In Lynch v. The City Of New York, the Southern District of New York decertified a conditionally certified FLSA collective of thirty Administrative Associates alleging, primarily, that they were not paid overtime for all hours worked. See No. 16-CV-5677 (KBF) (S.D.N.Y. Oct. 27, 2017). The Court’s decision hinged on the variation in facts necessary to establish an element of each plaintiff’s claim: whether the City had actual or constructive knowledge of the allegedly unpaid work.
The City used a web-based program called “City Time” that allowed employees to manage their time at work, electronically submit time sheets, and make requests for overtime. Employees were responsible for submitting compensation requests when they worked beyond their regularly scheduled shifts. City Time required employees to review and certify their weekly hours, including whether they worked any time outside of their regularly scheduled. The Court found the program effective, noting that 98.5% of overtime requests submitted by the plaintiffs had been approved.
The Court analyzed the motion for decertification under the second-step of the Myers v. Hertz Corp., 624 F.3d 537 (2d Cir. 2010) standard. The Court acknowledged that it was bound to apply a more “stringent standard” than at the conditional certification stage to determine whether the named plaintiffs were similarly situated to the opt-in plaintiffs. The Court thus considered: (i) the disparate factual and employment settings of the individual plaintiffs; (ii) the defenses available to defendants which appear to be individualized; and (iii) fairness and procedural considerations. The Court summarized the plaintiffs’ burden as making “a persuasive showing that the original and opt-in plaintiffs were common victims of an FLSA violation pursuant to a systematically-applied company policy or practice such that there exist common questions of law and fact that justify representational litigation.”
As to disparate factual and employment settings, the Court credited the differences among the plaintiffs identified by the City including their varying levels of responsibility, times that they were on and off-site, and different supervisors. The Court found the variation in the supervisors under which the plaintiffs worked to be the most critical because it impacted whether the City had actual or constructive knowledge of the allegedly uncompensated work. Further, the Court noted that each plaintiff had a different experience in terms of what their supervisor told them, with directives ranging from “no overtime” to “overtime always approved.”
As to individualize defenses, the Court held that the differences among supervisors would likewise provide the City with defenses particular to each plaintiff. The Court also found that the merit of any claim would be dependent, in part, on the acts of the employee; i.e. whether a particular employee failed to request compensation through City Time. This too counseled against continued collective treatment.
Finally, as to fairness and procedural considerations, the Court rejected the plaintiffs’ claim that the burden of individual actions merited collective treatment. The Court noted that if collective treatment were permitted, “each plaintiff would [still] need to present evidence about their failure to receive overtime compensation, subject to cross-examination and individual challenges by the defendant.” Thus, the Court found that any judicial efficiencies would evaporate. Accordingly, the Court decertified the collective.
The arguments that can be advanced in support of a motion for decertification will necessarily vary from case to case based upon the relevant issues and the facts associated therewith. Not all variations will be relevant or fruitful for this purpose. In Lynch, for example, the Court found differences as to supervisor knowledge determinative, but dismissed the employer’s argument concerning variations in job duties as tangential to the core issues. It is critical for employers to identify the issues that matter through early investigation at the inception of litigation and to conduct discovery strategically to exploit variations as to these issues in assembling the building blocks for a decertification motion.