duaneJust last week, we offered a web training to our clients highlighting the continuing challenges faced by employers as they strive to comply with state and federal wage and hour laws. A June 9th decision by New York District Judge Paul Oetken in Mani Jacob et. Al. v. Duane Reade Inc. et al., denying Duane Reade’s fourth attempt to fight the certification of a class of assistant managers in a wage/hour case, is yet another illustration of this issue.

  • Once again, the question of whether lower-level managers qualify as ‘exempt’ from overtime bedevils a major retailer. The decision clarifies that, to fit that definition, the retailer needs to give the manager real autonomy and real decision-making authority.
  • It is also clear from the decision that there is a continuing trend in the federal courts, creating a relatively easy path to class certification for plaintiffs in wage/hour litigation.
  • The recent changes in the FLSA salary thresholds, discussed in our blog on May 31, will only make FLSA compliance more challenging.

In fact, this decision is already reverberating in the world of FLSA litigation, having been cited by the plaintiffs in a letter to the court in a similar action pending in New Jersey against Burlington Coat Factory and profiled in this recent Law360 article.

Background

The Jacob case dates back to 2011, when plaintiffs, a group of assistant store managers (“ASMs”) at Duane Reade, sued the pharmacy chain claiming that they were wrongly classified as exempt and should in fact be eligible for paid overtime. The retailer pushed back, claiming that these plaintiffs were exempt under either the “administrative” or “managerial” exemptions, and that the disparities in their individual duties and employment terms did not support litigation of these issues on a class-wide basis.  Rejecting those arguments, Judge Oetken first certified a class of 250 ASMs in 2012 under the FLSA’s “collective action” standard.  After additional discovery, a larger “opt out” class of 750 ASMs was certified in March 2013, under the New York Labor Law.  In an interesting twist, later in 2013 the Judge de-certified the classes on the issue of damages, but then declined to de-certify the two classes on liability.

In a significant decision in January 2015, the Second Circuit affirmed class certification.

(See also our related articles on class certification: Supreme Court Limits Wal-Mart, Approves Representative Proof in Employee Class Actions; and Supreme Court Refuses to Review $188M Class Action Verdict Against Wal-Mart Based Upon “Trial by Formula.”)

Undeterred, Duane Reade most recently went back to Judge Oetken to ask him to reconsider the class certification issue, citing “new evidence” which it claimed had been uncovered in later discovery.

Asking a judge to reconsider a past decision is always an uphill battle, as you are (basically) telling the judge he is wrong and asking the judge to potentially reverse himself.  If this is going to be undertaken, it has to be based on something very new – a new legal precedent or new evidence that has been discovered since the first decision was issued.  What was clear from the tenor of the recent decision is that Judge Oetken was frustrated, felt that the “mélange” of allegedly ‘new’ evidence presented by Duane Reade was “unconvincing”, and that the record supported his original findings that a class should be certified.

Continue Reading The Fourth Bite at the Apple Uncovers a “Worm” for Duane Reade