Comer v. Wal-Mart Stores ( 2006 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 06a0250p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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Plaintiffs-Appellees, -
KIM COMER, et al.,
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No. 05-1761
v.
,
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WAL-MART STORES, INC., -
Defendant-Appellant. -
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Appeal from the United States District Court
for the Western District of Michigan at Grand Rapids.
No. 04-00108—Richard A. Enslen, District Judge.
Argued: May 30, 2006
Decided and Filed: July 19, 2006
Before: BOGGS, Chief Judge; and GIBBONS and GRIFFIN, Circuit Judges.
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COUNSEL
ARGUED: Neal D. Mollen, HASTINGS, JANOFSKY & WALKER, Washington, D.C., for
Appellant. Harry Ingleson II, Petoskey, Michigan, for Appellees. ON BRIEF: Neal D. Mollen,
John P. Isa, HASTINGS, JANOFSKY & WALKER, Washington, D.C., Judith M. Kline,
HASTINGS, JANOFSKY & WALKER, Los Angeles, California, for Appellant. Harry Ingleson
II, Petoskey, Michigan, John B. Ingleson, Murfreesboro, Tennessee, for Appellees.
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OPINION
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BOGGS, Chief Judge. Wal-Mart appeals the district court’s January 4, 2005, order granting
the motion of plaintiffs, former Wal-Mart Assistant Store Managers (ASMs), to approve notice to
advise ASMs employed at any time in the past three years in Wal-Mart’s Region 3 (comprising
Michigan, Northern Indiana, and Northern Ohio) of their rights under the Fair Labor Standards Act
(“FLSA”) and to furnish them an opportunity to opt into plaintiffs’ lawsuit pursuant to 29 U.S.C.
§ 216(b). We DISMISS Wal-Mart’s appeal for lack of jurisdiction.
I
Section 207(a) of the FLSA requires employers to pay time-and-a-half for employee labor
exceeding forty hours per week. The FLSA exempts employees who are
1
No. 05-1761 Comer, et al. v. Wal-Mart Stores, Inc. Page 2
employed in a bona fide executive, administrative, or professional
capacity . . . ( . . . except that an employee of a retail or service
establishment shall not be excluded from the definition of employee
employed in a bona fide executive or administrative capacity because
of the number of hours in his workweek which he devotes to
activities not directly or closely related to the performance of
executive of administrative activities, if less than 40 per centum of
his hours worked in the workweek are devoted to such activities. . .
.)
29 U.S.C. § 213(a)(1).
Employees can sue in their own behalf and for “similarly situated” persons. Section 216(b)
establishes two requirements for a representative action: 1) the plaintiffs must actually be “similarly
situated,” and 2) all plaintiffs must signal in writing their affirmative consent to participate in the
action. 29 U.S.C. § 216(b); Hoffman-La Roche, Inc., v. Sperling, 493 U.S. 165, 167-68 (1989).
Similarly situated persons are permitted to “opt into” the suit. This type of suit is called “collective
action.” It is distinguished from the opt-out approach utilized in class actions under Fed. R. Civ. P.
23.
The district court may use its discretion to authorize notification of similarly situated
employees to allow them to opt into the lawsuit. Hoffman-La Roche, 493 U.S. at 169. The court
must first consider whether plaintiffs have shown that the employees to be notified are, in fact,
“similarly situated.” Pritchard v. Dent Wizard Int’l Corp., 210 F.R.D. 591, 594 (S.D. Ohio 2002).
The plaintiffs in this case are former ASMs seeking overtime back-pay for work in excess
of 40 hours per week. They claim that Wal-Mart established working conditions such that ASMs
were required continuously to perform the same tasks as hourly employees (unloading trucks of
merchandise, stocking shelves, rotating stock, etc.) and that for this and other reasons they do not
fall within FLSA’s bona fide executive exemption. The plaintiffs seek to pursue this litigation as
a collective action under § 216(b). Wal-Mart claims that its ASMs are bona fide executives and
therefore exempt from FLSA’s hourly pay requirements.
On May 7, 2004, the district court ordered that discovery proceed in steps. The court first
ordered limited discovery related to two questions: 1) whether the suit should properly continue as
a collective action, and 2) how best to define the collective action group or class. The court set a
deadline of November 30, 2004, for completion of this portion of discovery. For the initial phase,
the order contemplated production of documents, expert witness reports, and small numbers of
depositions (ten per party) and interrogatories (twenty-five per party). The district court ordered that
merits and damages discovery be postponed until a later phase of the litigation.
The district court’s order bifurcating discovery was consistent with the approach typically
used by courts in suits filed under 29 U.S.C. § 216(b). The first question such courts have generally
asked has been whether proposed co-plaintiffs are, in fact, “similarly situated” for the purposes of
the statute’s requirements. They have used a two-phase inquiry to address this question. The first
takes place at the beginning of discovery. The second occurs after “all of the opt-in forms have been
received and discovery has concluded.” Goldman v. Radioshack Corp., 2003 WL 21250571, at *6
(E.D. Pa. Apr. 17, 2003); see also Morisky v. Public Serv. Elec. & Gas Co., 111 F. Supp. 2d 493,
497 (D. N.J. 2000) (and cases cited therein).
As Judge Enslen wrote in our case, “[a]t the notice stage, the certification is conditional and
by no means final.” The plaintiff must show only that “his position is similar, not identical, to the
positions held by the putative class members.” Pritchard v. Dent Wizard Int’l, 210 F.R.D. at 595
No. 05-1761 Comer, et al. v. Wal-Mart Stores, Inc. Page 3
(quoting Viciedo v. New Horizons Computer, No. 2:01-CV-250, slip. op. (S.D. Ohio Dec. 4, 2001)
and Allen v. Marshall Field & Co., 93 F.R.D. 438, 443 (N.D. Ill. 1982)). Judge Enslen quoted the
Pritchard court’s conclusion that authorization of notice “need only be based on a modest factual
showing,” Pritchard, 210 F.R.D. at 596 (JA 346), as well as the Morisky court’s view that “this
determination is made using a fairly lenient standard, and typically results in ‘conditional
certification’ of a representative class,’” Morisky, 111 F. Supp. 2d at 497 (quoting Thiessen v.
General Elec. Capital Corp., 996 F. Supp. 1071, 1080 (D. Kan. 1998)). See also Roebuck v. Hudson
Valley Farms, Inc., 239 F. Supp. 2d 234, 238 (N.D.N.Y. 2002) (to gain court approval for notice to
similarly situated persons, plaintiffs must “make a modest factual showing sufficient to demonstrate
that they and potential plaintiffs together were victims of a common policy or plan that violated the
law”).
At the second stage, following discovery, trial courts examine more closely the question of
whether particular members of the class are, in fact, similarly situated. As the Morisky court wrote,
at this second stage, “the court has much more information on which to base its decision and, as a
result, [it] employs a stricter standard.” 111 F. Supp. 2d at 497.
The district court in our case found that
the materials submitted by the Plaintiffs in the form of the deposition
testimony of Kim Comer, the affidavits of Kevin Arend and Sandra
Farr, and the Notice of Consent of the other Plaintiffs, constitute a
preliminary showing that Plaintiffs and potential plaintiffs, are
similarly situated under the lenient standard applicable at this stage
in the proceedings.
The court clearly characterized its approval as conditional. The court moreover granted
approval for the most restrictive version of the plaintiffs’ proposed notification, allowing notification
only for the states comprising Region 3, rather than for persons located in Region 3 plus persons
located in all other states save one.
This Court will approve Notice to advise the salaried assistant
managers employed by Walmart at any time in the past three years
only within Walmart’s “Region 3”, i.e. the management region for
Michigan, Northern Indiana and Northern Ohio. The Court will
approve notice as to Region 3 because Defendant, itself, created
Region 3 as an area distinct from other areas of the country.
Furthermore, although individual Plaintiffs have worked in nine
different states, it is unclear that this limited number of Plaintiffs
would be able to adequately represent the interests of all potential
future class members who choose to opt-in if notice were granted on
a national level. Notwithstanding, should it be shown later that
salaried assistant managers in Region 3 are similarly situated to other
current Plaintiffs who represent states outside Region 3, the Court
may then be justified in approving notification of salaried assistant
managers in those states or regions. Therefore, this is a conditional
certification subject to later review after completion of significant
discovery. Later review may include Court action to either expand
or limit the certification as appropriate.
The court ordered that notice be sent to the 1,200 current and former ASMs who were
employed in Region 3. The district court also ordered Wal-Mart to “produce a list of names and last
known addresses of all its salaried assistant managers employed during the past three years in
No. 05-1761 Comer, et al. v. Wal-Mart Stores, Inc. Page 4
Region 3.” The court further allowed Wal-Mart to object to the plaintiffs’ proposed notification
document or to submit an alternative document for review.
II
We hold that there is no jurisdiction to hear this appeal.
The central jurisdictional question is whether the order of the district court is final and
irrevocable under the Cohen test for collateral order review. Such an order is reviewable if:
1) it conclusively determines a disputed question;
2) that question is separate from the merits of the action;
3) the matters decided in the order at issue will be effectively unreviewable on appeal from
a final judgment; and
4) it is not “tentative, informal, or incomplete.”
Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 545-46 (1949); see also Manion v. Evans, 986
F.2d 1036, 1038 (6th Cir. 1993).
Wal-Mart asks us to focus our Cohen analysis on the notice to the 1,200 ASMs, rather than
the question of whether those 1,200 ASMs (or whatever subset ultimately chooses to “opt into” the
suit) are, in fact, similarly situated. We consider each approach in turn.
Wal-Mart correctly notes that the district court’s order will have the irrevocable effect of
notifying 1,200 current and former ASMs of the lawsuit and their rights under FLSA. It is true that
they can not be “de-noticed” at a later date. It is clear that the second element of the Cohen test is
satisfied. The order treats notice to a group of possible plaintiffs, not the merits of any claims they
may end up pursuing. As to the third component of the Cohen inquiry, Wal-Mart urges that the
order will be unreviewable because “notice to . . . ‘class’ members will always be an accomplished
fact by the time a final judgment is rendered in these collective action cases.” When we look
through Wal-Mart’s proposed highly constrained lens, the third component is also satisfied. With
respect to the fourth part of the Cohen inquiry, the particulars of our case give us no clear answer
as to jurisdiction. The decision in our case is not “informal”: it was issued following a reasoned
opinion and in an official order. Nor was it really “incomplete,” insofar as it, by itself, calls for
notice to be sent to 1,200 persons. However, we might view the order as “tentative,” since the
district court described it explicitly as conditional. There is no learning in the circuit courts of
appeal as to what the phrase “tentative, informal, or incomplete” means with respect to orders
relating to collective action in FLSA. However, our court, in Wedding v. University of Toledo, 89
F.3d 316, 319 (6th Cir. 1996), a Title VII and Equal Pay Act case, helped define “tentative” as it
appears in the Cohen doctrine. There, we ruled that “there [was] nothing ‘inherently tentative’
about” the district court’s motion to stay proceedings and compel utilization of a grievance system
provided for in a collective bargaining agreement “as there was no indication that the district court
might reconsider or revise its order before it has an effect on the parties by requiring that they
proceed forthwith with arbitration . . . .” There is such indication in our case. The district court
wrote explicitly that it would review its decision following further discovery.
Even using Wal-Mart’s suggested focus on the fact of notice–rather than on the question of
whether the notified persons will ultimately be viewed as properly notified–we would be hesitant
to conclude that the order satisfies the Cohen test.
No. 05-1761 Comer, et al. v. Wal-Mart Stores, Inc. Page 5
More importantly, we consider this formulation of the question before us to be too narrow
and therefore improper.
Instead, the correct inquiry examines whether Wal-Mart may now appeal the court’s
conditional conclusion that the 1,200 ASMs, or however many choose to opt into the suit, are
similarly situated for the purposes of § 216(b). When viewed through the appropriate lens, the
district court’s order clearly fails to satisfy the Cohen test. The order describes itself as conditional
and temporary, and there is no reason our court could not, following an appeal from final judgment,
determine that part or all of the plaintiff group was improperly deemed to be similarly situated and
therefore improperly notified and included by opt-in. We see no obstacle to our court’s later review
of this issue. The true disputed issue is ultimately the size and nature of the representative group.
From the vantage point of this issue, the district court’s ruling fails the highly important first part
of the Cohen test.
In Baldridge v. SBC Communications, Inc., 404 F.3d 930 (5th Cir. 2005), the Fifth Circuit
ruled in a case quite similar to ours that it did not have appellate jurisdiction to review an
interlocutory appeal of an order certifying a FLSA action as collective. As in our case, the dispute
reached the circuit court before notice had issued. Wal-Mart urges that Baldridge was “wrongly
decided” and seeks to undermine it by arguing that it was chiefly a spirit of fear–of a proliferation
of appeals from § 216(b) rulings–that “animated” the court’s decision in that case.
We adopt the approach of the Fifth Circuit. We hold that a conditional order approving
notice to prospective co-plaintiffs in a suit under § 216(b) is not appealable.
III
We therefore DISMISS Wal-Mart’s appeal for lack of jurisdiction.