Wednesday, July 18, 2012

Federal Court Grants Conditional Class Certification Applying Lenient FLSA Standard

In a case co-counseled by Bryan Schwartz Law, the federal court for the Northern District of California conditionally certified a class of employees who are suing Sephora, a beauty supply retailer, for unpaid overtime under the Fair Labor Standards Acts (“FLSA”). See Sanchez v. Sephora USA, Inc., Order Granting Plaintiff’s Motion for Conditional Certification, Case No. 11-03396 SBA, Dkt. 27 (July 18, 2012) (Armstrong, J.). Judge Saundra Brown Armstrong pointedly rejected Sephora’s arguments against conditional certification, reinforcing the lenient standard for FLSA claims established in previous decisions such as Stanfield v. First NLC Fin. Servs., LLC, 2006 WL 3190527, at *2 (N.D. Cal., 16 Nov. 1, 2006) (Armstrong, J.).

The decision is a great victory for plaintiffs and employees, making it easier for employees collectively to challenge illegal wage-and-hour practices. With declarations from only four colleagues from other Sephora retail locations, the plaintiff in Sephora was granted permission to send notice to all Sephora employees in her position, inviting them to opt in to her lawsuit. Sephora, supra, at *8.

Below are some highlights from the court’s decision:
a) Plainttiff’s Declarations Need Not Be Very Specific or Tailored to Each Employee 
In granting conditional certification and notice to potential class members, the Sephora court rejected Sephora’s argument that the declarations submitted by the plaintiff were “cookie-cutter,” i.e. used very similar language, noting:

The mere fact that the declarations submitted by Plaintiff are virtually identical does not ipso facto render them incompetent, particularly at this stage of the proceeding where the Court is applying a lenient standard of review.

Sephora, supra, at *3 (citing Keiholtz v. Lennox Hearth Prods., Inc., 268 10 F.R.D. 330,337 n.3 (N.D. Cal. 2010)).

The Court also rejected Sephora’s argument that Plaintiff’s declarations “lacked foundation” or were “vague and ambiguous.”

It is axiomatic that the declarants are competent to articulate what their particular job duties were. Though the declarants may not have provided specific details regarding each and every aspect of their position as a Specialist, the lack of such information does not render their statements “vague and ambiguous” as Sephora asserts.

Sephora, supra, at *3.

b) The Standard For Conditional Certification Is Extremely Lenient 
The Sephora court carefully distinguished the initial stage of conditional certification, where the court is essentially deciding whether to send notice to potential class members, and the second stage, where the court engages in a “more searching inquiry” based on a full factual record. Sephora, supra, at * 4-5. At the initial stage, "[s]ince this first determination is generally made before the close of discovery and based on a limited amount of evidence, the court applies a fairly lenient standard and typically grants conditional class certification." Sephora, supra, at *4 (citing Misra v. Decision One Mortg. Co., LLC, 673 F. Supp. 2d 987, 993 (C.D. Cal. 2008)).

In terms of evidence, “the court requires little more than substantial allegations, supported by declarations or discovery, that the putative class members were together the victims of a single decision, policy, or plan." Sephora, supra, at *4. “[S]ubstantial and detailed” evidence is not necessary at the initial stage, only “some evidence.” Sephora, supra, at *6 (citing Kress v. Pricewaterhouse Coopers, LLP, 263 27 F.R.D. 623, 630 (E.D. Cal. 2009)).

Under this lenient standard, the Court found that the plaintiff’s evidence’s was sufficient for conditional certification:

The job descriptions, documents, admissions and declarations proffered by Plaintiff demonstrate that Sephora's policy of allegedly improperly classifying its Specialists as exempt from the FLSA is widespread and ongoing. This evidence shows Sephora's Specialists were employed with a common job description, performed similar job duties, under identical pay provisions, and is sufficient for conditional certification at this stage of the proceedings.

Sephora, supra, at *6.

c) Dukes does not apply to FLSA claims 
Sephora attempted to use the Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) – which denied class certification in a mass sex discrimination case – to defeat the plaintiff’s motion for conditional certification under FLSA. The Sephora court flatly rejected this argument on the grounds that Rule 23 – and thus Dukes’s stringent commonality requirement – does not apply to FLSA claims:

Sephora has not cited nor has the Court found any authority extending Dukes to a FLSA action, particularly at the frrst stage of the certification process. Indeed, application of Dukes to the conditional certification analysis would be contrary to the weight of authority holding that the FLSA's "similarly situated" requirement is less stringent than Rule 23's standard for class certification. See O'Brien v. Ed Donnelly Enters., Inc., 575 F.3d 567, 584 (6th Cir. 2009) (holding that district court erred in applying Rule 23 standard to determine whether opt-in plaintiffs were similarly situated under the FLSA); see also Grayson v. K Mart Corp., 79 F.3d 1086, 1096 (11th Cir. 1996).

Sephora, supra, at *4.

d) There Are No “Individualized Inquiries” at the Conditional Certification Stage 
Sephora argued that its policies varied from store to store and that therefore “individualized inquiries” were necessary to determine whether plaintiff and other Sephora employees were similarly situated for purposes of class certification. The court dismissed this argument out of hand on the grounds that it “go[es] to the merits and is better addressed at the second stage after discovery has closed.” Sephora, supra, at *7 (citing Stanfield, 2006 WL 7 3190527 at *3).

e) Evidence From the Employer is Irrelevant at the Conditional Certification Stage 
The court rebuked Sephora for relying “heavily on declarations from a number of its employees for the proposition that individualized inquiries are necessary to determine class members’ job duties.” Sephora, supra, at *7. The Court reiterated a clear and simple rule: “[E]vidence from the employer is not germane at the first stage of the certification process, which is focused simply on whether notice should be disseminated to potential claimants.” Sephora, supra, at *7 (citing Grayson, 79 F.3d at 1099 n.17; Luque v. AT & T Corp., 2010 WL 4807088, at *5 (N.D. Cal., Nov. 19, 2010); Kress, 263 F.R.D. at 628)).

f) Plaintiffs Need Not Show that a Sufficient Number of Employees Wish to Opt In 
Lastly, Sephora attempted to argue that plaintiff had not shown that a sufficient number of employees in plaintiff’s position wished to opt in to the lawsuit. The court promptly dispatched this argument noting that there is no authority requiring such a showing and that it would be “counter to the lenient standard applicable to motions for conditional certification.” Sephora, supra, at *8 (citing Delgado v. Ortho-McNeil, Inc., 2007 WL 2847238, at *2 (C.D. Cal., Aug. 7, 2007); Probert v. Family Centered Servs. of Alaska, Inc., 651 F.3d 1007, 1010 (9th Cir. 2011); Tony and Susan Alamo Foundation v. Secretary of Labor, 471 U.S. 290, 296 (1985)).

g) Plaintiffs Can Send Their Own Notice To Potential Class Members 
After the court granted plaintiff’s motion for conditional certification and dissemination of notice to class members, Sephora argued that it or a neutral third party should disseminate the class notice. The court rejected this argument as well. Sephora, supra, at *9 (citing Stanfield, 2006 WL 7 3190527 at *5). Instead, the court required Sephora to provide plaintiff with the names, addresses and telephone numbers of potential class members, so that plaintiff could send her own notice. Sephora, supra, at *9. In so holding, the court noted that the disclosure of names, addresses and numbers does not violate class members’ privacy rights. Id. (citing Khalilpour v. CELLCO P'ship, 2010 13 WL 1267749, at *3 (N.D. Cal., Apr. 1, 2010)).

On the basis of these holdings, the Court in Sephora gave the plaintiff permission to send an initial notice to potential class members giving them sixty days to opt in to the lawsuit, as well as a follow-up reminder notice. Sephora, supra, at *8-10. These notices will help inform other Sephora employees in plaintiff’s position that their workplace rights are potentially being violated and will give them the opportunity to vindicate those rights in court.

If you are being denied overtime or other wages as a result of a company-wide policy and wish to pursue an individual or collective action, contact Bryan Schwartz Law.

Disclaimer: Nothing in this article is intended to form an attorney-client relationship with the reader or to provide legal advice in a particular case, but is intended as commentary on a matter of general interest.