Rivet v. Office Depot, Inc.

207 F. Supp. 3d 417, 2016 WL 4778693, 2016 U.S. Dist. LEXIS 123655
CourtDistrict Court, D. New Jersey
DecidedSeptember 13, 2016
DocketCiv. No. 2:12-02992 (WJM)
StatusPublished
Cited by15 cases

This text of 207 F. Supp. 3d 417 (Rivet v. Office Depot, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rivet v. Office Depot, Inc., 207 F. Supp. 3d 417, 2016 WL 4778693, 2016 U.S. Dist. LEXIS 123655 (D.N.J. 2016).

Opinion

OPINION

WILLIAM J. MARTINI, United States District Judge

Plaintiffs in this case worked as Assistant Store Managers (“ASMs”) for Office Depot during a period ranging from early 2000 to July of 2013. Seeking to bring claims on behalf of themselves and other ASMs, they allege that Office Depot’s method for paying overtime violated state and federal wage and hour laws. Pursuant to 29 U.S.C. § 216(b), Plaintiffs move for final certification of a collective action that alleges violations of the Fair Labor Standards Act (“FLSA”). Under Federal Rule of Civil Procedure 23, Plaintiffs also move for certification of four proposed classes (collectively, “the State Law Classes”) that allege violations of state wage and hour laws. Office Depot opposes both motions, while also moving to decertify the FLSA conditional collective action.

For the reasons that follow, Plaintiffs’ motion for final certification of the FLSA collective action will be GRANTED and Office Depot’s motion for decertification will be DENIED. Plaintiffs’ motion for class certification of the State Law Classes will be GRANTED in part and DENIED in part; the motion will be GRANTED as to the Colorado, Maryland, and Washington Classes, but will be DENIED WITHOUT PREJUDICE as to the Oregon Class.

I. BACKGROUND

This action arises out of an overtime pay policy that Office Depot had in place from late 2005 to 2012. See Declaration of Seth R. Lesser in Support of Class Cert (“Lesser Class Decl.”), Ex. 1. While the policy provided that ASMs were non-exempt employees entitled to overtime, it paid overtime pursuant to a “fluctuating workweek” or “FWW” plan. See Pis.’ Mot. at 4. Accordingly, the Court will refer to the pay policy as the “FWW Plan.”

Typically, non-exempt employees will be paid “time and a half overtime,” meaning they will be paid at one and one-half times their normal hourly rate for every overtime hour worked. See, e.g., 29 U.S.C. § 207(a). Under the FWW Plan, however, the hourly overtime rate is reached by dividing total wages earned per week by the total numbers of hours worked that week. The resulting figure is termed “the regular rate.” Office Depot then pays ASMs for hours worked overtime by using the regular rate instead of the time and one-half rate. See Opinion on MTD, at 3, EOF No. 34. Consequently, the hourly overtime rate decreases as the total number of overtime hours increases. See Mot. for Class Cert, at 3.

The FLSA and the relevant state wage and hour laws permit use of the FWW only where all of the following criteria are met: (1) the employee’s hours fluctuate week to week; (2) the employee receives a fixed weekly salary that remains the same regardless of the number of hours worked; (3) the fixed paid amount must be at a rate not less than the legal minimum wage; (4) the employer and employee must have a clear, mutual understanding that the employee will receive a fixed weekly salary regardless of hours worked; and (5) for the time worked in excess of 40 hours in a given week, the employee must receive a 50% overtime premium in addition to the [422]*422fixed weekly salary. See 29 C.F.R. § 778.114(a).

Plaintiffs contend that when the FWW Plan was in place, an ASM’s non-overtime salary fluctuated depending on how his or her work schedule coincided with certain holidays. Plaintiffs further argue that because ASMs received varying amounts of non-overtime “holiday pay” based on their work schedules, they did not receive a fixed weekly salary, which means the FWW Plan was illegal. Thus, Plaintiffs are of the position that ASMs were entitled to time and one-half overtime, which would have exceeded the amounts paid under the FWW Plan. See Pis.’ Opp. to MTD, ECF No. 22.

In July of 2012, Office Depot moved to dismiss Plaintiffs’ complaint. See ECF No. 11. In a February 22, 2013 opinion and order, The Honorable Dennis M. Cava-naugh granted in part and denied in part Office Depot’s motion. See ECF No. 34. While Judge Cavanaugh dismissed Plaintiffs’ claims for violation of the New Jersey Wage and Hour Law, it held that Plaintiffs had stated a claim under the FLSA. Taking Plaintiffs’ allegations as true, Judge Cavanagh explained that “Office Depot makes additional payments to ASMs dependent upon the hours worked by the ASMs prior to the time the holiday pay is administered and such payments are impermissible under the ‘fixed’ salary requirement of 29 C.F.R. § 778.114(a).” Op. dated Feb. 22, 2013, at 5, ECF No. 34. Plaintiffs later amended their complaint to add claims under the wage and hour laws of the following states: Colorado, Maryland, Oregon, and Washington. See ECF No. 178. Plaintiffs wish to bring separate class actions on behalf of ASMs who worked in each of those states.

On August 19, 2013, the parties stipulated to conditional certification of the FLSA collective action. See ECF No. 114-1. Under the terms of the stipulation, Office Depot retained the right to move for decertification of the collective action pursuant to 29 U.S.C. § 216(b). id. Now, Office Depot moves to decertify the collective action, while Plaintiffs seek final certification. See ECF Nos. 225, 228. Plaintiffs also move for Rule 23 certification of the State Law Classes. See ECF No. 22.

II. FLSA CERTIFICATION

The Court will first decide the FLSA motions. In support of decertification, Office Depot argues that the FWW Plan was not illegal; but even if it were, Plaintiffs could prevail on their claims only if they qualified as non-exempt employees during the relevant period. Office Depot further argues that its decision to treat ASMs as exempt—and, in turn, pay them overtime—merely was a business maneuver designed to avoid future litigation costs. In reality, Office Depot contends, ASMs were “exempt” employees who enjoyed a wide range of discretion and authority. Consequently, Office Depot was not required to pay its ASMs any overtime, let alone overtime that complied with the wage and hour laws.

In light of that position, Office Depot argues that in order to prevail, Plaintiffs first must prove that ASMs were nonexempt employees entitled to overtime. However, the question of whether an employee qualifies as non-exempt is a fact-intensive inquiry that will largely depend on each ASM’s individual circumstances of employment. Specifically, ASMs differed in their levels of supervisory responsibility; the extent to which they hired, trained, disciplined, and reviewed other employees; and the degree to. which they assumed other managerial functions. Therefore, the argument goes, Plaintiffs’ claims cannot be resolved on a collective basis.

Plaintiffs take issue with what they describe as Office Depot’s “reverse misclassi-[423]*423fication defense.” They argue that a reverse misclassification defense has never been recognized by any other court, and should be rejected here accordingly.

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207 F. Supp. 3d 417, 2016 WL 4778693, 2016 U.S. Dist. LEXIS 123655, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rivet-v-office-depot-inc-njd-2016.