Harlow v. Sprint Nextel Corp.

254 F.R.D. 418, 14 Wage & Hour Cas.2d (BNA) 931, 2008 U.S. Dist. LEXIS 102965, 2008 WL 5173136
District Court, D. Kansas·Decided December 10, 2008·No. No. 08-2222-JWL·Published·Cited by 5 cases

Opinion

MEMORANDUM AND ORDER

JOHN W. LUNGSTRUM, District Judge.

Plaintiffs Rick Harlow, Jon Schoepflin, Myra Lisa Davis, and Jim Koval filed a lawsuit against Sprint Nextel Corporation and Sprint/United Management Co. (collectively referred to as Sprint) alleging that Sprint failed to pay them proper commissions. The case is currently before the court on Plaintiffs’ Motion for Class Certification (Doc. 38), Sprint’s Opposition to the motion (Doc. 46), Plaintiffs’ Reply Memorandum (Doc. 55), Sprint’s Sur-Reply (Doc. 59), and Plaintiffs’ Sur-Sur-Reply (Doc. 63). The motion was argued before the court on Wednesday, November 26, 2008. For the reasons discussed below, the motion to certify a class is granted.

BACKGROUND

According to the Second Amended Complaint (Doc. 43), the named Plaintiffs are current or former employees of Sprint’s Business Direct Channel, and they identify the relevant time period of their employment as ranging from 2003-2008. Plaintiffs were all subject to the same or similar Business Incentive Compensation Plans that governed commissions they would receive based on sales of various products and services. Due to problems with Sprint’s computers, Plaintiffs allege, Sprint failed to pay them the correct commissions, amounting to approximately $500 to $1000 or more per month.

Plaintiffs maintain that Sprint’s computer system failed to accurately track sales information. Specifically, Plaintiffs contend that Sprint improperly deducted commissions from employees for failing to meet quotas [420]*420when in fact they had met the quotas but the computer system had failed to track all of the activations and upgrades they sold. Plaintiffs also assert that Sprint denied commissions through improper and erroneous charge backs, and that when Sprint did reconcile some commission errors, it failed to reconcile those errors to the managers of the employees, who would also be entitled to additional commissions. The focal point of Plaintiffs’ complaint is a widespread, though undefined at this point, problem with Sprint’s computer system that affects the amount of commissions the class members received.

Also of note, though certainly not determinative to this case, is a recent class action certified by Chief Judge Vratil involving a group of employees in Sprint’s retail stores who allege that Sprint has failed to pay them proper commissions due to a systematic computer problem. Sibley v. Sprint Nextel Corp., No. 08-2063, 2008 WL 5046348 (D.Kan. Nov. 24, 2008).

DISCUSSION

I. Legal Standard for Class Certification

The standards for certifying a class action are set forth in Fed.R.Civ.P. 23. This rule requires all four prerequisites of Rule 23(a) and at least one of the three requirements of Rule 23(b) to be satisfied. Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 614, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997); In re Integra Realty Res., Inc., 354 F.3d 1246, 1262 (10th Cir.2004). The decision whether to certify a class is committed to the broad discretion of the trial court. Rector v. City & County of Denver, 348 F.3d 935, 949 (10th Cir.2003); J.B. ex rel. Hart v. Valdez, 186 F.3d 1280, 1287 (10th Cir.1999). The court must perform a rigorous analysis of whether the proposed class satisfies the requirements of Rule 23. Gen. Tel. Co. v. Falcon, 457 U.S. 147, 155, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982); J.B., 186 F.3d at 1287-88; see also Reed v. Bowen, 849 F.2d 1307, 1309 (10th Cir.1988) (party seeking to certify a class is under a strict burden of proof to show that all of the requirements are clearly met). The court should accept the allegations in the complaint as true, although it “need not blindly rely on conclusory allegations which parrot Rule 23 requirements [and] may ... consider the legal and factual issues presented by plaintiffs complaints.” J.B., 186 F.3d at 1290 n. 7 (quotation omitted; brackets in original). The court is to remain focused on the requirements of Rule 23 rather than looking at the merits underlying the class claim. Shook v. El Paso County, 386 F.3d 963, 971 (10th Cir.2004) (noting the question is not whether the plaintiffs will prevail on the merits, but rather whether the requirements of Rule 23 are met); Adamson v. Bowen, 855 F.2d 668, 676 (10th Cir.1988); Anderson v. City of Albuquerque, 690 F.2d 796, 799 (10th Cir.1982).

II. Class Definition and Claims

Plaintiffs proposed the following class definition:

those who worked in Sales and Distribution for Defendant’s Business Direct Channel since January 1, 2006, including General Business, Enterprise, and Public Sector Account Executives (or those in similar positions), and those who managed these individuals, who were paid in full or in part based on commissions.

This definition is intended to include two types of jobs from the Business Direct Channel: the Account Executive position and those who manage the Account Executives. Additionally, Plaintiffs clarify that they understand “Public Sector” to include account executives who work with public agencies, including federal agencies. According to Plaintiffs, Sprint perhaps classifies “Federal” as a separate category. Regardless, Plaintiffs seek to include account executives that handle federal customers, and Sprint has offered no specific objection to that inclusion.

As for class claims, Plaintiffs originally sought relief based on five causes of action: Count I—Violation of Kansas Wage Payment Act; Count II—Breach of Contract; Count III—Quantum Meruit; Count IV—Promissory Estoppel; and Count V—Unjust Enrichment. The parties entered a joint stipulation to dismiss Counts III-V. (Doc. 24.) Thus, only the KWPA claim and the breach of contract claim remain pending.

[421]*421Regarding the breach of contract claim, the parties agree that it is subject to a one-year limitations period and so is limited to conduct occurring after May 9, 2007. Additionally, at oral argument, Plaintiffs’ counsel agreed that the breach of contract claim they are pursuing is based solely on Sprint’s computer problems. Recalling the allegations in the complaint, Plaintiffs contend that Sprint breached the relevant contracts by failing to use an accurate computer system to evaluate employee commissions. This claim, then, centers on Sprint’s computerized procedures for calculating and paying commissions and not, for example, a policy-based decision by Sprint to award a particular commission to one employee over another. This distinction is key to the certification analysis.

III. Analysis

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Harlow v. Sprint Nextel Corp., 254 F.R.D. 418, 14 Wage & Hour Cas.2d (BNA) 931, 2008 U.S. Dist. LEXIS 102965, 2008 WL 5173136 (D. Kan. 2008).

254 F.R.D. 418 (Harlow v. Sprint Nextel Corp.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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