A recent summary order issued by the United States Court of Appeals for the Second Circuit in the case of Jacob v. Duane Reade, Inc. affirmed the District Court’s holding that the lawsuit, pertaining to a class of misclassified Assistant Store Managers, meets the requirements for class certification, at least in regards to questions of liability. The Plaintiff class consists of Assistant Store Managers at New York Duane Reade locations who believe that they have been misclassified by their employer as exempt and are therefore entitled to an overtime premium for all hours worked in excess of 40 per workweek. The District Court initially granted Plaintiffs request for class certification. Following the Supreme Court’s decision in Comcast v. Behrend, Duane Reade moved for reconsideration, and the District Court granted Duane Reade’s motion in part, decertifying the class with respect to damages only. Duane Reade appealed this decision, and on review, the Court of Appeals upheld the District Court’s decision.
The Court of Appeals first looked at whether or not the District Court conducted a “rigorous analysis” of Plaintiffs’ underlying claims, as set out by Rule 23 Standards. The court found that the District Court met this standard, in that they went beyond mere pleadings and actually considered the parties’ evidentiary submissions and made factual findings where those submissions conflicted. The court next addressed Duane Reade’s argument that the District Court’s commonality analysis failed to show that the class-wide proceeding is capable of generating common answers to “drive the resolution of the litigation”. The court found that the commonality required was satisfied based on evidence showing that Duane Reade uniformly classifies all Assistant Store Managers as exempt without an individual determination of each employee’s responsibilities, and that Assistant Store Managers carried out their duties pursuant to a uniform policy, uniform training, and uniform procedures across all stores.
The court next looked at Duane Reade’s argument that the District Court erred with respect to its predominance analysis. Duane Reade specifically argued that, in accordance with the Comcast v. Behrend decision, the District Court must analyze whether common questions predominate over individual questions in the case as a whole before certifying the class with respect to any particular issue. However, the District Court and Court of Appeals concluded that the Comcast holding only provided that a model for measuring class-wide damages relied upon to certify a class must actually measure damages that result from the class’s asserted theory of injury. That holding does not apply in this case. The court may certify a class as to liability without finding that the claim as a whole satisfies the predominance requirement. Accordingly, the court upheld the District Court’s holding that although the individualized nature of the damages inquiry would defeat predominance in the case as a whole, predominance was still satisfied here with respect to the issue of liability alone.
This case represents a significant victory for workers who have been misclassified as exempt, and are entitled to overtime wages. The employment lawyers at Fitapelli & Schaffer, LLP have recovered millions of dollars for its clients through class action and collective action lawsuits. If you believe that you have been misclassified as exempt, or have any questions pertaining to your exemption status, please contact us at (212) 300-0375 or visit our website at www.fslawfirm.com.