*
“In determining whether class certification is appropriate, a district court must first
ascertain whether the claims meet the preconditions of Rule 23(a) of numerosity, commonality,
typicality, and adequacy.” Teamsters Local 445 Freight Div. Pension Fund v. Bombardier Inc.,
9
The Court’s analysis regarding the fact intensive nature of Plaintiffs’ claims applies with
the same, if not more, force to the non-Kronos subclass as it does to the Kronos subclass which
the Court specifically addresses.
10
Although the allegations regarding Plaintiffs’ FLSA and NYLL claims are the same, only
the FLSA claims were conditionally certified for collective action. (Dkt. 212.) Plaintiffs now
seek to certify both their FLSA and NYLL claims under Rule 23(a).
21
546 F.3d 196, 201-02 (2d Cir. 2008) (“Bombardier”). Once these prerequisites have been met, a
court “may then consider granting certification where it ‘finds that the questions of law or fact
common to class members predominate over any questions affecting only individual members,
and that a class action is superior to other available methods for fairly and efficiently
adjudicating the controversy.’”
Id. (quoting FRCP 23(b)(3)); see also In re Initial Pub.
Offerings, 471 F.3d. 24, 30 (2d Cir. 2006). “The party seeking class certification bears the
burden of establishing by a preponderance of the evidence that each of Rule 23’s requirements
has been met.” Myers, 624 F.3d 537, 547 (2d Cir. 2010) (citing Amchem Prods., Inc. v. Windsor,
521 U.S. 591, 614 (1997); Bombardier, 546 F.3d at 196, 202–03).
Plaintiffs have not demonstrated that the questions they raise—namely whether
individual employees worked uncompensated overtime because of LIJ’s failure to enforce its
timekeeping and overtime compensation policies, and whether LIJ had knowledge that these
employees were not being paid correctly—will generate common class-wide answers, let alone
that these questions predominate over the myriad individualized inquiries presented by the facts
of this case. As discussed above, LIJ’s official policies, consistent with the law, provide that all
overtime worked should be compensated, and LIJ trains its managers on how to provide such
compensation. (Santiago Decl. Exs. 5, 6.) In fact, LIJ has paid out more than $551 million in
overtime compensation during the period relevant to Plaintiffs’ FLSA claim (Krock Dec. ¶
58.9.3.) Thus, as Plaintiffs concede, their claims hinge on whether an LIJ manager correctly
used his or her discretion to approve overtime worked during a meal period: “in order for hourly
employees to be paid for hours worked outside of their regularly scheduled shifts and during
unpaid automatically deducted meal periods, a manager must decide which, if any, of that time
should be paid and then enter whatever amount of time worked will be paid in Kronos.” (Dkt.
22
392-1 at 9) (emphasis added.) But, as the Supreme Court held in Wal-Mart v. Dukes, “a
corporate policy of . . . allowing discretion by local supervisors . . . is just the opposite of a
uniform employment practice that would provide the commonality needed for a class action.”
131 S. Ct. at 2554. In other words, even assuming a manager improperly disapproved payment
for time that was actually worked for LIJ’s benefit, while that violation may beget a claim for an
individual employee, it does not support class treatment.
As Plaintiffs acknowledge, the elements of their NYLL claim are the same as their FLSA
claim. (Dkt. 392-1 at 4-5.) Therefore, for the same reasons that Plaintiffs have failed to meet
their burden for class certification under the FLSA, they have also failed to demonstrate, by a
preponderance of the evidence, that common issues predominate over individual issues for their
NYLL claim under Rule 23(b). See, e.g., Hinterberger, 2014 WL 1278919, at *30 (proposed
hospital employee class did not satisfy Rule 23(b)(3) where implementation of the defendants’
automatic break deduction policy varied from department manager to department manager).
In sum, because the question of LIJ’s FLSA and NYLL liability necessarily depends on
whether, on a department-by-department basis, a particular manager failed to follow LIJ’s
directive to approve reported mealtime worked or knew that such work was performed but did
compensate employees as required, Plaintiffs cannot meet Rule 23(b)’s commonality precondition, nor can it satisfy the Rule’s predominance requirement. See Bombardier, 546 F.3d at
201-02.
Accordingly, the Court denies Plaintiffs’ motion for Rule 23 certification of the
proposed class under FLSA and NYLL.
23
IV.
Motions to Strike
A. Expert Report of Dr. Joseph Krock
Plaintiffs move to strike the expert report of Dr. Joseph Krock, which Defendants
submitted in support of their motion for decertification. (Dkt. 389.) Plaintiffs cite three reasons
for their motion. First, Defendants did not disclose Dr. Krock’s report to Plaintiffs prior to
Defendants’ motion for decertification. (Dkt. 389-1 at 1.) Second, Dr. Krock’s report “contains
an impermissible legal conclusion.” (Id.) Third, “Dr. Krock’s testimony is inadmissible under
Federal Rule of Evidence 702 because it is neither relevant nor reliable.” (Id.)
At the outset, the Court notes its limited reliance on Dr. Krock’s report in deciding the
certification issues before it. The Court cites to the Report as to only three uncontroverted
facts—the number of different positions held by opt-in Plaintiffs, the amount of overtime
compensation paid by LIJ to its employees, and the number of LIJ employees exempt under the
FLSA. That Plaintiff does not dispute these facts weighs heavily in favor of denying Plaintiffs’
motion to strike.
1. Failure to Disclose – FRCP 26(a)(2)
Plaintiffs seek to strike Dr. Krock’s report because Defendants did not disclose it to
Plaintiffs prior to the filing of Defendants’ motion for decertification. (Dkt. 389-1 at 1.)
Expert testimony must satisfy the disclosure requirements under FRCP 26(a)(2). The
party seeking to admit such testimony must (i) “disclose to the other parties the identity of any
witness it may use at trial to present evidence,” FRCP 26(a)(2)(A); (ii) accompany such
disclosure with “a written report—prepared and signed by the witness—if the witness is one
retained or specially employed to provide expert testimony in the case or one whose duties as the
party’s employee regularly involve giving expert testimony,” FRCP 26(a)(2)(B); and (iii) submit
24
the disclosure and written report “at the times and in the sequence that the court orders” or,
“[a]bsent a stipulation or a court order, . . . at least 90 days before the date set for trial or for the
case to be ready for trial,” FRCP 26(a)(2)(D). These requirements are intended to ensure that,
“sufficiently in advance of trial[,] . . . opposing parties have a reasonable opportunity to prepare
for effective cross examination and perhaps arrange for expert testimony from other witnesses.”
FRCP 26 Advisory Committee Notes to 1993 Amendments (emphasis added).
A textual reading of the rule supports the conclusion that, absent a stipulation or court
order, a party need not disclose its expert testimony until 90 days prior to trial. See, e.g., Weiss v.
Nat’l Westminster Bank, PLC, 242 F.R.D. 33, 63 (E.D.N.Y. 2007). Here, given the absence of a
scheduling order and trial date, Defendants’ duty to disclose was never triggered. Thus, the
timing of the disclosure does not, in itself, justify striking the report.
To the extent Plaintiffs claim that they were prejudiced by the timing of the Report’s
disclosure (Dkt. 389 at 5-6), the Court would ordinarily consider permitting Plaintiffs the
opportunity to depose Dr. Krock, and then have the parties re-file their certification briefs.
However, given the Court’s limited reliance on the Report, such additional discovery would be
futile and the resulting delay unwarranted.
2. Legal Conclusions
Plaintiffs also argue that “Dr. Krock’s expert report must be stricken because it opines as
to the ultimate legal conclusion that is for this Court to decide,” namely “whether there is
sufficient commonality among the opt-in plaintiffs such that liability can be adjudicated
collectively.” (Id. at 6.) The Court agrees that Dr. Krock’s report includes impermissible legal
conclusions that the Court should not consider in deciding the certification issue, on summary
judgment or at trial. See United States v. Scop, 846 F.2d 135, 139, 142 (2d Cir. 1988), rev’d in
25
part on other grounds, 856 F.2d 5 (2d Cir. 1988) (expert witness statement “embodying legal
conclusion exceeded the permissible scope of opinion testimony under the Federal Rules of
Evidence”). For example, the Report states:
After an extensive review of the available data and other materials, I have concluded that:
1) The determination of liability and damages for working through all or part of meal
periods is fact specific and requires individual inquiry into each alleged,
uncompensated missed meal period for each Opt-In Plaintiff.
2) The members of the collective action have such varied employment experiences that
sampling them cannot be used to estimate collective class wide liability and damages.
(Krock Dec. ¶ 39.)
However, in its limited use of Dr. Krock’s report, the Court has not relied on the disputed
conclusory statements or any legal conclusions asserted by Dr. Krock. Furthermore, that the
Report contains limited legal conclusions does not provide a basis to strike the entirety of the
report. See, e.g., Ebbert v. Nassau County, 2008 WL 4443238, at *13 (E.D.N.Y. Sept. 26, 2008)
(denying motion to strike entire expert report, striking only the legal conclusions from the expert
report) (collecting cases).
3. Admissibility – Fed. R. Evid. 702
Plaintiffs assert that the Report is irrelevant and unreliable. Federal Rule of Evidence
(“FRE”) 702 governs the admissibility of expert testimony:
A witness who is qualified as an expert by knowledge, skill, experience, training,
or education may testify in the form of an opinion or otherwise if: (a) the expert’s
scientific, technical, or other specialized knowledge will help the trier of fact to
understand the evidence or to determine a fact in issue; (b) the testimony is based
on sufficient facts or data; (c) the testimony is the product of reliable principles
and methods; and (d) the expert has reliably applied the principles and methods to
the facts of the case.
Fed. R. Evid. 702.
26
The district court must perform a “gatekeeping role” in applying FRE 702, “ensuring that
an expert’s testimony both rests on a reliable foundation and is relevant to the task at hand.”
Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 597 (1993) (emphasis added). In addition
to the relevance and reliability requirements, district courts are also required to consider
“whether a witness is ‘qualified as an expert by knowledge, skill, experience, training, or
education’ to render his or her opinions.” Nimely v. City of N.Y., 414 F.3d 381, 395 n.11 (2d Cir.
2005) (emphasis added). In short, expert testimony must satisfy three requirements—relevance,
reliability, and qualification—to be admissible.
Plaintiffs do not challenge Dr. Krock’s qualifications; rather, they challenge his report as
both irrelevant, because it “primarily relates to damages and is therefore not relevant to
certification,” and unreliable because it is “based on flawed analyses.” (Dkt. 389-1 at 8, 11.)
The Court has not relied on any of the Report’s damages calculations or “rate of meal period
cancellation” analysis to which Plaintiffs object. The specific portions of Dr. Krock’s report on
which the Court relied, and which were undisputed by the parties, are both relevant and reliable
to the degree necessary for consideration. See, e.g., Zerega Ave. Realty Corp. v. Hornbeck
Offshore Transp., LLC, 571 F.3d 206, 213-14 (2d Cir. 2009) (expounding on the high bar
required to find evidence unreliable). It is unnecessary for the Court to address Plaintiff’s
challenges to the remainder of the Report at this time.
Accordingly, Defendants’ motion to strike Dr. Krock’s Report is denied.
B. Rule 23 Affirmation of Sarah E. Cressman
Defendants move to strike the Rule 23 Affirmation of Sarah E. Cressman, which
Plaintiffs submitted in support of their motion for class certification. (Dkt. 390.) Because the
Court does not rely on Ms. Cressman’s affirmation, Defendants’ motion is denied as moot.
27
V.
Sanctions
Defendants urge the Court to impose both monetary and non-monetary sanctions on
Plaintiffs and their attorneys, Thomas & Solomon LLP, pursuant to FRCP 11. (Dkt. 391.)
Rule 11 provides that a court may impose sanctions either by motion or by its own
initiative, when, inter alia, an attorney falsely certifies that “factual contentions have any
evidentiary support” or are “likely [to] have any evidentiary support after a reasonable
opportunity for further investigation or discovery.” Fed. R. Civ. P. 11(b)-(c); see also Ipcon
Collections LLC v. Costco Wholesale Corp., 698 F.3d 58, 63 (2d Cir. 2012) (“Sanctions may
be—but need not be—imposed when court filings are used for an ‘improper purpose,’ or when
claims are not supported by existing law, lack evidentiary support, or are otherwise frivolous.”).
“[E]ven when a district court finds a violation of Rule 11, ‘the decision whether to impose a
sanction for a Rule 11(b) violation is . . . committed to the district court’s discretion.’” Ipcon
Collections, 698 F.3d at 63 (quoting Perez v. Posse Comitatus, 373 F.3d 321, 325 (2d Cir.
2004)). District courts must exercise restraint in determining whether sanctions are necessary.
Storey v. Cello Holdings, L.L.C., 347 F.3d 370, 387 (2d Cir. 2003) (citation omitted).
Here, Defendants contend that Plaintiffs, under the direction and guidance of their
attorneys, Thomas & Solomon LLP, submitted false affirmations in support of their motion for
conditional certification. (Dkt. 391-1.) Where, as here, a motion for sanctions is based on the
submission of unsupported factual allegations, “sanctions may not be imposed unless a particular
allegation is utterly lacking in support.” Storey, 347 F.3d at 388 (quoting O’Brien v. Alexander,
101 F.3d 1479, 1489 (2d Cir. 1996); see also Kiobel v. Millson, 592 F.3d 78, 81 (2d Cir. 2010)
(“A statement of fact can give rise to the imposition of sanctions only when the particular
allegation is utterly lacking in support.”)
28
Defendants contend that absent Plaintiffs’ false affirmations, the Court would not have
conditionally certified Plaintiffs’ collective action. (Dkt. 408 at 1.) In support of their argument,
Defendants have submitted a 35-page chart containing alleged contradictions between Plaintiffs’
affirmations and their deposition testimony. (Dkt. 408-1, Ex. A.) Though Defendants take issue
with particular contradictory statements, Defendants’ overarching complaint is best summed up
by the following statement from their brief:
This [case] is an example of opportunistic class action lawyering at its worst: in a
rushed effort to get a class conditionally certified and investigate grounds for the
lawsuit later, Plaintiffs’ counsel cut and pasted affirmations from their other
“auto-deduct” cases – and the Plaintiffs blindly signed them – without regard for
their truth or falsity. (Dkt. 408 at 1.)
Indeed, given the number of statements that Plaintiffs subsequently disavowed or
admitted were not based on personal knowledge (see Dkt. 391-1 at 7-13), the fact that
Plaintiffs’ affirmations appear to simply track the allegations in the TAC (see, e.g., Dkt.
391-1 at 5-6), and the fact that Thomas & Solomon LLP has filed more than a dozen
putative class actions against healthcare systems in the Northeast based on almost
identical allegations, Lundy v. Catholic Health Sys. of Long Island Inc., Case No. 121453, 2013 WL 765117 at *1 (2d Cir. Mar. 1, 2013), Defendants’ criticisms are
legitimate and their frustration warranted. In fact, Plaintiffs’ counsel have already been
sanctioned once, Pruell v. Caritas Christi, 09-cv-11466, Dkt. 141, Slip Op. at 1-2 (D.
Mass. May 31, 2013), and chastised in other instances. See, e.g., Nakahata v. New YorkPresbyterian Healthcare Sys., Inc., 10 CIV. 2661 PAC, 2011 WL 321186, at *6
(S.D.N.Y. Jan. 28, 2011) aff'd in part, vacated in part, remanded, 723 F.3d 192 (2d Cir.
2013) (“The very fact that this boilerplate complaint has been used, with identically
vague and conclusory allegations, in more than a dozen actions in New York and
29
elsewhere is a vivid demonstrative of how not to plead.”); DeSilva I, 770 F. Supp. 2d at
547 (“If plaintiffs choose to re-plead, their Third Amended Complaint ‘should not take a
blunderbuss approach of alleged wrongs, multiple defendants who are not employers, and
random citation of inapplicable statutes.’” (quoting Nakahata, 2011 WL 321186, at *6)).
However, while the Court does not approve of the tactics and conduct of
Plaintiffs’ counsel in pursuing this case, including what can charitably be described as
taking “shortcuts” in preparing Plaintiffs’ affirmations (see, e.g., Dkt. 408-1), in light of
the seriousness with which the Court regards the imposition of sanctions, the Court
declines to do so at this time. This decision is based primarily on the Court’s finding that
the allegedly false statements and inaccuracies in Plaintiffs’ affirmations were not
outright lies or fabrications, but amounted to overstatements and partial inaccuracies
caused by Plaintiffs’ counsel’s sloppy cut-and-paste approach to drafting the
affirmations. Moreover, given the number of affirmations and the diversity of Plaintiffs’
work experiences, their cumulative effect provided at least some factual support for
Plaintiffs’ theory of the case, namely that LIJ maintained system-wide time-keeping and
overtime compensation policies that may not have been consistently enforced by
individual managers. See Kiobel, 592 F.3d at 81 (sanctions may not be imposed unless a
particular allegation is “utterly lacking” in support). The Court therefore does not accept
Defendants’ contention that conditional certification of the collective action would have
been denied but for the inaccuracies in Plaintiffs’ affirmations.
The inaccuracies in Plaintiffs’ affirmations were generally either: (1) statements
purportedly based on “personal knowledge” when, in reality, Plaintiffs were inferring
facts based on their own experiences; or (2) statements purportedly based on the
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declarant’s “work[] throughout the [LIJ] health system” when, in reality, he or she had
only worked at one or more, but not all, facilities within the LIJ Health System. (See,
e.g., Dkt. 408-1 at Ex A. 1-13, 19-20, 34-35.) At worst, these inaccuracies amounted to
overstatement, i.e., drawing broader generalizations from the declarant-Plaintiff’s own
experiences but presenting these generalizations as fact based on personal knowledge.
As the Second Circuit has held, “Rule 11 neither penalizes overstatement nor authorizes
an overly literal reading of each factual statement.” Kiobel, 592 F.3d at 83 (citation and
quotation marks omitted).11
11
In some cases, the affirmation statements identified as false or inaccurate by Defendants
were not actually directly contradicted by the plaintiff’s later deposition testimony. A
representative example from Defendants’ Chart is Plaintiff Haas’s Declaration (Dkt. 388-7, Ex.
37), which in Paragraph 7 states: “In fact . . . hourly employees, including myself, often
performed work for the Hospital System during [meal periods], even though under the Hospital
System’s auto deduct policy[,] it did not pay us for that time.” The portions of Haas’s deposition
that Defendants identified as contradictory to this affirmation statement are:
Q. And do you know whether any of the departments at the hospital system outside of
what you already testified to with the two ICU units you worked in, do you know
whether any other departments of the hospital required their employees to work during
meal breaks?
A. I don’t know. (Dkt. 388-9, Ex. 58 (“Haas Dep.”) 141:11-18)
Q. And do you have any information about how employees in other North Shore
facilities took their meal breaks?
A. No. (Haas Dep. 103:13-16)
Haas’s affirmation can be reconciled with his deposition testimony. The
affirmation statement very well may have meant that Haas and other employees whom he
knew or worked with were not paid for work they performed during meal breaks. This
statement is not necessarily inconsistent with his deposition responses about lacking
information at to employees outside of the units he worked in. Without having been
asked at deposition whether any LIJ employees were subject to auto-deduct, the Court
cannot definitively determine that Haas’s affirmation statement and deposition testimony
were contradictory.
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Accordingly, the Court denies Defendants’ motion for sanctions in its entirety.
CONCLUSION
For the foregoing reasons: Defendants’ motion to decertify Plaintiffs’ conditionally
certified class (Dkt. 388) is GRANTED; Plaintiffs’ motion for Rule 23 and FLSA final
certification (Dkt. 392) is DENIED; Plaintiffs’ motion to strike the expert report of Dr. Joseph
Krock (Dkt. 389) is DENIED; Defendants’ motion to strike the Rule 23 Affirmation of Sarah E.
Cressman (Dkt. 390) is DENIED as moot; and Defendants’ motion for sanctions (Dkt. 391)
against Plaintiffs and their counsel is DENIED.
Accordingly, the class is decertified, the claims of the opt-in plaintiffs are dismissed
without prejudice, and the named Plaintiffs have the option of pursuing their claims on
individual bases. The parties shall meet and confer and submit a joint letter to the Court by July
1, 2014 as to how the parties plan to proceed.
Likewise, with respect to alleged misrepresentations identified by Defendants
regarding whether meal breaks were given and properly recorded, it is impossible for the
Court to determine without further context whether a Plaintiff’s affirmation statement is
in fact contrary to his or her deposition testimony. For example, Defendants claim ¶ 26
of Plaintiff DeSilva’s affirmation, which states, “[o]ther hourly employees had
conversations with our managers in which we discussed how we are working through
these meal periods and were not getting paid for such work,” is contradicted by her
deposition testimony. (Dkt. 388-7, Ex. 35 ¶ 3, 9, 13, 14, 20.) During her deposition,
when questioned about system-wide timekeeping and meal break policies, DeSilva
responded, “[a]ll I can speak for is the other North Shore employees that I’m with.”
(Dkt. 388-8, Ex. 52 171:16-173:16, 185:16-21, 187:14-188:25, 190:18-24.) That
testimony does not directly conflict with DeSilva’s affirmation because in her
affirmation, as during her deposition, she could have been referring only to employees
with whom she had contact. Furthermore, Defendants fail to mention that DeSilva later
testified in her deposition that employees complained to management about working
through meal periods without pay during monthly staff meetings. (Dkt. 400-4 (DeSilva
Tr.) 189:1-190:1, 196:19-22, 251:16-252:1, 253:1-21.) Plaintiffs provide another
example where context is important: “that Gregg Lambdin may have been able to take a
meal break whenever he worked with another nurse clinician is not a far cry from his
assertion that he was not relieved by other employees to take a break; defendants fail to
point out that Lambdin rarely, if ever, worked with another nurse clinician alongside
him.” (Dkt. 400 at 3 (citing Lambdin Dep. 68:11-69:12, 101:9-107:20).)
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SO ORDERED:
/s/ Pamela K. Chen
PAMELA K. CHEN
United States District Judge
Dated: June 5, 2014
Brooklyn, New York
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