Primer on the Procedures and Power of Class and Collective Actions -

Wage and Hour Hypothetical KidzTown is a Delaware corporation headquarered in New York that operates several hundred children's gymasiums and play spaces in ten states. Each facility is managed by an exempt Site Manager and a cadre of non-exempt Playtime Coordinators. Site Managers supervise the Playtime Coordinators and handle hiring, training, scheduling, and employee relations including performance management and discipline related to their employment. They also organze and

conduct local marketing campaigns and promotions, and manage the profit and loss ledger for their facility. Playtime Coordinators lead visiting children in group activities, including special events such as birthday paries, distribute toys and sports equipment to visitors, take inventory of KidzTown equipment and clean up after visitors leave, and are expected to either walk the floor or drve around the facility in a golf car throughout their shifts to answer questions and monitor visitor activities, to ensure visitor safety and satisfaction. Larger facilities, which comprise the facilities operated by KidzTown, also have a Junior Site Manager. Junior roughly one-half of Site Managers, who are classified as exempt, are usually high-performing Playtime Coordinators who have been promoted into management. Junor Site Managers provide support to the Site

Managers in performance of Site Manager duties, serve as back-up when Site Managers are on vacation, and fill in for Playtime Coordinators during staff shortages, breaks, and otherwise as needed to ensure a quality experience for KidzTown visitors.

Julia Robbins has been a Junor Site Manager at a Kidztown facility in Californa for approximately five months following her promotion from Playtime Coordinator. After marijuana, KidzTown HR KidzTown received a tip that Julia was at work under the influence of confronted Robbins, who admitted that she had used marjuana during a lunch break but said that her stress disorder. KidzTown terminated the she had a doctor's prescription for the treatment of Robbins in accordance with KidzTown's Zero Tolerance Workplace Substance employment of Hunt & Spears to seek Abuse Policy. Robbins contacted the well-known plaintiffs' firm of representation regarding her termination. She also questions why she did not receive overtime pay for hours she worked over 8 per day or 40 per week after she became a Junor Site Manager. She tells Rick Spears that her duties basically did not change once she was promoted except that she was expected to work much longer hours. She also describes how as a Playtime Coordinator, she and her peers were told to stay on premises during their lunches and often got pulled back on the floor durng lunch or breaks. Spears decides to fie a civil complaint on behalf of a class of

the varous state minimum wage laws, the wage payment laws of varous states, and the FLSA. all Junior Site Managers at Kidztown, believing that there are violations of

the prestigious defense firm Settles & Hyde and Kidztown's counsel in employment matters, to let her know that the lawsuit is coming down the pike. Hyde immediately contacts her client at Kidztown to chew over

As a couresy, Spears also calls his frequent adversary Maxine Hyde, of

the impending litigation.

Following removal by Kidztown, U.S. District Judge Hiram Wright sets the case for a case management conference with all counsel. After the conference, Plaintiffs' counsel hand-serves defense counsel with discovery seeking names and contact information of all current and former Junor Site Managers at Kidztown durng the class period and a deposition notice ofKidztown.

After a few months of discovery, but before class certification has been briefed, Hyde sees Spears at an LEL section meeting and suggests that perhaps the paries could discuss settlement before everyone spends even more money litigating the case.

2

Primer on the Procedures and Power of Class and Collective Actions -

Title VII Hypothetical Audrey Sewer is a 32-year-old woman who sought legal advice after she was forced to leave her job when she returned from having a child and was told that only the night shift was available.

Audrey worked as a cashier at a national supermarket chain called Cheapies, which has its headquarers in New York City, 40 stores throughout New York City, and 20 stores scattered around the country, including lOin Californa. She has now moved to San Francisco, where she is living with a relative.

Durng her interview with a San Francisco lawyer, Audrey mentioned that she had not actually the applied for the cashier position, but had requested an entry-level, full-time position in one of food departments. Audrey is an amateur cook and was interested in working in a position that involved handling or preparng food. She also needed a full-time job to make ends meet. The human resources representative she met with, however, told her that he felt the cashier position was "a better fit" for her and that, in any case, a cashier position was open at one of its stores. Needing the job, Audrey accepted it, even though it was only a par-time position. The human resources representative told her to mark down "cashier" as her preferred job on her application a formality and that it didn't matter that she had actually requested a form. He said it was only grocery clerk position. When Audrey began working, she noticed something peculiar about her store: all of the cashier positions were held by women and all of the grocery clerk and managerial positions were held by men. She mentioned this observation to some ofthe women she worked with, but most ofthem said that they had only ever wanted to be cashiers anyway. Only one woman, Diane, agreed that the store. Before taking the job at Cheapies there was something wrong about the make-up of seven years ago, Diane had ru a small family-owned grocery store in East Hampton, where she the grocery business. When she moved to the city to take care of a leared the ins and outs of sick relative, she took the job at Cheapies out of

necessity. Like Audrey, she had requested a

position other than cashier. In fact, Diane had requested a deparent manager position based on her prior experience. During her interview, the human resources representative told Diane that Cheapies required managers to have in-store experience before they were eligible to be promoted. He said that once Diane had spent some time as a cashier, she would be considered for a management promotion. Diane agreed to take the cashier job. Things did not tum out as the human resources representative had promised. Cheapies did not post openings for manager positions or have any procedure, as far as Diane could tell, for allowing employees to express interest in a promotion. Durng her tenure, Diane saw several men moved into manager positions -- some were moved laterally from other Cheapies stores, some, she believed, were hired directly into the position, and some were promoted from the ranks ofthe grocery clerks. When Diane asked the store manager why she was not promoted or considered, he told her that grocery clerk experience was a pre-requisite to obtaining a manager position because clerks saw firsthand how the deparents were ru. Cashiers, on the other

the store and infrequently performed any duties on the grocery floor. Diane asked whether she could be transferred to grocery clerk to obtain the

hand, were stationed in the front of

necessary skils or receive cross-training. The store manager said that no cross-training was

available, that grocery clerks must be able to lift 60 pounds, which he didn't think Diane could do, and, in any case, no clerk positions were available. Years passed. Diane continued to see men hired as clerks and moved up the rans while she remained in her part-time cashier position.

Neither Diane nor Audrey worked at any other Cheapies store and did not know whether their store was an aberration or whether all the stores were equally segregated by sex. Audrey is interested in pursuing gender discrimination claims against Cheapies on a classwide basis, but Diane is concerned that she could face retaliation if she sued the company. Although she is extremely unhappy at work, she stil needs the job to pay her bils.

her right to sue from the EEOC, Audrey fies a class action. The class is defined as including all non-managerial women from all 60 stores and the complaint alleges disparate impact and treatment steering, promotion, and pay claims and an individual FMLA claim for Audrey.

After receiving notice of

Diane gets fired after she is accused of stealing money from the register. She joins the lawsuit as a class representative. Plaintiffs request a class list and classwide data from Defendants, including pay and promotion data for all 60 stores durng the class period. Plaintiffs also request other discovery regarding the company's policies and practices. Plaintiffs move to compel classwide data for all 60 stores and prevaiL. After several months of discovery, Plaintiffs move for class certification.

2

WesÜaw~ Page 1

244 F.R.D. 243, 101 Fair EmpL.Prac.Cas. (BNA) 522

(Cite as: 244 F.R.D. 243)

of law or fact common to class members predomi-

p-

United States Distrct Cour, S.D. New York. Amy VELEZ, et aL., Plaintiffs, v.

nated and that class action was superior to other available methods of adjudication would be deferred until after liability phase of class action. Motions granted.

NOV ARTIS PHAACEUTICALS CORPORATION, Novartis Corporation, and Thomas Ebeling, Defendants. No. 04 Civ. 9194(GEL). July 31,2007.

As Amended Aug. 16, 2007.

West Headnotes

il Civil Rights 78 ~1l12 78 Civil Rights 78II Employment Practices 78kl108 Employers and Employees Affected

brought gender discrimnation suit under Title VII

78kll12 k. Multiple Entities; Thid Parties. Most Cited Cases

against employer and its corporate parent, alleging

Parent company can be held liable for its subsidiary's

various form of disparate treatment including discrimination in compensation, promotion and

violations of Title VII under the "single or joint employer" test, under which parent and subsidiary cannot be found to represent a single, integrated enterprise in the absence of evidence of (1) interrelation of operations, (2) centralized control of labor relations,

Background: Pharmceutical company employees

promotional opportties, personnel evaluations, and

adverse treatment of women takig pregnancy leave. Corporate parent moved for sumry judgment, and employees moved for class certfication. Holdings: The District Cour, Lynch, J., held that:

il employees failed to show, under "single or joint employer" test, that parent's operations were suffciently integrated with subsidiar's to give rise to any liability by parent for alleged acts of discrimation; il claim of compensation and promotion discrimination were reasonably related to claim of harass-

(3) common management, and (4) common owner-

ship or financial control. Civil Rights Act of 1964, § 701 et seq., 42 U.S.C.A. § 2000e et seq.

il Civil Rights 78 ~1l12 78 Civil Rights 78II Employment Practices 78kll08 Employers and Employees Affected

ment and hostile work environment, for puroses of

78kll12 k. Multiple Entities; Thid Partes.

determg whether all claim were admstratively

Most Cited Cases Four-factor "single or joint employer" test for deter-

exhausted and scope of class period; il numerosity requirement for class certification was met;

il commonality requirement for class certification was met by statistical and anecdotal evidence, although class would not be certified as to claim of

minig when parent company may be considered "employer" of subsidiary's employee under Title VII may be satisfied by showing that there is an amount of partcipation that is suffcient and necessary to

total employment process, even absent total control

discrimination in pay on basis of pregnancy;

or ultimte authority over hiing decisions. Civil

il tyicality certification requirement was met;

Rights Act of 1964, § 70l(b), 42 U.S.CA. §

(Q adequacy of representation certfication require-

2000e(b).

ment was met; il class action was maintainable on ground that in-

junctive relief would be appropriate and necessary were employees to succeed on the merits; and

æ issue of maintainability on ground that questions

il Civil Rights 78 ~1112 78 Civil Rights 78II Employment Practices

(Ç 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.

Page 2

244 F.R.D. 243, 101 Fair Emp1.Prac.Cas. (BNA) 522 (Cite as: 244 F.R.D. 243) 78kl108 Employers and Employees Affected

78kl 112 k. Multiple Entities; Thid Partes. Most Cited Cases

Most imortnt element in four-factor "single or joint employer" test for determg when parent company may be considered "employer" of subsidiary's employee under Title VII is whether the two enterprises

exhbit centralized control of labor relations, including tasks such as handling job applications, approv-

ing personnel status reports, and exercising veto

power over major employment decisions; this particular criterion has been distiled to a critical question of what entity made final decision regarding em-

ployment matters related to person claimig discrimination. Civil Rights Act of 1964, § 70l(b), 42 V.S.C.A. § 2000e(b).

economies of scale. l§ Civil Rights 78 ~lii2

78 Civil Rights 78II Employment Practices 78kll08 Employers and Employees Affected

78kll12 k. Multiple Entities; Thid Parties. Most Cited Cases When considering "interrelation of operations" prong

of integration analysis for whether parent company can be held liable for its subsidiary's violations of Title VII, factors considered include whether (1) parent was involved directly in subsidiar's daily decisions relating to production, distrbution, marketing, and advertsing, (2) entities shared employees, ser-

vices, records, and equipment, (3) entities commn-

il Civil Rights 78 ~ii12

gled ban accounts, accounts receivable, inventories,

78 Civil Rights 78II Employment Practices

books, (5) parent issued subsidiary's paychecks, and

and credit lines, (4) parent maintained subsidiary's

78kll08 Employers and Employees Affected

78kll12 k. Multiple Entities; Thid Pares. Most Cited Cases Pharmceutical company employees failed to show, under "single or joint employer" test, that parent corporation's operations were suffciently integrated with those of subsidiary for parent to incur any liabilty for

alleged acts of gender discrimiation; fact parent's vice president of Human Resources (RR) performed due dilgence on personnel who would be transferred

in support of operations being acquired from another company and merged into pharmceutical company was not evidence of centralized control of labor relations, and other evidence submitted, such as fact parent and subsidiary submitted joint applications for business magazine's "Best Places to Work" survey, was even weaker. Civil Rights Act of 1964, § 701 et seq., 42 U.S.C.A. § 2000e et seq.

(6) parent prepared and fied subsidiary's tax retus.

Civil Rights Act of 1964, § 701 et seq., 42 U.S.C.A. § 2000e et seq. il Civil Rights 78 ~lii2

78 Civil Rights 78II Employment Practices 78kl108 Employers and Employees Affected

78kll12 k. Multiple Entities; Thid Parties. Most Cited Cases

Fact that parent corporation did not have wrtten lease for offce space it rented from subsidiar although anual rent was over one millon dollars, while evidence of their close relationship, had nothing to do with labor relations for puroses of deter-

mig whether parent could be held liable under Title VII for alleged gender discrimiation against

employees of subsidiary. Civil Rights Act of 1964, § 701 et seq., 42 V.S.C.A § 2000e et seq.

æ Labor and Employment 231H ~25 231 H Labor and Employment 231 HI In General

--lHk2 Natue, Creation, and Existence of Employment Relation 231Hk25 k. Who Is Employer; Multiple Entities. Most Cited Cases Fact that parent and subsidiary maintain the same

benefits does not suggest centralized control of labor relations; common benefits package speaks only to

.w Civil Rights 78 ~ii12 78 Civil Rights

- 78II Employment Practices . 78kll08 Employers and Employees Affected

78kll12 k. Multiple Entities; Thid Parties. Most Cited Cases

In Title VII suit in which pharmceutical company employees sought to hold parent corporation liable

(e 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.

Page 3

244 F.RD. 243, 101 Fair EmpLPrac.Cas. (BNA) 522

(Cite as: 244 F.R.D. 243)

for alleged acts of gender discrimiation, fact that employees of various companies were told to th of

corporations as "one big family" and that parent corporation fied consolidated tax retu on subsidiary's

behalf, while indicatig some degree of interrelationship of operations, did not suggest degree of entanglement generally found to satisfy that prong of integration analysis even in combination with other fac-

tors. Civil Rights Act of 1964, § 701 et seq., 42 V.S.C.A. § 2000e et seq.

.l Labor and Employment 231H ~25 23lH Labor and Employment 231 HI In General -ilHk2 Natue, Creation, and Existence of

Employment Relation

23lHk5 k. Who Is Employer; Multiple Entities. Most Cited Cases

In order to use "single employer doctre," employees of subsidiary corporation need to prove more than

.l Labor and Employment 231H ~25

an overlap in boards or management of subsidiary and parent.

231H Labor and Employment 23lHI In General

I. Corporations 101 ~215

-ilHk2 Natue, Creation, and Existence of

Employment Relation

23lHk5 k. Who Is Employer; Multiple Entities. Most Cited Cases Common management and common ownership, the

last two prongs of single employer test, are less important than interrelation of operations and centra~ized control of labor relations as they represent ordi-

nary aspects of parent-subsidiary relationship.

I1 Labor and Employment 231H ~25 231 H Labor and Employment 231 HI In General

lQ Corporations

101IX Members and Stockholders

-W1IX(D) Liability for Corporate Debts and Acts

101k2l5 k. Natue and Grounds in General. Most Cited Cases Parent corporation's possession of a controlling inter-

est in a subsidiary entitles the parent to the norml incidents of stock ownership, such as the right to select directors and set general policies, without forfeiting the protection of limited liability. IH Corporations 101 ~i.5(1)

-ilHk2 Natue, Creation, and Existence of

Employment Relation

231Hk5 k. Who Is Employer; Multiple Entities. Most Cited Cases

lQ Corporations

1011 Incorporation and Organiation 101k1.5 Separate Corporations, Disregarding

Fact tht parent assists subsidiary's employee in lo-

catig other employment with company's group

does not indicate centralized control of labor relations where parent tyically provides such assistance. il Corporations 101 ~i.5(3)

Separate Entities 101k1.5(l) k. In General. Most Cited Cases

Labor and Employment 231H ~25 23lH Labor and Employment 231 HI In General

101 Corporations

-ilHk2 Natue, Creation, and Existence of

1011 Incorporation and Organiation 101k1.5 Separate Corporations, Disregarding Separate Entities 101k1.5(3) k. Parent and Subsidiary Corpo-

rations. Most Cited Cases

Directors and officers holding positions with parent and its subsidiary can and do change hats to represent the two corporations separately, despite their common ownership.

Employment Relation

23lHk5 k. Who Is Employer; Multiple Entities. Most Cited Cases

The law only treats employees of a corporate entity as employees of a related entity under extraordinary circumstances.

rr Federal Civil Procedure 170A ~184.25

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Page

4

244 F.R.D. 243, 101 Fair Empl.Prac.Cas. (BNA) 522 (Cite as: 244 F.R.D. 243)

against employee for filing EEOC charge and claims l70A Federal Civil Procedure l70AII Parties l70AIID) Class Actions

alleging fuher incidents of discriation carried

out in precisely the same manner alleged in EEOC charge may be considered reasonably related.

l70AIID)3 Parcular Classes Represented

l70Ak184 Employees

l70Ak184.25 k. Prior Admstrative

Proceeding, Use or Availability; Limtations. Most Cited Cases

I. Federal Civil Procedure 170A ~184.25 l70A Federal Civil Procedure l70AII Partes

In employment discriation case, class representative can only represent those individuals who have either fied timely Equal Employment Opportnity Commssion (EEOC) charge or could have fied one

l70AII(D) Class Actions l70AIID)3 Paricular Classes Represented l70Ak184 Employees

at time class representative's charge was fied.

l70Ak184.25 k. Prior Admistrative Proceeding, Use or Availability; Limitations. Most

.l Federal Civil Procedure 170A ~184.25

For puroses of determning scope of class period in

Cited Cases gender discrimiation case, claim of compensation

l70A Federal Civil Procedure l70AII Partes

l70AIID) Class Actions l70AIID)3 Parcular Classes Represented

l70Ak184 Employees

and promotion discrimination were reasonably related to claims of harassment and hostile work environment raised in earliest Equal Employment Oppor-

tuity Commssion (EEOC) charge and were administratively exhausted. Civil Rights Act of 1964, §

170Ak184.25 k. Prior Admstrative Proceeding, Use or Availability; Limitations. Most

706(e), 42 V.S.C.A. § 2000e-5(e).

Cited Cases

I! Federal Civil Procedure 170A ~16i.

Timely filing of admistrative charge by named plaintiff in employment discrination class action satisfies charge filing obligation of all members of class; such a charge must give some indication that

grievance affects group of individuals defined broadly enough to include those who seek to piggyback on claim.

l70A Federal Civil Procedure l70AII Parties l70AIID) Class Actions l70AII(D)i In General

l70Ak161. k. Factors, Grounds, Objections, and Considerations in General. Most Cited Cases

I! Civil Rights 78 ~1516 Federal Civil Procedure 170A ~171 78 Civil Rights 78IV Remedies Under Federal Employment Discrimination Statutes 78k15l2 Exhaustion of Admnistrative

Remedies Before Resort to Cours 78k15l6 k. Scope of Administrative Proceedings; Like or Related Claims. Most Cited Cases

l70A Federal Civil Procedure l70AlI Partes

l70AII(D) Class Actions l70AIID)2 Proceedings

l70Ak17l k. In General; Certification in General. Most Cited Cases

To satisfy exhaustion of admstrative remedies requirement in employment discrimnation case, em-

There are two sets of requirements for class certifica-

ployees' claims not included in timely Equal Em-

analysis, that numerosity, commonality, tyicality,

ployment Opportnity Commssion (EEOC) charge must be "reasonably related" to claim made therein,

meaning that conduct complained of would fall within scope of EEOC investigation which can reasonably be expected to grow out of charge of discrimination; claims alleging retaliation by employer

tion: (1) cour must be persuaded, after rigorous

and adequacy of representation prerequisites have

been satisfied, and (2) plaintiffs must show that proposed class action fits into one of the thee categories for maintainability of class actions. Fed.Rules

Civ.Proc.Rule 23(a, b), 28 U.S.C.A

(Q 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.

Page 5

244 F.R.D. 243, 101 Fair EmpLPrac.Cas. (BNA) 522 (Cite as: 244 F.R.D. 243)

certfication tend to merge because both serve as (20) Federal Civil Procedure 170A ~172

guideposts for determnig whether named plaintiffs claim and class claim are so interrelated that inter-

l70A Federal Civil Procedure

ests of class members will be fairly and adequately protected in their absence. Fed.Rules Civ.Proc.Rule 23(a)(2, 3), 28 U.S.C.A

l70AII Partes

l70AII(D) Class Actions

l70AIlD)2 Proceedigs l70Akl72 k. Evidence; Pleadings and

(23) Federal Civil Procedure 170A ~174

Supplementary MateriaL. Most Cited Cases

District judge must receive enough evidence, by affdavits, documents, or testimony, to be satisfied that

each requirement of class certfication rule has been met. Fed.Rules Civ.Proc.Rule 23, 28 U.S.C.A.

l70A Federal Civil Procedure l70AII Pares l70AIlD) Class Actions l70AIlD)2 Proceedigs

l70Ak174 k. Consideration of Merits.

Il Federal Civil Procedure 170A ~184.15 l70A Federal Civil Procedure l70AII Partes

l70AII(D) Class Actions

Most Cited Cases

To determe commonality for class certfication puroses, it is not necessar to decide whether plain-

tiffs' evidence is ultimtely compelling. Fed.Rules Civ.Proc.Rule 23(a)(2), 28 U.S.C.A

l70AIlD)3 Parcular Classes Represented

l70Ak184 Employees

l70Ak184.15 k. Sex Discrimination Actions. Most Cited Cases

Numerosity requirement for class certfication was met in employment discrination case where pro-

posed class consisted of "all women who are currently holding, or have held, a sales-related job" with pharmceutical company durg a five-year period; class could number in the thousands. Fed.Rules

Civ.Proc.Rule 23(a)(l), 28 U.S.C.A.

(22) Federal Civil Procedure 170A ~164 l70A Federal Civil Procedure

(24) Federal Civil Procedure 170A ~174 l70A Federal Civil Procedure l70AII Partes

l70AIlD) Class Actions l70AIlD)2 Proceedings

l70Ak174 k. Consideration of Merits. Most Cited Cases Cour should not refrain from fact-finding on motion for class certfication in employment discrimination

case simply because it may overlap with merits inquir; however, statistical dueling is not relevant to

certfication stage uness such dueling presents a valid basis for denying class certfication. Fed.Rules

Civ.Proc.Rule 23, 28 U.S.C.A.

l70AII Partes

l70AIlD) Class Actions l70AIlD)l In General

l70Ak164 k. Representation of Class; Typicality. Most Cited Cases

(25) Federal Civil Procedure 170A ~184.10 l70A Federal Civil Procedure l70AII Partes

Federal Civil Procedure 170A ~165 l70A Federal Civil Procedure l70AII Partes

l70AIlD) Class Actions l70AIlD)1 In General l70Akl65 k. Common Interest in Subject Matter, Questions and Relief; Damages Issues. Most Cited Cases Commonality and tyicality requirements for class

l70AIlD) Class Actions l70AIlD)3 Paricular Classes Represented l70Akl84 Employees l70Ak184.1O k. Discrination and

Civil Rights Actions in General. Most Cited Cases

Class certfication of employment discrimition case

is not appropriate uness plaintiffs can show that challenged practice is causally related to pattern of disparate treatment or has a disparate impact; where

decisionmakig process is difficult to review because

~ 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.

Page 6

244 F.R.D. 243, 101 Fair Empl.Prac.Cas. (BNA) 522 (Cite as: 244 F.R.D. 243)

of role of subjective assessment, signficant statistical

disparities are relevant to determing whether chal-

78kl164 Sex Discrination in General

78kl176 k. Pregnancy; Maternty. Most

lenged employment practice has a classwide impact.

Cited Cases

(26) Federal Civil Procedure 170A ~184.15

Federal Civil Procedure 170A ~184.15

l70A Federal Civil Procedure

l70A Federal Civil Procedure l70AII Partes

l70AII Partes

l70AIID) Class Actions l70AIID)3 Parcular Classes Represented

l70Ak184 Employees

l70Ak184.15 k. Sex Discrimination Actions. Most Cited Cases

Commonality requirement for class certfication was met in pharmceutical company employees' Title VII

l70AII(D) Class Actions l70AII(D)3 Particular Classes Represented l70Ak184 Employees

l70Ak184.l5 k. Sex Discrimination Actions. Most Cited Cases

In pharmceutical company employees' gender discrimiation action, class would not be certfied as to

gender discrimation suit, even though report of

claims of discrimination in pay on basis of preg-

employees' expert analyzing performnce management and related compensation system used by em-

nancy; it was not discriatory to treat pregnancy-

ployer to determe whether it was vulnerable to bias

employees had offered no evidence that employer's

in decision making and criticizing performnce evaluation system on number of grounds was by itself insuffcient to support class certification on any issue because it ilustrated only the potential for discrination; employees also offered statistical and

compensation policies did otherwse. Fed.Rules

related leave the same as other form of leave, and Civ.Proc.Rule 23(a), 28 U.S.C.A; Civil Rights Act of 1964, § 70l(k), 42 U.S.C.A. § 2000e(k).

(29) Federal Civil Procedure 170A ~184.10

anecdotal evidence of disparate impact in perform-

ance evaluation scores, compensation, and promotions, and of discriation on the basis of preg(a)(2), 28 nancy. Fed.Rules Civ.Proc.Rule 23 U.S.C.A.; Civil Rights Act of 1964, § 703(a)(1), 42

U.S.C.A. § 2000e-2(a)(l).

l70A Federal Civil Procedure l70AII Partes

l70AIID) Class Actions l70AiiD)3 Parcular Classes Represented

l70Ak184 Employees

l70Ak184.l0 k. Discrimination and

(271 Civil Rights 78 ~1176

Civil Rights Actions in General. Most Cited Cases

78 Civil Rights 78II Employment Practices 78kl164 Sex Discrimnation in General

Commonality and tyicality requirements for class certfication of employment discrimination claim can be satisfied by affdavits, statistical evidence, or both. Fed.Rules Civ.Proc.Rule 23(a)(2,3), 28 U.S.C.A

78kl176 k. Pregnancy; Maternty. Most

Cited Cases

Pregnancy Discrimiation Act (PDA) does not require the creation of special programs for pregnant

(30) Federal Civil Procedure 170A ~164

women, nor does it mandate any special treatment; to the contrary, statute specifically requires that pregnant women be treated the same as all other employees with similar disabilities. Civil Rights Act of 1964, § 70l(k), 42 U.S.C.A. § 2000e(k).

l70A Federal Civil Procedure

(28) Civil Rights 78 ~1176 78 Civil Rights 78II Employment Practices

l70AII Partes

l70AII(D) Class Actions l70AII(D)1 In General l70Ak164 k. Representation of Class; Typicality. Most Cited Cases "Typicality" required for class certfication does not require that factual background of each named plain-

tiffs case be identical to that of all class members; rather, it requires that disputed issue of law or fact

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Page

7

244 F.R.D. 243, 101 Fair EmpLPrac.Cas. (BNA) 522 (Cite as: 244 F.R.D. 243)

occupy essentially the same degree of centrality to named plaintiffs claim as to that of other members of proposed class. Fed.Rules Civ.Proc.Rule 23(a)(3), 28 U.S.C.A.

IJ Federal Civil Procedure 170A ~164 l70A Federal Civil Procedure

Typicality. Most Cited Cases

There are two separate inquiries under adequacy of representation requirement for class certfication: first requires showig that class counel is experienced,

qualified, and able to conduct litigation, and second is demonstration that there is no confict of interest between named plaintiffs and other members of class. Fed.Rules Civ.Proc.Rule 23(a)(4), 28 U.S.C.A.

l70AII Partes

l70AII(D) Class Actions l70AII(D)1 In General l70Ak164 k. Representation of Class; Typicality. Most Cited Cases

Primry criterion for determg tyicality for certification puroses is forthrghtness and vigor with which representative part can be expected to assert

(34) Federal Civil Procedure 170A ~184.15 l70A Federal Civil Procedure l70AII Partes

l70AIID) Class Actions l70AII(D)3 Paricular Classes Represented

l70Ak184 Employees

l70Ak184.l5 k. Sex Discrimination

interests of class members. Fed.Rules Civ.Proc.Rule

Actions. Most Cited Cases

23(a)(3), 28 U.S.C.A

Adequacy of representation requirement for class (32) Federal Civil Procedure 170A ~184.15 l70A Federal Civil Procedure l70AII Partes

l70AIID) Class Actions l70AIID)3 Paricular Classes Represented l70Ak184 Employees l70Ak184.l 5 k. Sex Discrimination

Actions. Most Cited Cases Typicality requirement for class certfication was met in Title VII gender discrimnation class action by

pharmceutical company employees, despite analysis

certfication was met in Title VII gender discrimina-

tion action by pharmceutical company employees, despite contention that inclusion of pregnancy discrimination claims created confict between class members; while tension over lost incentive pay might be factor in some relationships between pregnant

women and their teammtes, cour could not imgine, and employer did not suggest, any partcular impact that putative tension might have on proceedings.

Fed.Rules Civ.Proc.Rule 23(a)(4), 28 U.S.C.A; Civil Rights Act of 1964, § 703(a)(1), 42 U.S.C.A. §

2000e-2(a)(l ).

by employer's expert showing that named plaintiffs'

claims of promotion and compensation discrimiation were not reflective of other women hied for

(35) Federal Civil Procedure 170A ~184.15

simlar jobs at same time as plaintiffs and concluding that each named plaintiff was, with one exception, the only woman in her "hig cohort," i.e., group of women hied for similar jobs at the same time, who experienced disparate treatment of which she complained. Fed.Rules Civ.Proc.Rule 23(a)(3), 28

l70A Federal Civil Procedure l70AII Pares l70AIID) Class Actions

U.S.C.A.; Civil Rights Act of 1964, § 703(a)(1), 42

Actions. Most Cited Cases

U.S.C.A. § 2000e-2(a)(l).

In Title VII gender discriation action by pharma-

l70AII(D)3 Parcular Classes Represented

l70Ak184 Employees

l70Ak184.l5 k. Sex Discrimiation ceutical company employees, inclusion of managers

(33) Federal Civil Procedure 170A ~164 l70A Federal Civil Procedure l70AII Partes

l70AIID) Class Actions l70AIID)l In General l70Ak164 k. Representation of Class;

in plaintiff class did not create confict that would preclude finding of adequacy of representation required for class certfication; if supervisory employees and supervisees all were subject to discrina-

tion, all had an equal interest in remedying the dis-

criation, and named plaintiffs could still be expected to litigate case with ardor, and potential for

confict did not necessarily defeat class certification.

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Page 8

244 F.RD. 243, 101 Fair Emp1.Prac.Cas. (BNA) 522

(Cite as: 244 F.R.D. 243) Fed.Rules Civ.Proc.Rule 23(a)(4), 28 U.S.C.A.

(36) Federal Civil Procedure 170A ~164 l70A Federal Civil Procedure l70AII Pares l70AII(D) Class Actions l70AIID)1 In General l70Ak164 k. Representation of Class'

Typicality. Most Cited Cases ' Class certification is inappropriate where putative

cla~s representative is subject to unique defenses

which threaten to become focus of litigation. Fed.Rules Civ.Proc.Rule 23(a)(4), 28 U.S.C.A

(37) Federal Civil Procedure 170A ~184.15

l70AiiD) Class Actions l70AIID)1 In General l70Ak165 k. Common Interest in Subject Matter, Questions and Relief; Damages Issues. Most Cited Cases

Finding, for certfication puroses, that class action is maintainable on ground that part opposing class has acted or refused to act on grounds generally applica-

~le to c~ass, thereby makig appropriate final injunctive rehef or corresponding declaratory relief with

res~e.ct to ~lass as whole, is appropriate where (1) positive weight or value to plaintiffs of injunctive or declaratory relief sought is predomiant even though compensatory or puntive damages are also claimed and (2) class treatment would be effcient and manageable, thereby achieving an appreciable measure of judicial economy. Fed.Rules Civ.Proc.Rule 23(b)(2), 28 U.S.C.A.

l70A Federal Civil Procedure l70AlI Parties l70AII(D) Class Actions l70AIID)3 Paricular Classes Represented l70Ak184 Employees l70Ak184.l5 k. Sex Discrimination

Actions. Most Cited Cases In T~tle VII gender discrimination action by pharmceutical company employees, named plaintiffs could adequately represent interests of female managers in

class even though only named plaintiff who was manager was subject to unque defense that she improperly disclosed corporate inormtion to frend in

violation of company policy; employer did not suggest any way in which their pursuit of that defense could affect interests of other class members or that plaintiff manager's credibility was adversely affected

(39) Federal Civil Procedure 170A ~184.15 l70A Federal Civil Procedure l70AII Partes

l70AiiD) Class Actions l70AIID)3 Paricular Classes Represented l70Ak184 Employees

l70Ak184.l5 k. Sex Discrimiation Actions. Most Cited Cases Clas~ action by pharmceutical company employees alleging gender discriation under Title VII was

maintainable on ground that injunctive relief would be appropriate and necessary were employees to suc-

ceed on the merits. Fed.Rules Civ.Proc.Rule 23(b)(2), 28 U.S.C.A.; Civil Rights Act of 1964, § 703(a)(1), 42 U.S.C.A § 2000e-2(a)(l).

by their allegations. Fed.Rules Civ.Proc.Rule

(a)(4), 28 U.S.C.A; Civil Rights Act of 1964, § 703(a)(1), 42 U.S.C.A § 2000e-2(a)(l) 23

(38) Declaratory Judgment 118A ~305 l18A Declaratory Judgment l18AII Proceedings

118AII(C) Pares l18Ak305 k. Representative or Class Actions. Most Cited Cases

Federal Civil Procedure 170A ~165

(40) Federal Civil Procedure 170A ~184.15 l70A Federal Civil Procedure l70AIl Parties l70AIID) Class Actions l70AIID)3 Paricular Classes Represented l70Ak184 Employees l70Ak184.l5 k. Sex Discrination

Actions. Most Cited Cases Issue of maintainability of Title VII gender discrimination class action on ground that questions of law or fact common to class members predominated and that class action was superior to other available methods

l70A Federal Civil Procedure l70AlI Partes

of adjudication would be deferred until after liability phase of class action; it was not necessary to decide

(Ç 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.

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9

244 F.RD. 243, 101 Fair EmpLPrac.Cas. (BNA) 522 (Cite as: 244 F.R.D. 243)

Civ.Proc.Rule 23(b)(3), 28 U.S.C.A.; Civil Rights

FNI. Two of the nineteen named plaintiffs, Ashley Narmour and Sue Earl, sue only in their individual capacities, and not as puta-

Act of 1964, § 703(a)(1), 42 U.S.C.A § 2000e-

iw. *248 David W. Sanford, Angela Corridan, Jeremy

tive class representatives. (P. Class Cert.

Is, Sanford, Wittels & He-

NPC is a pharaceutical company with about 6,000 sales representatives, headquartered in East Hanover,

that issue at certification stage where action was found maintainable on another ground. Fed.Rules

Heisler, and Steven Witte

isler, LLP, Washigton, DC, and New York, NY, and Grant Morris, Washington, DC, for plaintiffs.

Vincent R. FitzPatrick, Jr., Heather K. McDevitt, and Jack E. Pace II, White & Case LLP, New York, NY, for defendant Novars Corporation.

Jonathan A. Wexler, Richard H. Schnadig, Thomas G. Abram, and Aaron R. Gelb, Vedder, Price, Kauf-

man & Kamrolz, P.C., New *249 York, NY, and Chicago, IL, for defendant Novarts Pharmceuticals Corporation.

Mem. 3 n. 1.)

New Jersey, with operations in all

50 states. The cor-

poration's organiational strctue divides the countr which has one or more sales into "terrtories," each of representatives responsible for marketing NPC's products to local doctors. NPC also has "national field forces" of employees focusing on areas such as

"mass markets," institutional markets, and specialty physicians. NPC is wholly owned by defendant Corporation, a holding company with thee employees, though another company, Novars FinanciaL As discussed below, the partes dispute the extent and

natue of the relationship between Corporation and

Andrea S. Christensen, Kaye Scholer, LLP, New York, NY, for defendant Thomas Ebeling.

OPINION AN ORDER

NPC.

Defendant Thomas Ebeling is Chief Executive Officer ("CEO") of Novartis Pharma AG, a related company that is not a par to ths case. Ebeling is also a

boardrember of NPC, and is alleged to have been actively involved with the maagement of NPc.

LYNCH, District Judge.

(Compl. ii 44.) Female employees of Novarts Pharceuticals Corporation ("NPC") bring this gender discrition

suit under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. ("Title VII"). Defendant Novartis Corporation ("Corporation"), the corporate parent of NPC, moves for summry judgment, arguing that plaintiffs have failed to show that Corporation is subject to liabilty for its subsidiary's actions.

Plaintiffs also move for class certfication pursuant to Rule 23 ofthe Federal Rules of Civil Procedure. Both motions wil be granted.

BACKGROUND Plaintiffs are nieteen women presently or formerly employed by NPC in sales-related positions.FNI They claim that NPC discriates against them in various

After extensive discovery, plaintiffs move for certfication of a class consisting of

(a)ll women who are curently holding, or have held, a sales-related job position with (NC) durng the time period July 15, 2002 though the present, including those who have held positions as Sales Representatives, Sales Consultants, Senior Sales

Consultants, Executive Sales Consultants, Sales Associates, Sales Specialists, Senior Sales Special-

ists, and Distrct Managers i. (P. Class Cert. Mem. 1.) In support of the motion for

class certfication, plaintiffs offer evidence that includes the declarations of 87 women who are or were employees ofNPC, as well as two expert reports.

ways, including in compensation, promotion and promotional opportties, personnel evaluations, and

by adverse treatment of women who take pregnancy leave. They seek injunctive relief, back pay and front pay, and compensatory and puntive damages.

Defendants oppose the request for class certfication,

prily on the grounds that plaintiffs' statistical and anecdotal evidence fails to show the existence of common questions of fact and law. Defendant Corpo-

ration moves for sumary judgment on the grounds

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244 F.RD. 243, 101 Fair Empl.Prac.Cas. (BNA) 522

(Cite as: 244 F.R.D. 243) that plaintiffs have failed to show it that its operations

sufficient and necessar to the total employment

are suffciently integrated with NPC's operations to

process, even absent total control or ultite author-

give rise to liability for any acts of discrimiation.

ity over hig decisions." Id. at 1241 (internal cita-

DISCUSSION

tions, alterations and quotation maks omitted). "We focus our inquir ... on the second factor, centralized control of labor relations," id. at 1241, a "crucial

i. Novartis Corporation's Motion for Summary

element of

the inquir." Parker v. Columbia Pictures

A. Summary Judgment Standard

Indus.. 204 F.3d 326, 341 (2d Cir.2000) (internal citations and quotation marks omitted). Because centralized control of labor relations is the focus of the analysis, it wil be discussed first.

Summry judgment is warranted where "the plead-

C. Centralized Control of Labor Relations

Judgment

ings, depositions, answers to interrogatories and ad-

missions on fie, together with the affdavits, if any, show that there is no genuine issue as to any material fact and that the moving part is entitled to a judgment as a matter of law." Fed.RCiv.P. 56(c). The

moving part has the burden to *250 establish the absence of any material factual issues. Terry v.

Ashcroft. 336 F.3d 128, 137 (2d Cir.2003), citig Celotex Corp. v. Catrett. 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (986). "In determng whether there are genuine issues of

material fact," the

Cour must "resolve all ambiguities and draw all permssible factual inferences" in favor of the non-

moving part. Id. (citation and internal quotation marks omitted).

B. Standards for Parent Company Liabilty Under Title VII

il The most importt element in the four-factor test is "whether the two enterprises exhbit centralized

control of labor relations, including tasks such as handling job applications, approving personnel status

reports, and exercising veto power over major employment decisions." Parker, 204 F.3d at 341. "This

partcular criterion has been distilled to a critical question: what entity made the final decision regarding employment matters related to the person claim-

ing discrimation?" Regan v. In the Heat ofthe Nile, Inc.. 93 Civ. 862, 1995 WL 413249, at *3 (S.D.N.Y. July 12, 1995).

Corporation relies heavily on ths Cour's decision in Salemi v. Boccador. Inc. No. 02 Civ. 06648, 2004 WL 943869 (S.D.N.Y. Apr. 29, 2004). In that case, the Cour held that there was a genuine issue of mate-

rial fact as to whether a corporation and its parent il A parent company can be held liable for its subsidiary's violations of Title VII under the "single or joint employer" test developed by the National Labor Relations Board and adopted by the Second Circuit in the Title VII context. Gulino v. N. Y.S Educ. Dep't,

460 F.3d 361, 378 (2d Cir.2006). Under ths test,

company should be treated as an integrated employer

for Title VII puroses, even though the level of control exercised by the parent company was "less than that described in many of the cases that have allowed integration under Title VII." Id. at *5. Acknowledging that centralized control of labor relations was the

"key factor" in the inqui, id. at *4, the Cour ana-

tralized control of labor relations, (3) common

lyzed that factor in term of the specific allegations in the case, which concerned the conditions of the plaintiffs employment, not failure to promote or wrongful termnation. Id. at *5. The Cour held that

management, and (4) common ownership or fmancial control.

the relevant employment decisions for puroses of

(A) parent and subsidiary cannot be found to represent a single, integrated enterprise in the absence of evidence of (1) interrelation of operations, (2) cen-

integratig (the two companies) are not simply the

Cook v. Arrowsmith Shelburne. Inc.. 69 F.3d 1235, 1240 (2d Cir.1995).

hiing or firing of plaintiff, but rather are those decisions that constrct the conditions of employment

for employees at the plaintiffs level, including not il The four-factor test may be satisfied "by a show-

ing that there is an amount of paricipation that is

only the hiing and firing of employees at (her)

level, but also the hiring and firing of the manager

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244 F.R.D. 243, 101 Fair Empl.Prac.Cas. (BNA) 522 (Cite as: 244 F.R.D. 243)

(of the subsidiary company) and the settg of overall policies for employee conduct and disci-

not share it with anyone at NPC's HR departent.

pline.

some indirect sense involved personnel management at NPC (in that that was the subject of the report), nothg suggests that Robinson exercised any control over labor relations at NPC. The wrtig of the report was not a joint HR fuction, but a financial analysis of the prospects of a proposed acquisition by the holding company. Thus, Robinon's analysis of the

ld. In ths case, the relevant employment decisions

for the most part also concern conditions of employ-

ment. Plaintiffs' allegations include discriminatory promotion, disparate pay, differential treatment, hos-

tile work environment, discriation against women who take pregnancy leave, sexual harassment, and retaliation. (Compl.~ 3.)

(ld. at 56, 60.) Although this service may have in

proposed deal is not evidence that Corporation exercised any control over the conditions of employment

atNPC. il Nothg about the allegations concernng Corpo-

ration, however, suggests that *251 it has any control

over the personnel policies of NPC, much less the conditions of employment experienced by NPC employees. Unlike the situation in Salemi, where the officer who served as president of both corporations "controlled many of (the subsidiary's) employment policies, even those as quotidian as dress code," and

Other evidence submitted by plaintiffs is even weaker. Plaintiffs note that Corporation and NPC have submitted joint applications for Forte Magazine's "Best Places to Work" surey. Plaintiffs acknowledge, however, the rules of the contest required

that corporations apply together with all affliates, rather than individually.FN2 (P. Mem.FN3 11-12.) The

"exercised this authority on behalf of (the parent cor-

only inference that can be drawn from the joint sub-

poration)," 2004 WL 943869 at *6, plaintiffs have pointed to no evidence that any Corporation offcer

mission, therefore, is that the various Novartis entities wished to be known as good places to work. The

has any control whatsoever over the conditions of employment at NPC. Uncontradicted testimony in the record indicates that Corporation never tells NPC's

law of corporate liabilty is not governed by the rules of a magazine contest.

HR personnel what policies to adopt or how to re-

FN2. The joint-application policy makes eminent sense, given that many major cor-

spond to an employee complaint, and never communicates with them to discuss the hiing or firing of

NPC's employees. (Reply Ex. 2 at 299.)

Plaintiffs contend that there is a "blending" of humn resources fuctions between Corporation and NPC.

porations have a surfeit of affliated subsidiaries. If the contest were strctued otherwise, the entie "Best Places to Work" list could theoretically be filled with one corporation and its subsidiaries.

They note that James Robinson, Vice President of Corporation's HR departent, is also Vice President

FN3. This Opinon and Order adjudicates

of HR for two related companies, Novarts Services and Novarts Financial, and contend that Ronbinson

two motions, which were separately briefed.

"has also been responsible for the HR aspect of

law will be cited thoughout the "Discus-

(NC's) acquisitions of sales personneL." To support ths claim, they note that on one occasion when Cor-

sion" section of this opinon as "D. Mem.,"

poration planned to acquire certin operations from

should be understood that such citations refer to the parties' summry judgment memo-

another company and merge those operations into

NPC, Robinon performed due diligence on the personnel who would be transferred in support of those operations. (P.Ex. E.l at 52-53, 55-56.) No reasonable factfinder could find, however, that ths due diligence was evidence of centralized control of labor

For the sake of brevity, the memoranda of

"P. Mem.," "D. Reply," and so fort. It randa when they appear in the discussion of

sum judgment, and that they refer to the class certfication memoranda when they

appear in the discussion of class certfication.

relations.

In connection with the acquisition, Robinson wrote a the due diligence," but did report on the "HR piece of

Plaintiffs also rely on the Novarts companies' use of Lisa DiPaolo, an NPC admstrative employee. Di-

Paolo works for NPC and does separate work for

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244 F.RD. 243, 101 Fair Empl.Prac.Cas. (BNA) 522

(Cite as: 244 F.R.D. 243) Corporation, for which Corporation reimburses NPC.

(Reply Ex. 4 at 135.) Plaintiffs do not contend that D~~olo's services for Robinon. at Corporation pert~in in any way to NPC's personnel policies or practices. The fact that the NPC employee is paid for HR work at Corporation, and the fact that the employee's

sidiary) and that each was supervised by another (subsidiary) employee. It follows from these undisputed facts that (the subsidiary), and not (the parent), made the 'final decisions' regarding plaintiffs'

employment that are at issue here.

between the two corporations. Moreover, the fact that

Duff v. Drake Beam Morin. No. 96 Civ. 5606, 1998 WL 252063, at *4 (S.D.N.Y. May 19, 1998). Therefore, there is no genuine issue of material fact as to

a s~gle NPC employee is used by Corporation says

ths critical prong of

nothg about whether Corporation controls conditions of employment at NPC.

D. Interrelation of Operations

work at Corporation is limted to Corporation's HR

needs, is evidence of separation of HR fuctions

the inquir.

*252 Plaintiffs also note that Corporation's Head of HR partcipates in HR-related meetigs at NPC. The

~ When considering the "interrelation of opera-

evidence suggests that Corporation sometimes adopts policies formulated by NPC. (D. Ex. E.3 at 229-34.) It is not surrising that Corporation, which has three

distrct have considered factors including:

employees, would use policies adopted by NPC, a much larger affliated corporation, as a modeL. But

no~ng in the record indicates that it is in any way obli?ated to do so, or that Corporation has the ability to dictate the term of any policies to NPC.

tions" prong of the integration analysis, cours in this

(1) whether the parent was involved directly in the subsidiary's daily decisions relatig to production,

distribution, marketing, and advertsing; (2) whether the two entities shared employees, services, records, and equipment; (3) whether the enti-

il Finally, plaintiffs also argue that the two corpora-

ties commngled bank accounts, accounts receivable, inventories, and credit lines; (4) whether the parent maintained the subsidiary's books; (5)

tions share employee benefit plans. However, "the

whether the parent issued the subsidiary's pay-

fact that the companies maintained the same benefits

checks; and (6) whether the parent prepared and

does not suggest centralized control of labor relations." Balut v. Loral Elec. Sys.. 988 F.Supp. 339, 347 (S.D.N.Y.1997). Rather, a "common benefits package speaks only to economies of scale ... and not to centralized control of labor relations." Kellett v. Glaxo Enter.. 91 Civ. 6237, 1994 WL 669975, at *5 (S.D.N.Y. Nov.30, 1994).

Plaintiffs have failed, in short, to offer any meanig-

ful evidence of centralized control of labor relations. There is no evidence that Corporation and NPC "ap-

pear to make joint hiing and firing decisions." Lihli Fashions Corp. v. NL.R.B.. 80 F.3d 743, 747(2 Cir.1996). Nor is there evidence from which a reasonable factfinder could conclude that Corporation exerted control over the conditions of employment at

NPc. As in a similar case,

fied the subsidiary's tax retus.

Herman v. Blockbuster Entm't Group. 18 F.Supp.2d 304, 309 (S.D.N.Y.l998), affd 182 F.3d 899 (2d

Cir.l999). Plaintiffs offer no evidence pertainng to the first, third, or fift of

these factors.

The evidence on which plaintiffs rely to show interre-

lation of operations is weak. There is no evidence that Corporation "establish( es) the operatig practices

and management practices" at NPc. Cook. 69 F.3d at

1241. Rather, plaintiffs' evidence primrily establishes that Corporation, which is very small, shares some services with and purchases others from NPC for reasons of effciency. Corporation and NPC share offce space in Florham

(i)t is uncontroverted that (the two companies)

have separate humn resources deparents, and that (the subsidiary) establishes its own policies

and makes its own decisions as to the hiing, discipline, and termation of its employees. It is likewise undisputed that plaintiffs worked for (the sub-

Park, New Jersey. A reasonable factfinder could conclude, based on testimony introduced by plaintiffs (P .Ex. C), that the offce space is not clearly marked as separate, although there is contradictory evidence

in the record. (D.Ex. 6.) Similarly, plaintiffs note that Corporation and NPC employees have access to the

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244 F.R.D. 243, 101 Fair Empl.Prac.Cas. (BNA) 522 (Cite as: 244 F.R.D. 243)

same phone directory and intranet services (P. Mem 16), and that NPC provides IT services to Corpora-

intellectual propert-related services it perform for NPC (P. Mem 9), but ths allegation concerns the

tion. (P. Mem. 17.) Although these facts, if tre,

relationship between Corporation and Novarts Services, not Corporation and NPC. Similarly, plaintiffs'

would indicate that Corporation and NPC are closelyaffliated companies, they do not indicate any interrelationship that is relevant *253 to control over condi-

tions of employment at NPC.

claim that loans from Novars Financial to NPC are approved by NPC's board without any effort to get a better deal from non-Novars companies. (P. Mem 10.) Even if tre, ths allegation concerns the rela-

A lengthy list of other asserted connections offered by plaintiffs includes little of relevance. Plaintiffs

contend that Corporation pays NPC to store its records at NPC's warehouse, but offer no evidence that ths was anything other than an arm's-length transaction. Plaintiffs' claim that all of the relevant Novars companies use Pricewaterhousecoopers as external

auditors is even less compelling. Any number of companies use that auditor's services without being affiiated in any way. Plaintiffs' contention that No-

varis Services decides which NPC drgs need patent protection (P. Mem 17) is irelevant to whether Corporation exercises any control over NPC's personnel fuctions. Plaintiffs also claim that Corporation's

deputy general counsel keeps custody of NPC's miute books. (P. Mem 17.) This fact establishes that the parent company is keeping track of the operations of

tionship between NPC and Novarts Financial, not NPC and Corporation. il Finally, plaintiffs note that employees of the vari-

ous Novaris companies are told to th of the cor-

porations as "one big family" (P. Mem 18), and that NPC files its tax retu through Corporation, Novar-

tis Financial, and Novarts Services. Corporation files

the consolidated tax retu. (P. Mem. 17.) While these allegations do indicate some degree of interrelationship of operations, they do not suggest the degree of entanglement generally found to satisfy this prong of the analysis, even in combination with the other

allegations discussed above. Cf Regan. 1995 WL 413249, at *3 (finding interrelationship of operations where employees rotated inormlly between the

its subsidiary, but not that it exercises any control

relevant companies, and where employee records, payroll records, and bank deposits of each company

over NPC's operations. See Balut. 988 F.Supp. at

were kept together); Parker. 204 F.3d at 341 (relyig

345-346 ("The fact that (the parent) Loral reviewed

on pay stubs that listed an employee's employer as

(the subsidiary's) operations biannually, however,

paid "on behalf of' the parent "though" the subsidi-

does not demonstrate an interrelationship, because a

ary); Linskey v. Heidelberg Eastern Inc., 470

parent tyically reviews a subsidiary's progress on a

F.Supp. 1181, 1184 CE.D.N.Y.1979) (noting that the

periodic basis"). Plaintiffs note that Corporation pro-

subsidiar could request employees from the parent,

vides some capital financing to NPC, but ths is tyi-

and the parent had the "absolute privilege" of ap-

cal of a relationship between parents and subsidiaries. Nor does the allegation that Corporation has the

pointig employees to the subsidiar, including its

power to approve or disapprove NPC's budget sug-

rate affliates necessitated a finding of interrelated

gest an interrelationship of operations; rather, ths is a

operations, most large corporate families would count

norml corollary of ownership.

president). If such routine connections among corpo-

as single enterprises for Title VII puroses. Even if the facts as alleged by plaintiffs are tre, the evidence is insuffcient for a reasonable factfinder to find for

II Plaintiffs also rely on what they call a "lack of

arm's-length dealings" between the two corporations.

(P. Mem 9.) They note that Corporation does not

have a written lease for the offce space it rents from NPC, although the annual rent is over one million dollars. This is evidence of a close relationship, but it has nothing to do with labor relations. Nor does the

plaintiffs on ths prong.

E. Common Management

I2 Common management and common ownership, the last two prongs of the single employer test, "are

inormlity of the arrangement raise a question about

less importt as they *254 represent ordinary as-

whether it was agreed to at arm's length.

pects of the parent-subsidiary relationship." Meng v. Ipanema Shoe Corp.. 73 F.Supp.2d 392, 403

Plaintiffs claim that Corporation decides how much Novarts Services will bil NPC for audit, legal, and

(S.D.N.Y.1999). Thus, "the mere existence of common management and ownership are not sufficient to

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244 F.R.D. 243, 101 Fair Empl.Prac.Cas. (BNA) 522 (Cite as: 244 F.R.D. 243)

justify treating a parent corporation and its subsidiary as a single employer." !J quotig Lusk v. Foxmever Health Corp.. 129 F.3d 773,778 (5th Cir.1997).

ployer doctre." Dewev v. PIT Telecom Nether-

lands, Us., Inc.. No. 94 Civ. 5983, 1995 WL 425005, at *3 (S.D.N.V. Ju1.9, 1995). In Herman,

the cour found plaintiffs' evidence of conuon man-

Il As to common management, plaintiffs first point out that Paulo Costa, CEO of Corporation, was for-

merly the CEO of NPC, and that other officers have moved from one corporation to the other. This is not "common" management. As a general matter, "the fact that a parent assists a subsidiary's employee in locatig other employment with the company's

group does not indicate centralized control of labor

relations where the parent tyically provides such assistance." Balut, 988 F.Supp. at 346 (internal citations omitted). "To hold otherwise would deter a parent from making referrals for valued employees, by

agement inuffcient, despite the fact that the two companies shared a CEO and CFO, because the "two entities maintained distinct management strctues," i 8 F.Supp.2d at 313, and, crucially, there was no evidence tht the parent's corporate offcers had "par-

ticipated in any respect in the employment decisions affecting Plaintiffs." Id. The same is tre here. Thus, plaintiffs' evidence of common management is insufficient on this factor as well.

F. Common Ownership or Financial Control

transformng a common couresy into a means of

I. It is undisputed that Corporation wholly owns

'control.' " Id. This is no less tre when the employee in question is CEO.

Novarts Financial, which in tu wholly owns NPC, and that both Corporation and NPC are ultimately

il As to actual overlap, the boards of directors of

based in Switzerland. "A parent corporation's posses-

Corporation and NPC are separate and distict, although it is undisputed that there is overlap in the

the parent to the norml incidents of stock ownership,

owned by Novars AG, a non-par corporation

membership of the boards. Three members of Corporation's board are also members of NPC's board, and

a fourh member of Corporation's board is an NPC offcer. (See P. Mem. 6, D. Mem. 24.) There is no curent overlap of corporate officers, although in the past there has been an overlap of up to three offcers, none of whose fuctions pertained to HR or labor relations. (Robinson Decl., D. Ex. 6 ir 9.) These facts

sion of a controlling interest in a subsidiary entitles

such as the right to select directors and set general

policies, without forfeiting the protection of limited liability." Meng. 73 F.Supp.2d at 403, quotig Lusk. 129 F.3d at 778. Thus, this factor alone is insuffcient to support an integrated-enterprise theory ofliability. ll "(T)he law only treats the employees of a corpo-

rate entity as the employees of a related entity under

must be considered "in the light of the well estab-

extraordinary circumtances." Murray v. Miner, 74

lished priciple that directors and officers holding

F.3d 402,404 (2d Cir.1996). This is not that extraor-

positions with a parent and its subsidiary can and do

dinary case. Because plaintiffs have failed to show that Corporation and NPC fuction as a single enter-

change hats to represent the two corporations sepa-

rately, despite their common ownership." Herman, 18 F.Supp.2d at 312, quotig Lusk, 129 F.3d at 779 (ci-

prise, Corporation cannot be held liable for any viola-

tation omitted).FN4

motion for summry judgment will be granted. FN5

FN4. Plaintiffs' contention that NPC has no

tion of Title VII by NPC, *255 and Corporation's

FN5. Because Corporation's motion for

"independent" directors adds nothg to ths

sumry judgment is granted, there is no

analysis. The testimony on which they rely establishes merely that the directors in ques-

need to address its arguments against class

tion are not "independent directors" in the

lack of evidence implicatig Corporation in

norml sense of that term that is, directors

any discrimiation. For the remainder of the

not otherwise associated with the company

they serve. (Merkelson Dep., Reply. Ex. 3, at 154.)

certfication, which primarily concern the opinon, therefore, references to "defendants" should be understood to mean defendants NPC and Ebeling, who submitted joint briefs on the class certfication question.

I1 Plaintiffs "need to prove more than an overlap in

boards or management in order to use the single em-

II. Plaintifs' Motion for Class Certifcation

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244 F.R.D. 243, 101 Fair Emp1.Prac.Cas. (BNA) 522 (Cite as: 244 F.R.D. 243) Pres. & Dev.. 990 F.2d 1397, 1401 (2d

A. Exhaustion and the Scope of the Class Period Defendants raise a threshold arguent which, if meritorious, would affect the scope of the evidence

relevant to class certfication.

A plaintiff may brig an employment discriation action under Title VII only after fuing a tiely

charge with the EEOC or with "a State or local agency with authority to grant or seek relief from such practice." 42 U.S.C. § 2000e-5(e). Defendants

argue that plaintiffs did not file a charge with the Equal Opportty Employment Commssion ("EEOC") satisfyg the exhaustion requirement until January 25, 2005, and that the class period, which

plaintiffs say opens July 15, 2002, therefore cannot

Cir.1993). Neither is at issue here.

Plaintiffs argue that the EEOC charge of plaintiff Amy Velez, fied on July 15,2003, and the November 10, 2004 charge filed by plaintiff Michelle Williams, satisfied the exhaustion requirement.FN7 De-

fendants contend that these charges do not raise the

same claim raised by the class, and that the earliest relevant EEOC charge by a putative class representa-

tive is the January 25, 2005 charge fied by Jennfer Waxman-Recht. (Schnadig Ltr. at 3 & Ex. 1.) If

Waxmn-Recht's EEOC charge is the first charge satisfying the exhaustion requirement, the class period could open no earlier than March 31 2004 which is 300 days before Waxmn-Recht's' charg~

was filed. See 42 U.S.C. § 2000e-5(e)(l) (establishing 300-day filing period for certain states).

open until March 31, 2004. (Ltr. from Richard H.

Schnadig to the Cour, dated June 13,2007.)

FN7. Defendants argue that Velez's charge

cannot support class claims because it was

(15)(6)(71 A class representative can only represent those individuals who have either fied a timely EEOC charge or could have fied one at the time the class representative's charge was filed. "(T)he timely filing of an admstrative charge by a named plaintiff in a class action satisfies the charge filing obligation of all members of the class." Tollver v. Xerox Corp.. 918 F.2d 1052, 1056 (2d Cir.1990). Such a

charge must give "some indication that the grevance affects a group of individuals defined broadly enough to include those who seek to piggyback on the claim." !d. at 1058 (discussing the issue under the

ADEA). The plaintiffs' claim must be "reasonably related" to the claims made in the timely EEOC charge, meanig that "the conduct complained of would fall with the scope of the EEOC investiga-

tion which can reasonably be expected to grow out of

"never perfected" -meaning that the EEOC

dismissed the charge on August 24, 2004 for failure to fie a tiely charge. (Schnadig Ltr.

Ex. 3.) The EEOC, however, withdrew ths

determation upon Velez's submission of

evidence that the charge had in fact been timely filed, and the reason for dismissal

was "altered to reflect an admstrative dismissal of the charge." (Sanford Ltr. Ex.

B.) Thus, there is no basis in the record on which to conclude that Velez's charge was not tiely fied.

Velez's charge alleges, on behalf of herself and a pu-

tative class of women at NPC, that NPC discrimi-

nates againt her as "part of a contiuing pattern and practice of discriation against female Novartis

the charge of discrimation." Holtz v. Rockefeller &

employees, including but not limted to subjecting Co.! 258 F.3d 62, 83 (2d Cir.200l). FN6 The Second Circuit has described ths priciple as "essentially an

allowance of loose pleading." ¡d. (internal citation and quotation marks omitted).

FN6. There are two other kinds of claim that may be considered "reasonably related":

those alleging "retaliation by an employer against an employee for filing an EEOC

charge," and those alleging "fuher incidents of discriation carried out in pre-

cisely the same manner alleged in the EEOC charge." Butts v. City ofN. Y Dep't ofHous.

female employees to a sexually hostile work *256 environment, harassment, and denyig female employees the full rights afforded to them under the FMLA." (Schnadig Ltr. Ex. 2.) Another charge, filed by Michelle Willams on November 11, 2004, makes the same claims, on behalf of Wiliams and the class. It also claim that the "pattern and practice" of dis-

criation includes "denying female employees promotions and promotional opportties in favor of

less qualified male employees." (Schnadig Ltr. Ex. 4.)

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244 F.R.D. 243, 101 Fair EmpLPrac.Cas. (BNA) 522 (Cite as: 244 F.R.D. 243) I1 Defendants argue that claims of compensation

S.Ct. 2364, 72 L.Ed.2d 740 (1982).

and promotion discrimnation are not reasonably related to claims of harassment and hostile work environment. In Holtz, however, the Second Circuit approvingly noted a distrct cour's conclusion that "it

Second, the plaintiffs must also show that the proposed class action fits into one of the thee categories of class actions listed in Rule 23(b). Those categories

would have been reasonable to suspect that the EEOC, in investigatig (a) complaint of failure to train because of age, would have assessed (the corporation's) promotion and transfer policies." 258 F.3d at

84 (quotation marks omitted). It would simlarly have been reasonable here for the EEOC to investigation pay and promotion claim, because Velez's complaint

specifically references being denied a merit pay increase. (Schnadig Ltr., Ex. 2, at 3.) It also alleges that Velez's incentive-based compensation is unairly low because her manager failed to assign her a parter to help with her sales terrtory. (Id.) In short, Velez's

complaint adequatelrgut NPC on notice of the natue of the class claims.-- Thus, defendants' arguments are without merit, and there is no exhaustion-related

reason why the class period cannot open on July 15,

2002.

FN8. Because defendants' argument that the class period cannot sta earlier than 2004 is

without merit, it is unecessary to address defendants' argument that Ledbetter v. Goodyear Tire & Rubber Co., 550U.S. 618, 127 S.Ct. 2162, 167 L.Ed.2d 982 (2007),

precludes consideration of statistical data

pre-dating the putative 2004 beging of the class period (Schnadig Ltr. at 4-5).

encompass class actions where: (1) prosecution of separate actions by individual partes either would create a risk of inconsistent adjudications or would be dispositive of the interests of those members not parties to the adjudication; (2) defendants have acted or refused to act on grounds generally applicable to the

class; or (3) questions of law or fact common to members of the class predomiate, and a class action is superior to other available methods for adjudication. Fed.R.Civ.P. 23(b).

The Second Circuit's recent decision in In re Initial Public Offring Securities Litigation, 471 F.3d 24 (2d

Cir.2006) (" In re IPO" ) signficantly clarfied the standards for the adjudication of motions for class certfication. The Circuit explained that

a distrct judge may certfy a class only after mak-

ing determations that each of the Rule 23 requirements has been met; (and) such determations can be made only if the judge resolves factual disputes relevant to each Rule 23 requirement and

finds that whatever underlying facts are relevant to a parcular Rule 23 requirement have been estab-

lished and is persuaded to rule, based on the relevant facts and the applicable legal standard, that the requirement is met.

B. Class Action Certifcation Standards

*257 Id. at 41. Thus, the cour must make a legal

ll Rule 23 of the Federal Rules of Civil Procedure

determation as to whether class certfication is merited, and ths process may necessitate fact-rinding by

contains two sets of requirements for class certfica-

tion. First, the part seekig class certfication must show that the four prerequisites of Rule 23(a) have

the cour. "Definitive assessment" of each class certification requirement is required, even if those issues overlap with merits issues. Id. Ths Cour has noted

claim or defenses of the representative pares are

that "the holdings of In re IPO are both significant and narrow-a distrct judge must consider all of the relevant evidence in determg whether Rule 23 has been satisfied, but a distrct judge may not go beyond the boundaries of Rule 23 when makig such a de-

tyical of the claims or defenses of the class ("tyi-

termation." Hnot v. Wills Group Holdings Ltd.,

cality"); and (4) the representative partes will fairly

241 F.RD. 204, 209 (S.D.N.Y.2007) (" Hnot II" ).FN9

been met. Plaintiffs must show that: (1) the class is so numerous that joinder of all members is impracticable ("numerosity"); (2) there are questions of law or fact common to the class ("commonality"); (3) the

and adequately protect the interests of the class ("adequacy"). Fed.R.Civ.P. 23(a). The cour must be

FN9. In re IPO discussed at length circum-

persuaded, "after a rigorous analysis, that the prereq-

staces under which a class certfication mo-

uisites of Rule 23(a) have been satisfied." Gen. Tel.

tion requires analysis of the merits of a case. Previously, the Supreme Cour had held that

Co. of

Southwest v. Falcon, 457 U.S. 147, 161, 102

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"nothng in either the language or history of Rule 23 ... gives a cour any authority to conduct a preliminary inquir into the merits of a suit in order to determe whether it

whether ... the named plaintiffs claim and the class claims are so inter-related that the interests of the class members wil be fairly and adequately protected

v. Carlisle and Jacquelin. 417 U.S. 156,

in their absence." Falcon. 457 U.S. at 157 n. 13, 102 S.Ct. 2364. "The cru of both requirements is to ensure that maintenance of a class action is economical

177,94 S.Ct. 2140, 40 L.Ed.2d 732(974).

and that the named plaintiffs claim and the class

may be maintained as a class action." Eisen

Notig tht Eisen concerned a prelimiary

claims are so interrelated that the interests of the class

inquir into the merits for puroses of as-

In re IPO held that ths language does not

members wil be fairly and adequately protected in their absence." Marisol A. v. Guiliani. 126 F.3d 372, 376 (2d Cir.1997) (internal citations, alterations and

apply to "cases where a merits inquir either

quotation marks omitted).

signig costs of notice, the Second Circuit in

concerns a Rule 23 requirement or overlaps with such a requirement." 471 F.3d at 34.

(201 "(T)he district judge must receive enough evidence, by affidavits, documents, or testimony, to be

satisfied that each Rule 23 requiement has been met." In re IPO. 471 F.3d at 41. Defendants' evi-

dence, as well as plaintiffs', wil be considered. Plaintiffs have the burden of showing that the class certfication requirements have been met. Id. at 40.

fl To determne commonality, it is not necessary to decide whether plaintiffs' evidence is ultimately compelling. In re IPO makes clear that cours may

resolve contested factual issues where necessary to decide on class certfication, and when a claim cannot succeed as a matter of law, the Cour should not certify a class on that issue. See In re IPO. 471 F.3d at 42 (denyig class certfication as to the issue of reliance because the presumption on which plaintiffs'

theory depended was inapplicable). However, rn The proposed class consists of "all women who

"( c )ommonality requires that plaintiffs present com-

are curently holding, or have held, a sales-related job

mon questions of fact or law; plaintiffs' ultite suc-

with Novartis durg the time period July 15, 2002 though the present." (P. Mem. 34.) Defendants do

question, specifically that defendants actually did

not challenge the numerosity of ths class, which plaintiffs say could numer in the thousands. FNIO The

Cour concludes that the class "is so numerous that the joinder of all members is imracticable."

Fed.R.Civ.P. 23(a)(l). Nor do defendants challenge the ascertinability of the class, which is clear. See

Dunnigan v. Metro. Life Ins. Co.. 214 F.R.D. 125, 135 (S.D.N.Y.2003) (discussing implicit theshold requirement of ascertainability). Three questions remain to be analyzed under Rule 23(a): commonality, tyicality, and adequacy of

representation.

cess at tral on the merits requires an answer to that

discrimate against plaintiffs." Hnot Il 241 F.R.D. at 211 (emphasis in original). "For the Cour to decide which expert report was *258 more persuasive

would be to decide whether the class was actually discriminated against by defendants. Ths the Cour was not required to do, either before or after, In re IPo." Hnot Ii 241 F.R.D. at 211.

(24) Thus, the Cour may only examie expert reports or other evidentiary submissions "as far as they bear on the Rule 23 determation." Id at 210. For exam-

ple, in order to analyze whether the class is large FNIO. Indeed, the number of declarations by potential class members complainng of dis-

parate pay and promotion exceeds the 40member level at which numerosity is presumed. See Conso!. Rail Corp. v. Town of Hyde Park. 47 F.3d 473, 483 (2d Cir.1995).

C. Commonality Under Rule 23(a) (22) As various cours have noted, the requirements

of commonality and tyicality "tend to merge" because "(b loth serve as guideposts for determnig

enough to satisfy Rule 23(a)'s numerosity requirement, it is necessary to know how many members are

in the class. In re IPO. 471 F.3d at 40. A Cour should not refrain from such fact-rinding simply be-

cause it may overlap with a merits inquir. However, " 'statistical dueling' is not relevant to the certfication stage unless such dueling presents a valid basis for denying class certifcation. " Hnot Il 241 F.R.D. at 210 (internal citations and quotation marks omit-

ted; emphasis in originai).FNII In short, the Cour wil consider all of the relevant statistical and anecdotal evidence to determe whether the requirements of

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244 F.R.D. 243, 101 Fair Emp1.Prac.Cas. (BNA) 522 (Cite as: 244 F.R.D. 243) Rule 23 have been met, making whatever subsidiary

factual or legal fmdings are required as part of that

Plaintiffs contend that NPC's personnel evaluation and maagement system is overly subjective, and that

analysis.

ths subjectivity leads to discriation. FNl1. It is partcularly unwise for the Cour to become too deeply involved in an analysis of the mathematical and statistical merits

In Caridad v. Metro-North Commuter Railroad, 191

of an expert report, rather than leaving such

understanding of the selection processes

the commonality requirement could, in some circumstances, be satisfied by a challenge to "the subjective components of company-wide employment practices," based on a theory that "the grant of discretionary authority to supervisory employees either results

they seek to model, they often have incom-

in a pattern and practice of discrination or affects

plete or erroneous data, and are laboring in

one class of employees more harshly than others." Id. at 291-92 (internal citation omitted). In other words, it is possible for class action plaintiffs to make out a

an analysis to the factfinder, because

"(l)awyers and judges workig with statistical evidence generally have only a partial

an alien and unamiliar terrain." Waisome v. Port Auth. of

N.Y. & N.J., 948 F.2d 1370,

1372 (2d Cir.199l).

F.3d 283 (2d Cir.1999), the Second Circuit held that

discriation claim on the basis of allegedly exces-

sive subjectivity in the company's employment prac-

Plaintiffs assert that four questions of fact are common and appropriate for certfication: (1) whether NPC's employment policies are overly subjective and discrimiatory; (2) whether NPC paid women less than similarly-situated male employees; (3) whether

tices. As this Cour has previously held, In re IPO did

women; and (4)

uness plaintiffs can show "that the challenged practice is causally related to a pattern of disparate treatment or has a disparate impact." Caridad, 191 F.3d at 292. "Where the decision-makig process is difficult

NPC denied or delayed promotion of

whether NPC discrimates against pregnant employees.FN12

not underme or even address this holdig, which remains good law. Hnot IL 241 F.R.D. at 210. (25) Of course, class certfication is not appropriate

FN12. As defendants note, plaintiffs do not

to review because of the role of subjective*259 as-

appear to seek class certfication on their claims of sexual harassment or discrimtion in the admistration of discipline.

vant to determg whether the challenged employ-

(D.Mem. 34.) Plaintiffs' reply does not contest this asserton. Accordingly, there is no

need to address those claim in the class certification context. As to each of these questions, plaintiffs contend, each

class member's case will revolve around the same statistical and anecdotal evidence, personnel management analysis, deposition testimony, and docu-

ments. Each class member's case, they contend, will present the same questions of law: whether a pattern or practice of disparate treatment exists at NPC, and whether NPC's policies have a disparate imact on women. (P. Mem. 38-39.) In response, defendants essentially attck the merits of plaintiffs' case, arguing that plaintiffs' expert and anecdotal evidence fails bias or disparate imact. (D.Mem. 20-33.) to show

sessment, significant statistical disparities are relement practice has a class-wide impact." /d. The cour in Caridad found the statistical and anecdotal evidence presented in that case suffcient to show common questions of fact regarding the implementation

of company-wide employment policies, regardless of whether the evidence would ultimately be persuasive on the issue ofliability. Id. (26) At NPC, a substantial porton of employees'

evaluations are based on subjective factors, and the evaluations have a direct impact on employees' com-

pensation and chances for promotion. Plaintiffs' expert David C. Mart analyzed "the performnce

maagement and related compensation system" used

by NPC to determe whether it was "vulnerable to bias in decision makig." (Martin Report, P.Ex. 36

("Mar Rep."), at 1.) Mart's report criticizes the pedormnce evaluation system on a number of grounds. It argues that the ratings do not necessarily

1. Structure of the NPC Personnel Evaluation and Management System

correspond to real performnce, because they are

subject to being modified by higher-level supervisors

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244 F.R.D. 243, 101 Fair EmpL.Prac.Cas. (BNA) 522

(Cite as: 244 F.R.D. 243)

and because they are forced to fit a prescribed cure or "forced distribution" (id. at 8-9), and because appeals are directed to the same manager who had ear-

pact analysis, just as were evaluation sys-

lier approved the rating or to an HR employee with

which plaintiffs rely addressed the question

no authority to actually change the ratig. (!d. at 9.)

of whether subjective evaluation systems should be exempted from disparate impact law, not whether Title VII liability exists whenever an evaluation system is partially

tems based on objective criteria. 487 U.S. at

989-90, 108 S.Ct. 2777. The language on

The report argues that each decision in the evaluation process is essentially subjective (id. at 11-12) without

giving much detail; indeed, the entie report is only 14 pages long.

NPC argues that Mart's report is flawed because, as Martin acknowledges, he "didn't look at a single performnce appraisaL" (Mart Dep., D. Ex. 36, at 21.)

This argument is not persuasive. Mart's report is offered to show the flaws in the system's strctue,

subjective. Id

Mart's report is, by itself, inufficient to support class certification on any issue, because it ilustrates only the potential for discrination. The subjectivity of the NPC personnel management system presents a certfiable common question if, and only if, plaintiffs

not in its implementation. Martin did not purort to

can show "that the challenged practice is causally

offer evidence that the system at NPC actually causes

related to a pattern of disparate treatment or has a

disparate treatment or has a disparate impact; he

disparate impact." Caridad, 191 F.3d at 292. In order to show such an impact, plaintiffs offer statistical and

merely offered to show how the system makes discrimination possible. Whether his report and testimony do so successfully is ultimately a question for the jury. The report is suffciently persuasive, how-

anecdotal evidence of disparate impact in perform-

ance evaluation scores, compensation, and promo-

tions, and of discrimiation on the basis of preg-

ever, to permt a conclusion, at this prelimiary stage, that plaintiffs have raised a common question about

nancy.

whether NPC's system is strctued in a way that

2. Disparity in Performance Evaluation Scores

facilitates discrimination, and not merely a collection of individual claim of particular unfair evaluations.

Plaintiffs submit the report of Dr. Louis R. Lanier to show the discriatory effects of *260 NPC's em-

NPC also asserts that Martin admits that NPC's evaluation process includes many of the procedures

and safeguards that he hielf has recommended in

ployment policies in the various areas in which discrimination allegedly occured, including the scores on the performnce evaluations themselves. As to the

published writings to cabin subjectivity. (D.Mem. 18.) This is an appropriate ground for impeachment

performnce evaluations, Lanier finds that class

of Martin's conclusions, and may be offered to the factfinder as such, but it is hardly a basis for finding that Marin's report raises no common question as to

("Lanier Rep."), at 4.)

the plaintiffs in the putative class. FN13

members were systematically given lower ratings than male counterparts. (Lanier Report, D. Ex. 37

NPC argues that Lanier's analysis of different job

performnce scores should have controlled for job FN13. Plaintiffs also argue that Watson v. Fort Worth Bank and Trust, 487 U.S. 977,

108 S.Ct. 2777, 101 L.Ed.2d 827 (988), compels a finding that NPC "employs subjective practices which discriminate against

women." (P. Reply 10.) Plaintiffs appear to interpret Watson as holding that any evaluation system that combines subjective and objective elements must be treated as subjective, and therefore inerently impermssible. (Id.) This is a misreading of Watson, which held that evaluation systems based on subjective criteria were subject to disparate im-

level, because higher-level staff, who were presumably promoted because of a tendency to achieve high scores on performnce evaluations, wil score dispro-

portionately high. (D. Mem. 20, Welch Rep. 38.) According to Welch, after controlling for job level, the differences in high ratigs given to women was statistically insignificant. (Welch Rep. 40.) Lanier responds that the "competencies" or skills required of higher-level employees are different than the competencies required of lower-level employees. (Lanier

DecL., D. Ex. 39 ("Lanier Decl."), at 7.) That is, one can be a good sales representative but tu out to be a

terrble manager.

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Lanier also argues that controlling for job level in the analysis of disparate performnce scores would introduce inaccuracies, because there are fewer females

in higher-level jobs. (Lanier Rep. 14-15; see also Lanier Decl. 6 (speculatig that discrimiation may cause women to depart earlier in their careers).) Defendants argue that there is no evidence that this unequal distribution across job levels is due to discrimnation, and that therefore the control should be used anyway. While the partes disagree on the propriety of various controls, their arguments go to the merits of the expert analysis; they do not bear on whether

the question of discrimiation in performnce evaluations is common across the class. Other arguments also relate to the merits of Lanier's approach, not to the question of commonality. De-

fendants contend that Lanier errs by counting each performnce review as separate, even though some represent multiple reviews of the same individuaL.

ble experience, which Lanier says shows both a pay inequity and a failure to promote women commensurate with their experience. (!d.) Defendants argue that it is inappropriate to examine the pay disparity across all job groups. Higher-level

employees make more money, they point out, so comparing pay without accounting for job level proves only that there are fewer higher-level women

employees at NPC. (D.Mem. 29.) It is tre that pay disparities not adjusted for job level are not a comparison of simlarly-situated employees, and are

therefore not necessarily evidence of discrimination in pay. The unadjusted comparison is relevant, however, to the question of whether women at NPC actu-

ally suffer any adverse impact as a result of bias in the allegedly subjective evaluation system. If it is tre that bias reduces a woman's chances of promotion,

then it is useful to identify the resulting pay disparity *261 as an additional consequence of the subjective and biased evaluation system.

They argue that a higher-performng employee is

likely to continue to be higher-performg. Plaintiffs

respond that to control for multiple reviews of one employee would be to ignore the possibility of multiple acts of discrimination againt a single employee. (P. Reply 13.) Defendants furter argue that Lanier

did not analyze whether ratings were given by female

or male managers. (D.Mem. 22.) A cultue of discrimination, however, may be such that female raters as well as male raters grade women unairly; the

Moreover, a signficant disparity of

$74.82 per month

remains even after adjustment for job leveL. Defen-

dants argue that $74.82 is only 1% less than the aver$7,463 per month. (Welch Rep. age male earnngs of

12; see D. Mem. 24.) Plaintiffs respond, however, that the difference is signficant to 5.4 standard devia-

tions (see Lanier Decl. 9), and of course even discrimination that costs its victims only $897.84 per year is unawful and compensable under Title VII.

Cour cannot assume that women are incapable of objections to Lanier's findings with respect to performnce evaluation scores are unconvincing. The

Defendants argue that Lanier wrongly excludes from his pay calculation certain groups of employees, in particular employees hied into the sales force during

question presented-whether women are systemati-

the relevant pay period, and that the exclusions are

cally given lower scores on performnce evaluations-

"disproportionately female and those occupying entr

is common to the class, and it cannot be said that

level sales

discriminating against other women. Defendants'

Lanier's report is insuffcient to present a serious

jobs." (Welch Rep. 6.) Ifnot for these exclusions, NPC's expert argues, the correct pay differ-

question for the factfinder to resolve.

ential would show that women were paid $19.55 more per month. (Id.) Lanier replies the exclusions

3. Discrimination in Pay

are sensible because male and female employees in

the excluded groups are not similarly situated-for

Lanier finds that class members were signficantly under-compensated compared to their male counterpars. Compared to males in simlar job positions,

women were paid approximtely $74.82 per month less. (Lanier Decl. 11.) When all males and females are compared without regard to job position, women with simlar levels of experience are paid approxi-

mately $220 less per month than men with compara-

example, men are less likely than women to work less than one year because they are on unpaid leave.

(Laner Decl. 4.) This is precisely the sort of "statistical dueling" that should be resolved by a factfinder.

Welch also argues that of the 12 tyes of job identified by Lanier, the difference in pay is statistically

significant in only thee. (Welch Rep. 8.) Lanier re-

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244 F.R.D. 243, 101 Fair Empl.Prac.Cas. (BNA) 522 (Cite as: 244 F.R.D. 243) sponds that the statistical signficance of differences in individual job groups is imterial to the larger question of whether there is a pattern of discria-

tion at NPC. (Lanier Decl. 4.) Moreover, Lanier responds that in 11 of the 12 groups, men were paid more than women, which is strong evidence of discrimiation. (Id. at 12.) Welch also argues that

Lanier's analysis of "similarly-situated" women fails to control for work or educational experience prior to the employee's hiing at NPC, but offers no evidence suggesting that controlling for these variables would have changed the outcome of Lanier's analysis. (Welch Rep. 7.) These disagreements about statistical method are not appropriate for resolution at ths

they rest not on a theory that women are paid less in the traditional sense, but on a theory that women earn less because of the goals set and assignents given to them by NPC management. However, Lanier's report

still raises a question that is common to the class: whether NPC management's discretionary actions result in lower pay for women thoughout the corporation. Plaintiffs offer significant anecdotal evidence from various women claiming that *262 they were not paid consistently with their performnce (see P. Exs. 27-34), some of whom testified to the effects of their assignments on their pay. (See, e.g., P.Ex. 28, Bernce Dezelan Decl. ii 11.) This evidence supports their contention that the discretion allowed to manag-

stage.

ers by NPC's personnel management system was

Welch also argues that Lanier's analysis is corrpted by his use of age as a proxy for experience (to determie whether women are similarly situated to their

F.2d 590, 604 (2d Cir.1986) ("In evaluating all of

abused. See Rossini v. Ogilvv & Mather, Inc.. 798

male counterpars). Women, Welch believes, are more likely to spend time out of the workforce, and so a woman and man of the same age are statistically

unikely to have comparable work experience. Lanier disputes the relevance of this proposition to the data

the

evidence in a discrimnation case, a distrct cour may properly consider the quality of any anecdotal evi-

dence or the absence of such evidence."). Thus, even

if plaintiffs' claim is based not on direct base pay discrination, but on pay disparities that resulted indirectly from assignent and other management actions, there is suffcient evidence to show that the question is common to the class.FN14

(Lanier Decl. 5), but ths, again, is a question for the

factfinder. Lanier's findings are sufficiently rooted in

accepted statistical methodology to be received into evidence, and thus the accuracy of his conclusion

identifying classwide discrimation presents a factual issue for trial common to the entire class.

Defendants argue that the difference in pay cannot be causally linked to discrimiation because it includes tyes of pay that are not lined to subjective manage-

rial judgments, including incentive-based pay.

(D.Mem. 24.) Welch argues that Lanier should have used only base pay, not commssions, because commissions are formula drven, and not related to the performnce evaluations. (Welch Rep. 7.) Had Lanier done so, according to Welch, he would have found

the difference in pay to be a statistically inignificant five dollars. (Id.) Lanier argues that although commissions are formula-driven, the goals built into the the employees (which formula and the assignments of affect their ability to meet sales goals) are created though managerial discretion, and that incentive payments are therefore fairly considered in the pay disparity. (Lanier Decl. 3.)

FN14. The experts also appear to disagree about the standard for showing commonal-

ity. Welch criticizes Lanier for failing to show that the "estited $79 difference is common across the women in the proposed class." (Welch Rep. 13.) To show common-

ality, however, it is not necessary to find the

same common diference in each group. In other words, plaintiffs need not show that they each suffer the same degree of pay disparity. The asserted common question is whether there was discrination; the degree

of damage presumbly differs in most classaction discriation cases.

4. Discrimination in Promotions Lanier's report concludes that women at NPC had a

lower probability of promotion, and that women are underrepresented in the Management Development

Program (MDP), which is a prerequisite to promotion to management. (Lanier Rep. 5.) Moreover, plaintiffs

allege that women at NPC are overrepresented at

Plaintiffs' claims of pay discriation would be more diffcult to prove if, as Lanier's report suggests,

lower-level positions in the corporate hierarchy, but

increasingly underrepresented at successively higher

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244 F.R.D. 243, 101 Fair Empl.Prac.Cas. (BNA) 522 (Cite as: 244 F.R.D. 243) levels. (See P. Reply 15-16.)

those from sales representative to first-level managerial positions, which only affects a small fraction of

Defendants argue that it is unair to look at the actul representation of women at the various levels of the organiation's hierarchy, because employees reach their positions in that hierarchy through a number of events and decisions, some of which are not under

the class. Welch argues that Lanier's analysis is based on too small a *263 sample, but Welch does not dis-

the discretionary control of NPC management.

(D.Mem. 28.) Defendants do not dispute, however, that promotion depends at least in substantial part on performnce evaluations.

pute that with that sample the probability of male

promotion is dramatically greater thn the probability

of female promotion; the disparity is signficant to more than five standard deviations. (Lanier Decl. 13.) FN15

FN15. Welch's report examies the total number of promotions, broken down by

Defendants also argue that the snapshot approach

gender, and finds that women are slightly

employed by Lanier is not a useful methodology.

more likely to receive a promotion. (Welch

"After specifying the employment practice allegedly responsible for excluding members of their protected class from a benefit, plaintiffs must identify the cor-

lamely that analyzing all promotions is unnecessary, because the unequal distribution

rect population for analysis. In the tyical disparate

impact case the proper population for analysis is the applicant pool or the eligible labor pooL." Smith v.

Xerox Corp.. 196 F.3d 358,368 (2d Cir.l999), overruled on other grounds by Meacham v. Knolls Atomic Power Lab.. 461 F.3d 134 (2d Cir.2006). NPC argues that Lanier's findings with respect to representation in the hierarchy are invalid because they do not identify

a relevant pool of women who were eligible and available for promotion, and that without identifying benchmrks based on the pool of available women, "no inference of discriation can be drawn from

across the corporate hierarchy is sufficient evidence of discrimiation, and that "Dr.

Lanier need not provide statistical evidence

for every allegation in order to compel a finding of commonality." (P. Reply 17.) While it is possible to imgine reasons why plaintiffs' sample might be a better one despite its small size-for example, a contention that NPC managers are more likely to interfere with a woman's elevation from the

ranks of the sales staff to a managerial post than they are to interfere with her promotion withi the ranks-it is unecessary to con-

the workforce profie." (D.Mem. 29.) In this case, it is tre that Lanier's snapshot of the

corporate hierarchy does not identify an eligible pool of employees, and is therefore not directly useful in

determg whether the decisions that caused the unequal distribution were infected by discrimation. Lanier does, however, offer an analysis of gender

disparities in actual promotion decisions-that is, cases where employees were promoted within NPC-as does Welch. In both analyses, the eligible pool of employees is simply those employees at NPC who are eligi-

ble to be promoted to manager-that is, sales staff. Defendants do not contend that ths is an inappropriate "eligible pooL."

Lanier's analysis of promotions from sales employee to first-line manager concludes that male sales employees are 4.9 ties more likely to be promoted to

first-line manager than female sales employees. (Lanier Decl. 13.) As to this analysis, Welch faults Lanier for analyzing only one group of promotions,

~ 2010 Thomson

Rep. 32.) To ths plaintiffs respond rather

sider these questions, which pertain to the merits of the expert reports, at the class certification stage. Lanier's analysis also shows that women are under-

represented in the MDP, which is a prerequisite to promotion to manager. 15.2% of eligible males were selected for the MDP, compared to only 9.1% of

eli-

gible females, which is significant to 6.0 standard deviations. (Lanier Rep. 20.) Defendants argue that Lanier's criteria for eligibility are based on his own guesses as to who might be eligible for such a program, rather than any offcial criteria of NPC's.

(D.Mem. 32.) This arguent is specious. Defendants acknowledge that "there are no Company-wide re-

quirements for nomiation" (D.Mem. 14), so Lanier had no alterntive but to rely on his own guesses as to

who might be eligible. Defendants point to no inaccuracies or implausibilities in Lanier's estites of

which personnel are "eligible" for participation in the MDP, and present no alternative definition of eligi-

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244 F.R.D. 243, 101 Fair Emp1.Prac.Cas. (BNA) 522

(Cite as: 244 F.R.D. 243)

bility or statistical analysis based on an alternative

the same for all employment-related puroses, in-

defintion.FNl6

cluding receipt of benefits under fringe benefit program, as other persons not so affected but similar in their abilty or inability to work.

FN16. Defendants also argue that Lanier's

analysis fails to account for women's unwilingness to relocate, which is a prerequisite

42 U.S.C. § 2000e(k.

for management positions in many if not all cases. (D.Mem. 31.) Dr. Lanier examined

questionnaires given to applicants for positions as sales representatives, in which 68.8 percent of men were wiling to relocate, but only 43.5 percent of women. (Welch Rep. 37.) Plaintiffs respond that Welch's analysis of wilingness to relocate is flawed because

Lanier's report concludes that women who take FMLA leave earn an average of $210.20 less per month for the first six months after retung than women not retung from leave, which is statistically signficant to 6.4 *264 standard deviations, and that they experience a slightly lower disparity for the following six months.FNl7 (Lanier Rep. 24.)

his data comes from sales representatives, not managers. The question to which that data relates, however, is whether women in

the pool of employees eligible for promotion are interested in management positions, and

so it is not clear that a surey of managers would be more usefuL. Welch's alternative

explanation is a matter to be considered by the factfnder.

FN17. Defendants argue that "(nJothig" in ths conclusion "provides any supportg

evidence that NPC discrimiates against women as a class in compensation or on the basis of pregnancy" because Lanier did not examie "whether both men and women who take FMLA leave are simlarly treated or whether women who take FMLA leave for pregnancy reasons are less favorably

Lanier's statistical findings are supported by anecdo-

treated." (D.Mem. 33.) Defendants con-

tal evidence that gives "textue" to the statistics.

spicuously fail to offer such an analysis

Robinson v. Metro-North Commuter R.R. Co.! 267 F.3d 147, 168 (2d Cir.200l) Various declarants al-

themselves; they offer no evidence that the

lege that they were passed over for promotions, or

between men and women who take leave,

that they were kept out of trainng sessions to which their male counterparts were invited. (See, e.g., P.Ex. 29, Debra Benbow Decl. ir 10; id., Deborah Davis

and men and women who do not-would be

Decl. ir 11). Takig all the evidence into account,

women to women when it concludes that

"( w Jhether or not plaintiffs' statistical evidence is

ultimately sufficient to establish that plaintiffs and the members of their proposed class have actually suffered discrimination, it is certainy adequate to establish that whether or not (NC's J promotion and compensation policies subject class members to discrimination is an issue common to all class members." Hnot 1. 228 F.R.D. at 483.

comparison Welch seems to advocateany less suggestive of discrimination. In fact, Welch's report appears to compare

base pay does not fall after leave. (Welch Rep. 44.) In any event, Lanier argues that to include men in the analysis would make it

impossible to determe whether FMLA leave-as opposed to gender differences themselves-was the cause of any disparity. (Lanier Rep. 23.) Ths methodological dispute is appropriately addressed to the fact-

finder; for present puroses it is clear that

5. Discrimination on Account of Pregnancy The Pregnancy Discrimination Act of 1978(PDA)

Lanier's findings raise a signficant question

as to whether leave causes a decline in women's pay.

provides that Title VII's prohibition on gender dis-

crimination includes discrimiation on the basis of:

Lanier's analysis of the effects of pregnancy leave includes both base salary and incentive-based earn-

pregnancy, childbir, or related medical condi-

tions; and women affected by pregnancy, childbir, or related medical conditions shall be treated

ings (i.e., pay that is determed on the basis of sales in a representative's terrtory). Defendants argue that

there is nothig discriatory in failing to pay

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244 F.RD. 243, 101 Fair Emp1.Prac.Cas. (BNA) 522

(Cite as: 244 F.R.D. 243)

women (and men) incentive bonuses that are not earned. When the effects of incentive pay are ex-

payments wil fall, regardless of the reason for the

cluded, according to Welch, the base pay of women

employees who take off long periods of tie in order to raise children and those who either do not have children or are able to raise them without an appreciable career interrption. That is not inerently sex specific and does not give rise to a claim under Title VII." Fisher v. Vassar Coll.. 70 F.3d 1420, 1448 (2d Cir.l995) reheard en banc on other grounds, 114 F.3d 1332 (2d Cir.1997). The failure to adjust incentive

who take leave is unaffected. (Welch Rep. 44.)

Plaintiffs do not dispute that pregnancy is treated the same as any other legitimate reason for leave by NPC's compensation policies. But women at NPC, Lanier notes, take 76 times more FMLA leave than

do men. (Lanier Dec1. 8.) Plaintiffs argue that the NPC's payment strctue, which gives employees

who retu after taking leave for pregnancy the same partally incentive-based compensation as all other employees, has a larger and more detrimental impact on women than on men, even though it treats pregnancy the same as any other legitimate reason for leave. They argue that NPC "could implement, but

has not (implemented), a commssion payment system that accounts for time away from the territory during FMLA leave." (P. Reply 22.)

leave. "A policy may discriate between those

payments is not unawful because "(t)he Pregnancy

Discrimiation Act requires the employer to ignore an employee's pregnancy, *265 but ... not her absence from work, uness the employer overlooks the com-

parable absences of nonpregnant employees ... in which event it would not be ignorig pregnancy after all." Troupe v. May Dep't Stores Co.. 20 F.3d 734, 738 (7th Cir.1994). l1 There appears to be no factual dispute over

whether NPC's compensation policies systematically

(271 "It has been repeatedly affrmed that the PDA does not require the creation of special programs for

pregnant women; nor does it mandate any special treatment. To the contrary, the statute specifically requires that pregnant women be treated the same as all other employees with simlar disabilities." Dimino v. N. yc. Transit Auth.. 64 F.Supp.2d 136, 157

discriate against women except insofar as they

fail to adjust incentive payments that drop when an employee goes on leave. Under the PDA, "it is discrimiatory to treat pregnancy-related conditions less favorably than other medical conditions." Newport

News Shipbuilding and Dry Dock Co. v. E.E.O.C.. 462 U.S. 669, 684, 103 S.Ct. 2622, 77 L.Ed.2d 89 (1983). It is not discrimiatory to treat pregnancy-

(E.D.N.Y.1999). See Urbano v. Con!'l Airlines. 138

related leave the same as other form of leave, and

judgment where a defendant treated the plaintiff "in exactly the same manner as it would have treated any other worker who was injured off the job"); Gratton

plaintiffs have offered no evidence that NPC's com-

F.3d 204, 206 (5th Cir.1998) (affirg sumry

v. JetBlue Airways. No. 04 Civ. 7561, 2006 WL 2037912, at *6 (S.D.N.Y. Ju1. 21, 2006) (holding that

pensation policies do otherwise.FN1S Accordingly,

plaintiffs' motion to certify a class is denied as to their claim of discrimiation in pay on the basis of pregnancy.

plaintiff "has not identified any accommodation given to other temporarily disabled employees that

FN18. At least one cour has held that an

was witheld from her"); Minott v. Port Authority of N. Y and N.J.. 116 F.Supp.2d 513, 521

employee may make out a claim for sex dis-

(S.D.N.Y.2000) ("Title VII and the Pregnancy Dis-

tral evaluation system has a disparate impact on women who take leave. In Vosdingh v.

crimiation Act do not protect a pregnant employee

from being discharged for absenteeism even if her

crimiation by showig that a facially neuQwest Dex. Inc.. No. Civ. 03-4284, 2005

absence was due to pregnancy or complications of

WL 914732 (V.Minn. Apr. 21, 2005), a dis-

pregnancy, unless other employees are not held to the

trct cour held that the plaintiff employees

same attendance standards.").

had shown that an evaluation system had a

In this case, the compensation system does not differentiate between employees who take leave for preg-

nancy and employees who take leave for other reasons. If sales figures in a territory drop while a representative is on leave, that representatives' incentive

disparate impact on women who took leave,

and accordingly applied the thee-step framework of 42 U.S.c. § 2000e-2(k), shifting the burden to the employer to demonstrate a legitite, business-related justifica-

tion for the evaluation system, which the

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244 F.R.D. 243, 101 Fair Empl.Prac.Cas. (BNA) 522 (Cite as: 244 F.R.D. 243)

plaintiff could defeat by showing that an alternative approach-such as one normlizing the evaluation scores to compensate for absence-was comparably effective. Id at *14*16. See Smith. 196 F.3d at 365 (discussing burden-shiftng framework for disparate impact cases).

In Vosdingh, however, employees were

given a score of zero on certain categories

in their performnce evaluations for the time they were on leave-the same score

they would have received had they been on the jobs but failing miserably. Effec-

both." Attenborough v. Const. and General Bldg.

Laborers' Local 79, 238 F.R.D. 82, 95 (S.D.N.Y.2006). Anecdotal testiony is generally

used as a supplement to statistical evidence, to brig "the cold numbers convincingly to life." In!'l Bhd of Teamsters v. United States, 431 U.S. 324, 339, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977). At the liability phase, anecdotal evidence wil be usually be introduced not "to establish that the parcular intances of discrimination actually occured nor that the particular employees were in fact victi of discrimination,"

but simply to provide "textue" to the statistical evidence. Robinson, 267 F.3d at 168. Cours have discretion to rely on anecdotal evidence, "but they

tively, their evaluations appeared to report

commonly do so where the statistical evidence is

poor performnce for the time they were

weak." Hnot 1. 228 F.R.D. at 484.FN19 When *266

on leave, which much more closely re-

sembles an affirtive sanction for tag leave. Here, the employee is paid the full

and norml base salary after retu from leave. Incentive-based payments are simply not adjusted to account for decreases in sales due to a representative's absence

statistical evidence does not exist, however, anecdo-

tal evidence can suffice if "plaintiffs ... compile sworn statements from a large enough sample of plaintiffs to demonstrate that common issues exist." Cokelv v. N. Y. Convention Ctr. Operating Corp., No.

00 Civ. 4637, 2003 WL 1751738, at *3 (S.D.N.Y. Apr. 2, 2003).

from the job. In effect, incentive pay is not awarded when it is not earned.

FN19. At least one cour in this Circuit has

Nothg in the PDA requires NPC to ad-

ment motion dealing with a challenges to an

just incentive payments in light of the na-

affirtive action program, that "(a Jnecdotal

tue of the leave that caused their decline.

To hold otherwise would effectively imply that payig employees on an incentive

stated, in the context of a sumry judgevidence alone will not suffice to prove a systematic pattern of discrimination." !d. at *4. North Shore Concrete and Assoc., Inc. v.

New York. No. 94 Civ. 4017, 1998

basis is unlawfl wherever women are

City of

more likely than men to take leaves that

WL 273027, at *4 fE.D.N.Y. Apr.

might adversely affect their productivity when they retu, for reasons having nothing to do with their employer's actions.

There are, however, other allegations of pregnancy discrimation. The complaint alleges that women retug from pregnancy leave are subjected to denial of promotions and promotional opportties,

"strcter scrutiny," hostile comments, uneasonable discipline, and "adverse employment actions" upon

retu. (4th Am.Compl. ,r 68.) In support of these allegations, plaintiffs rely on the anecdotal evidence of the twenty-eight declarants and three plaintiffs who claim to have been the victi of pregnancy

12, 1998).

That decision cited Coral Const. Co. v. King

County 941 F.2d 910, 919 (9th Cir.l99l), which held that "( w Jhile anecdotal evidence

may suffce to prove individual claim of discrimination, rarely, if ever, can such evidence show a systemic pattern of discrimination necessary for the adoption of an af

firmative action." (emphasis added). While

anecdotal evidence alone may be inuffcient to justify a governent body's adoption of race-conscious policies, this does not mean it is insuffcient to justify class certification, which merely requires that a common question be presented.

discrimation. (See P. Mem. 43-44.) As to the extent of the anecdotal evidence required

(29) The commonality and tyicality requirements can be satisfied by "affidavits, statistical evidence, or

when statistical evidence is unpersuasive, plaintiffs

argue that they "are not required to produce a statisti-

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244 F.RD. 243, 101 Fair Emp1.Prac.Cas. (BNA) 522 (Cite as: 244 F.R.D. 243)

cally signficant amount of declarations." (P. Reply 14.) Cf Ross v. Nikko Sees. Co. In!'l, 133 F.R.D. 96, 97 CS.D.N.Y.1990) (holding that in the absence of

Three plaintiffs (Earl, Comp1. ii 302, Durki, id. ii

statistical proof of commonality, "(t)he testionial proof must identify a statistically significant number

have submitted declarations claimg pregnancy dis-

of aggreved persons in the putative class in relation

pregnancy discriation worked for NPC in fourteen different states. (Id.) They point to a variety of il-treatment suffered by pregnant women and mothers at NPC, from arbitrary discipline to verbal harassment to denial of promotion and termation. All but one give specific examples from personal experience of differential treatment on the basis of pregnancy or motherhood.FN20 Many attest to *267 specific comments by managers indicating hostility to pregnancy, and are therefore directly relevant to the question of whether a nationwide pattern or practice

the relevant work force."). The concept of statistical signficance is not useful here. A number is statistically signficant when it differs from the

to the size of

number that could be expected from a random distri-

bution, that is, when it is not with the magin of error. To determne what number of declarations are "statistically significant," it would be necessary to determe how many declarations would be filed due

to the operation of randomness-that is, how many declarations would be filed in the absence of any wide discrimation. It is difficult to imagine class any meanigfu way to identify such a number.

323-337, and Deyne, id. iiii 389-90) and 28 declarants criation. (See P.Ex. 35.) The declarants claimg

of discrimiation exists. One declarant reports being

told by her manager tht she "did not qualify for a pay increase because (she) had not been in her terri-

Moreover, anecdotal evidence is not statistical evi-

tory durg (her) Matemity Leave." (P.Ex. 32,

dence. The declarations are offered not pririly for

Ramona Pouncy Decl. ii 12.) Another claim that her

their quantity, but for their quality. The testiony in

manager told her that he preferred not to hire young

the declarations is valuable inofar as it could per-

suade a reasonable factfinder that a pattern or practice of discrimiation exists at NPC. The factfinder would examie the content of the testimony to determne

females, explainig, "First comes love, then comes marriage, then comes flex time and a baby carrage." (P.Ex. 30, Jennfer Ryan Tseliks Decl. ii 13.) Another declarant says that after her leave, she was dis-

whether the incidences of discrimation described

ciplined for low sales numbers and her teammate was

actually occured, and, if so, whether they are iso-

not, although the two employees were "listed to-

lated incidents or symptomatic of a deeper pattern. That is, the factfinder would examie the declarations not merely to see how many have been produced, but

gether" for puroses of sales rankngs. (P.Ex. 33,

to see what they say.

(P.Ex. 28, Chrstine Macarell Decl. ii 7.) Still another

Renee Tittle Decl. ii 8.) Another manager allegedly encouraged a declarant employee to get an aborton.

declarant alleges that employees were urged durg a Of course, the anecdotal evidence must encompass "a large enough sample of plaintiffs to demonstrate that common issues exist." Cokely, 2003 WL 1751738, at

*3. But there is no minium number of statements that must be compiled in relation to the total number of similarly-situated employees. Rather, the question is whether the statements submitted, in light of their

persuasiveness and whether the incidents they describe appear to be isolated or generalized, "show

that sex discrimnation 'was the company's standard

operatig procedure-the regular rather than the un-

usual practice.' " Carter v. Nfnsday Ine.. 528 F.Supp. 1187, 1197 (E.D.N.Y.198l), quotig Teamsters, 431 U.S. at 336, 97 S.Ct. 1843. "In the case ... of a showing of nonexistent statistical discrimation, anecdotal testiony must by itself sup-

trainng session to avoid getting pregnant. The decla-

rant, five months pregnant at the time, drew the eye of the trainer, who said, "Oops, too late." (P.Ex. 29, Ivette Flower Decl. ii 6.)

FN20. The one declaration that appears not to present specific examples from personal experience is that of An Hogan. (P.Ex. 27.) Hogan alleges that "Novarts maagement" disciplined two undentified female employees and the declarant, but not the other (also undentified) employee in the group, who was male. The other two female employees,

but not the declarant, had taken matemity leave. The manager is not identified, and it

port an inference of sex-based (employment) deci-

appears that the declarant is not entiely sure of the relative performnce of the employees

sions." Carter, 528 F.Supp. at 1197.

("his sales performnce was the same or

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244 F.R.D. 243, 101 Fair EmpLPrac.Cas. (BNA) 522 (Cite as: 244 F.R.D. 243)

worse than our sales pedormance"). More-

D. Typicality Under Rule 23(a)

over, it appears that of the employees who did not take maternty leave, one was disciplined anyway. This declaration is notably unpersuasive on the question of pregnancy

J1 "Typicality ... requires that the claims of the

discriation, compared to the other twenty-seven, but its unpersuasiveness is

anomalous.

class representatives be tyical of those of the class,

and is satisfied when each class member's claim arises from the same course of events, and each class

member makes simlar legal arguents to prove the defendant's liability." Marisol A.. 126 F.3d at 376 (internal quotation marks and citations omitted).

It is of course possible that these declarants will be found not credible. At this stage, however, it is only necessary to determe whether a common question

has been presented. It has. See Selzer v. Ed ofEduc.,

Typicality "does not require that the factual back-

ground of each named plaintiffs case be identical to that of all class members; rather it requires that the disputed issue of law or fact occupy essentially the

statistics were inconclusive, affdavits from named

same degree of centrality to the named plaintiffs claim as to that of other members of the proposed

plaintiffs and five proposed class members were suf-

class." Caridad, 191 F.3d at 293 (internal quotations

ficient to establish the existence of an aggreved class); Donaldson v. Pilsbury Co.. 554 F.2d 825,

and citations omitted).

830-32 (8th Cir.1977) (aggreved class established

To show that plaintiffs are not tyical of the class, defendants offer an analysis by Dr. *268 Welch showing that the named plaintiffs' claim of promotion and compensation discrimiation are not reflec-

112 F.R.D. 176, 180 (S.D.N.Y.1986) (although the

where plaintiff produced six affidavits alleging dis-

crimiation and identified eighteen other individuals who claimed to be victims of discriminatory policies). A "cour must be wary of a claim that the tre color of a forest is better revealed by reptiles hidden

tive of other women hied for similar jobs at the same tie as plaintiffs. Welch concludes each named

in the weeds than by the foliage of countless free-

plaintiffs was, with one exception, the only woman in

standing trees," NAACP v. Claiborne Hardware Co.. 458 U.S. 886, 934, 102 S.Ct. 3409, 73 L.Ed.2d 1215

her "hiing cohort"-the group of women hied for

(1982), but in ths case plaintiffs have produced

disparate treatment of which she complains. (D. Mem. 35; Welch Rep. 11-12.)

enough foliage to raise a question about the forest's

color. Whether or not the declarations are ultimately convincing to a factfinder, they are numerous enough and detailed enough to establish that a common question exists.

simlar jobs at the same time-who experienced the

This is a potentially significant finding, which could

be interpreted to suggest, as defendants contend, that

plaintiffs' treatment "was attibutable to somethng specific to (each) Plaintiff." (D.Mem. 35.) Plaintiffs

Moreover, in deciding whether the anecdotal evi-

respond that ths method effectively carves up each

dence specifically directed at pregnancy discrimina-

tion is adequate to establish a common question, it

sample into a group too small to have any statistical meanig-also a potentially convincing point. (P. Re-

would be inappropriate to ignore the statistical evi-

ply 5.) These questions are for the factfinder. "As

dence adduced in other contexts in ths case. Preg-

nancy discriation, after all, is a form of discri-

long as plaintiffs assert, as they do here, that defendants commtted the same wrongful acts in the same

nation against women, and so the fact that plaintiffs

maer, against all members of the class, they estab-

have offered significant statistical evidence of other

lish (the) necessary tyicality." In re Towers Fin.

form of gender discrimiation sheds light on their

Corp. Noteholders Litig.. 177 F.R.D. 167, 170

anecdotal evidence of pregnancy discriation. The

(S.D.N.Y.1997) (internal quotation marks and cita-

Cour is required to consider all the evidence, and in

tion omitted). Moreover, in a case alleging that sub-

context it is clear that a common question is pre-

jectivity in evaluation systems resulted in disparate

sented. Accordingly, class certfication wil be

treatment, it is entiely foreseeable that incidences of

granted on the question of pregnancy discriation, except with respect to the issue of incentive-based

poration, rather than clustered in any parcular "hi-

compensation discussed above.

ing cohort."

discriation will be distrbuted thoughout the cor-

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244 F.R.D. 243, 101 Fair EmpLPrac.Cas. (BNA) 522

(Cite as: 244 F.R.D. 243)

Defendants also attempt to show that each named plaintiff is unusual in some respect. For example, they contend tht plaintiff Velez performed poorly

must show that "the representative partes wil fairly and adequately protect the interests of the class." Fed.R.Civ.P.23(a)(4).

and had attendance problems, and that plaintiff Lopes

reported damage to her company car and missed work while in substance abuse programs. (D.Mem. 36.) FN21 Defendants attck the tyicality of various

named plaintiffs' claim, essentially arguing that those claims are "unique" because the partcular factual circumtances of each plaintiffs situation-not discrimnation-explains their treatment. (D.Mem. 3746.) Ths is, of course, always the defendant's contention in class action discriation claims: that the

plaintiffs suffered no discrimation, or at least that any discriation that occured was isolated rather

.Q There are two separate inquines under Rule

23(a)(4). One requires a showig that class counsel is experienced, qualified, and able to conduct litigation.

"In determg the adequacy of counsel, the cour looks beyond reputation built upon past practice and examies counsel's competence displayed by present

pedorrnce." Towers Fin., 177 F.R.D. at 171 (internal quotation marks and citation omitted). Defendants do not contest counsel's experience, qualifications, or

ability *269 to conduct the litigation, and the Cour finds that counsel is suitable.

than systematic.

The second requirement is that "(p Jlaintiffs must ...

FN2l. Defendants also point out that one of

demonstrate that there is no confict of interest be-

the women claimg pregnancy discrimina-

tion, Mine! Tobertga, adopted her child, rather than giving bir natually. (D.Mem.

tween the named plaintiffs and other members of the class." Marisol A.. 126 F.3d at 378 (citation omitted). See Amchem Prods.. Inc. v. Windsor, 521 U.S. 591,

36.) The Cour need not decide whether

625-26, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997)

adoption is a permssible basis on which to make a claim of gender discrination based

("The adequacy inquir under Fed.R.Civ.P. 23(a)(4) serves to uncover conflcts of interest between named

on parental status under the Pregnancy Dis-

partes and the class they seek to represent. A class

crimination Act, because a finding of tyi-

representative must be part of the class and possess

cality would be appropriate even without

the same interest and suffer the same injur as the

Tobertga's evidence.

class members."); In re Visa ChecklMasterMoney

Antitrust Litig.. 280 F.3d 124, 142 (2d Cir.200l) (re-

(31)321 Defendants cannot rebut tyicality by claiming that something other than discrination explains

the named plaintiffs' experience. The question presented by each plaintiffs claim is undoubtedly tyical of the class, whether or not defendants are eventually able to prove that the answer to that question is unque to each plaintiff. "The primry criterion for

quirg cour to "ask whether plaintiffs interests are antagonistic to the interest of other members of the class") (quotation marks and citation omitted). "(NJot every potential disagreement between a representative and the class members wil stand in the way of a

class suit. The confict that will prevent a plaintiff

with which the representative part can be expected

from meeting the Rule 23(a)(4) prerequisite must be fudamental, and speculative confict should be disregarded at the class certfication stage." Id. at 145.

to assert the interests of the members of the class." New York, 209 F.R.D.

J1 NPC argues that there are thee problems with

determg tyicality is the fortghtness and vigor Latino Offcers Ass'n v. City of

79, 89-90 (S.D.N.Y.2002) (internal citation and quotation marks omitted). Defendants have offered no persuasive basis on which to question plaintiffs' tyicality. The Cour finds that the named plaintiffs' claims are entiely tyical of those presented on behalf of

the class.

the named plaintiffs' representation of

the class. First,

NPC contends that the inclusion of pregnancy discriation claim creates confict between class

members. As previously discussed, sales representa-

tives at NPC are paid partly on an incentive basis, with pay determed by sales figues in the terrtory

E. Adequacy of Representation Under Rule 23(a)

to which the given team of representatives is assigned. NPC argues that this creates "inerent ten-

The last of the Rule 23(a) requirements is adequacy

sions" between a representative who takes leave and the teammtes who are still working in the terrtory:

of representation. A part seekig class certfication

if one representative leaves, the other representative's

(Ç 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.

Page 29

244 F.RD. 243, 101 Fair Emp1.Prac.Cas. (BNA) 522

(Cite as: 244 F.R.D. 243) pay will suffer if sales decline due to their absence.

(D.Mem. 48.) It is possible to imgine tension over lost incentive pay being a factor in some relationships between pregnant women and their teammtes, but it is diffcult to imgine this tension playing any role in

the curent litigation, and indeed NPC does not sug-

the female managers in the class, because only one named plaintiff, Kelly Corbett, is a manager. (See Comp1. iiir 279, 288.) Corbett, according to NPC, is

subject to a defense that will not apply to the *270 other plaintiffs, because she allegedly shared confdential NPC sales reports with a frend who was not

gest any parcular impact that the putative tension might have on these proceedings.

employed by NPC. (D.Mem. 49.)

Q2 Second, NPC argues that the inclusion of managers in the class creates conflct. It notes that at least eleven declarants allege that their female managers harassed them on the basis of their pregnancies and resulting leaves. While ths shows that female managers may be subject to discrimiation claims in ths litigation, it does not show that the plaintiff manager

a putative class representative is subject to unque defenses which theaten to become the focus of the litigation." Gary Plastic Packaging Corp. v. Merril Lynch. Pierce, Fenner & Smith. Inc., 903 F.2d 176,

(361(37) "(C)lass certfication is inappropriate where

be subject to discrimi(there is only nation claims. "Even if one female offcer supervised one) will herself

another, it is still possible, as plaintiffs allege, that they all suffered from gender discrimination by the key decisionrkers." Rnot I, 228 F.R.D. at 485. In a similar case involving alleged discrimnation withi the New York Police Departent, a district cour rejected ths arguent for reasons that apply equally

180 (2d Cir.1990). "Regardless of whether the issue is framed in term of the tyicality of the representa-

tive's claim, or the adequacy of its representation, there is a danger that absent class members wil suffer if their representative is preoccupied with defenses unque to it." ¡d. (citations omitted). However,

"any allegations concernng the representative's adequacy must be relevant to the claim in the litigation,

such that the problems could become the focus of cross-examiation and unque defenses at tral, to the detriment of the class." German v. Fed. Rome Loan

Mortgage Corp.. 168 F.R.D. 145, 154 (S.D.N.Y.1996) (intemal citations omitted).

well here:

The Cour does not see more than a hypothetical

confict. Commanding-offcer class members allegedly are subject to the disparate impact of the

Defendants have not suggested any way in which

disciplinary system themselves. There is no reason

their pursuit of the defense to which Corbett is allegedly subject-that she improperly disclosed corporate

for the Cour to th that the commnding officer

informtion to a frend in violation of NPC policy-

class members have any less of a desire to end any discrimination withn the NYD than the police of-

could affect the interests of the other class members. "Plaintiffs' testimony or credibility that is subject to

ficer members. Their interests on this point are aligned. If an actual confict develops, the Cour is prepared to revisit ths question and consider certi-

fying a separate subclass for each ran of unformed offcer.

attack must be on an issue critical to one of their causes of action." Id. Improper informtion-sharig, one supposes, could provide defendants with a legitimte reason for adverse employment action, but of course defendants claim to have had a legitimate reason for all of the relevant adverse employment

Latino Offcers Ass'n, 209 F.RD. at 90. This Cour

rejected a simlar contention of confict in Hnot I, noting that "(i)f supervisory employees and supervi-

sees all are subject to discrimiation, all have an equal interest in remedyig the discrimiation, and

actions, so ths can hardly be a basis for a finding of inadequate representation. Defendants do not suggest that Corbett's credibility is adversely affected by their allegations.

the named plaintiffs can stil be expected to litigate the case with ardor. A potential for confict need not

If an actual confict should arise, the Cour is pre-

defeat class certfication." Rnot L, 228 F.R.D. at 48586.

dants have not even presented a hypothetical confict

Finally, defendants argue that there is no named plaintiff who can adequately represent the interests of

pared to revisit the question, but at ths point defen-

for the Cour to address. Accordingly, the Cour finds

that the named plaintiffs adequately represent the class, and that the prerequisites for class certfication under Rule 23(a) have been satisfied.

(Q 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.

Page 30

244 F.R.D. 243, 101 Fair EmpLPrac.Cas. (BNA) 522 (Cite as: 244 F.R.D. 243)

the merits. Inignificant or sham requests for injunctive relief should not provide cover for (b)(2)

F. Rule 23(b) Requirements

certfication of claim that are brought essentially

When the prerequisites of Rule 23(a) have been met,

a class may be certfied if it fits withi one of the thee categories in Rule 23(b). Fed.R.Civ.P. 23(b).

for monetary recovery. Id.FN22

"The requirement of 'rigorous analysis' to ensure 'actual, not presumed conformance' with Rule 23(a) applies with 'equal force to all Rule 23 requirements,

FN22. Although In re IPO modified other aspects of class certification analysis under

including those set fort in Rule 23(b)(3).' " In re

Rule 23, " In re IPO is entiely inapposite to

Vivendi Universal, S.A.. 242 F.R.D. 76

the Cour's determnation under Rule

(S.D.N.Y.2007), quotig In re IPO, 471 F.3d at 33 & n. 3. Plaintiffs contend that the class should be certified under Rule 23(b)(2), which applies to classes in which "the part opposing the class has acted or refused to act on grounds generally applicable to the

class, thereby makig appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole," or Rule 23(b)(3), which applies when "questions of law or fact common to the members of the class predominate over any questions

affectig only individual members, and that a class action is superior to other available methods for the the controversy."

fair and effcient adjudication of

J: Certification under Rule 23(b)(2) is appropriate

23(b)(2)." Hnot JJ 241 F.R.D. at 211.

U2 In ths case, there can be little question that reasonable plaintiffs would sue to obtain the injunctive relief sought. The central goal of ths lawsuit is to alter practices at NPC that plaintiffs believe are discrinatory. If plaintiffs prevail on the merits, that

injunctive relief will be appropriate and reasonably necessary, because it would serve little purose to award money damages for discrimination without

addressing the institutional strctue that perpetuates it. Defendants are alleged to have acted on grounds generally applicable to the class, and "(p )laintiffs

seek to reform defendants' practices to provide for equitable employment opportties and compensa-

where "(1) the positive weight or value to the plaintiffs of the injunctive or declaratory relief sought is predomiant even though compensatory or puntive damages are also claimed, and (2) class treatment would be efficient and manageable, thereby achiev-

tion for women." Hnot 1. 228 F.R.D. at 486.

ing an appreciable measure of judicial economy."

injunctive relief." (D. Mem. 50.) Plaintiff have not

Robinson, 267 F.3d at 164 (internal alteration, cita-

yet been asked to prove any such thing. Ths is a

tion and quotation marks omitted). When a case in-

class certfication motion, not a tral, and if plaintiffs fail to prove the existence of class-wide discrimiatory practices, no injunctive relief wil be awarded. For now, the cour need only determe whether such relief would be appropriate and necessar "were the plaintiffs to succeed on the merits," Robinson, 267

volves claims for both injunctive relief and nonincidental monetary damages, cours must assess "the relative importnce of the remedies sought, given all of the facts and circumtances of the case." !J quoting Hoffman. 191 F.R.D. at 536.

Defendants' argument against class certification is

that plaintiffs have "fail( ed) to show the existence of any class-wide discriatory practice in need of

F.3d at 164, and it clearly would be.

Although the assessment of whether injunctive or declaratory relief predominates will require an ad hoc balancing that will vary from case to case, be-

fore allowig (b )(2) certfication a distrct cour should, at a mium, satisfy itself of the following: (1) even in the absence of a possible *271

monetary recovery, reasonable plaintiffs would brig the suit to obtain the injunctive or declaratory

relief sought; and (2) the injunctive or declaratory relief sought would be both reasonably necessary and appropriate were the plaintiffs to succeed on

(40) Thus, the requirements of Rule 23(b)(2) are satisfied and the class wil be certfied under that provision. Because the Cour finds that plaintiffs meet the

requirements of Rule 23(b)(2), it is unecessary at ths point to determe whether class certfication under Rule 23(b)(3) would also be warranted. See Hnot I at 486. Additionally, Title VII civil rights cases may be divided into liability and remedial phases. Id. Therefore, the issue of whether plaintiffs meet the requirements of Rule 23(b)(3) is deferred

(Ç 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.

Page 31

244 F.R.D. 243, 101 Fair Emp1.Prac.Cas. (BNA) 522 (Cite as: 244 F.R.D. 243)

until after the liability phase of ths action.

CONCLUSION Defendant Novarts Corporation's motion for summary judgment (Doc. # 7) is granted.

As to the remainng defendants, plaintiffs have demonstrated that their proposed class and its representatives satisfy the requirements of

Federal Rule of

Civil

Procedure 23(a) and 23(b). Accordingly, plaintiffs'

motion for class certfication (Doc. # 89) is granted. Amy Velez, Penn Zelinkoff, Mine! Hider Tobertga,

Michael Wiliams, Jennfer Waxmn-Recht, Karen Liggins, Lori Horton, Holly Waters, Wendy Pinon, Roberta V onlintel, Catherie White, Kelly Corbett, Jamie Holland, Joan Durki, Simona Lopes, Mary-

anne Jacoby, and Mart Deyne are appointed as class representatives. The firm of Sanford, Wittels & Heisler, LLP, is appointed as lead counsel for the class. SO

ORDERED.

S.D.N.Y.,2007. Velez v. Novartis Pharmceuticals Corp.

244 F.R.D. 243, 101 Fair Emp1.Prac.Cas. (BNA) 522

END OF DOCUMENT

~ 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.

Westlaw Page 1

267 F.R.D. 86, 108 Fair EmpI.Prac.Cas. (BNA) 1396, 93 EmpL Prac. Dec. P 43,832 (Cite as: 267 F.R.D. 86)

ties existed in employer's hig and promoting practices, and that disparities were result of discrimina-

H United States District Cour, York. Susan DULING, Margaret Anderson, and Lakeya Sewer on behalf of themselves and all others simlarly situated, Plaintiffs, S.D. New

v.

GRISTEDE'S OPERATING CORP., et aI., Defendants.

tory practices, were admissible on female employees' motion for class certfication in sex discrimination

action against employer under Title VII; underlying data and methodologies employed by experts was

reliable, and reports were relevant to disparate treatment and disparate impact claim. Civil Rights Act of

1964, § 701 et seq., 42 U.S.CA. § 2000e et seq.; Fed.Rules Evid.Rule 702, 28 U.S.C.A.

No. 06 Civ.10197(LTS)(HP). il Federal Civil Procedure 170A ~164 March 8, 2010. i 70A Federal Civil Procedure

Background: Female employees brought action against employer, alleging intentional discrimination

and disparate impact claim under Title VII, New York State Humn Rights Law (NYSHRL), and New York City Human Rights Law. Plaintiffs sought class

certfication, and defendants moved to strike expert

l70AlI Partes

l70AIID) Class Actions l70AII(D)1 In General l70Ak164 k. Representation of class; tyicality. Most Cited Cases

reports.

Federal Civil Procedure 170A ~165

Holdings: The District Cour, Laura Taylor Swain,

l70A Federal Civil Procedure l70AII Partes

J., held that: il expert report were admissible;

il employees met commonality requirement for

class certification;

il employees were adequate class representatives; and il injunctive and declaratory relief sought was pre-

domiant and would be sought by reasonable plain-

l70AIID) Class Actions l70AIID) 1 In General l70Ak 165 k. Common interest in sub-

ject matter, questions and relief; damages issues. Most Cited Cases

The commonality and tyicality requirements for class certfication tend to merge because both serve

tiffs, as required for class certification.

as guideposts for determng whether the named plaintiffs claim and the class claims are so inter-

Plaintiffs' motion granted in part; Defendants' motion denied.

related that the interests of the class members will be fairly and adequately protected in their absence.

Fed.Rules Civ.Proc.Rule 23(a), 28 U.S.C.A.

West Headnotes

il Federal Civil Procedure 170A ~165

il Federal Civil Procedure 170A ~172 l70A Federal Civil Procedure l70AII Parties l70AIID) Class Actions l70AIID)2 Proceedigs.

l70Akl72 k. Evidence; pleadigs and supplementary materiaL. Most Cited Cases

Expert reports purortg to show that gender dispari-

l70A Federal Civil Procedure l70AII Partes

l70AIID) Class Actions l70AIID)l In General l70Ak165 k. Common interest in sub-

ject matter, questions and relief; damages issues. Most Cited Cases For class certfication puroses, commonality re-

~ 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.

Page 2

267 F.R.D. 86, 108 Fair Emp1.Prac.Cas. (BNA) 1396, 93 EmpL Prac. Dec. P 43,832 (Cite as: 267 F.R.D. 86)

quires that plaintiffs present common questions of

l70Ak 165 k. Common interest in sub-

fact or law; plaintiffs' ultimate success at trial on the

ject matter, questions and relief; damages issues.

merits requires an answer to that question, specifi-

Most Cited Cases For puroses of class certfication, the commonality

cally that defendants actully did discrinate againt

plaintiffs. Fed.Rules Civ.Proc.Rule 23(at 28

and tyicality requirements, together, require plain-

U.S.C.A.

tiffs to show that they raise questions of fact or law,

HI Federal Civil Procedure 170A ~164 l70A Federal Civil Procedure l70AII Partes

l70AIID) Class Actions

arising out of a single course of conduct or set of events, that are common to all putative class members and that their individual claim and circumstances are suffciently similar to those of the absent

class members so as to ensure that the named plaintiffs will press the claims of all class members.

Fed.Rules Civ.Proc.Rule 23(a), 28 U.S.C.A.

l70AII(D)l In General

l70Ak164 k. Representation of class; tyicality. Most Cited Cases

il Civil Rights 78 ~1140

The typicality requirement for class certification purposes is satisfied when each class member's claim

arises from the same course of events, and each class

78 Civil Rights 78II Employment Practices

member makes simlar legal arguents to prove the defendant's liability. Fed.Rules Civ.Proc.Rule 23(a), 28 U.S.C.A

æ Federal Civil Procedure 170A ~164 i 70A Federal Civil Procedure l70AII Parties

l70AIID) Class Actions l70AIID)l In General l70Ak164 k. Representation of class; tyicality. Most Cited Cases

For puroses of class certfication, tyicality is absent where the named plaintiffs are subject to unque defenses which theaten to become the focus of the litigation. Fed.Rules Civ.Proc.Rule 23(a) 28 U.S.C.A.

IM Federal Civil Procedure 170A ~164 l70A Federal Civil Procedure l70AII Partes

l70AIID) Class Actions l70AII(D)l In General

l70Ak 164 k. Representation of class;

78kl140 k. Disparate impact. Most Cited

Cases

To make a prim facie case on Title VII disparate impact claims, plaintiffs must (1) identify a policy or practice, (2) demonstrate that a disparity exists, and (3) establish a causal relationship between the two.

Civil Rights Act of 1964, § 701 et seq., 42 U.S.C.A § 2000e et seq.

il Federal Civil Procedure 170A ~184.15 l70A Federal Civil Procedure l70AII Parties l70AII(D) Class Actions l70AII(D)3 Parcular Classes Represented

l70Ak184 Employees

l70Ak184.15 k. Sex discrimination actions. Most Cited Cases Female employees met burden of demonstrating that

there were core questions that were common to claims asserted in sex discrimiation action against

employer under Title VII, such that commonality

requiement for class certification was satisfied; claim were of injur and ongoing violations arising from company-wide policies and practices rather than

tyicality. Most Cited Cases

one-on-one specific decisions or acts of discrina-

Federal Civil Procedure 170A ~165

tion, and employees submitted evidence of steering or chaneling practices at initial hiing stage, lack of hig and promotion standards having purose or

l70A Federal Civil Procedure l70AII Parties l70AIID) Class Actions l70AIID)1 In General

effect of protectig against intentional or uninten-

tional sex discrination, and data showing statistically signficant disparities in hiing into job categories and in promotion and resulting compensation

(Ç 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.

Page

3

267 F.R.D. 86, 108 Fair EmpLPrac.Cas. (BNA) 1396,93 Empl. Prac. Dec. P 43,832 (Cite as: 267 F.R.D. 86)

rates. Civil Rights Act of 1964, § 701 et seq., 42 U.S.C.A § 2000e et seq.; Fed.Rules Civ.Proc.Rule 23(a), 28 U.S.C.A.

actions. Most Cited Cases

Female employees were adequate class representatives for puroses of class certfication in sex discriation action against employer under Title VII,

12 Federal Civil Procedure 170A ~164

although representatives were no longer employed by employer; there were no conflcts of interest between

l70A Federal Civil Procedure

representatives and other class members, and relief sought included injunctive relief that would open

l70AII Partes

l70AIID) Class Actions l70AIID)l In General l70Ak164 k. Representation of class; tyicality. Most Cited Cases

Federal Civil Procedure 170A ~165 l70A Federal Civil Procedure l70AII Partes

l70AIID) Class Actions l70AII(D)l In General

l70Ak 165 k. Common interest in sub-

ject matter, questions and relief; damages issues. Most Cited Cases A difference in the amount of damages arising from

avenues to a greater range of entr level jobs and

prospects for promotion should representatives decide to retu to work for employer. Civil Rights Act

of 1964, § 701 et seq., 42 U.S.C.A § 2000e et seq.; Fed.Rules Civ.Proc.Rule 23(a)(4), 28 U.S.c.A.

1l Declaratory Judgment 118A ~305 l18A Declaratory Judgment l18AII Proceedigs

118AII(C) Pares l18Ak305 k. Representative or class actions. Most Cited Cases

Federal Civil Procedure 170A ~165

differig degrees of injur does not preclude either

commonality or tyicality for class certfication purposes. Fed.Rules Civ.Proc.Rule 23(a), 28 U.S.C.A

I1 Federal Civil Procedure 170A ~164 l70A Federal Civil Procedure l70AII Partes

l70AIID) Class Actions l70AII(D)l In General

l70Ak164 k. Representation of class; tyicality. Most Cited Cases

Adequacy for class certfication puroses is twofold: the proposed class representative must have an inter-

est in vigorously pursuing the claim of the class, and must have no interests antagonistic to the interests of other class members. Fed.Rules Civ.Proc.Rule 23(a)(4), 28 U.S.c.A.

l70A Federal Civil Procedure l70AII Partes

l70AII(D) Class Actions l70AIID) 1 In General l70Ak165 k. Common interest in sub-

ject matter, questions and relief; damages issues. Most Cited Cases Cour may grant class certfication when the part opposing the class has acted or refused to act on

grounds that apply generally to the class, so that fmal injunctive relief or corresponding declaratory relief is

appropriate respectig the class as a whole, if it determnes that (1) the positive weight or value to the the injunctive or declaratory relief sought

plaintiffs of

is predomiant even though compensatory or puni-

tive damages are also claimed, and (2) class treatment would be efficient and manageable, thereby achieving an appreciable measure of judicial economy.

Fed.Rules Civ.Proc.Rule 23(b)(2), 28 U.S.C.A

I! Federal Civil Procedure 170A ~184.15 l70A Federal Civil Procedure l70AII Partes

l70AII(D) Class Actions l70AII(D)3 Parcular Classes Represented

l70Ak184 Employees

l70Ak184.l5 k. Sex discrimiation

I. Declaratory Judgment 118A ~305 l18A Declaratory Judgment l18AII Proceedings

l18AII(C) Pares l18Ak305 k. Representative or class ac-

(Ç 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.

Page

4

267 F.RD. 86, 108 Fair EmpLPrac.Cas. (BNA) 1396,93 EmpL Prac. Dec. P 43,832 (Cite as: 267 F.R.D. 86)

interference with her restoration rights under the

tions. Most Cited Cases

Federal Civil Procedure 170A ~184.15 i 70A Federal Civil Procedure i 70AII Partes l70AII(D) Class Actions l70AIID)3 Parcular Classes Represented

Family and Medical Leave Act, 29 U.S.c. § 2601, et seq. ("FMLA"), and gender and pregnancy discrimithe NYCHRL. nation under § 8-107(1) of

The Cour has federal question jursdiction of Plain-

tiffs' Title VII and FMLA claim pursuant to 28 U.S.C. §§ 1331 and 1343. The cour has supplemen-

l70Ak 184 Employees l70Ak184.15 k. Sex discrimiation actions. Most Cited Cases

tal jursdiction of the state statutory claims pursuant

Natue of harm that female employees alleged in sex discrimination action against employer under Title VII, that employer's employment policies and practices deprived them of opportties to obtain certain

Plaintiffs now move for class certification under Rule

positions and better pay, lent itself to injunctive and

declaratory prospective relief, and thus injunctive and declaratory relief sought was predomiant and would be sought by reasonable plaintiffs, as required for class certfication. Civil Rights Act of 1964, § 701 et

to 28 U.S.C. § 1367.

23(b)(2) of the Federal Rules of Civil Procedure of their class claims asserted pursuant to Title VII and the state and local Human Rights laws. Defendants oppose the motion, and move to strike two expert reports submitted by Plaintiffs in support of their motion. For the reasons stated below, Defendants'

motions to strike are denied and Plaintiffs' motion for class certfication is granted in part.

seq., 42 U.S.C.A. § 2000e et seq.; Fed.Rules

BACKGROUND

Civ.Proc.Rule 23(b)(2), 28 U.S.C.A.

*88 Outten & Golden, LLP, by Adam T. Klein, Esq.,

Justin M. Swarz, Esq., Cam E. Greene, Esq., New York, NY, for Plaintiffs.

Plaintiffs allege that Gristede's maintains a pattern and practice of intentional discriation against

hiing and promotions, and that its hiing, promotion and compensation policies have an women in term of

Morgan, Lewis & Bockius LLP, by Michael J. Puma, Esq., Amber L. Kagan, Esq., New York, NY, Finkel

ilegal disparate imact on women. Women, accord-

Goldstein Rosenbloom & Nash LLP, by: Kevin J.

ing to Plaintiffs, are predominantly steered or placed

Nash, Esq., New York, NY, for Defendants.

intially into "cashier," as opposed to "clerk" positions, regardless of their qualifications or interests. (Second Am. CompL ~~ 3, 69-71). Plaintiffs fuher allege that Gristede's selects managers, who are al-

OPINION AND ORDER LAURA TAYLOR SWAIN, District Judge.

Plaintiffs Susan Duling, Margaret Anderson, and Lakeya Sewer (collectively "Plaintiffs") bring this

action on behalf of themselves and all others simlarly situated, asserting intentional discrimination and disparate impact claim for violations of Title VII of

the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. ("Title VII"), the New York State Human Rights Law, N.Y. Exec. L. § 296 et seq. ("NYSHRL"), and

the New York City Human Rights Law, N.Y.C. Admin. Code § 8-101 et seq. (''NCHR''), by de-

most exclusively promoted from with the company,

predomiantly from among clerks. (Id. ~~ 77-79.) According to Plaintiffs, the combination of initially placing women in certain positions upon hing and

seldom promotig employees from those positions results in a deart of women in management positions. These hiing and promotion practices are not undertaken pursuant to a forml policy. *89 Rather, hig to and promotion from all entr-level positions

is done pursuant to unwrtten, subjective and discretionary processes. (!d. ~~ 5, 78-79.) Plaintiffs argue

that the unconstrained discretion exercised by the

fendants Gristede's Operating Corp., Red Apple

individuals who make Gristede's hing and promotion decisions causes those individuals' biases to

Group, Inc., d//a Gristede's, Gristede's Foods, Inc.,

manifest themselves in the company's practices. (!d.

Gristede's Delivery Service, Inc., Gristede's Foods

NY, Inc., Gristede's NY, LLC, Namdor, Inc., and John Catsimatidis (collectively "Gristede's" or "De-

fendants"). Sewer also asserts individual claim for

~~ 79-81.)

The Cour has pedormed a rigorous review of the

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Page 5

267 F.R.D. 86, 108 Fair Emp1.Prac.Cas. (BNA) 1396, 93 EmpL Prac. Dec. P 43,832 (Cite as: 267 F.R.D. 86)

paries' extensive evidentiary submissions in connection with ths motion practice. The followig factual

sumry presents the Cour's findings as to undis-

117:7-18:3; see also ¡d. at 36: 19-37: 17.) Charles

Criscuolo, who is Gristede's senior executive vice president and who "ru( s) the operations of the com-

puted facts, and findings as to disputed ones, that are relevant to Plaintiffs class certfication motion.

pany" (Criscuolo Dep. at 24:3-23), "irgine(s)" that

Gristede's operates a chain of fort-two grocery

requirements on interviewing and talkg to the peo-

stores in and near New York City. (Decl. of Cara E. Greene ("Greene Decl."), Ex. 5, Tr. ofDep. of Chris-

McCormck bases his hig decisions "on the needs of the company" and is "sure (McCormck) has his ple to see what it would be like for their specific requirements" (Criscuolo Dep. at 55:20-56: 17).

topher Lang ("Lang Dep.") at 19:14-16; Greene

Decl., Ex. 2, Tr. of Dep. of Charles Criscuolo ("Criscuolo Dep.") at 37:22-38:5.) The stores are divided

There are no written descriptions of Gristede's entry

into two districts, each of which is overseen by a

level positions. (Decl. of Michael J. Pum ("Puma Decl."), Ex. N., Tr. of Dep. of Angelo Mendoza

"district maager." (Criscuolo Dep. at 37:7-21.) Each

("Mendoza Dep. (Def.)" at 81:-5.) While applicants

distrct manager, in tu, supervises the "store man-

for entr level positions are given the opportty to

agers" who ru the grocery stores within his district.

state the position for which they are applying

(Id. at 32:10-12,37:3-6.) Individual stores are separated into deparents, each of which is staffed by

(McCormck Dep. at 99:3-10), they are not told

clerks and may be ru by a "departent manager."

97:22-24). McCormck decides into which position to place a successful applicant on the basis of the length

(Id. 26:15-32:9.) The majority of clerks and cashiers are part-tie employees. (Greene Decl., Ex. 11, Tr.

of Dep. of James Monos ("Monos Dep.") at 87:1418.)

Until September 2007, every decision regarding whether to hie an applicant for an entr-level position at Gristede's and the placement of successful

applicants was made by Michael McCormck.

which positions are available (McCormck Dep. at

of tie each available position has been open and the

amount of pressure he receives from store managers

to fill particular openigs. (McCormck Dep. at 99:19-100:6.) At his deposition, McCormck denied having suggested to any applicant that they apply for a specific position. (Pum Decl., Ex. K, Tr. of Dep. of Michael McCormck ("McCormck Dep. (Def.)") at 102:19-104:7, 106:24-108:6.) He testified that,

(Greene Decl., Ex. 7, Tr. of Dep. of Michael

when an applicant asks which positions exist, McCormck "ru(s) though a list of what the posi-

Greene Decl., Ex. 1, Tr. of Dep. of Deborah Clusan ("Clusan Dep.") at 67:6-14; Criscuolo Dep. at 57:23-

but does not otherwise make suggestions to the appli-

McCormck ("McCormck Dep.") at 118:4-13;

25; Lang Dep. at 55:14-23; Greene Decl., Ex. 10, Tr.

Mitchell Moore ("Moore Dep.") at 24:2025:8,28:13-16,29:23-30:5,58:14-59:4.) McCormck, who has been Gristede's Human Resources Specialist since approximtely December 2003 (McCormck ofDep. of

Dep. at 13:2-5), has a college degree in humn resource management, but no other post-college work experience or other experience in humn resources. (McCormck Dep. at 14:25-15:15; Criscuolo Dep. at 57:9-22.) McCormck received no traing regarding employment and antidiscrimation laws, and essen-

tially no trainig on how to determe whether an applicant is qualified for a partcular entr level posi-

tion. (McCormck Dep. at 37:18-41:24.) McCormck decides whether to hie an applicant on the basis of purely subjective criteria, namely his imression of "how (applicants) conducted themselves, (whether they) were ... friendly, (and whether they) were ... honest" during the interview. (McCormck Dep. at

tions are, off *90 the top of (his) head, real quick,"

cant. (McCormck Dep. (Def.) at 103:2-11.) Since September 2007, hiing and initial placement decisions have also been made by four male store managers, who were given no direction as to how to make those decisions other than to verify that applicants

have valid identifying documents. The managers' decisions are reviewed by "headquarters." (Moore

Dep. at 24:20-32: 17, 54: 13-60:3.)

A number of present and former Gristede's employees, including the named plaintiffs, proffer that they and other female applicants were "steered" into cashier positions; several state that they were told on ap-

plying that only cashier positions were available. (Greene Decl., Ex. 3, Tr. of Dep. of Susan Duling ("Duling Dep.") at 53:6-19; Greene Decl., Ex. 15,

Decl. of Susan Duling ("Duling Decl.") , 4; Greene Decl., Ex. 16, Decl. of Opalita Echevearra ("Echevearria Decl.") " 6-7; Greene Decl., Ex. 17,

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267 F.R.D. 86, 108 Fair EmpLPrac.Cas. (BNA) 1396,93 EmpL. Prac. Dec. P 43,832 (Cite as: 267 F.R.D. 86)

Decl. of Cynthia Gonzales ("Gonzales Decl.") ir 3;

ment in promotion decisions, stating that he

Greene Decl., Ex. 20, Decl. of Racquel McDonald ("McDonald Decl.") ir 6; Greene Decl., Ex. 21, Decl.

merely transmits the distrct managers' rec-

of

France Ort ("Ort Decl.") ir 5; Greene Dec1, Ex.

ommendations to Criscuolo, who makes the

final determation. (McCormck Dep. at

23, Decl. of Yashia Santiago ("Yashira Santiago

125:20-127:23.) Thus, it appears from the

Decl.") ir 4; Greene Decl., Ex. 24, Decl. of Yesenia

record tht store managers make recommendations to the district managers, who transmit them uneviewed to McCormck, who transmits them unreviewed to Criscuolo. It is not clear by what criteria Criscuolo decides whether to act upon the recommendations; he suggested at his deposition that he simply accedes to the recommendations that

Santiago ("Yesenia Santiago Decl.") ir 6; Greene

Decl., Ex. 26, DecL. of Ebony Singleton ("Singleton Decl.") ir 5). One declarant alleges that, when she and

a ma applied and both expressed interest in two open positions-one for a cashier and one in "deli"-the man was given the deli position. (Greene Decl., Ex. 18, Decl. of Dailin Gonzalez ("Gonzalez Decl.") ir 5.) Defendants proffer that most cashier applicants are women and that the women express their preference for the cashier position. (Defs.' Br. 20.)

Gristede's attempts to fill openigs for non-entr level positions by promotig from withn the company, and only "(v)ery rarely do(es the company) hie

are given to him, at least with respect to some management positions. (See Criscuolo

Dep. at 79:21-24,93:12-95:17.) There are no wrtten criteria for promotions of em-

ployees, and store managers, who often make the intial promotion recommendations, are not told of

Charles Criscuolo ("Criscuolo Dep. (Def.)") at 46:2048:5; McCormck Dep. at 33:10-34:15; Monos Dep.

any such criteria. (Greene Decl., Ex. 4, Tr. ofDep. of Faustio Ferdinand ("Ferdinand Dep.") at 70:1971:4, 71:13-16.) Employees are not told how to seek a promotion (see id. at 70:19-24 (statig that Ferdi-

at 45:6-9.) Whle the procedure for promotig entr level employees to management positions is not as

ployee should do in order to get a promotion); Monos

from the outside." (Criscuolo Dep. at 34:8-10; see also id. at 43; Pum Decl., Ex. J, Tr. of Dep. of

centralized as is the hiing procedure, it is equally discretionary. When a departent manager position becomes available at a store withn his distrct, Chrstopher Lang, one of Gristede's two distrct managers who oversee the individual store managers (see Cris-

nand, a store manager, has "no idea" what an em-

Dep. at 49:20-25; Monos Dep. (Def.) at 62:6-11, 63:20-64:13), and they often are not told when a management*91 position is available (Criscuolo Dep.

cuolo Dep. at 37:3-15; Lang Dep. at 19:2-20:6), so-

at 86:25-87:5; Greene Decl., Ex 8, Tr. ofDep. of Angelo Mendoza ("Mendoza Dep.") at 67:4-14; Greene Decl., Ex. 9, Tr. of Dep. of Sandi Molina ("Molina

licits recommendations of entry level employees

Dep.") at 107:2-23; Moore Dep. 72:21-24; Monos

from store managers (Lang Dep. at 55:2-58:3, 78:2024, 84:10-23). James Monos, the other district man-

Dep. at 49:15-50:25; but see Ferdinand Dep. at

ager, simly passes store managers' promotion rec-

68:25-70:13). One store manager evaluates an employee's "attendance, their personality and their abil-

ommendations along to McCormck and other man-

ity for them to do the job that they have to do" in

agers. (Monos Dep. at 44:3-12, 45:12-46:4, Puma

deciding whether to promote that employee (Mendoza Dep. at 60: 13-20), as well as "a gut feeling" that the new posithe employee can perform the duties of tion (id. at 62:4-7).

Decl., Ex. L, Tr. of Dep. of James Monos ("Monos Dep. (Def.)") at 60:13-61:15, 64:15-65:21.) Monos also discusses promotions with employees who raise the issue directly with him. (Monos Dep. at 49:5-19.) The promotion recommendations eventually reach Criscuolo, who makes the ultimate decision about whether to make the recommended promotion. (Lang

Some management positions require specific experience. (Criscuolo Dep. (Def.) at 111:22-112:11 (a

dair manager "should have working knowledge" of

the dair departent); Monos Dep. (Def.) at 84:11-

Dep. at 100:22-24.) FNl

86:2 (deli, meat and grocery departent managers FN 1. Monos testified at his deposition that

must have experience in those departents).) A de-

Michael McCormck makes final promotion

partent manager usually has been a clerk in that

decisions. (Monos Dep. at 44:7-12.) However, McCormck disavowed any involve-

departent. (Monos Dep. (Def.) at 121:4-11; Mendoza Dep. (Def.) at 79:3-5.) It is unusual for an entr-

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267 F.R.D. 86, 108 Fair Emp1.Prac.Cas. (BNA) 1396,93 Emp1. Prac. Dec. P 43,832 (Cite as: 267 F.R.D. 86) level employee to transfer into a different entry-level

part-tie cashier from approximtely November

position. (Mendoza Dep. (Def.) at 78:17-79:2.) Potential promotees do not complete an application. (Lang Dep. at 57; Monos Dep. at 50:2-11.) There are

2004 though December 2004. (Id. 'i'i 89, 95.) Gristede's records indicate that Anderson's employment was termated because she was "contiually short on

positions. (McCormck Dep. at 68:9-11.)

(her) register." (Pum Decl., Ex. Q, Anderson Termnation Report.) Plaintiff Lakeya Sewer was employed

no written job descriptions for departent manager

by Gristede's as a full tie cashier from approxi-

Plaintiffs' witnesses have observed that most Gristede's cashiers are women and/or most clerks are men (see Greene Decl., Ex. 12, Decl. of Kizy Bueford ("Bueford Decl.") 'i9; Greene Decl., Ex. 13, Decl. of Lewis Chewnng ("Chewning Decl.") 'i 6; Greene Decl., Ex. 14, Decl. of Adela Davila ("Davila Decl.")

'i'i3, 7; Duling Dec1. 'i2; Echevearra Decl. 'i'i3, 11; Gonzales Decl. 'i'i2, 7; Gonzalez Decl. 'i8; Greene Decl., Ex. 19, Decl. of Angela John ("John Decl.") 'i'i3, 9; McDonald Dec1. 'i'i2, 8; Ort Decl. 'i'i3, 9; Greene Decl., Ex. 22, Decl. of Starliza Ramos

("Ramos Decl.") 'i'i3, 7; Yashia Santiago Dec1. 'i'i2, 7; Yesenia Santiago Decl. 'i'i3, 11; Greene Decl., Ex. Lakeya Sewer ("Sewer Decl.") 'i'i4, 11; 25, Decl. of Greene Decl., Ex. 26, Decl. of Ebony Singleton

("Singleton Decl.") 'i'i 3, 9; Greene Decl., Ex. 33,

EEOC Charge of Margaret Anderson ("Anderson

EEOC Charge") 'i 11); and assert that employees were not told about the existence of, or process for seekig, promotions from entr level positions, regardless of whether they expressed an interest in a promotion (see Bueford Decl. 'il0; Chewng Dec1. 'i1O; Davila DecL 'i8; Duling Decl. 'i9; Echevearria Decl. 'i'i 9, 11, 12, 14; Gonzales Decl. 'i'i 5-8; Gon-

zalez Decl. 'i 9; John Decl. 'i'i 7, 10; McDonald Decl. 'i'i9-l2; Ortiz Decl. 'i'i7, 10; Ramos Decl. 'i'i 4, 5, 8; Yashia Santiago Dec1. 'i'i 6, 8; Yesenia

Santiago Decl. 'i'i 10, 12; Sewer Decl. 'i'i9, 12, 13; Anderson EEOC Charge 'i 12). Two of Plaintiffs' witnesses assert that women were expressly disfa-

vored for promotions (see Davila Decl. 'i 4; Ramos Decl. 'i4). FN2

FN2. Defendants correctly note that many of the declarations submitted by Plaintiffs con-

tain boilerplate conclusory language. The Cour has focused on the aspects of the declarations that contain specific factual allegations.

mately 2001 until February 2002, when she transferred to a receptionist position in Gristede's corpo-

rate offce. (!d. 'i'i 96-97.) Duling, Anderson and Sewer contend that, at the time they were hied, Gristede's steered them into cashier positions by re-

fusing to consider their applications for any other

position. (Id. 'i 84, 92-94; Duling Dep. at 53:6-19; Puma Decl., Ex. H, Tr. ofDep. of

Margaret Anderson

("Anderson Dep.") at 33:2-25; Sewer Decl. 'i 7; Pum Decl., Ex. V, Tr. of Dep. of Lakeya Sewer ("Sewer Dep.") at 26:3-27:6.) Duling wrote on her Gristede's application that she was interested in a

cashier position before speakng to anyone about the

available positions *92 (Pum Decl., Ex. G, Tr. of Dep. of Susan Duling ("Duling Dep. (Def.)") at 50:7-

13, 60:16-24; Puma Decl., Ex. B, Application for Employment of Susan Duling ("Duling App.")), but alleges that when she delivered her completed appli-

cation she asked about other positions and was told none were available (Duling Dep. at 53:6-19). Duling

also alleges that, over the course of her tenure at Gristede's, she has never been made aware of available maagement positions at Gristede's (Second Am. Comp1. 'i'i 85-86), despite her belief that she is quali-

fied for such positions (id. 'i 88). Durg that tie Duling has received four "wrte-ups" for poor performnce. (Duling Dep. (Def.) at 88:2-16.) Sewer alleges that she was told when she applied for Gristede's employment that the only position available at the tie she applied was that of cashier, and that she

did not ask to be placed in a different position. (Sewer Decl. 'i7; Sewer Dep. at 26:3-27:6.) Plaintiffs have also proffered reports from their expert witnesses Wiliam T. Bielby and David L. Crawford in support of their motion for class certfication. (Greene Dec1., Ex. 28 ("Bielby Report"); Greene

Decl., Ex. 29 ("Crawford Report").) FN3 Plaintiffs' expert reports purort to show that gender disparities exist in the hing and promotig of Gristede's em-

Plaintiff Susan Duling has been employed by Gristede's as a part-time cashier since approximtely August 2003. (Second Am. CompL 'i'i 82-83.) Plaintiff Margaret Anderson was employed by Gristede's as a

ployees, and that those disparties are the result of the

practices described above. Using a "multiple pools exact test," which is "based on the computation of an

exact probability" and "combines informtion for multiple groups (or multiple pools) to test for overall

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267 F.R.D. 86, 108 Fair Emp1.Prac.Cas. (BNA) 1396,93 EmpL Prac. Dec. P 43,832 (Cite as: 267 F.R.D. 86) bias across several groups of employees" and which he describes as "a widely accepted method for com-

placements of new clerks in part-time and full-time positions consistent with gender-neutrality. (Id. ir 27.)

putig statistical signficance" (Crawford Report ir

15), Dr. Crawford calculated the probability that hiing and promotion decisions for 4,889 employees

made by Gristede's during the period from 1999 to 2007 were gender neutral (id. irir 11, 15). Dr. Craw-

ford reported the results of his analysis in term of standard deviations from projected gender-neutral

results, notig that discrepancies of "2 or 3" standard deviations are generally considered statistically sig-

FN4. Dr. Crawford did not purort to account for applicants' preferences in intial placement. Defendants contend, without any specific evidentiary proffer, that female applicants overwhelmgly request cashier positons. Plaintiffs, as previously noted, contend that female applicants are steered toward such positions. The partes dispute the

nificant in litigation involving tests based on the

quality and signficance of preference-

norml distribution. (Id. at ir 13-14.) According to Dr. Crawford, "the probability that a discrepancy of 2 or more standard deviations would occur by chance is 4.55% ... (and) the probability that a discrepancy of3 or more standard deviations would occur by chance is 0.27% ...." (/d. ir 14.)

related inormtion provided in discovery.

*93 Finally, Dr. Crawford analyzed wage disparities. He found that, when controlling for length of tenure

FN3. Plaintiffs also submit a report by Dr.

amied, with each year's disparity larger than seven standard deviations. (Id. ir 28.) When controlling for position, which, as noted above, he believes is itself

Crawford in response to a report by Defendants' expert, Dr. June O'Neil, itself apparently responding to Dr. Crawford's initial report. (Greene Decl., Ex. 30 ("Crawford Rebuttl Report").) Dr. O'Neill's report is not before the Cour.

at Gristede's, gender differences ranged from 24.4% to 10.5% for each year during the period of

time ex-

the product of a "tainted" intial placement process,

the wage differences are not statistically signficant. (Id. ir 29.) Dr. Crawford concludes that gender disparities in wages are due to disparties in ultimate job position. (/d. ir 30.) FN5 Dr. Crawford similarly found that "merit increases," which are discretionary pay

Dr. Crawford determed that the intial placement of new hies into entry-level clerk positions significantly departed from gender-neutrality, with a difference of

more than 6 standard deviations. (Id. irir 22-23

(notig that 319 women were placed into clerk positions whereas a gender-neutral assignment would

have placed 1038 women into clerk positions, and

increases, are awarded in a non-gender-neutral man-

ner, in that women were awarded fewer such increases than expected, and the disparity was equivalent to approximtely 2.2 standard deviations. (Crawford Report ir 31.) However, as with the wage disparity, the disparity in merit increases disappears when one controls for position, and women even receive "a

assertng that the probability that the actual assign-

disproportonately large share of merit increases"

ments were made in a gender-neutral manner is es-

under such an analysis. (Id. ir 32.) This last result is

sentially zero).) FN4 Simlarly, Dr. Crawford found that the promotion of entr-level employees also de-

job position "is tainted by past depares from gen-

not inormtive, according to Dr. Crawford, because

parted from gender-neutrality by approximately 6.3

der-neutrality" and is thus not a legitite control

standard deviations. Even when controlling for intial position, significantly fewer women were promoted than expected, resultig in a departe from genderneutrality equivalent to a difference of approxitely 4.9 standard deviations. (Id. irir 12, 16, 18-19.) Dr.

variable. (Id.)

FN5. In accordance with a collective bar-

gaining agreement, clerks and cashiers re-

ceive identical beging wages and wage

osition is not a legitimte control variable ... because it is tainted by intial as-

increases. (Puma Decl., Ex. I, Tr. of Dep. of Deborah Clusan ("Clusan Dep. (Def.)") at

signments that were not gender-neutraL" (Id. ir 24.)

79:5-17; Criscuolo Dep. (Def.) at 64:24-

Dr. Crawford also reported a discrepancy, equivalent

65:6.)

Crawford opined that "(p )

to a difference of approxitely 3.1 standard devia-

tions, in the placement of new cashiers in part-time

and full-time positions. (Id. ir 26.) He found the

Dr. Bielby, relying on the Crawford Report, Gristede's job placement and promotion practices, and

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9

267 F.R.D. 86, 108 Fair Emp1.Prac.Cas. (BNA) 1396, 93 Emp1. Prac. Dec. P 43,832 (Cite as: 267 F.R.D. 86) social science research, opined as to the potential causes of the discrepancies described in the Crawford

sociology and organiational studies, datig back to the 1950s," showing that employees with fewer op-

Report. Dr. Bielby reviewed social science literatue showing that "occupations and jobs with highly skewed ratios of men to women become sex labeledwidely viewed as 'men's work' " (Bielby Report ir 23 (emphasis in original)), that sex labeling reinorces gender-based disparities by contributig to a "genderthe job (id.), and that such schemas based schema" of

portties for advancement tend to lower their ambi-

tend to solidify over tie (id. ir 24).

ment, and promotion," and characteried the "qualifications and criteria" used in making those decisions as "highly subjective." (Id. ir 34.) He asserted that "Gristede's nondiscrination and equal employment

Dr. Bielby's report also discusses social science research demonstratig that "substantial discretion in

tions and commtment to their work as compared to others with more opportties. (Id. ir 40.) *94 Dr. Bielby noted that "Gristede's provides very little guidance to its maagers about the criteria to be

used in makig decisions about hirg, job assign-

assessing and weighing evaluative criteria (for em-

opportty policies are virally nonexistent." (Id. ir

ployment) invites bias" (id. ir 25), and that "discretion

48.) Dr. Bielby also noted Gristede's failure to make any "systematic efforts to learn which employees are interested and qualified for promotions" (id. ir 39), that employees are not informed about promotion requirements (id.), and that employees learn of open

in the defintion and weighig of evaluative criteria, even with regard to ostensibly objective criteria, con-

tributes to bias, and ... often does so in a way that

allows decision-maers to justify to themselves and to others that their actions are fair and nondiscrimiatory" (id. ir 26).FN6 Bias resulting from such discretion is largely due, according to Dr. Bielby's report,

to the influence of gender stereotyes, which are "so-

cially shared beliefs about the characteristics or at-

positions primarily by word of mouth (id. ir 41). When inormtion about job opportties is dissemiated in this manner, says Dr. Bielby, "opportnities for advancement tend to be more accessible to advantaged groups in the workplace- 'insiders,' "

tributes of men and women in general tht inuence our perception of individual men and women." (Id. ir

namely men. (Id. ir 42.)

27 (internal quotation and citation omitted).)

Dr. Bielby opined that Gristede's does not even have

ineffective passive, or symbolic, nondiscriation FN6. Like Dr. Crawford, Dr. Bielby did not purort to account for applicants' preferences in initial placement.

policies, but rather that it has no such policies at all.

(Id. ir 48.) Dr. Bielby concluded that Gristede's in-

adequate nondiscrimiation policies, its failure to monitor personnel decisions, and its highly subjective

Dr. Bielby proffers that the inuence of gender

criteria for makig such decisions "creates and sus-

stereotyes can someties be curailed (id. ir 28-33),

tain a highly segretated workforce and gender dis-

but only when "humn resources practices are formalized so that decision-makers know that they will be held accountable for the criteria used to make de-

cisions, for the accuracy of the inormtion upon which the decisions are based, and for the conse-

parities in promotion rates." (Id. ir 50.)

Plaintiffs' proposed class consists of "all curent and former female Gristede's employees who worked for

quences their actions have for equal employment

Gristede's at any time between November 2, 2004 and the date of final judgment in this matter." (PIs.'

opportty" (id. ir 31). Forml written policies are

Br. 1.) FN7

inuffcient to mie bias if they are merely "pas-

sive" or symbolic. (Id. ir 32.) Instead, Dr. Bielby

FN7. Defendants contest the scope of the

opines, bias reduction requires "proactive policies

class period on the ground that Anderson's

and practices, including recurg and mandatory traing of managers and supervisors, and systematic

EEOC charge cannot support promotion claim in light of Anderson's brief tenure at

and consistent monitorig of outcomes of personnel

Gristede's. (Defs' Br. 8, n. 4.) However,

decisions," as well as "explicit evaluation of manag-

Anderson's September 2, 2005, EEOC charge supports all class claim because they are "reasonably related" to the claim in that

ers and supervisors on their contributions to an or-

ganiation's equal opportty goals." (Id. ir 33.) Dr. Bielby also pointed to "(a) large body of research in

charge. The question is whether "the con-

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267 F.R.D. 86, 108 Fair Emp1.Prac.Cas. (BNA) 1396,93 Emp1. Prac. Dec. P 43,832 (Cite as: 267 F.R.D. 86) duct complained of would fall with the

(S.D.N.Y.2003). "The Federal Rules of Evidence

scope of the EEOC investigation which can reasonably be expected to grow out of the

assign to (the Cour) 'the task of ensurg tht an

charge of discrimation." Velez v. Novartis

and is relevant to the task at hand.' " United States v.

expert's testiony both rests on a reliable foundation

Pharmaceuticals Corp.. 244 F.R.D. 243,

Willams. 506 F.3d 151, 160 (2d Cir.2007) (quotig

255 (S.D.N.Y.2007) (quotig Holtz v.

Daubert v. Merrell Dow Pharms.. Inc.. 509 U.S. 579,

Rockefeller & Co.. 258 F.3d 62, 83 (2d Cir.2001)). The Holtz cour "approvingly noted a distrct cour's conclusion that 'it would have been reasonable to suspect that the EEOC, in investigatig (a) complaint of failure to train because of age, would have assessed (the corporation's) promotion and

597, 113 S.Ct. 2786, 125 L.Ed.2d 469 (993)). The

transfer policies.' " Velez. 244 F.R.D. at 256

(quotig Holtz. 258 F.3d at 84) (alterations in original). Simlarly, it would have been reasonable to suspect that the EEOC, in investigatig Anderson's discriation claims

relating to initial job placement, would have assessed Grstede's promotion policies and practices. This is especially tre in light of

the allegations in Anderson's EEOC charge that Gristede's promotion practices also discrimnate againt women.

Cour has "broad latitude" in deciding both "how to

determe reliability" and in *95 reachig "its ultimate reliability determation," but it may not abandon its gatekeeping fuction. Id at 160-61 (internal

quotation marks and citations omitted).

il The Crawford and Bielby Reports easily satisfy Rule 702. Defendants' arguments, made in legal memoranda but not supported by exthe requirements of

pert or other evidence, challenge varous aspects of the experts' procedures in conducting their statistical evaluations, including the time frame used, the alleged failure to control for certin variables, and the

failure to consider certain alleged facts. The validity of Plaintiffs' experts' conclusions is not vitiated by the consideration of data outside of the class period, National R.R. Passenger Corp. v. Morgan. 536 U.S. 101, 113, 122 S.Ct. 2061, 153 L.Ed.2d 106 (2002) (such data may constitute "background evidence in

DISCUSSION

support of a tiely claim"); there is no evidence in Defendants'

Motions to Strike Plaintif' Expert Re-

the curent record of material changes in Gristede's practices over the class period or the longer period.

ports

The challenged aspects of the methodology are ap-

Defendants move, pursuant to Rule 702 of the Federal Rules of Evidence, to strike the expert reports of Wiliam T. Bielby and David L. Crawford, both of which were submitted by Plaintiffs in support of

their

motion for class certfication. Rule 702 provides:

If scientific, techncal, or other specialized knowledge wil assist the trer of fact to understand the evidence or to determe a fact in issue, a witness qualified as an expert by knowledge, skill, experience, traing, or education, may testify thereto in

the form of an opinon or otherwse, if (I) the testiony is based upon suffcient facts or data, (2) the testiony is the product of reliable priciples

parent on the face of the reports, thus permttg a fact finder to evaluate the impact and weight of the alleged flaws. Furhermore, there is evidence in the record that, if believed, would support a finding of deliberate sex-segregation of the workforce from hig onward. On ths record, Plaintiffs have demon-

strated suffciently the reliabilty of the underlyig data and the methodologies employed by the experts to satisfy the requiements of Rule 702. Defendants'

arguents are relevant, if at all, to the weight that should be given to the reports. The Cour concludes that both reports plainy employ reliable and well accepted methods and adequately apply them to sufficient data in order to render the conclusions reliable.

and methods, and (3) the witness has applied the

principles and methods reliably to the facts of the case. Fed.R.Evid. 702. The proponent of an expert's testi-

mony bears the burden of establishig its admissibility by a preponderance of the evidence. Figueroa v.

Plaintiffs' expert reports also satisfy the relevance requirement of Rule 702. The Crawford Report provides evidence that, with the other evidence of record concerng intial hig and promotions in a sex-

segregated workforce, would tend to make more

Boston Sci. Corp.. 254 F.Supp.2d 361, 366

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267 F.R.D. 86, 108 Fair Emp1.Prac.Cas. (BNA) 1396, 93 Emp1. Prac. Dec. P 43,832 (Cite as: 267 F.R.D. 86)

probable Plaintiffs' disparate treatment hypotheses. As to the Bielby Report, which offers no new data but makes social-science based observations relatig to sex-stereotying as an underlyig mechanism that, if not actively checked, could explain the impact of Gristede's hiing and promotion practices, the sources cited and methodology employed are suffciently well explained for Rule 702 puroses and the report

Southwest v. Falcon, 457 U.S. 147, 161, 102 S.Ct.

is relevant to the disparate treatment and disparate

cf In re IPO, 471 F.3d 24 (rejecting lower "some

2364, 72 L.Ed.2d 740 (982)). *96 "(T)he requirements of Rule 23 must be met, not just supported by some evidence." !J see also Teamsters Local 445

Freight Div. Pension Fund v. Bombardier Inc., 546 F.3d 196, 202 (2d Cir.2008) (holding that "the pre-

ponderance of the evidence standard applies to evidence proffered to establish Rule 23's requirements");

impact claim.

showing" standard). The burden on Plaintiffs to

Finally, the Cour finds that Dr. Crawford's and Dr.

prove satisfaction of the Rule 23 requirements is not those requirements with the reduced by the overlap of Plaintiffs' claim. Id at 41 ("there is no reamerits of son to lessen a distrct cour's obligation to make a

Bielby's qualifications suffce to establish their exper-

tise in the fields of statistics and sociology, respectively, as required by Rule 702. Accordingly, Defendants' motions to strike the reports are denied.

Class Certifcation Motion Rule 23 of the Federal Rules of Civil Procedure governs the certfication of an action as a class action.

First, Rule 23(a) requires Plaintiffs to show: (1) that the class is so numerous that joinder of all members is impracticable ("numerosity"); (2) that there are

questions of law or fact common to the class ("commonality"); (3) that the claims or defenses of the representative partes are tyical of the claim or defenses of

the class ("tyicality"); and (4) that the rep-

resentative parties will fairly and adequately protect the interests of the class ("adequacy"). Fed.R.Civ.P.

23(a). Second, Plaintiffs must show that the action is of one of the thee tyes listed in Rule 23(b). Plaintiffs' motion seeks class certfication on the basis of Rule 23(b)(2), which applies when "the part opposing the class has acted or refused to act on grounds

that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respectig the class as a whole." Fed.R.Civ.P. 23(b)(2).FN8

FN8. The Second Amended Complaint also invokes Rule 23(b)(3), but Plaintiffs have not requested Rule 23(b)(3) certfication in ths motion practice. (Second Am. Comp1. ir 60).

determation that every Rule 23 requirement is met before certifying a class just because of some or even that requirement with a merits issue"). full overlap of

While it remains tre that there is "nothng in either the language or history of Rule 23 that gives a cour any authority to conduct a prelimary inquir into

the merits of a suit in order to determne whether it may be maintained as a class action," Eisen v. Car-

lisle & Jacquelin. 417 U.S. 156, 177,94 S.Ct. 2140, 40 L.Ed.2d 732 (1974), such an inquir is appropriate where the class certification determnation inciden-

tally overlaps with merits, In re IPO, 471 F.3d at 33 (explaing that the merits inquiry reproved in Eisen was gratuitous and "had nothg to do with determing the requirements for class certification"). Thus,

the Cour must mae a "definitive assessment" based on the "resol(ution of! factual disputes relevant to each Rule 23 requirement and (a) find(ing) that whatever underlying facts are relevant to a partcular Rule 23 requirement have been established" while avoid-

ing the "assess (ment of! any aspect of the merits unrelated to a Rule 23 requirement." I d at 41 . The Cour has made just such a thorough and rigor-

ous defintive assessment with respect to each of the Rule 23(a) factors and Plaintiffs' contention that certfication pursuant to Rule 23(b)(2) is appropriate. Rule 23(a) Factors

Numerosity

A class action " 'may only be certfied if the trial cour is satisfied, after a rigorous analysis, that the prerequisites' " of Rule 23 are met. In re Initial Pub. Offring Secs. Litig. ("In re IPO"), 471 F.3d 24, 33 (2d Cir.2006) (quotig General Telephone Co. ofthe

Defendants do not contest that the proposed class, which Plaintiffs contend consists of "at least 668 women," meets the numerosity requirement. (Pls.' Br.

17.) Because "numerosity is presumed at a level of

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267 F.R.D. 86, 108 Fair Emp1.Prac.Cas. (BNA) 1396,93 Emp1. Prac. Dec. P 43,832 (Cite as: 267 F.R.D. 86) 40 members," the Cour concludes that the Plaintiffs'

become the focus of the litigation.''' Id (quotig

proposed class is sufficiently numerous to satisfy Rule 23(a)0). Consolidated Rail Corp. v. Town of

Baffa v. Donaldson. Lufkin & Jenrette Sec. Corp.. 222 F.3d 52, 59 (2d Cir.2000)). " 'The unique de-

Hyde Park. 47 F.3d 473,483 (2d Cir.1995).

fense rule, however, is not rigidly applied in this Circuit,' and is 'intended to protect (the) plaintiff class-

Commonality and Typicality

not to shield defendants from a potentially meritori-

il The commonality and tyicality requirements "

ous suit.' " Id (quotig In re Parmalat Sec. Litig.. No. 04 MD 1653(LAK), 2008 WL 3895539, at *5

'tend to merge' because '(b)oth serve as guideposts

(S.D.N.V. Aug.21, 2008)); see also Caridad. 191

for determg whether ... the named plaintiffs

F.3d at 293 (the tyicality requirement "does not re-

claim and the class claim are so inter-related that the interests of the class members will be fairly and ade-

quately protected in their absence.' " Caridad v. Afetro-North Commuter R.R.. 191 F.3d 283,291 (2d

Cir.l999) (alterations in original) (quotig Falcon, 457 U.S. at 157 n. 13, 102 S.Ct. 2364 (982)); see al~o Marisol A. v. Giuliani, 126 F.3d 372, 376 (2d Cir. 1 997). "To determe commonality, it is not nec-

essary to decide whether plaintiffs' evidence is ultimately compelling" as to the merits of their claims. Velez. 244 F.R.D. at 257. "Commonality requires that

plaintiffs present common questions of fact or law; plaintiffs' ultimate success at tral on the merits requires an answer to that question, specifically that

defendants actually did discriminate against plain-

tiffs." Id (emphasis in original) (quotig Hnot v. Wills Group Holdings Ltd, 241 F.R.D. 204, 211

(S.D.N.Y.2007)). "Even a single common legal or factual question wil suffice" to satisfy the common-

quire that the factual background of each named plaintiffs claim be identical to that of all class members; rather, it requires that the disputed issue of law or fact occupy essentially the same degree of centrality to the named plaintiffs claim as to that of other members of the proposed class"); Velez. 244 F.R.D.

at 268 ("As long as plaintiffs assert ... that defendants commtted the same wrongful acts in the same manner, against all members of the class, they establish the necessar tyicality." (intemal quotation marks

and alteration omitted)). Thus, the commonality and

tyicality requirements, together, require Plaintiffs to show that they raise questions of fact or law, arising out of a single course of conduct or set of events, that are common to all putative class members and that their individual claims and circumstances are suffciently similar to those of the absent class members so as to ensure that the named plaintiffs wil press the claim of all class members.

ality requirement as to a partcular claim. In re NYSE

Specialists Sec. Litig. ("In re NYSE"), 260 F.R.D. 55,

70 (S.D.N.Y.2009) (quotig Freeland v. AT & T Corp., 238 F.RD. 130, 140 (S.D.N.Y.2006)).

II Plaintiffs assert both disparate treatment and dis-

parate impact discrimation claims. When such claim "focus on allegations of widespread acts of intentional discrimiation against individuals," as they do here, plaintiffs tyically seek to establish a

il Similarly, the tyicality requirement "is satisfied

when each class member's claim arises from the same course of events, and each class member makes similar legal arguments to prove the defendant's liability."

Robinson v. Metro-North Commuter R.R. Co.. 267 F.3d 147, 155 (2d Cir.200n (quotig Marisol A., 126

F.3d at 376). The purose of ths requirement is "to ensure that a class representative has 'the incentive to

prove all the elements of the cause of action which would be presented by the individual members*97 of the class were they initiatig individualized actions.'

" In re NYSE, 260 F.R.D. at 71 (quoting In re

NASDAQ Market-Makers Antitrust Litig.. 172 F.R.D. 119, 126 (S.D.N.Y.1997)). il Typicality is absent where the named plaintiffs are" 'subject to unque defenses which threaten to

prim facie case by producing "two kids of circumstantial evidence ... (1) statistical evidence aimed at establishig the defendant's past treatment of the pro-

tected group, and (2) testiony from protected class

members detailing specific intances of discria-

tion." Robinson, 267 F.3d at 158. Disparate impact claim challenge policies or practices that are neutral on their face but have a disparate effect on the pro-

tected group. To mae their prima facie case on their disparate impact claims, Plaintiffs "must (1) identify a policy or practice, (2) demonstrate that a disparity exists, and (3) establish a causal relationship between the two." Id at 160 (citig Byrnie v. Town ofCromwell, Bd ofEduc.. 243 F.3d 93, 111 (2d Cir.200l)). il Plaintiffs' claim are of injur and ongoing viola-

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267 F.R.D. 86, 108 Fair Empl.Prac.Cas. (BNA) 1396,93 Empl. Prac. Dec. P 43,832 (Cite as: 267 F.R.D. 86)

tions arising from company-wide policies and practices rather than one-on-one specific decisions or acts

employment practices does not bar a finding of

of discrimiation. Plaintiffs have proven by a preponderance of the evidence that common questions

disparate impact modeL." Caridad. 191 F.3d at 292.

exist, through their evidence of steering or channel-

ing practices at the intial hig stage, lack of hig

commonality under either the disparate treatment or The Supreme Cour has recogned that intentional discrimination claims are susceptible to class action

suits where "the discriation manifested itself ...

and promotion standards having the purose or effect

though entirely subjective dec,isionmkig proc-

of protectig againt intentional or untentional sex

esses." Falcon. 457 U.S. at 159 n. 15, 102 S.Ct. 2364.

discrimination, and data showing statistically signfi-

"And, it is beyond dispute that the disparate impact analysis may be applied to subjective, as well as objective, employment practices." Caridad, 191 F.3d at

cant disparities in hing into job categories and in promotion and resultig compensation rates. The

Cour cautions that it does not address the overlapping question of whether Plaintiffs have demonstrated that they can prevail on the merits of any of their claims, but determes merely that Plaintiffs have met their burden of demonstratig that there are core questions that are common to the claims asserted, such that the commonality requirement is satisfied.

292 (statig fuer that "(w)e see no reason to limit ths priciple to individual claims of disparate im-

pact," as opposed to class-wide claim). In order to demonstrate that their claim challenging

Defendants' subjective decision-makig practices

poor job performnce, in that she received four

satisfy the commonality and tyicality criteria, Plaintiffs must show "that the challenged practice is causally related to a pattem of disparate treatment or has a disparate impact." Velez, 244 F.R.D. at 258 (quoting their claims, Caridad, 191 F.3d at 292). In support of Plaintiffs have submitted deposition testimony from

"write-ups," and Anderson's tenure at Gristede's hav-

Gristede's high-level managers tending to show that

ing been too brief for her to have been eligible, and

all hig decisions are made by five male individu-

thus denied the opportty, for a promotion, subject

als, in their sole discretion, are unguided by any policies or criteria, and are not reviewed by anyone else.

il Defendants argue that Duling's voluntary indica-

tion of interest in a cashier position and her allegedly

the named Plaintiffs to unque defenses that render them atyical of the class. Arguing that the named

plaintiffs' circumtances are unque "is, of course,

Plaintiffs have offered numerous accounts of female

always the defendant's contention in class action dis-

applicants being steered or diected to cashier posi-

crimiation claims," but "claimng that somethg

tions. Plaintiffs have also submitted an expert report

other than discrimination explains the named plain-

indicatig a significant gender discrepancy in the

tiffs' experience" is insuffcient to *98 defeat tyicality because "(t)he question presented by each plain-

intial placement of newly hired employees, in that

tiffs claim is undoubtedly tyical of the class, whether or not defendants are eventually able to prove that the answer to that question is unque to each plaintiff." Velez. 244 F.R.D. at 268. The individual circumstances on which Defendants base this argument relate to the named Plaintiffs' ability to

women are far more likely than men to be placed into cashier positions. Similarly, Plaintiffs have submitted testimony from various Gristede's managers demonstratig that manager positions are usually filled by

promotig from within the company, and that the selection of employees for promotion is based pri-

prove their specific claims of injur, but do not bear

marily on the recommendations of store managers. Gristede's has no policy or criteria, and store manag-

upon whether Plaintiffs have raised common ques-

ers are not otherwise given any guidance, regarding

tions of law or fact as to Gristede's employment poli-

cies and practices. "A difference in the amount of

the qualifications required for any of the varous manager positions. Thus, the promotion decisions,

damages arising from differing degrees of injur does

like the initial hig decisions, are left to the discre-

not preclude either commonality or tyicality." Vengurlekar v. HSBC Bank, No. 03 Civ. 243(LTS),

tion and subjective preferences of the managers in charge of makig those decision.

2007 WL 1498326, at *6 (S.D.N.V. May 22,2007).

Furhermore, "the fact that the Class Plaintiffs challenge the subjective components of company-wide

As with the placement of intial hies, Plaintiffs' experts' reports show that women are disproportonately less likely than men to be selected for promotion, and

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267 F.R.D. 86, 108 Fair Empl.Prac.Cas. (BNA) 1396,93 Empl. Prac. Dec. P 43,832 (Cite as: 267 F.R.D. 86) in partcular that cashiers are disproportionately

partcular position or promotion. However, the pres-

unikely to be promoted. In addition, Plaintiffs prof-

ence of such individual questions does not preclude

fer the deposition testiony of several maagers who confirm that they received no direction from their superiors as to selecting employees to recommend for

class certfication with respect to the liability and injunctive relief aspects of Plaintiffs' pattern or practice disparate treatment, and disparate impact, claims

relatig to Defendants' hing, promotion and com-

promotion, have promoted few or no women, or are disinclined to promote cashiers. This anecdotal evidence appears to be consistent with Plaintiffs' expert

pensation practices.

and statistical evidence regarding the relevant practices and their effects.

Adequacy

Civil Prothe Federal Rules of cedure requires that "the representative partes (demonstrate that they) wil fairly and adequately protect the interests of the class." Fed.RCiv.P. 23 (a)(4). "A class representative must be part of the class and possess the same interest and suffer the same injury as

Il Rule 23(a) (4) of

Plaintiffs' evidentiary submissions are suffcient to

demonstrate, by the requisite preponderance of the evidence, that there are multiple questions that are

common to the proposed class and that are susceptible to class-wide resolution, including: whether De-

fendants' hiing and job placement practices are discretionary and based on subjective judgments; whether female entry-level employees were disproportonately placed into cashier positions as a result

the class members." Amchem Prods,. Inc. v. Windsor, 521 U.S. 591, 625-26, 11 7 S.Ct. 2231, 138 L.Ed.2d

of those job placement practices; whether, and to

representative must have an interest in vigorously

what extent, intentional gender bias is a component

pursuing the claim of the class, and must have no

689 (997) (intemal quotation marks and citations omitted). "Adequacy is twofold: the proposed class

of the subjective exercise of the discretionary*99

interests antagonistic to the interests of other class

hiing and intial placement decisions; whether De-

members." Denney v. Deutsche Bank AG. 443 F.3d 253, 268 (2d Cir.2006) (citig Baffa. 222 F.3d at 60; Robinson, 267 F.3d at 170). As a par of its inquiry, the Cour must determne whether Plaintiffs' attorneys "are qualified, experienced and able to conduct the litigation." Baff. 222 F.3d at 60.

fendants' promotion practices are discretionary and based on subjective judgments; whether female entr-level employees were disproportonately passed over for promotion as a result of those promotion

practices; and whether, and to what extent, intentional gender bias is a component of the discretionary promotion decisions. At least some of these questions are relevant to each of the named Plaintiffs' individ-

ual claims, establishig that they meet the tyicality requirement.

il As they did with respect to the tyicality re-

quirement, Defendants argue that Duling's voluntary selection of the cashier position on her application

and the brevity of Anderson's tenure at Gristede's

make those plaintiffs atyical, and therefore inadeThe evidence submitted by Defendants does not contradict Plaintiffs' characteriations of Gristede's rele-

quate, class representatives. As explained above, ths

vant personnel practices as discretionary and subjec-

tives are no longer employed by Gristede's does not

tive, nor does it undermne the relevance of the expert reports. Rather, Defendants endeavor to show

make them inadequate, as the relief they seek in-

that Gristede's managers exercise their discretion appropriately, and that the named Plaintiffs and several other potential class members did not qualify for

arguent fails. Furermore, the fact that representacludes injunctive relief that would open avenues to a greater range of entr level jobs and prospects for promotion should they decide to retu to work for

Gristede's.

positions they claim they were denied discriato-

rily. These are merits-related questions that the Cour need not, and should not, resolve at this stage. These issues do not vitiate the presence of common questions applicable to all class members.

The interests of the proposed class representatives, Diling, Anderson and Sewer, are well aligned with those of the absent class members. There are no con-

flcts of interest, and certainly no "fudamental" con-

flcts, see Denney. 443 F.3d at 268 (quotig In re To be sure, there are also individual questions, such as whether each class member was qualified for a

Visa Check/MasterMoney Antitrust Litig.. 280 F.3d 124, 145 (2d Cir.2001)), between the representatives

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267 F.R.D. 86, 108 Fair Empl.Prac.Cas. (BNA) 1396,93 Empl. Prac. Dec. P 43,832 (Cite as: 267 F.R.D. 86)

and the other class members, and Defendants do not suggest otherwise. Simlarly, the Cour is persuaded, and Defendants do not dispute, tht Plaintiffs' counsel

are experienced and well qualified to conduct the intant litigation. (See Declaration of Adam T. Klein irir 20-26 (discussing counsel's and Plaintiffs' adequacy, and describing nie other class actions prosecuted by Plaintiffs' counel's firm in various cours).) The Cour therefore finds that Plaintiffs satisfy the adequacy requirement of Rule 23 (a)( 4 ).

opt-out of

the litigation as well.

In order for the injunctive or declaratory relief to pre-

domiate, the Cour must conclude, at mium, that (1) "reasonable plaintiffs would brig the suit to obtain the injunctive or declaratory relief sought," and (2) such relief "would be both reasonably necessary and appropriate were the plaintiffs to succeed on the merits." Id at 164. The natue of

the har that Plain-

tiffs allege-namely, that Defendants' employment

policies and practices deprive them of opportties to obtain certin positions and better pay-lends itself

Rule 23(b)(2)

to injunctive and declaratory prospective relief, and I1 Rule 23(b) (2) of

the Federal Rules of Civil Pro-

cedure permts the certfication of a class action where "the part opposing the *100 class has acted or refused to act on grounds that apply generally to the

class, so that final injunctive relief or correspondig declaratory relief is appropriate respectig the class as a whole." Fed.RCiv.P. 23 (b)(2). The Cour may grant 23(b)(2) certfication if it determes that "(1) the positive weight or value to the plaintiffs of the injunctive or declaratory relief sought is predominant even though compensatory or puntive damages are also claimed, and (2) class treatment would be effi-

the Cour is therefore satisfied that the injunctive and declaratory relief sought is predominant and would be sought by reasonable plaintiffs. See Velez 244

F.R.D. at 271 (certifyig a Rule 23(b)(2) liability class, reasonig that "it would serve little purose to award money damages for discrimination without

addressing the institutional strctue that perpetuates it").

It may be that back- and front-pay determations, and monetary damages calculations, for individual class members may not be as amenable to class-based

cient and manageable, thereby achieving an appre-

determation, partcularly in light of individualized

ciable measure of judicial economy." Robinson, 267

performnce, job selection and simlar issues. Rule

F.3d at 164 (internal quotation marks, citation, and

23(c)(4) permts the certfication of class actions with

alteration omitted).

respect to parcular issues. Here, the cour finds that class treatment is appropriate in so far as Plaintiffs

I. Plaintiffs seek several form of relief, including

declarations tht Defendants have violated the law

allege, and seek injunctive and declaratory relief in respect of, pattern or practice disparate treatment and

and discrimiated againt the class on the basis of

the disparate impact of Gristede's alleged company-

gender, a permnent injunction, a judgment directig

wide hig, promotion and compensation practices.

Defendants to intitute policies and practices that

The Cour denies the certfication motion without

eliminate gender disparities in employment opportnities and "eradicate the effect of (their) past and present" practices and to implement "objective standards" for making employment decisions, appoint-

prejudice to the extent it seeks certfication of the

front pay, back payor money damages aspects of Plaintiffs claim, and to the extent it seeks the provi-

sion of individualized notice at ths junctue.

ment of a monitor to ensure compliance with any

injunctive provisions of the judgment, and an award of "all damages sustained as a result" of Defendants' conduct and puntive damages. Among the damages potentially available to Plaintiffs should they succeed, are back pay and front pay, which are individualized equitable form of relief. See Robinson, 267 F.3d at 160. Plaintiffs request the certification of a their injuncRule 23(b)(2) class with respect to all of tive and equitable relief claim, including remedial pay, and that the cour direct the provision of indi-

vidualized notice of the action and an opportty to

(Q 2010 Thomson

CONCLUSION

For the foregoing reasons, the Cour denies Defendants' motions to stre the expert reports of Wiliam T. Bielby and David L. Crawford, and grants Plain-

tiffs' motion to certfy, pursuant to Fed.RCiv.P. 23(b )(2), a class consisting of "all curent and former female Gristede's employees who worked for Gristede's at any tie between November 2,2004 and the date of final judgment in this matter" with respect to Plaintiffs' claims for injunctive and declaratory relief

Reuters. No Claim to Orig. US Gov. Works.

Page 16

267 F.R.D. 86, 108 Fair Empl.Prac.Cas. (BNA) 1396,93 Empl. Prac. Dec. P 43,832 (Cite as: 267 F.R.D. 86) based on Defendants' alleged systemic pattern or

practice intentional discriation, and the allegedly disparate impact of Defendants' hiing, promotion

and compensation policies. Plaintiffs' motion for class certfication is denied without prejudice in all other respects. The pares are directed to proceed in accordance*101 with Judge Pitmn's Order of

March

19,2009. (Docket entry no. 93.)

This Opinon and Order resolves docket entr nos. 69, 77, and 82.

SO

ORDERED.

S.D.N.Y.,2010. Duling v. Gristede's Operating Corp. 267 F.RD. 86, 108 Fair EmpL.Prac.Cas. (BNA) 1396,

93 EmpL. Prac. Dec. P 43,832

END OF DOCUMENT

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Reuters. No Claim to Orig. US Gov. Works.

Westlaw. Page 1

201 F.R.D. 81,143 Lab.Cas. P 34,267, 9 Wage & Hour Cas.2d (BNA) 1646

(Cite as: 201 F.R.D. 81)

Supplementary MateriaL. Most Cited Cases

po

United States District Cour, York. Faty ANSOUMANA, Jacques Legrand Ngouvi, S.D. New

Cour may consider material beyond the pleadings in determng whether to certify a class, for class action puroses under federal procedure rule. Fed.Rules

Civ.Proc.Rule 23, 28 U.S.C.A

Lassana Diara, Moussa Soumhoro, Mamadou Camara, Justin Obiang, Issa Diabate, Sidy Soukona,

Dramane Zoungrana, Individually, and on behalf of all others simlarly situated as Class Representatives,

Plaiiffs, GRISTEDE'S OPERATING CORP.; Great Atlantic and Pacific Tea Company, Inc., d//a A & P; Shopwell, Inc., d//a Food Emporium; Duane Reade, Inc.; Charlie Bauer, individually, and d//a B & B Delivery Service a/k/a Citi Express; Scott Weinstein and Steven Pilavin, individually and d//a Hudson Delivery Service, Inc.; Chelsea Truckig, Inc., ala

Hudson York, Defendants.

No. 00 Civ. 253(AK). May 24,2001.

Low paid workers provided to retailers by labor agents brought suit claiming violations of Fair Labor Standards Act (FLSA) and state minimum wage statute. Workers sought class action certification. The District Cour, Hellerstein, J., held that: (1) numeros-

ity, commonality, tyicality and adequacy of representation requirements were satisfied; (2) common questions regarding whether workers were employees or independent contractors dominated over individual questions; (3) class action was superior method for

il Federal Civil Procedure 170A ~184.5 170A Federal Civil Procedure 170AII Partes l70AII(D) Class Actions

170AIID)3 Parcular Classes Represented 170Ak184 Employees 1 70Akl 84.5 k. In General. Most

Cited Cases

Low paid workers supplied to retailers by labor agents satisfied numerosity requirement, for class action certfication of suit under state mimum wage law, even though it was possible to specifically identify each potential class member; estited class size was over 1,000, and most of

Fed.Rules Civ.Proc.Rule 23(a)(l), 28 U.S.C.A;

N.Y.McKiney's Labor Law § 650 et seq.

il Federal Civil Procedure 170A ~184.5 170A Federal Civil Procedure 170AII Partes

170AiiD) Class Actions 170AIID)3 Paricular Classes Represented 1 70Ak 184 Employees l70Ak184.5 k. In General. Most

adjudicatig dispute; and (4) exercise of supplemen-

tal jurisdiction over state minimum wage claims was appropriate.

Class certfied.

them lacked resources to

sue individually and would be afraid of reprisals.

Cited Cases

Low paid workers supplied to retailers by labor agents satisfied commonality requirement, for class action certification of suit under state mimum wage law; essential to all cases was question whether

West Headnotes

il Federal Civil Procedure 170A ~172

workers were independent contractors or employees of retailers, and question predomiated over individual questions based on work performed and applicable pay. Fed.Rules Civ.Proc.Rule 23

(a)(2), 28

U.S.C.A; N.Y.McKiney's Labor Law § 650 et seq. l70A Federal Civil Procedure 170AII Partes

l70AII(D) Class Actions 170AIID)2 Proceedigs

170Akl72 k. Evidence; Pleadings and

il Federal Civil Procedure 170A ~184.5 170A Federal Civil Procedure

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Page

2

201 F.RD. 81, 143 Lab.Cas. P 34,267, 9 Wage & Hour Cas.2d (BNA) 1646

(Cite as: 201 F.R.D. 81)

l70AII Pares 170AIID) Class Actions

II Federal Civil Procedure 170A ~184.5

l70AIID)3 Parcular Classes Represented

1 70Ak184 Employees l70Ak184.5 k. In General. Most

Cited Cases

Low paid workers supplied to retailers by labor

170A Federal Civil Procedure

l70AII Pares 170AIID) Class Actions 170AII(D)3 Parcular Classes Represented

agents satisfied tyicality requirement, for class ac-

1 70Akl 84 Employees

tion certfication of suit under state mimum wage law; all were placed by labor agents, and allegedly

paid below applicable mimum wage and denied overtme benefits. Fed.Rules Civ.Proc.Rule 23(a)(3),

28 U.S.C.A; N.Y.McKiney's Labor Law § 650 et seq.

æ Federal Civil Procedure 170A ~184.5 170A Federal Civil Procedure 170AII Pares 170AII(D) Class Actions

170Ak184.5 k. In General. Most

Cited Cases

Low paid workers supplied to retailers by labor agents satisfied requirement, for class action certifi-

cation of suit under state mium wage law, that common questions predomiate over individual questions; essential to all cases was question whether workers were independent contractors or employees of retailers, and question predomiated over individual questions based on work performed and applicable pay. Fed.Rules Civ.Proc.Rule 23(b)(3), 28

U.S.C.A.; N.Y.McKinney's Labor Law § 650 et seq.

170AIID)3 Parcular Classes Represented 1 70Akl 84 Employees

ll Federal Civil Procedure 170A ~184.5

l70Ak184.5 k. In General. Most

Cited Cases

Low paid workers supplied to retailers by labor agents satisfied adequacy of representation require-

ment for class action certfication of suit under state

minlum wage law, even though only one named plaintiff was still working for retailer and some named plaintiffs were imgrants. Fed.Rules Civ.Proc.Rule Rule 23 (a)(4), 28 U.S.c.A.;

170A Federal Civil Procedure 170AII Pares 170AiiD) Class Actions l70AiiD)3 Parcular Classes Represented

1 70Akl 84 Employees l70Ak184.5 k. In General. Most

Cited Cases

N.Y.McKiney's Labor Law § 650 et seq.

Low paid workers supplied to retailers by labor agents satisfied requirement, for class action certifi-

ff Federal Civil Procedure 170A ~184.5

cation of suit under state mimum wage law, that class action was superior to other methods of handling suit; workers were simultaneously bringing

consolidated suit under federal wage and hour law,

170A Federal Civil Procedure i 70AII Partes

and both could be conveniently handled under proce-

l70AIID) Class Actions 170AiiD)3 Parcular Classes Represented

l70Ak184 Employees 170Ak184.5 k. In General. Most

dure rule governg class action. Fair Labor Standards Act of 1938, § l6(b), 29 U.S.C.A § 216(b);

Fed.Rules Civ.Proc.Rule 23(b)(3), 28 U.S.C.A.;

N.Y.McKiney's Labor Law § 650 et seq.

Cited Cases

Suit by low wage workers, supplied to retailers by

labor agents, claimig violations of state minium wage law, would not be certfied as class action under federal procedure rule governng action or inaction on grounds generally applicable to class, making injunctive relief appropriate; main purose of suit

was to secure backpay for work already done. Fed.Rules Civ.Proc.Rule 23

(b)(2), 28 U.S.C.A.;

N.Y.McKinney's Labor Law § 650 et seq.

I2 Federal Courts 170B ~16 170B Federal Cours

170m Jursdiction and Powers in General 170BI(A) In General 170Bk14 Jursdiction of Entie Contro-

versy; Pendent Jursdiction

l70Bk 16k. Labor Relations. Most

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Page 3

201 F.RD. 81, 143 Lab.Cas. P 34,267, 9 Wage & Hour Cas.2d (BNA) 1646

(Cite as: 201 F.R.D. 81) Cited Cases Cour considerig whether low paid workers supplied

to retailers by labor agents were being denied compensation under Fair Labor Standards Act (FLSA),

would exercise supplemental jursdiction over claims under state minimum wage statute, despite claim that longer statute of limtations under state statute would cause those claims to predominate over FLSA claim.

Portl-to-Portal Act of 1947, § 6(a), 29 U.S.C.A § 255(a); N.Y.McKiney's Labor Law §§ 198, subd. 3, 663, subd. 3.

I1 Federal Courts 170B ~16

Il Federal Courts 170B ~334 l70B Federal Cour l70BV Amount or Value in Controversy Affecting Jursdiction

170Bk331 Cases Subject to Pecunary Limta-

tion 170Bk334 k. Labor and Employment;

Seamen and Longshoremen. Most Cited Cases

There was no mimum amount in controversy to be satisfied, in suit brought by low paid workers supplied to retailer by labor agents raising federal question that they were undercompensated under Fair

Labor Standards Act, and there was consequently no

170B Federal Cours

170BI Jurisdiction and Powers in General 170BI(A) In General

170Bk14 Jurisdiction of Entire Controversy; Pendent Jursdiction

170Bk16 k. Labor Relations. Most

mium amount required for supplemental jurisdiction over claim under state minimum wage statute.

U.S.C.A Const. Ar. 3, § 2, cl. 1; 28 U.S.CA. § 1367; Fair Labor Standards Act of 1938, § 16, 29

U.S.C.A § 216; N.Y.McKiney's Labor Law § 650

Cited Cases Federal district cour considerig whether low paid

et seq.

workers supplied to retailers by labor agents were

.l Federal Courts 170B ~16

denied compensation due them under Fair Labor

Standards Act (FLSA) had supplemental jursdiction over claims that might be made by workers under

state mium wage statute, regardless of whether those workers had elected to join FLSA action. U.S.C.A. Const. Ar. 3, § 2, c1. 1; 28 U.S.C.A. §

1367(a); Fair Labor Standards Act of 1938, § l6(b), 29 U.S.C.A. § 2l6(b); N.Y.McKinney's Labor Law § 650 et seq.

170B Federal Cours

170BI Jurisdiction and Powers in General 170BI(A) In General

l70Bk14 Jurisdiction of Entire Controversy; Pendent Jurisdiction

170Bk16 k. Labor Relations. Most Cited Cases Trial cour would exercise supplemental jursdiction

1! Federal Courts 170B ~16

over class action claims by low paid workers supplied to retailers by labor agents, that they were de-

170B Federal Cours

ute, while considerig simlar claim under Fair La-

170BI Jursdiction and Powers in General

170BI(A) In General 170Bk14 Jursdiction of Entie Contro-

versy; Pendent Jurisdiction

170Bkl6 k. Labor Relations. Most Cited Cases

nied compensation under state mium wage statbor Standards Act (FLSA), even though state statute presented allegedly novel questions arsing from liquidated damages provision lost uness claimant opted out of class action. U.S.CA. Const. Ar. 3, § 2, c1. 1; 28 U.S.C.A § 1367; N.Y.McKiney's Labor Law §§ 198, subd. I-a, 663.

Cour could exercise supplemental jursdiction over claim of state minium wage law violations, by low

paid workers supplied to retailers by labor agents, without being required in each instace to determne whether complaing worker had viable claim under

Fair Labor Standards Act (FLSA) to which state claim could be considered supplemental. U.S.C.A.

Const. Ar. 3, § 2, c1. 1; 28 U.S.CA. § 1367;

N.Y.McKinney's Labor Law § 650 et seq.

JJ Federal Courts 170B ~16 170B Federal Cours l70BI Jursdiction and Powers in General

170BI(A) In General 170Bk14 Jursdiction of Entie Contro-

versy; Pendent Jurisdiction

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201 F.R.D. 81, 143 Lab.Cas. P 34,267, 9 Wage & Hour Cas.2d (BNA) 1646 (Cite as: 201 F.R.D. 81)

170Bk16 k. Labor Relations. Most Cited Cases

Trial cour would exercise supplemental jursdiction over class action claims by low paid workers supplied to retailers by labor agents, that they were de-

nied compensation under state mium wage stat-

Plaintifs are unskilled workers who were assigned by labor agents to stores of supermrket and drgstore chain in New York City, to deliver products from those stores to retail customers according to the intrctions of supervisors in the stores. The super-

bor Standards Act (FLSA), despite claim that jur

market and drgstore chains considered the Plaintiffs independent contractors, not employees, and the la-

would be confsed. U.S.C.A Const. Ar. 3, § 2, cl. 1;

bor agents who gathered and assigned them also con-

28 U.S.C.A. § 1367; N.Y.McKiney's Labor Law §§ 198, subd. l-a, 663.

sidered them independent contractors. In consequence, Plaintiffs allege, they were not paid mii-

ute, while considerig simlar claims under Fair La-

*83 Catherine K. Ruckelshaus,James Wiliams and

mum wages or overtme, and they were not provided

Laurence E. Norton, II, National Employment Law

with other benefits guaranteed to employees by fed-

Project, New York City, Adam T. Klein and Scott Moss, Outten & Golden LLP, New York City, for

eral and state laws.

Plaintiffs.

Plaintiffs sue under the Federal Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 216, and under the New

Randy M. Mastro, Lawrence 1. La Sala, and Andrew Rotstein, Gibson, Dunn & Crutcher LLP, New York

York Minimum Wage Act, N.Y. Lab. L. §§ 650 et seq., to recover unpaid compensation guaranteed by

City, for Gristede's Operatig Corp.

those laws and to enjoin fuher violations. Section 2. of the FLSA allows individuals to become

David G. Januszewski and Cathy Smith, Cahill

pares to a collective action under the FLSA by filing

Gordon & Reindel, New York City, for Great Atlantic and Pacific Tea Company, Inc., d.b.a. A & P, and Shopwell, Inc., d.b.a. Food Emporium.

consents. Approximately 350 delivery workers have

Daniel F. Murhy, Jr., James E. McGrath, II, Larissa A. Cason, and Alexander Tchernovitz, Putney, Twombly, Hall & Hirson, LLP, New York City, for

filed such consents. Plaintiffs also sue under the Minum Wage Act for themselves and on behalf of a class of similarly situated delivery workers, *84 and have fied a motion for class certfication pursuant to Rule 23 of the Federal Rules of Civil Procedure in

order to pursue their state-law claim.

Duane Reade, Inc.

Stephen D. Hans, Stephen D. Hans & Associates, P.C., Rego Park, NY, for Charlie Bauer, individually, and d.b.a. B & B Delivery Service a.k.a. Citi Express.

The overall question presented is whether a plaintiff class should be certfied. Three principal issues are imlicated. First, does the proposed class satisfy the requirements of

Rule 23(a) and (b)? Second, may ths

Cour exercise supplemental jursdiction, pursuant to

367(a), over the state law claims of

Marin Gringer, Frankin Griger & Lipp, P.C., Gar-

28 U.S.c. § 1

den City, NY, for Scott Weinstein and Steven Pi-

collective action? Thid, may this Cour exercise

lavin, individually, and d.b.a. Hudson Delivery Service, Inc., and Chelsea Truckig, Inc., a.k.a. Hudson York.

Mary Hughes, Assistant Attorney General, for Eliot Spitzer, Attorney General of the State of New York, Amicus Curae.

MEMORANDUM AND ORDER GRANTING PLAINTIFFS' MOTION FOR CLASS CERTIFICATION

HELLERSTEIN, Distrct Judge.

proposed class members who have joined the federal

supplemental jursdiction over individuals who are not part of the federal collective action, but who belong to the proposed class?

For the reasons discussed below, I grant Plaintiffs'

motion for class certfication. I hold that the criteria of Rule 23, and the conditions favorig supplemental jurisdiction, are satisfied. Ths opinon constitutes my fact and conclusions oflaw. findings of FACTS

The Plaintiffs are unkilled imgrants who have

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201 F.RD. 81, 143 Lab.Cas. P 34,267, 9 Wage & Hour Cas.2d (BNA) 1646

(Cite as: 201 F.R.D. 81) been workig as delivery workers, delivering to cusNew York City supermrket and drgstore tomers of

chains. The Plaintiffs claim to have worked 60 to 84 hours per week, six or seven days each week, and to have been paid only one to two dollars per hour

without overtime compensation. Plaintiffs state causes of action under the Fair Labor Standards Act and the New York State Minmum Wage Act.

FLSA, not a class action brought under Rule 23, Fed.R.Civ.P.FNI

FNl. The consent procedures of29 U.S.C. § ll provide for a collective action, not a class action. Although cases frequently make loose reference to certfyig such col-

lective actions, see, e.g., Foster v. The Food

Emporium. 2000 WL 1737858, at *1 The Defendants fall into two groups:

(S.D.N.Y. April 26, 2000); Hoffmann v.

Sbarro. Inc.. 982 F.Supp. 249, 263 1. The users of Plaintiffs' services: Defendants

Great Atlantic and Pacific Tea Company, Inc., d//a A & P; Shopwell, Inc., d//a Food Empo-

rium; Gristede's Operatig Corp.; and Duane Reade, Inc.;

(S.D.N.Y.1997), neither the Federal Rules

nor the FLSA requires that a motion for cer-

tification be made. Nevertheless, a district judge should be concerned about fair notice

and other protections for partes who are not

directly before the cour. See, e.g.,

2. The labor agents: Charlie Bauer, individually

and d//a B & B Delivery Service ala Citi Ex-

Hoffmann-La Roche Inc. v. Sperling. 493 U.S. 165, 110 S.Ct. 482, 107 L.Ed.2d 480

press; Scott Weinstein and Steven Pilavin, indi-

(1989) (district cour has discretion to regu-

vidually and d//a Hudson Delivery Service, Inc.;

consents).

and Chelsea Truckig, Inc. ala Hudson York.

These Defendants gathered Plaintiffs and directed them to work at stores owned and operated by the other Defendants.

The complaint, fied January 13, 2000, alleges that Defendants violated state and federal labor laws though the misclassification of the Plaintiffs as inde-

pendent contractors. Plaintiffs allege that the stores to which they were assigned routinely set their schedules, managed their pay, and supervised their work.

Plaintiffs allege that they lack specialized skills, education and traing, and that they provided no re-

sources or capital investment to the enterprises to which they had been assigned. Their work, they allege, was performed on-site, at Defendants' stores, and they should have been considered employees of such stores.

late notices to those wishig to file FLSA There is no opt-in requirement, analogous to the procedure authorized by the FLSA, under the New York Minmum Wage Act, N.Y. Lab. L. § 650 et seq. Accordingly, Plaintiffs seek class certification under

*85Rule 23 with respect to their state law Minmum Wage Act claims. The class they propose would inelude those persons who were assigned by the Defendant labor agents to the Defendant supermrket and drgstore chain, who worked for such chains as delivery persons and/or dispatchers after January 13,

1994,FN2 and who were not paid mium wages or overtme premium pay, or spread-of-hours compenthe New York sation, from Defendants in violation of Minmum Wage Act. FN2. The Complaint defines the class period as ending on the date of entr of judgment.

The Fair Labor Standards Act, 29 U.S.C. § 216(b), provides that "(n)o employee shall be a part plaintiff

to (an action brought under the FLSA) unless he gives his consent in wrting to become such a par

and such consent is filed in the cour in which such action is brought." This opt-in requirement thus relaw to stricts the right of recovery under the federal those who affirtively file consents to partcipate in

the suit. At the tie of arguent, approximtely 350 Plaintiffs had fied consents. The federal action thus is a collective action under Section 21 6(b) of the

Plaintiffs' motion for class certfication, however, specifies an end date of January

13, 2000, the day the Complaint was fied. In my discretion, and in the interests of fair-

ness and effciency of case maagement, I fix the end date of the class period as the

date of ths decision.

Plaintiffs' motion for class certfication was fied August 31, 2000. By stipulation and order filed September 18, 2000, I adjoured the opposition and reply

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201 F.RD. 81, 143 Lab.Cas. P 34,267, 9 Wage & Hour Cas.2d (BNA) 1646

(Cite as: 201 F.R.D.81) deadlines to allow the pares to conduct discovery

relevant to class certfication. Following such discovery, opposition and reply briefs were filed, and the

New York State Attomey General submitted an

action proceeding in a single cour presents the best means of resolving ths dispute with efficiency and the greatest potential for a fair and fmal resolution for all pares involved.

amicus curiae brief. Also, on November 28, 2000, Defendants A & P and Food Emporium ("A & P") served Plaintiffs with an Offer of Judgment pursuant to Rule 68 of the Federal Rules of Civil Procedure,

proposing a settlement of the case as againt those

Numerosity il Rule 23(a)(n requires that the proposed class be

tiffs filed an Acceptance of the Rule 68 Offer of

"so numerous that joinder of all members is impracticable." Fed.R.Civ.P. 23(a). In the Second Circuit, "numerosity is presumed at a level of 40 members." Hyde Park. 47 Consolidated Rail Corp. v. Town of

Judgment, attachig a proposed order of judgment for

F.3d 473,483 (2d Cir.1995).

Defendants. The Rule 68 offer was conditioned upon certfication of a class. On December 7, 2000, Plainmy endorsement. By order dated December 11, 2000, I declined to endorse the order of judgment, ruling

that it was inappropriate for me to consider the fairness of the proposed settlement until after a class was

certfied and class members had an opportty to object. RULE 23 CLASS CERTIFICATION CRITERIA il The Plaintiffs bear the burden of proof with re-

spect to a motion for class certfication. The first step requires the Plaintiffs to show that the four criteria of Federal Rule of Civil Procedure 23(a) are satisfied: numerosity of plaintiffs, commonality of issues, tyi-

Plaintiffs estimate an eventual total class size of 1,000. Of

ths number, approximately 345 have opted

to join the federal collective action as Plaintiffs, and presumbly would not opt out of a state law class that would present an opportty for a possibly larger recovery under state law. These numbers satisfy the numerosity requirement of Rule 23(a)(l). I also find it fair to consider that *86 the members of this group would not be likely to fie individual suits. Their lack of adequate financial resources or access to lawyers, their fear of reprisals (especially in relation to the

immgrant status of many), the transient natue of their work, and other similar factors suggest that in-

cality of partes, and adequacy of representation.

dividual suits as an alternative to a class action are

Once the 23(a) criteria are established, the Plaintiffs

not practical. See Robidoux v. Celani. 987 F.2d 931,

must then demonstrate that they are entitled to certfication in at least one of the 23(b) categories. "When

936 (2d Cir.1993) (the standard is "impracticable," not "impossible").

considerig a motion for class certfication, cours should consider the allegations in the complaint as

tre." Hirschfeld v. Stone, 193 F.RD. 175, 182

Defendants' arguents that the proposed class is in-

suffciently numerous to satisfy this requiement rest

(S.D.N.Y.2000) (citing Shelter Realty Corp. v. Alled

pririly on their arguent that the potential Plain-

Maintenance Corp.. 574 F.2d 656, 661 n. 15 (2d

tiffs can be identified, and that individualized deter-

Cir.1978)). However, a cour may consider material

beyond the pleadings in determg whether to cerNew York. 198 F.R.D. 409, 413 n. 5 (S.D.N.y.200n. Lastly, "(i)n deciding tify a class. Daniels v. City of

a certification motion, distrct cours must not consider or resolve the merits of the claims of the purported class." Caridad v. Metro-North Commuter

R.R.. 191 F.3d 283,293 (2d Cir.l999), cert. denied, 529 U.S. 1107, 120 S.Ct. 1959, 146 L.Ed.2d 791

(2000).

As I ruled at argument, ths case presents essentially a claim for damages that must satisfy the requirements of Rules 23(a) and (b)(3), not (b)(2); the criteria provided by these rules are satisfied; and a class

minations of liabilty and damages will predominate over the common issues of law and fact. However, at ths stage, I must accept the allegations of the complaint as tre. See Shelter Realty Corp. v. Alled

Maintenance Corp.. 574 F.2d 656, 661 n. 15 (2d

Cir.1978). It is clear from the complaint that individualized questions concerng the number of hours worked, overte, etc., wil not predomiate over the larger question of the case, and, as such, Defendants have failed to demonstrate that the proposed class is inufficiently numerous to warrant class action status. Commonality il The second requirement of

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Rule 23(a) is that Class

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201 F.RD. 81, 143 Lab.Cas. P 34,267, 9 Wage & Hour Cas.2d (BNA) 1646

(Cite as: 201 F.R.D. 81) members share in common "questions oflaw or fact."

same course of events and each class member

"(A) single common question may be sufficient to

makes simlar legal arguents to prove the defen-

satisfy this rule." Marisol A. ex reI. Forbes v.

Giuliani, 929 F.Supp. 662, 690 (S.D.N.Y.l 996), affd, 126 F.3d 372 (2d Cir.1997).

dant's liabilty ... When it is alleged that the same unawfl conduct was directed at or affected both the named plaintiff and the class sought to be represented, the tyicality requirement is usually met

Plaintiffs allege that there is substantial commonality

among themselves. Durg the relevant period, each Plaintiff worked at the Defendant stores providing low-skill delivery services that were integrated into the stores' businesses; each was engaged and placed by the Defendant labor agents; and each allegedly

irespective of mior variations in the fact patterns underlying individual claims. Robidoux v. Celani. 987 F.2d 931, 936-37 (2d

Cir.1993) (citations omitted). See also Rossini v. Ogilvv & Mather. Inc.. 798 F.2d 590, 598 (2d

received pay below minium wage, without any

Cir.1986) (tyicality requirement satisfied by evi-

overtime or spread-of-hours pay.FN3 The central issue posed by the case is whether the Plaintiffs were em-

dence indicatig that employer discriated in same general fashion *87 againt class representatives and other members of class). "A difference in damages arising from a disparity in injures among the plaintiff class does not preclude tyicality." Duprey v. Connecticut Dep't of Motor Vehicles, 191 F.R.D. 329,

ployees or independent contractors, and the consequences of the resolution of that issue in relation to minimum wage, overtme, spread-of-hours, obligations of record maintenance, and like issues. Common questions of law and fact predomiate. The differences among the Plaintiffs as to the number of hours worked, the precise work they did, and the amount of pay they received concern the amount of damages to which any individual Plaintiff might be entitled if and when liability is found. "It is wellestablished that individual questions with respect to damages wil not defeat class certfication or render a

337 (D.Conn.2000).

Plaintiffs contend that all of the class members, including the proposed representatives, experienced the same workig conditions and therefore have the same claims. They all worked at the Defendant stores; they all were hied and placed by the Defendant labor

agents; and they all were paid below mium wage

proposed representative inadequate uness that issue creates a confict which goes to the heart of the law-

and denied overtme pay.

suit." In re AM Int'l, Inc. Securities Litigation. 108

Defendants argue that the elements of each individual's claims vary considerably. Some Plaintiffs were

F.R.D. 190, 196 (S.D.N.Y.1985).

required to perform tasks other than deliveries, while

FN3. Overtme is premium pay for hours worked additional to a specified maximum.

Spread-of-hours pay is premium pay for hours worked before the norml starting time, or after the norml ending time, of a workday.

periods of tie and for different levels of compensa-

tion. Therefore, Defendants argue, the claim of the named Plaintiffs cannot be "tyical" of those of all

I thus find that Plaintiffs have carred their burden of demonstrating common issues of law and fact shared by the class as a whole. Typicality il Rule 23(a)(3) requires that "the claims or defenses of the representative partes are tyical of the claims or defenses of

some Plaintiffs were not. One of the named Plaintiffs, Mamadou Camara, was a "dispatcher," not a delivery person. Plaintiffs worked different hours at different locations for different employers, during different

the class."

Rule 23(a)(3)'s tyicality requirement is satisfied when each class member's claim arses from the

class members.

Again, it bears emphasizing that the differences cited by the Defendants do not underme the central, specific claim presented by the Plaintiffs as a group.

Differences concerng for whom any particular Plaintiff worked, or for what partcular number of hours, cannot underme the conclusion that each

putative class member's claim arise from the same course of events and each class member wil make a simlar legal argument to demonstrate liability. Accordingly, I conclude that the named representatives'

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201 F.R.D. 81, 143 Lab.Cas. P 34,267, 9 Wage & Hour Cas.2d (BNA) 1646

(Cite as: 201 F.R.D.81) claims are sufficiently tyical of those of the pro-

Rule 23

(b)

(2)

Requirements

posed class as a whole.

IQ Plaintiffs seek certfication under Rule 23(b)(2), Adequacy il Rule 23(a)(4) requires that the representative par-

ties "fairly and adequately protect the interests of the class." To demonstrate satisfactorily the requirement

of adequacy, the movant must demonstrate that " 'class counsel is qualified, experienced, and generally able to conduct the litigation.' Plaintiffs must also

alleging that Defendants have "acted or refused to act on grounds generally applicable to the class, thereby

makig final injunctive relief or corresponding declaratory relief appropriate with respect to the class as *88 a whole." Fed.RCiv.P. 23

(b)(2). Plaintiffs

argue that class certfication under Rule 23(b)(2) is common for employment class actions, and that back pay can be awarded incidental to injunctive and de-

demonstrate that there is no confict of interest be-

claratory relief. See, e.g., Martens v. Smith Barney,

tween the named plaintiffs and other members of the plaintiff class." Marisol A. ex reI. Forbes v. Giuliani, 126 F.3d 372, 378 (2d Cir.1997). Under the confict

quence of Plaintiffs' arguent is that they could

of interest inquir, "only a confict that goes to the very subject matter of the litigation wil defeat a part's claim of representative status." Martens v.

Smith Barney. 181 F.R.D. 243, 259 (S.D.N.Y.1998)

181 F.RD. 243, 260 (S.D.N.Y.1998). The conseavoid the individualized notice requirements pro-

vided in Rule 23(c) for a Rule 23(b)(3) class. In this case, however, the recovery of individualized

damages will predomiate, and "the best notice practicable under the circumtances, including individual

(citation omitted).

notice to all members who can be identified though

Plaintiffs' counsel, Adam Klein and Scott Moss of Outten & Golden LLP and Catherie K. Ruckelshaus,

James Wiliams and Laurence E. Norton, II of the National Employment Law Project, are experienced and well-qualified in the fields of labor law and class litigation and, in particular, wage-and-hour class litigation. With respect to potential conficts between the proposed named Plaintiffs and the class members, given the commonality and tyicality of claim

among the Plaintiffs, see supra, I find that there are no antagonistic interests that bear directly upon the subject matter of the litigation. Defendants' arguents that the named Plaintiffs' interests confict with those of other potential class

members are unupported. Because this is a suit primarily for money damages stemmg from past ac-

tions, it is not relevant that only one of the named Plaintiffs is stil employed as a delivery person. Further concerns raised by the Defendants concerng the liquidated damages aspect of the state law involved in this case are irelevant for the reasons discussed later in ths opinon. Finally, Defendants' con-

cern regarding the imgration status of the various named Plaintiffs as bearig on their potential credibility and fitness as class representatives are without merit, and I find no inIrty with respect to the ade-

quacy of counsel or the named Plaintiffs as representatives of ths putative class.

reasonable effort," is required. See Fed.R.Civ.P.

23(c)(2); Eisen v. Carlisle & Jacquelin. 391 F.2d 555, 564 (2d Cir.l968) ("(s)ubsection (b)(2) was never intended to cover cases ... where the primary

claim is for damages, but is only applicable where the relief sought is exclusively or predominantly injunc-

tive or declaratory."); see also Allson v. Citgo Petroleum Corp.. 151 F.3d 402,413 (5th Cir.1998); Parker v. Time Warner Entertainment Co.. 198 F.R.D. 374 (E.D.N.Y.2001); Robinson v. Metro-North Commuter Railroad Co.. 197 F.R.D. 85 (S.D.N.Y.2000). Plain-

tiffs want monetary compensation, to the extent they

were not paid mium wage and overtme. This is not a Rule 23(b)(2) class.

Certfying a Rule 23(b)(3) class is appropriate for an additional reason: to allow members to be fully advised of their rights and options in a notice approved

by the cour, and thereafter to opt-out of the class. The interplay of the Minmum Wage Act and the Civil Practice Law and Rules makes this procedure important. Those aggreved by a wilful violation of the New York Minum Wage Act may recover liquidated damages equivalent to twenty-five per cent of unpaid wages found to be due them. N.Y. Lab. L. §§

198, subd. l-a, 663. However, they cannot do so as part of a class action. See N.Y.C.P.L.R. 901(b).FN4

Hence, those affected must be given an option: to gain the convenience of class membership, or optigout and suing individually.FN5 See Brzvchnalski v.

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201 F.RD. 81,143 Lab.Cas. P 34,267, 9 Wage & Hour Cas.2d (BNA) 1646

(Cite as: 201 F.R.D. 81) Unesco, Inc., 35 F.Supp.2d 351, 353 (S.D.N.Y.1999)

(citing Pesantez v. Boyle Envtl. Servs.. Inc.. 251 A.D.2d 11, 11 Ost Dept.

1998)

("To the extent certain

individuals may wish to pursue puntive claim pur-

suant to Labor Law § 198(I-a), which cannot be maintained in a class action (CPLR 90l(bJ ), they

only individual members, and that a class action is superior to other available methods for the *89 fair and efficient adjudication of the controversy." The

predomiance criterion is, in effect, a strcter version of the commonality requirement of Rule 23(a)(2). If

may opt out of the class action ....") (citations omit-

common issues do not predominate over individual factual issues, a class action is "not a superior method

ted)). Although some cours have certfied classes under Rule 23(b)(2) and have preserved opt-out

Blue Cross and Blue Shield. 194 F.R.D. 66, 72

rights for individuals at a later date, see, e.g., Martens v. Smith Barney. 181 F.R.D. 243, 260

(E.D.N.Y.2000).

(S.D.N.Y.1998), for example, between the liabilty

As I ruled previously, Plaintiffs each raise the same

stage and the damages stage, see, e.g., Holmes v.

underlying, contested issue: whether the Defendant

Continental Can Co.. 706 F.2d 1144, 1155, 1157

stores, in contravention of applicable federal and

(lIth Cir. 1 983), I believe that such a bifucated procedure complicates a class action, affects due process

state labor law, should have treated the Plaintiffs as

rights, and increases problems of manageability. I decline to follow that procedure in ths case.

same issue applies to the Defendants who were the labor agents. This single issue predominates over all other factual and legal issues presented, because each proposed Plaintiff class member did substantially the

FN4. CPLR 90l(b) provides that "(u)nless a statute creatig or imposing a penalty, or a minimum measure of recovery specifically

authories the recovery thereof in a class action, an action to recover a penalty, or

for fair and effcient adjudication." Pecere v. Empire

employees, rather than independent contractors. The

same tye of work, for the same tye of employer,

and was assigned in the same sort of way, during the relevant time period. Accordingly, I find that common issues predomiate over individual issues.

minimum measure of recovery created or imposed by statute may not be maintained as a class action."

il i find also that a class action is superior to other

available methods for the fair and effcient adjudication of the controversy. Fed.R.Civ.P. 23(b)(3). The

FN5. Defendants argue that New York State

collective action involves approximtely 345 present

law bars class actions on state wage claim

and former deliveryen for Gristede's, Food Empo-

seekig liquidated damages. The Defen-

rium A & P, and Duane Reade who have filed consents to join the Plaintiffs who originally fied this

dants' contentions are treated in a later section, discussing whether the state law claim at issue here raise novel or complex issues of state law.

lawsuit. Section 2l6(b) of Title 29, United States

Code, provides for ths procedure, but does not instrct the distrct judge how and to what extent those

fiing consents may partcipate and control the litigaRule 23(b)(3) Requirements: Predominance of

Com-

mon Questions and Superiority of Class Action oyer Alternatiyes

tion and be bound by any settlement or trial, or what

kids of notice, if any, they are entitled to receive. However, the tasks that I wil have to pedorm in order to manage these partes and their claims are essentially the same as those required for class actions

II Plaintiffs seek certfication under Rule 23(b)(3) if

they fail to qualify under Rule 23(b)(2). I grant Plaintiffs' motion. Accordingly, Plaintiffs wil be required to direct to the members of the class "the best notice practicable under the circumtances, including indi-

vidual notice to all members who can be identified though reasonable effort." Fed.RCiv.P. 23(c)(2).

Rule 23(bX3) requires plaintiffs to demonstrate that "the questions of law or fact common to the members of the class predomiate over any questions affectig

generally, and considerable guidance exists in the developed jursprudence for class actions under Rule

23. As with members of a Rule 23 class, distrct judges must oversee the fairess and suffciency of

notice to those who have become partes by their filed consents. The distrct judge must be assured that

counel are competent and responsive to all for whom they act, that there be no discriation among the pares, that settlements be fair and that all have equal opportty to benefit therefrom. The protec-

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201 F.RD. 81, 143 Lab.Cas. P 34,267, 9 Wage & Hour Cas.2d (BNA) 1646

(Cite as: 201 F.R.D. 81)

tions of Rule 23, although diected to class actions, can be easily adapted to the management of a collecthe FLSA. Federal Rule of Civil Procedure 16, providig for the ''just, speedy, and inexpensive disposition" of all civil cases

tive action under section 216(b) of

before a distrct cour, gives me ample discretion to supervise these proceedings and to tae wisdom from Civil Procedure, including Rule 23, to accomplish those goals.

the entie body of

v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 16

L.Ed.2d 218 (1966))). Distrct cours traditionally have exercised ths discretion in favor of supplemental jursdiction where, as here, "considerations of

judicial economy, convenience and fairess to litigants" weigh in favor of hearing the state law claim at the same time as the federal

law claim. Gibbs, 383

U.S. at 726, 86 S.Ct. 1130. FN6. Section 1367(a) provides:

With these considerations in mid, it is clear to me that a class action is superior to other available meth-

gate the predomiant common questions substantially

(I)n any civil action of which the district cours have original jursdiction, the district cours shall have supplemental jurisdiction over all other claim that are so re-

ods for the fair and efficient adjudication of the controversy. The interest of the class as a whole to liti-

outweighs any interest by individual members to

lated to claim in the action within such

bring and prosecute separate actions. These common questions are best litigated in a single foru and the proceedings already undertaken cause any separate actions in ths and other forums to be wasteful and

original jursdiction that they form the

inefficient. Finally, the difficulties likely to be encountered in the management of the class portion of

My jursdictional analysis must treat two distinct

this action are not likely to be different or greater

than in the management of the collective portion of ths action. Thus, the specific considerations set out

in Rule 23(b)(3)(A) through (D) are satisfied and class certification is warranted.

same case or controversy under Arcle III of

the United States Constitution....

categories of actual and potential plaintiffs in the case before me: those individuals who have stated federal

claims, either by originally filing the action or by filing consents, and those individuals who have only state claim. A basic argument made by Defendants

is that the longer period of limtations under New York's Minum Wage Act (six years, compared to

SUBJECT MATTER JURISDICTION

two year under the FLSA (thee years for wilful violations), compare N.Y. Lab. L. §§ 198, suM. 3, 663,

12 Having decided that common questions of law

and fact predomiate among the members of the

suM. 3 with 29 U.S.C. § 255(a)) would cause the state law claims to predomiate over the federal

class, that my management of the class action of the

claim, and that I should therefore exercise my dis-

Minum Wage Act claims is consistent with my management of the collective action of the FLSA claims, and that there is a substantial judicial interest to avoid additional and unnecessary lawsuits of simlar issues in other state and federal cours, I must now decide whether I have jurisdiction to hear the Plaintiffs' state law claims. The issue is one of supplemental jurisdiction: whether the claims under the FLSA and under the Minmum Wage Act are "so related ... tht they form part of the *90 same case or contro-

versy under Arcle II of the United States Constitu-

cretion to dismiss the state claims and allow them to

be fied in the New York cours. See 28 U.S.C. § 1367(c); Perez v, Ortiz, 849 F.2d 793, 798 (2d Cir.1988).FN7

FN7. Section 1367(c), enacted in 1990 and

codifyig numerous cases, provides the grounds for declinng to exercise supple-

mental jurisdiction. It provides that a district cour may decline to exercise supplemental jursdiction over a claim if:

tion;" 28 U.S.C. § 1367(a); FN6 whether, tht is, they

form "a common nucleus of operative fact' " and "would ordinarily be tred in one judicial proceed-

ing." MMT Sales, Inc. v. Channel 53 Inc., 1993 WL 541242 (S.D.N.Y. Dec. 27, 1993) (quoting Promisel v. First American Artificial Flowers Inc., 943 F.2d 251,254 (2d Cir.1991) (citing United Mine Workers

(1) the Claim raises a novel or complex issue of State law,

(2) the claim substantially predomiates over the claim or claim over which the

district cour has original jurisdiction,

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201 F.R.D. 81, 143 Lab.Cas. P 34,267, 9 Wage & Hour Cas.2d (BNA) 1646 (Cite as: 201 F.R.D. 81) oped to provide an efficient procedural device to re(3) the distrct cour has dismissed all

claim over which it has original jursdiction, or

(4) in exceptional circumtances, there are other compelling reasons for decling ju-

risdiction.

solve common claim belonging to a large number of

simlarly situated people. Rather than have their claims brought in different cours and in a multiplicity of proceedings, or not brought at all because of the expense and burden on each individual litigant,

the class action device was developed as a fairer and more efficient procedure for presentig and resolving simlar claim. General Tel. Co. ofSWv. Falcon. 457

U.S. 147, 159, 102 S.Ct. 2364, 72 L.Ed.2d 740

Defendants' argument of predomiance is not persua-

sive. If Plaintiffs are able to show that they were employees, not independent contractors, durg their

most recent two years of employment, they probably

wil prevail as well for earlier years. Similarly, if Plaintiffs fail in their proofs as to the last two years, they are likely to fail as well for the earlier years. The essential facts and issues are likely to be the same, and pre-tral proceedings are not likely to be materi-

ally more burdensome, nor is it likely that a tral will be materially prolonged, if supplemental jurisdiction

is exercised over the related Minum Wage Act claims. The existence of a longer statute of limita-

tions in a related state claim is not a unque phenomenon, and district cours commonly exercise supplemental jursdiction in such circumtances. See,

e.g., Tomka v. Seiler Corp.. 66 F.3d 1295 (2d Cir.1995) (supplemental claim

jurisdiction in similar

federal and state employment discrimiation cases with longer state limitations), abrogated on othe; grounds by Burlington Indus.. Inc. v. Ellerth. 524 U.S. 742, 118 S.Ct. 2257, 141 L.Ed.2d 633(998). The same considerations of sound jursdictional efficiency and economy should apply to the delivery workers who filed consents to be part-plaintiffs to

the FLSA claim. Section 2l6fb) gives them the status of partes and, as partes, they shoild have the same rights as the named Plaintiffs to have all their related claims adjudicated in the same foru. Plaintiffs properly chose a federal forum to vindicate their

federal rights to be paid a mium wage and overtie premium pay. Their suit wil not be undermed or compromised by including their related claim under New York's Minum Wage Act. Nor will Defendats' claim, defenses or proofs significantly vary. The Minum Wage Act claim will not predomite over the FLSA claim.

*91 Plaintiffs' motion to certfy a class pursuant to Federal Rule of Civil Procedure 23 should be governed by the same considerations. Rule 23 was de-

(1982); Deposit Guar. Natl Bank v. Roper, 445 U.S.

326, 329, 100 S.Ct. 1166, 63 L.Ed.2d 427 (980). The Plaintiffs in ths case propose to utilize ths procedural device for the more effcient resolution of their supplemental claim. Il Plaintiffs seek by ths lawsuit to vindicate the

rights of all delivery workers whom the labor agent

Defendants assigned to the supermrket and drgstore chain Defendants: those who have fied consents to join the FLSA claims, or who may do so in response to the notice that is to be sent to the class' and those who may wish to take advantage of th~ longer period for recovery under the New York Minmum Wage Act. As I have held in my previous discussion, the common federal and state issues predomiate, and the class action device is superior to

the alternatives of numerous actions in a number of cours, or a loss of guaranteed rights because many

Plaintiffs wil not have the ability or means to fie individual suits. This case presents the ideal factual scenario supportg the exercise of supplemental jurisdiction. A distrct cour's Arcle II jursdiction over cases

and controversies arising under the laws or constitution of the United States has traditionally embraced related state issues and claim. Osborn v. Bank ofthe United States. 22 U.S. (9 Wheat.) 738, 6 L.Ed. 204 (1824). As Chief Justice Marshall ruled, jurisdiction exists over a "case," not merely a claim and if, in a case "arising under" the laws or constitution of the United States, other questions are presented that may not be dependent upon the constrction of federal law, the federal cours are neverteless empowered to

rule upon them.

"(w)hen a question to which the judicial power of the Union is extended by the Constitution form an ingredient of the original cause, it is in the power of Congress to give the circuit cours jursdiction of

veloped to provide an effcient procedural device to

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201 F.RD. 81, 143 Lab.Cas. P 34,267, 9 Wage & Hour Cas.2d (BNA) 1646

(Cite as: 201 F.R.D. 81)

that cause, although other questions of fact or law may be involved in it."

not sue the non-diverse part. Rule 14, the Supreme Cour held, is not a basis of jursdiction, even though it provides that a plaintiff may file a complaint

against an impleaded thd part arsing from a re-

Id 22 U.S. at 823.

lated transaction or occurence. United Mine Workers of

America v. Gibbs, 383 U.S.

715,86 S.Ct. 1130, 16 L.Ed.2d 218 (1966), provided

the modem formulation of ths doctrine of pendent jurisdiction. The issue in Gibbs was whether a claim under the common law of Tennessee could be joined to a claim under the federal Labor Management Relations Act, in a lawsuit against a labor unon. The Supreme Cour held tht because the "state and federal claims ( ) derive from a common nucleus of operative

fact ... such that (the plaintiff! would ordinrily be expected to tr them all in one judicial proceeding,"

pendent jursdiction could be exercised over the state claim as well as the federal claim. Id. at 725,86 S.Ct. 1130. Judicial power exists, the Supreme Cour held, whenever "the relationship between (the federal law) claim and the state law claim permts the conclusion

that the entie action before the cour comprises but one constitutional 'case.' " Id. at 725, 86 S.Ct. 1130. Gibbs established a thee-par test: the federal claim

must confer subject matter jursdiction, the federal and the state law claim must derive from a common nucleus of operative fact, and the claim must be such that the plaintiff would ordinarily be expected to tr them together in one proceeding.

But there were limts to the doctre, based on interpretations of what Congress had intended in conferrig jurisdiction on the district cours. Where, for

example, Congress provided that certin partes are

not subject to suit under federal law except under specified conditions, the conditions cannot be cir-

cumvented by joing a related state cause of action. See e.g., Aldinger v. Howard. 427 U.S. 1, 96 S.Ct. 2413, 49 L.Ed.2d 276 (976) (because an individual

Finley v. United States, 490 U.S. 545, 109 S.Ct.

2003, 104 L.Ed.2d 593 (1989), extended ths rule against pendent-par jursdiction to cases where

Congress provided for exclusive federal jursdiction. In such a case, where a federal statute provided that

federal jursdiction was exclusive to the district cours, there was to be no jursdiction over a related state law claim brought againt a non-diverse pen-

dent-part-defendant. The Supreme Cour refused to "assume that the full constitutional power has been congressionally authoried" with respect to pendent partes, and held that only an express congressional

grant of authority would support the exercise of pendent part jursdiction. Id. at 549, 109 S.Ct. 2003.

The Cour invited a Congressional remedy:

"( w )hatever we say regarding the scope of jurisdic-

tion ... can of course be changed by Congress." Id. at 556, 109 S.Ct. 2003. See Lindsay v. Kvortek, 865

F.Supp. 264, 272 (W.D.Pa.1994) (commenting on

unduly harsh result, and noting that, post-Finley, "no

pendent part jurisdiction could be asserted unless Congress clearly provided for it"). Congress accepted the Supreme Cour's invitation and, in 1990, enacted 28 U.S.C. § 1367 to loosen the restrictions of Finley. See Judicial Improvements Act

of 1990, Public Law 101-650, 104 Stat. 5089; 28 U.S.C. § 1367; Fallon, Meltzer and Shapiro, Hart and Wechsler's The Federal Courts and the Federal Sys-

tem 970 (4th ed.1996). A report issued by the Federal

Cours Study Commttee, organied pursuant to an earlier Congressional enactment, see Judicial Improvements and Access to Justice Act of 1988,

is unable to sue county under 42 U.S.C. § 1983 *92

Pub.L. No. 100-702, § 102(2), 102 Stat. 4642, 4644

for constitutional violations perpetrated by county officials, no federal supplemental jurisdiction exists

(1988), recommended that federal cours be authorized "to exercise pendent jurisdiction over partes

Owen Equipment & Erection Co. v. Kroger. 437 U.S.

without an independent federal jursdictional basis." Federal Cours Study Commttee Report 47. Con-

365,98 S.Ct. 2396, 57 L.Ed.2d 274(978), presented

gress accepted the Commttee's recommendation in

over related state causes of action against county).

another example: where, in an action founded on

state law, plaintiff sues only one of two defendants in a federal cour because he lacks diversity jursdiction

over the other, and the defendat-part brings in the other as a thd-part defendant pursuant to Federal

Rule of Civil Procedure Rule 14, plaintiff still may

enacting section 1367. See H.R.Rep. No. 734, 101st

Cong., 2d Sess. 28 (1990), reprinted in 1990 U.S.C.C.A.N. 6860, 6875 ("(i)n providing for supplemental jursdiction over claim involving the addition of

partes, subsection (a) explicitly fills the statu-

tory gap noted in Finley v. United States" ); 13B

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201 F.RD. 81, 143 Lab.Cas. P 34,267, 9 Wage & Hour Cas.2d (BNA) 1646

(Cite as: 201 F.R.D. 81)

Charles A. Wright, Arhur R. Miler & Edward H.

Act claim arise from the same nucleus of operative

Cooper, Federal Practice and Procedure § 3567.2

facts, are substantially related to each other, and natu-

(Supp.2000) (A pri purose of the statue is "to make it clear that in federal-question cases pendent-

rally would be treated as one case and controversy.

par jursdiction is permssible."); § 3523

(Supp.1994) ("In the Judicial Improvements Act of

Indeed, it would be difficult to tr them separately,

for the findings in one case would tend to be preclusive as to the other or, if not preclusive, could expose

1990, Congress explicitly granted pendent part ju-

the pares to inconsistent results. See Fallon, Meltzer

risdiction to the district cours.").

and Shapiro, Hart and Wechsler's The Federal

As long as a distrct cour has original jursdiction over a civil action, Section 1367 provides, subject to exceptions in the Act and in other federal statutes, the

The test of relatedness under Section 1367 is satisfied, and the federal FLSA claim confers supplemental jurisdiction over the Minum Wage Act claim.

Courts and the Federal System 967 (4th ed.1996).

district cour "shall have supplemental jurisdiction

over all other claim tht are so related to claim in

Subsections (b) and (c) of Section 1367 provide ex-

the action withi such original jurisdiction that they form part of the same case or controversy under Ar-

ceptions to supplemental jurisdiction. Subsection (b) provides that in an action where the cour's original

the United States Constitution." 28 U.S.C. §

jursdiction "is founded solely on Section 1332 of

1367(a). Furer, Congress provided, supplemental

ths title," that is, on grounds solely of diverse or for-

jurisdiction was to "include claims that involve the

eign citienship, the district cours are not to have

joinder or intervention of additional partes," in effect

supplemental jursdiction over-

cle II of

over-ruling the limtation formulated by the Supreme Cour ruling in Finley Y. United States.

claim by plaintiffs against persons made parties under Rule 14, 19,20, or 24 of

the Federal Rules of

scope of supplemental jursdiction first artculated by

Civil Procedure, or over claim by persons proposed to be joined as plaintiffs under Rule 19 of

the Supreme Cour in United Mine Workers v.

such rules, or seekig to intervene as plaintiffs un-

Gibbs, " that is, supplemental jursdiction to the constitutional limit. See H.R.Rep. No. 734, lOlst Cong., 2d Sess. 29 n. 15, 1990 u.S.C.C.A.N. at 6875. Com-

mental jursdiction over such claim would be inconsistent with the jursdictional requirements of

mentators have noted that Congressional expres-

section 1332.FN8

Congress intended that Section 1367 codify "the

der Rule 24 of such rules, when exercising supple-

sion*93 with approval. See Denis F. McLaughlin,

The Federal Supplemental Jurisdiction Statute-A

FN8. The referenced rules treat thd-part

Constitutional and Statutory Analysis. 24 Ariz. ST.

practice, necessary joinder and permssive

LJ. 849, 856-57 (992); David D. Siegel, Developments in Federal Jurisdiction and Practice, 540 PLI/it 7, *51 (996). As Justice Scalia noted in Finley, "the full constitutional power" was exercised "for pendent-claim jursdiction" but not, he held, for

"pendent-part jurisdiction," even though, he assumed, "the constitutional criterion for pendent-part

jurisdiction is analogous." Finley, 490 U.S. at 549, 109 S.Ct. 2003. With the enactment of

joinder, and intervention, respectively. These exceptions apply by their term only to cases

where the cour's jursdiction is founded "solely" on

diverse or foreign citienship. See 28 U.S.C. § 1332. The exceptions are not applicable in the case before me, which is founded on federal question jurisdiction-28 U.S.C. § 1331.

Section 1367,

Congress elimnated the pendent-part restrction established in Finley. Hencefort, except as provided in subsections (b) and (c) of Section 1367, the broad test of United Mine Workers v. Gibbs for supplemental-claim jursdiction would apply as well to supplemental-part jursdiction. In the case before me, as I have ruled already, the

federal FLSA claims and the state Minmum Wage

Defendants ask me, neverteless, to apply this restrictive category of exception not only to Section 1332

cases founded on diversity, but also to Section 1331 cases involving substantial federal questions. Defendants argue that supplemental jursdiction should

extend to pendent partes who are sued as defendants,

and not to pendent partes who may seek to join as plaintiffs. Thus, Defendants argue, I do not have ju-

risdiction over the class action, since some of its

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201 F.R.D. 81, 143 Lab.Cas. P 34,267, 9 Wage & Hour Cas.2d (BNA) 1646 (Cite as: 201 F.R.D. 81)

members may not have a substantial federal claim of their own that is not time-barred.

volved in diversity actions are not relevant to this

Defendants' argument focuses on a sentence in the Report of the Federal Cours Study Commttee, rec-

matter jursdiction, and there is no mimum dollar theshold for an FLSA case or a Minum Wage Act

ommending to Congress that it extend federal jursdiction over claim arising out of the same transac-

tion or occurence "that require the joinder of additional partes, namely defendants againt whom that plaintiff has a closely related state claim." Commttee Report 47-48. Defendants' reading is torted; there is

nothng in the Report to suggest that pendent-part jurisdiction should be limted to pendent-defendant

jurisdiction. See, e.g., Denis E. McLaughlin, The Federal Supplemental Jurisdiction Statute-A Consti-

action founded on federal subject matter jursdiction.

FN9 The case before me is based on federal subject

case over which I have supplemental jursdiction.

Zahn, to whatever degree it remains viable, is not applicable. Compare Zahn, 414 U.S. 291. 94 S.Ct. 505, 38 L.Ed.2d 511 (973), with Supreme Tribe of

Ben-Hur v. Cauble. 255 U.S. 356, 41 S.Ct. 338, 65 L.Ed. 673 (921) (finding no jursdictional impairment in the certfication of a class action based on diversity where only the named representatives meet the citienship requirements of the diversity rule). See Fallon, Meltzer and Shapiro, Hart and Wechsler's

tutional and Statutory Analysis. 24 Ariz. St. LJ. 849,

The Federal Courts and the Federal System 1541

926 (992) ("In all cases not founded solely on .§

(4th ed.1996).

1332, the statute now authorizes full supplemental jursdiction for all claims involving additional parties,

FN9. As discussed previously, section

is joined as a *94 'pendent part plaintiff or 'pen-

1367(b) provides that supplemental jurisdiction shall not extend against "persons made

dent part defendant.' ").

partes under Rule 14, 19, 20, or 24 of the

without restrction as to whether the additional part

Federal Rules of Civil Procedure, or over il Defendants argue also that every putative class

member's claim form a separate case, and that I

claims by persons proposed to be joined as

plaintiffs under Rule 19 of such rules, or

therefore have to evaluate, for each member of the

seeking to intervene as plaintiffs under Rule

class, if that member has a viable federal FLSA claim as to which his Minmum Wage Act may be consid-

24 of such rules, when exercising supple-

ered supplemental. In support of ths argument, De-

fendants rely upon Fielder v. Credit Acceptance

mental jursdiction over such claims would

be inconsistent with the jursdictional requirements of

section 1332."

Corp., 188 F.3d 1031 (8th Cir.1999). The members of a class, however, are not partes. Without special

Supplemental jursdiction is not mandatory. Section

cour orders, they are not subject to counterclaim or

1367(c) provides that the district cour "may decline to exercise supplemental jurisdiction" in a number of instances:

discovery. Fielder is not the law of this Circuit, and I decline to follow it.

I1 Defendants also cite Zahn v. International Paper Co.. 414 U.S. 291. 301, 94 S.Ct. 505,38 L.Ed.2d 511

(1) if the claim "raises a novel or complex issue of State law"; or

(973), for the proposition that each plaintiffs claim

in a proposed diversity-based class action must satisfy the amount in controversy requirement, and that those whose claim is less may not "ride in on another's coattils." Settg aside the lively debate as to

whether Section 1367(b) overrles Zahn, see In re

Abbott Lab.. 51 F.3d 524, 527-29 (5th Cir.1995) (holdig that Zahn is overrled by the express omis-

sion of Rule 23 from the list of federal rules in section 1367(b) as to which supplemental

jursdiction

(2) if the state law claim "substantially predomi-

nates"; or

(3) if all federal claims have been dismissed; or

(4) if, "in exceptional circumstaces, there are other compelling reasons for decling

jursdiction." FNIO

cannot be exercised, when the underlying action is

FNIO. My discretion to decline supplemen-

based on diversity of citienship )-a debate notably excluded from Defendants' discussion-the issues in-

"enumerated category of subsection

tal jursdiction should be based upon an

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201 F.RD. 81, 143 Lab.Cas. P 34,267, 9 Wage & Hour Cas.2d (BNA) 1646

(Cite as: 201 F.R.D. 81) 1367(c)." Itar-Tass Russian News Agençy v.

rationale of Hauptman as "strained"). Compare

Russian Kurier. Inc.. 140 F.3d 442, 448 (2d

Brzychnalski v. Unesco. Inc.. 35 F.Supp.2d 351, 353 (S.D.N.Y.1999) (plaintiff satisfies CPLR 90l(b) by

Cir. 1 998); Executive Software North Amer-

(9th Cir.1994). Possibly, the criteria of fair-

waiving right to puntive damges), with Foster v. Food Emporium. 2000 WL 1737858, at *3 n. 3

ness and effciency discussed in United

(S.D.N.Y. April 26, 2000) (dictu waiver not a fa-

Mine Workers v. Gibbs, supra, may also be available. See Fallon, Meltzer and Shapiro,

vored procedure). I believe that Pesantez states the correct rule, and it is authoritative as the rule of deci-

Hart and Wechsler's The Federal Courts

sion to be followed. See Guaranty Trust Co. v. York.

and the Federal System 973 (4th ed.1996),

326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945);

ica. Inc. v. Us. District Ct.. 24 F.3d 1545

and Supp.(1998) at 55.

Gasperini v. Center (or Humanities. Inc.! 518 U.S.

415, 116 S.Ct. 2211, 135 L.Ed.2d 659(996). In any I. Defendants argue that I should decline to exercise supplemental jursdiction because the claims

raise novel state law issues. Under New York Labor Law §§ 198, subd. l-a and 663, plaintiffs may seek liquidated damages of an additional twenty-five percent of the amount due if employers wilfully failed to pay mimum wages or overte. However, New York Civil Practice Law and Rules 901(b) provides that actions for a penalty may not be maintained as a class action uness the authorizing statute so provides. See, e.g., Carter V. Frito-Lav Inc.. 52 N.Y.2d 994,438 N.Y.S.2d 80, 419 N.E.2d 1079 (981); *95 Ballard V. Community Home Care Referral Service. Inc.. 264 A.D.2d 747, 748, 695 N.Y.S.2d 130 (2nd Dept. 1999) ("the fact that the plaintiffs complaint

event, the Minium Wage Act claim is neither so "novel or complex" as to suggest that I should decline to exercise supplemental jursdiction.

Defendants next argue that the state law claim wil "substantially predomiate" over the FLSA claim. I have already discussed ths arguent in the context

of Rule 23. As my discussion indicates, the state law claim are substantially simlar to the federal law claims, and it is likely that they will either succeed or fail together. I do not decline supplemental jursdiction on this ground.

contains a claim for liquidated damages precludes

Defendants next argue that a state-law class wil be diffcult to manage alongside the collective action under the FLSA. Again, I have previously discussed

class action relief."); Caruso v. Allnet Commun.

and rejected that arguent in the context of Rule 23,

Servs.. 662 N.Y.S.2d 468,470 (1st Dept. 1997) (relying on Carter ).

and I reject it as well in the context of whether or not

I should, in my discretion, decline to exercise supplemental jursdiction.

Plaintiffs respond by offering to waive any right to recover liquidated damages as a condition of being

ll Finally, Defendants argue that a jury inevitably

certfied as a class; any who object may opt out of the

wil be confsed and Defendants wil be prejudiced

class. New York law authorizes such a procedure.

certain individuals may wish to pursue puntive

by combing federal and state claims in one lawsuit. See Zelaya V. J.M Macias. Inc.. 999 F.Supp. 778, 783 æ.D.N.C.1998) (supplemental jursdiction declined where class action of over 100 plaintiffs seek-

claim pursuant to Labor law § 198(1-a), which can-

ing minium wage and overtme pay under North

See Pesantez V. Boyle Envtl. Servs.. Inc.. 251 A.D.2d 11,673 N.Y.S.2d 659 (1st Dept. 1998) ( "to the extent

(b) ), the class action...."); Weinberg v.

not be maintained in a class action (CPLR 901 they may opt out of

Hertz Corp.. 116 A.D.2d 1, 6, 499 N.Y.S.2d 693 (1st Dept.986); Super Glue Corp. V. Avis Rent A Car Sys.. Inc.. 132 A.D.2d 604, 606, 517 N.Y.S.2d 764 1987). Pesantez overrled Hauptman v, (2d Dept.

Helena Rubinstein. Inc.. 114 Misc.2d 935, 452

Carolina labor laws was thought to confict with the

FLSA claim of a separate, distinct and smaller collective action brought under the FLSA, and would as a result "undoubtedly confse a jur"). I do not agree with ths reasonig. In my judgment, there is little

risk of jur confsion, and there is no greater risk

N.Y.S.2d 989 (Sup.Ct.N.Y.Co.1981) (waiver tends to

than that present in other cases involving supplemental jursdiction. Here, as in many such cases, state and

underme class representatives' abilty adequately to

federal claim are simlar and arse from the same

advance interests of class). See 3 Weinstein, Kom & Miler, New York Civil Practice ir 901.22 (describing

operative facts. There is no reason why competent counel, such as those in the case before me, will

(Q 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.

lack

Page 16

201 F.R.D. 81, 143 Lab.Cas. P 34,267, 9 Wage & Hour Cas.2d (BNA) 1646 (Cite as: 201 F.R.D. 81)

the ability to present the issues to the jur cogently and understandably, or why federal jurors will not be able to understand the issues that wil be presented to them. Nor will any unnageable problems likely arse in pre-trial proceedings. Competent counsel wil be able to draft appropriate notices, and they and the cour should be able to maage this case fairly and effciently. With respect to Zelaya, it seems to have

enjoyed little resonance, either in earlier, or later, cases, and I decline to follow its reasonig. See

Conclusion

The Plaintiffs in ths case properly selected the federal foru to vindicate federal rights and simlar

state-law rights. They asserted claims over which ths Cour has original federal subject matter jursdiction. They seek to use the Federal Rules of Civil Procedure

and the statutes governg jursdiction to certfy a

Ramirez v. NutraSweet Co.. 1996 WL 529413

pendent state law class. "(C)onsiderations of judicial economy, convenience and fairess to litigants" sup-

(N.D.Il Sept. 11, 1996); Krueger v. New York Tel.

port a class action. Gibbs, 383 U.S. at 726, 86 S.Ct.

Co.. 163 F.R.D. 433 (S.D.N.Y.1995); Leya v. Buley, 125 F.R.D. 512 (E.D.Wa.1989), decided prior to Zelaya; and *96Ladegaard v. Hard Rock Concrete Cut-

1130. Congress, pursuant to 28 U.S.C. § 1367, has given me the jursdictional authority over ths case, and Rule 23 of the Federal Rules of Civil Procedure has provided the criteria by which I may certfy a

ters, Inc.. 2000 WL 1774091 (N.D.nl. Dec. 1, 2000); In re Albertson's, Inc., Employment Practices Litig.,

MDL Docket No. 1215, CV 97-527-S (Order and Judgment dated September 8, 2000); Kelley v, SBC,

Inc" 1998 WL 928302 (N.D.Cal. Nov. 13, 1998),

class to prosecute the case. Were I to decline to exercise the jursdiction that Congress has given to me, I would signficantly prejudice the Plaintiffs who have properly tued to ths Cour to seek redress of what

decided aftèr Zelaya. There is no good reason why I should decline to exercise supplemental jurisdiction.

are alleged to be signficant violations of their rights.

Indeed, in contrast to the objections raised by the

prised of those persons who worked for Defendants

Accordingly, I certfy a Rule 23(b)(3) class com-

Defendants, ths case demonstrates why supplemental jurisdiction should be exercised. If the related FLSA and Minmum Wage Act claim were to be litigated in parallel fashion, in this court and in the New York Supreme Cour, there would be great potential for

confsion of issues; considerable unecessary costs, inefficiency and inconsistency of proceedings and results; and other problems inerent in parallel class action litigation. See, e.g., Wiliam W. Schwarzer et aI., Judicial Federalism in Action: Coordination of

Litigation in State and Federal Courts, 78 VA. L. REV. 1689 (992); Paul Beckett, Companies Still Fear Class-Action Suits, Wall St. J., Apr. 4, 1997, at

B2 (discussing the high costs to companies that result

from defending multiple class actions in state and federal cours). The wrters note the problems and

as delivery persons and/or dispatchers at any tie after January 13, 1994 to the date of ths decision,

who are entitled to back wages for unpaid mimum wages, overte work for which they did not receive overte premium pay, and/or spread-of-hours com-

pensation from Defendants, in violation of the New York Minum Wage Act, N.Y. Lab. Law §§ 650 et seq. SO

ORDERED.

S.D.N.Y.,2001. Anoumana v. Gristede's Operating Corp.

201 F.R.D. 81, 143 Lab.Cas. P 34,267, 9 Wage & Hour Cas.2d (BNA) 1646

needless expense of overlapping, uncoordinated dis-

covery; differing ruings by multiple cours with re-

END OF DOCUMENT

spect to discovery, relevance and privilege; differig

and conficting rulings on issues of both procedure

and substance; collateral estoppel issues with respect to interlocutory rulings; and the difficulties of maag-

ing joint trials even where multiple cours agree jointly to manage complex litigations. Congress enacted Section 1367 to avoid such problems. Defendants short-sightedly argue to reverse the Congres-

sional wisdom. I decline to do so.

(Q 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.

iii~iimi ~iiiiii~im ~11111111111

*4328826*

2

SUPERIOR COURT OF THE STATE OF CALIFORNIA END 0 A SED

3

FILED

IN AND FOR THE COUNTY OF ALAMEDA ALAMEDA COUNTY

4

NOV - 9 2006

5

ARAH THAYER-OGDEN, et aI,

No. RG05-199128

CLERK OF THE SUPERIOR COURT

6

Plaintiffs, 7

ORDER DENYING ~n~t*î.Erîcksonl Deputy PLAITIFF FOR CLASS CERTIFICATION

v. 8

Date: October 5, 2006

9 OTTER Y BARN KIDS, INC., et aI,

Time: 10:00 a.m. Dept.: 22

10 Defendants. J1

12

The motion by Plaintiff Shaunna Mattson for class certification came on regularly for 13

hearing on October 5, 2006, in Department 22, the Honorable Ronald M. Sabraw, presiding. 14

Plaintiff and Defendants appeared at the hearing through counsel of record. The Court, after full 15

consideration of all papers submitted in support and opposition to the motion, as well as the oral 16

arguments of counsel, decides as follows: IT is HEREBY ORDERED that Plaintifts motion for 17

class certification is DENIED. 18

19

FACTUAL BACKGROUND 20

This is a purported class action by Assistant Store Managers (ASMs) who are or were 21

employed by Pottery Bam Kids. Plaintiff alleges that the ASMs at Pottery Bam Kids were 22

improperly identified as executive employees exempt from California's overtime pay 23

requirements. Plaintiff Mattson asserts that she and similarly situated persons were not covered 2'l

by the executive exemption and are entitled to overtime pay for hours worked in excess of 40 25

hours per week. Plaintiff seeks to certify a class for all claims in the Complaint. 26

ASCERTAINABILITY AND NUMEROSITY 2 Plaintiff proposes a class of all ASMs during the relevant time frame. Pottery Barn Kids

3 does not contest the ascertainability requirement. .l The proposed class includes approximately 54 persons. Although sufficiently numeroiis

5 to warrant a class action, this is a relatively small class. (,

7 COMMON QUESTIONS OF LAW AND FACT - LEGAL FRAMEWORK. s Plaintiffs burden on moving for class certification is not merely to show that some

9 common issues exist, but, rather, to place substantial evidence in the record that common issues 10 predominate.... "(T)his means 'each member must not be required to individually litigate

i i numerous and substantial questions to determine his (or her) right to recover following the class 12 judgment; and the issues which may be jointly tried, when compared with those requiring

13 separate adjudication, must be suffciently numerous and substantial to make the class action 14 advantageous to the judicial process and to the litigants.''' Lockheed Martin Corp. v. Superior 15 COUl'l (2003) 29 CaL. 4th 1096, 1108. "The ultimate question in (class actions) is whether. . . the

16 issues which may be jointly tried, when compared with those requiring separate adjudication, are

17 so numerous or substantial that the maintenance of a class action would be advantageous to the 18 judicial process and to the litigants." Lockheed Martin, 29 CaL. 4th at 1104-1105.

19 Some cases have what the Court will refer to as "absolute commonality." In these cases

:w every member of the proposed class was exposed to the allegedly wrongful practice and the 21 practice was either consistently lawful or unlawful as to all members of the class. The 22 defendant's action can be found to be wrong in the abstract without examining whether it was

23 wrongful as to any individual classmember. Aguiar v. Cintas Corporation NO.2 (2006) 2006 Living Wage Ordinance); In re Cipro Cases J & !J 2-l CaL. App. LEXIS 1663 (applicability of

25 (2004) 121 CaL. App. 4th 402, 411 (antitrust violations); Massachusel/s Mutual Ltte Ins. CU. I'.

26 S'iiperior Court, (2002) 97 CaL. App. 4th 1282, 1292-1294 (misrepresentations); Reyes v. Board

2

ofSuperyisors (1987) 196 Cal.App.3d 1263, 1278 (erroneous interpretation of legislation). In 2 cases with "absolute commonality," the Court can extrapolate liability findings from the trial

3 witnesses to the absent class members with a great deal of certainty. In a case with absolute 4 commonality, each member of

the putative class is identically situated with regard to liability and

5 by definition has standing to maintain the action on his or her own behalf. Col/ins v. Sajèlvay 6 Stores, Inc. (1986) 187 CaL. App. 3d 62, 73. To the extent there are differences among class

7 members, they usually relate to the amount of damages that each class member can recover. Sav8 On Drug Stores, Inc. v. Superior Court (2004) 34 CaL. 4th 3 19, 333, 9 Other cases have what the Court will refer to as "partial commonality." In these cases 10 every member of

the proposed class was exposed to a practice but the trier of fact cannot the class without

II determine whether the practice was lawful as to any given member of

12 considering individualized factors. The Court can ceiiify a class based on a demonstration of 13 partial commonality. Say-On Drug Stores, Inc. v. Superior Court (2004) 34 CaL. 4th 3 19, 14 addresses this in several places, stating, "Predominance is a comparative concept," 34 Cnl. 4lh at 15 334, that the community of

16 uniform or identical, 34 CaL.

interest requirement does not mandate that class members' claims be 4th at 338, that the "logic of

predominance" does not require a

17 plaintiff to prove that a defendant's policy was "either right as to all members of the class or

i 8 wrong as to all members ofthe class," 34 CaL. 4th at 338, and "the established legal standard for

19 commonality... is comparative," 34 Cal.4th at 339. 20 The determination of

how much commonality is enough to warrant use of

the class

21 mechanism requires a fact specific evaluation of the claims, the common evidence, and the

22 anticipated conduct ofthe triaL. For example, it can be appropriate to certify a class ofwomcn to 23 pursue claims for sex discrimination where an employer has a pattern of denying promotions to

24 women even though not all women were denied promotions. Stephens v. lvfomgomery Ward

25 (1987) 193 Cal.App.3d 411, 416 fnl. To ensure that the class mechanism will really be usefuL. in 26 cases with "partial commonality" the Court usually makes some limited inquiry into whether the

3

plaintiff has an isolated claim or whether there are numerous similar incidents. 111tl Bhd. al 2 Teamsters y, United States (1977) 431 U.S. 324, 336 (defining "pattern or practice"). This can 3 take the Court close to a merits analysis. Linder v. Thrifty Oil Co. (2000) 23 CaL. 4th 429, 332.

.: "Partial commonality" cases pose a greater challenge than "absolute commonality" cases

5 because the Court Calmot automatically extrapolate liability findings from the trial \.vitl1essts to 6 the absent class members. In these cases the COUl1 has to devise "pragmatic procedural devicl.s"

7 and "innovative procedural tools" to structure a trial that provides significant bene1ìts to the g parties and the Court while at the same time protecting the rights of all the parties. State (!l 9 Calijòrnia v. LeYi Strauss & Co. (1986) 41 CaL. 3d 460,471. Because "partial commonality" 10 cases present greater trial

management concerns, a plaintiff seeking to pursue such 3 case should

ii present a manageable trial plan at the class certification stage. Washington Mutual Bonk v.

12 Superior Court (2001) 24 CaL. 4th 906, 923 ("the presentation must be sufficient to permit the i 3 district court, at the time of certification, to make a detailed assessment of how the eli frcul ties

14 posed by the variations in state law will be managed at trial"). See also Soutlnvesttr/1 Ref. Co. \',

15 Bernal (Tex. Sup., 2000) 22 S.W.3d 425, 435 ("We reject (the) approach of ceiiify now and I 6 wo rry later.").

17

18 COMMON QUESTIONS OF LAW AND FACT - ANALYSIS. 19 Commonality is determined with reference to the claims asserted. Hicks v, Kaujinan (I/1d

20 Broad Home Corp. (2001) 89 Cal.AppAth 908,916 fn 22. This case concerns whether the class 21 members fall within the executive exemption under Wage Order 7-2001. 8 CaL. Code Regs. Pottery Barn Kids to 22 11070(1)(A)(1)(e).! The Court considers commonality in the decision of

23 classify ASMs as exempt, in how ASMs actually spent their time, and in the legal issues. 24

i Because the regulation references "the work actually performed by the employee during the course of 25 26

the workweek," the Coui1 holds that an employee's exempt or non-exempt status can vary on a week by week basis. Counts v. s.c. Elec. & Gas Co. (41h Cir 2003) 3 i 7 FJd 453 (reference iii regulations to

"workweek" suggests that classification is examined on a week to week basis). 4

First, Pottery Barn Kids made a single policy decision to classify all the ASMs as exempt. 2

Some courts have relied on similar employer classification decisions to find there is "absolute

"

,

commonality" because the classification decision is applied equally to all class members and is

4

therefore consistently lawful or unlawful as to all class members. Wang Y. Chin('se Daily li/eil'.\,

5

Inc. (C.D. CaL., 2005) 231 F.R.D. 602, 612-613. See also Sciv-on, 34 Ca1.4th at 336-337 (noting

6

common issues such as "the employer's realistic expectations" and "the actual overall

7

requirements of the job"). The common policy is of greater import where there is "evideiice that

g

deliberate misclassification was defendant's policy and practice." Sciy-On, 34 Cal.4tli at 329.

l)

Other courts have held that a single policy decision to classify employees is merely the starting

10

point for the analysis because the decision could be improper as to some putative class members

ii

but proper as to others. Morisky v. Public Sery. Elec. & Gas Co. (D.N.J. 2000) ILL F. Supp. 2d

12

493,498.

13

Second, this Court considers how ASMs actually spent their time. Ramirez v, YO.\('l/ife

14

Wafer Co. (1999) 20 CaL. 4th 785, 802 (court "should consider, first and foremost, how the

15

employee actually spends his or her time"). The Court has considered the declarations presented

16

by Plaintiff, each of

17

non-exempt functions, and the declarations presented by Pottery Barn Kids, which state that an

IS

ASM's work typically varied by work location and time of

19

and do, spend most of

20

daily recap reports that Pottery Barn Kids required the ASMs to fill out on a daily basis. (Perry

21

Dec., Exh. K.) These reports required ASMs to describe and record how they spent their time.

22

The reports had IÌve general categories: (l) Operational-Exempt, (2) Operational - Non-Exempt,

?' _J

(3) Supervisory - Exempt, (4) Sales Floor - Non-Exempt, and (5) HR - Exempt. Under each

24

general category there were specific examples ofthe work that fit within each category. The

25

daily recap reports suggest that there is significant variation in how ASMs spent their time in the

which states that the declarant routinely spent over 50% of his or her time on

year, and that ASM's are directed to.

their on exempt functions. The Court considered the contemporaneous

26 various stores in the many weeks that comprise the class period. The record does not contain

5

substantial evidence that "classification based onjob descriptions alone resulted in widespread de 2 facto misclassification." Sav-on, 34 Cal.4th at 329.

3 The Court has considered whether the daily recap reports should be discounted or .. disregarded because they are litigation driven, biased, or unreliable. The daily recap reports may

5 have. been prepared in par in anticipation oflitigation, but they were implemented in February

6 2004, one year before this case was fied. The likely fact that the rep011s were designed to be of 7 use in potential

litigation does not make them inherently suspect given that they also serw the

s legitimate business purpose of monitoring how much time the ASMs are working each Jay and

9' '-liow they'are spending. tneir time. (Dec. Julie 'Jaureg\ii; Dec. Jackie White.) Th~ report fèml1S 00

10 not appear to be biased. The forms identify non-exempt work and invite ASMs to state how ii many hours they spend doing non-exempt work. (Perry Dec., Exh. K.) The report forms appear not readily susceptible to 12 to be reliable. The fori-rs are filled out by hand by the ASMs and are

13 manipulation. Plaintiff

Mattson states that Cathy Stein (presumably her supervisor) asked her to

14 include more time on exempt activities than non-exempt activities (Chareton Supp. Dec., Exh. ß,

15 para 9), but there is no other evidence in the record (including in the declarations filed with 16 Plaintiffs reply papers) that the ASMs were coerced into giving Pottery Barn Kids the data that

17 would be most useful to it in litigation. The reports are significantly different from the litigation is driven audits described in Tierno v. Rite-Aid, (N.D. CaL., 2006) C-05-02520.

19 Third, Plaintiff argues that there is a predominant common legal determination or 4th at 330 (''The record contains :w whether a specific task is exempt or non-exempt. Sav-on, 34 CaL.

21 substantial evidence suggesting that the predominant issue in dispute is how the various tasks in 22 which AM's and OM's actually engaged should be classified--as exempt or nonexempt.") The

23 commol) issue of whether certain tasks are exempt or non-exempt is important and the parties 2"¡ "hotly dispute the characterization of categories of duties." (0 Oppo at 20:20-21 :9.)

25 Plaintiffs have not demonstrated that there is "absolute commonality" in this case. 26 Although Pottery Barn Kids made a single policy decision to classify all the ASMs as exempt,

6

there is substantial evidence that the actual work experience of the ASMs varied person to person 2

and week to week. There is no evidence of a plan of deliberate misclassification, and Pottery

3

Barn Kids's use of the daily recap reports suggests that it was making efforts to detect any

-i

instances of misclassification. In summary, the trier of fact could conclude that some of the

5

ASMs may have been

6

some ofthe time, but it cannot conclude that all of

7

all of the time.

g

non-exempt all of

the time or all of

the ASMs may have been non-ex.empt

the ASMs were either exempt or non-exempt

Plaintiffs have not demonstrated there is "partial commonality" in this case. The Court

9

has considered whether it would beneficial to have a class trial on the common issues concerning

10

whether specific tasks are exempt or non-exempt and followed by individualized hearings where

11

individual ASMs could make claims. Say-on, 34 Cal.4lh at 339-340; 1nl'I Bhd. ojTean1sters v.

12

United States (1977) 431 U.S. 324, 360-361. A class trial on the common legal issues would not

13

be particularly beneficial because even after resolving the common legal issue of task

14

classification, every member of

the alleged class would still be required to litigate numerous and

15

substantial questions determining his or her individual right to recover. Dunhar. 141 CaL. App.

16

4th at 1431-1432. The Cour has also considered whether it would be beneficial and possible to

17

have a class trial that took an overall aggregate approach to both liability and damages and could

18

somehow determine what total damages Pottery Barn Kids might owe to the class taking into

1'.

account that only some ASMs may have been non-exempt some of

20

Exchange (2004) 115 CaL. App. 4th 715, 746-753 (discussion of

the time. Bell v. Fariiers lns. trial management and use of

21

statistics to prove damages). The Court could then supervise a subsequent nonadversary

22

procedure to make sure the right amounts of money (if any) were distributed to the right ASrvls.

j'--'

In re Cipro, 121 CaL. App. 4th at 417. This approach might be appropriate if

2'l

substantial evidence that either a significant percentage or a significant absolute number of

25

ASMs were misclassified. There is no substantial evidence that that the weeks when ASMs were

26

allegedly misclassified were more than isolated, sporadic incidents and rose to the level of a

there were

7

repeated, routine, or of a generalized pattern or practice. To the contrary, the recap reports ancl

2 other evidence presented by Pottery Barn Kids suggest that the work experiences of Ms. Mattson,

3 Ms. Thayer-Ogden, and the other persons who submitted declarations in support of class 4 certification were not typical of

most ASMs.

the experiences of

5

6 TYPICALITY AND ADQUACY OF REPRESENTATION. 7 Shaunna Mattson is the only putative class representative. Having found that common

R issues do not predominate, the Court does not reach the issues of typicality ancl adequacy. y

10 TRIAL MANAGEMENT. 1 1 Plaintiff suggested a phase one classwide trial on the common issue of whether certain 12 tasks are exempt or non-exempt, followed by a phase two in which classmembers submit

13 questionnaire responses stating how much time they spent on which tasks so the Court could their damages, 14 determine which individual employees were non-exempt and, ifso, the amount of

15 (P Opening brief

at 13-15.) Questionnaires can be used in certain circumstances. O'Connor I',

16 Boeing North Am., Inc. (C.D. CaL., 1998) 184 F.R.D. 311,327-328 (questionnaires used to 17 deterinine membership in class); Rodriguez v. McKinney (E.D. Pa., 1994) 156 F.R.D, 1 i 8.

i R 119 (submission of simple documentary evidence to determine membership in class)."

19 The main effect of Plaintiffs proposed plan would be to create a "trial by questionnaire" whether certain tasks are exempt or non20 procedure that followed the common resolution of

2 i exempt. The trial by questionnaire approach would probably deprive Defendant of due process

22 unless the questionnaires were merely a prelude to an individualized bearing process. Johliso/1 I',

l' -,) 24

2 Recent cases suggest that California law does not permit a trial court to condition initialmembersliip in

25

a class on the return of an opt-in form but appears to permit a trial coui1 to condition continuing

26

App. 4th 976; Hyper/ouch, Inc. v. Superior Court (2005) 128 CaL. App. 4th 1527. The Court do~s not

membership in a class on the return of a substantive questionnaire. Estrada v. RPs. fiic. (2005) 125 CaL. need to, and does not, address this distinction.

8

Ford Motor Co. (2005) 35 CaL. 4th 1191, 1210 ("In a class action, once the issues common to the 2 class have been tried,

and assuming some individual issues remain, each plaintiff must still by

:; some means prove up his or her claim, allowing the defendant an opportunity to contest each

-I individual claim on any ground not resolved in the trial of common issues.") Labor Code 98 5 already provides hearings that are supposed to be a "speedy, informal, and affordable method of

6 resolving wage claims." Post y, PalolHaklar & Associates (2000) 23 Cal.4lh 942, 947.

7 Therefore the proposed trial plan's apparent main effect would be to substitute a Comt 8 supervised adversarial hearing procedure for the legislatively created adversarial administrative 9 procedure. 10

i i POLICY CONSIDERATIONS.

12 There is a relatively simple administrative procedure for handling individual claims. 13 Labor Code 98. The Court is not inclined to hold that the administrative process is inadequate.

14 A class action is not necessary to deter and redress the alleged wrongdoing. If Pottery 15 Barn Kids has a consistent pattern of

knowingly misclassifying ASMs then the DLSE can initiate

16 an action to compel Pottery Barn Kids to change its policies. The Plaintiff did not raise whether

17 it would be appropriate to certify a class for the limited purpose of seeking injunctive relief

18 similar to a class under F.R.C.P. 23(b)(2). Compare Wang, supra, 23 i F.R.D. 602. i 9 If individual ASMs bring their own legal actions, either individually or by intervening in

20 this case, then it might be appropriate to consolidate the claims in a single action or to formally

21 or informally coordinate the related actions. Basurco v. 21st Century Insurance Co, (2003) 108 the 22 CaL. App. 4th 110, 121-122. Using case management tools, the Court can achieve many of

23 benefits of class ceitification even where class certification is not appropriate.

2-1 III

25 III 26

9

CONCLUSION.

2 The Court denies the motion for class certification. The class is relatively smalL. There is :1 no "absolute commonality" because the trier of fact will not be able to determine on a classwidc 4 basis whether the common policy was uniformly lawful or unlawful as to all ASMs. There is

:; insufficient "partial commonality" because (1) a classwide resolution ofdiscrde common kgal the need to litigate numerous and

6 issues concerning liability would not relieve the paiiies of

7 substantial individual questions and (2) a classwide trial on aggregated liability and damages is

8 not warranted because there is no substantial evidence of a pattern or practice of 9 misc1assification. Class members have an adequate administrative procedure for handling their

10 claims. II 12

13

EVIDENCE

The Court has considered all the declarations submitted, as well as the exhibits attached the evidence is limited to the motion for class certification

14

thereto. The Court's consideration of

15

and should not be construed as an indication of admissibility in future motions or at triaL.

16

17 FURTHER PROCEEDINGS.

18 The Court sets the next case management conference for January 9. 2007, at 10:00 am. 19 Counsel should be prepared to discuss whether this case on behalf of Ms. Thayer-Ogden and Ms.

20 lv1attson should remain designated as complex.

",.2 c~~~ cJJ,~

21 CI.

Dated: November _,2006

Judge Ronald M. Sabr3w

22

23

24 25 26

10

Entered on FLSD Docket 12/05/2007 Page 1 of 5

Case 9:07-cv-80811-DMM Document 29

REC'O by D.C. UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIA Case No. 07-80811-CIV-MIDDLEBROOKS/JOHNSON

DEC 052007 CLAIUNel MADDoX

CLERk U. S. DIST, CT.

a. D, OF nil.

---;.n

Cl r-

JULY CASTRO, on her own behalf and all others similarly situated,

:;~ ('..~ Ci -

.', 6' -l r:

o~~ '. () .(~'1 i.e o!'.... _

""0& '" ~~¡ it !? ~)(..

Plaintiff, vs.

p

GYMBOREE OPERATIONS, INC.,'a California Corporation,

Defendat.

/ ORDER This Cause comes before the Court on Plaintiffs Motion for Conditional Certification of

Collective Action and Permssion to Send Cour Supervised Notice Adviing Simlarly Situated Individuals of

their Opt-In Rights Pursuant to 29 U.S,c. § 216(b) (DE 11). The Cour has

reviewed the record and is fully advised in the premises.

Plaintiff July Castro ("Castro") filed this action for unpaid overtime compensation

pursuant to the Fai Labor Standads Act ("FLSA"), 29 U.S.c. § 216(b), on September 6,2007. Castro now ass the Cour for the following: (1) an order conditionally certifyng this case as a

collective action; (2) an order requirng Defendant to produce, within 30 days, the names and last known addresses of all "store maagers" employed by Defendant in the Palm Beach district for the period begining three years prior to the initiation of

this suit to the present; and (3) an order

authoriing Plaintiff to send notice to each such employee of this suit and seeking their consent to

opt-in. Defendant opposes Plaintiffs motion and argues that collective action certification is not

Case 9:07-cv-80811-DMM Document 29 Entered on FLSD Docket 12/05/2007 Page 2 of 5

appropriate. The proviions of

compensation on behalf of

the FLSA allow for an employee to brig an action for unpaid overtime herself and other employees simlarly situated. See 29 U.S.C. 216(b).

Defendat disputes Plaintifs clai that she is in fact simlarly situated to the other employees who might join the action, and argues that she has not met her burden of demonstrating that such employees exist.

At this stage of the proceedings, the certification of a collective action would be

conditional, and the Defendat could challenge the certification at a later point in the case. For conditional certification, "Plaintiffs need show only that their positions are simlar, not identical, to

the positions held by the putative class members." Hipp v. Liberty Nat'l Life Ins. Co., 252 F.3d

1208, 1217 (lIth Cir. 2001). The Eleventh Circuit has blessed, though not required, an approach in which district courts utilize a two-tiered analysis to detenne collective action certifications. That process is

described below.

The fist detennation is made at the so-called "notice stage." At the notice stage, the district court makes a decision--usually based only on the pleadings and any affdavits which have been submitted--whether notice of the action should be given to potential class members. Because the court has minimal evidence, this detennation is made using a faily lenient standad, and typically results in "conditional certification" of a representative class. If the district court "conditionally certifies" the class, putative class members are given notice and the opportunity to "opt-in." The action proceeds as a representative action

throughout discovery.

The second determnation is typically precipitated by a motion for "decertification" by the defendat usually filed after discovery is

largely complete and the matter is ready for trial. At this

2

Case 9:07-cv-80811-DMM Document 29

Entered on FLSD Docket 12/05/2007 Page 3 of 5

stage, the court has much more informtion on which to base its decision, and maes a factual detennation on the simlarly situated question. If the claits are siuúlarly situated, the district cour

allows the representative action to proceed to trial. If the claimts are not similarly situated, the district court decertifies the class, and the opt-in plaintiffs are dismissed without prejudice, The class representatives--i.e. the original plaintiffs--proceed to trial on their individual clai. Based on our review of

the case law, no representative review.

class has ever survived the second stage of

¡d. at 1218 (quoting Mooney Y. Aramco Servs, Co., 54 F.3d 1207, 1213-14 (5th Cir. 1995).

The Court accepts the Eleventh Circuit's guidace on this matter and wil utilize this approach in detenning the merts ofPlaintifs certification motion. As this is the "notice" stage of

the proceedings, the test calls for a "fairly lenient standad." However, the standad is not non-

existent. An examnation of

the Plaintifls pleading, along with the exhibits of

the paries, leads

the Court to conclude that conditional certification is not appropriate in this case.

Using the standard discussed above, the Court must detennne "1) whether there are other employees who desire to opt-in; and 2) whether these employees are similarly situated with

respect to their job requirements and pay provisions." Dybach Y. State of Florida Dept. of

Corrections, 942 F.2d 1562, 1567-68 (lIth Cir. 1991).

Plaitifls complait alleges a valid clai under the FLSA. In her Affdavit, Plaintiff states that there are eight other maagers within the Pal Beach district and she is aware of other store managers who have expressed an interest in joining the lawsuit, but fear joining it without an

assurance from the Cour that retaliation is prohibited. She states she has personal knowledge that one has expressed an interest in joining the action but has not due to fear of retaliation, and

the other has initiated her own suit. Defendat argues in opposition that Castro has not demonstrated that all store maagers within the Pal Beach District to whom she proposes to

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Case 9:07-cv-80811-DMM

Document 29 Entered on FLSD Docket 12/05/2007 Page 5 of 5

the class she proposes. Thus, she has not met her burden and the class should not be conditionally

certified.

Accordingly, it is

ORDERED AND ADWDGED that Plaitiffs Motion (DE 11) is DENIED. DONE AN ORDERED in Chambers at West Pal Beach, FL, thO ? day

of December,

2007.

DO D M. MIDDLEBROOKS UNTED STATES DISTRICT JUGE copies to counsel of record

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