Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alnd-1_14-cv-01708/USCOURTS-alnd-1_14-cv-01708-1/pdf.json

Parties Involved:
Virginia Prince
Plaintiff
The Cato Corporation
Defendant

Document Text:

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA

EASTERN DIVISION

VIRGINIA PRINCE, on behalf of

herself and all others similarly

situated,

Plaintiffs,

v.

THE CATO CORPORATION,

Defendant.

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Case No.: 1:14-CV-1708-VEH

MEMORANDUM OPINION AND ORDER

Plaintiff Virginia Prince has sued defendant The Cato Corporation alleging

violations of the Fair Labor Standards Act’s (FLSA), 29 U.S.C. §§ 201–19, wage-hour

provisions. Prince moves the court to facilitate nationwide notice to a proposed class of

similarly situated Cato employees under the FLSA’s collective action mechanism, 29

U.S.C. § 216(b). Cato opposes notice in any form and, in the alternative, argues that, if

notice is required at all, it should be limited to north Alabama. The motion will be

GRANTED with the class limited to north Alabama.

I-A.

Cato is a mid-range women’s clothing store with more than 1,000 locations in 32

states. (Doc. 40, ¶ 1; doc. 40-1 at 20:3–4). Virginia Prince worked as a store manager

(SM) for Cato in its Anniston, Alabama store from October 2011 until May 2013 and

FILED

 2016 May-25 PM 04:59

U.S. DISTRICT COURT

N.D. OF ALABAMA

Case 1:14-cv-01708-ACA Document 47 Filed 05/25/16 Page 1 of 15
from May 2014 until present. (Doc. 7-2, ¶ 2). She is, and always has been, paid a fixed

salary and no overtime for this work. (Id., ¶ 4). She is required to work a minimum of 45

hours per week and always works more. (Id., ¶ 25). The overwhelming majority of

Prince’s time on the job is spent performing manual labor. (Id., ¶ 5). The tasks she

performs are the same as the tasks performed by assistant managers, who are hourly

employees paid overtime for work in excess of 40 hours in a week. (Id., ¶ 8). As store

manager, Prince has “little to no” input into most activities bearing on store management,

including pay, employee performance, scheduling, and payroll. (Id., ¶ 12).

Prince filed this lawsuit on September 4, 2014, alleging that Cato has unlawfully

withheld overtime wages from her by misclassifying her as exempt from the wage-hour

laws. (See doc. 1). She purported to bring the suit on behalf of herself and all others

similarly situated, id., and moved on September 17, 2014 to facilitate the distribution of

notice to potential co-plaintiffs. (Doc. 7). The court denied this motion without prejudice

on March 10, 2015. (Doc. 18). On April 8, 2015, the court bifurcated discovery, with

Phase I limited to the issue of class certification. (Doc. 30). Prince moved again on

October 13, 2015 to facilitate notice. (Doc. 35). The motion has come under

submission. (See docs. 40 & 44).

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I-B.

Prince seeks to certify the following class:

[A] nationwide class consisting of:

1. Current and former employees ofCato

Fashions who served as a Store Manager or

Acting Store Manager between September 17,

2011 and the present;

2. Who were paid on a salary basis; and,

3. Worked at least 40 hours in any one week while

paid on a salary basis.

(Doc. 35 at 9).

II-A. THEFLSA

The FLSA prescribes a minimum wage, 29 U.S.C. § 206, and maximum hours, id.

§ 207, although “any employee employed in a bona fide executive, administrative, or

professional capacity” is exempt from the wage-hour requirements. Id. § 213(a)(1). Up

to 40 % of a retail executive or administrative employee’s duties may be “not directly

or closely related to the performance of executive or administrative activities” without

forfeiting the exemption. Id. It is the employer’s burden to show entitlement to an

exemption. Jeffery v . Sarasota White Sox, Inc., 64 F.3d 590, 594 (11th Cir. 1995). A

private citizen may enforce the FLSA either individually or through its collective action

mechanism. 29 U.S.C. § 216(b).

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II-B. COLLECTIVEACTIONS UNDER SECTION 216(B)

“An action to recover the liability prescribed [for violating section 206 and/or

207] . . . may be maintained . . . by any one or more employees for and in behalf of

himself or themselves and other employees similarly situated.” Id. (emphasis added).

Participants in a collective action must opt into the suit. Id. The Eleventh Circuit has

recommended managing collective actions in two steps: a notification stage and a

decertification stage. Hipp v. Liberty Nat. Life Ins. Co., 252 F.3d 1208, 1219 (11th Cir.

2001). “After being given notice, putative class members have the opportunity to opt-in.”

Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1259 (11th Cir. 2008). The

notice should be limited to “employees similarly situated.” Id.

The courts of appeals have avoided defining “similarly situated” with any real

precision. Id. at 1260 n. 38 (citing Mooney v. Aramco Servs. Co., 54 F.3d 1207,

1213–16 (5th Cir. 1995) (noting the “remarkable” fact that many courts decline to define

“similarly situated”), overruled on other grounds by Desert Palace, Inc. v. Costa, 539

U.S. 90 (2003)). The Eleventh Circuit has said that—at a minimum—before facilitating

notice; i.e., approving step one, a “district court should satisfy itself that there are other

employees . . . who desire to ‘opt-in’ and who are ‘similarly situated’ with respect to their

job requirements and with regard to their pay provisions.” Dybach v. State of Florida

Department of Corrections, 942 F.2d 1562, 1567 (11th Cir. 1991) (emphasis added).

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The job requirements and pay provisions need not be identical—just similar. Grayson

v . K Mart Corp., 79 F.3d 1086, 1096 (11th Cir. 1996). The required showing at the

notice stage is “not particularly stringent,” Hipp, 252 F.3d at 1214, and “less stringent

than that for joinder under Rule 20(a) or for separate trials under Rule 42(b).” Grayson,

79 F.3d at 1097.

The Eleventh Circuit’s Morgan decision, affirming the district judge, included the

facts on which the district judge relied in proceeding past step one, and thus provides a

useful benchmark for evaluating Prince’s motion:

The court found Family Dollar's store managers were

similarly situated within the meaning of § 216(b) because

they: (1) worked 60 to 80 hours a week; (2) received a fixed

salary and no overtime pay; (3) spent 75 to 90% of their time

on non-managerial tasks such as stocking shelves, running the

cash registers, unloading trucks, and performing janitorial

duties; (4) did not consistently supervise two or more

employees; (5) lacked the authority to hire, discipline, or

terminate employees without first obtaining permission from

their district managers; (6) could not select outside vendors

without their district managers' permission; (7) worked no

less than 48 hours a week under the threat of pay cuts or loss

of leave time; and (8) arrived at work before the store opened

and stayed until after closing.

Morgan, 551 F.3d at 1243.

As a threshold matter, Prince suggests that Morgan, the most recent

comprehensive discussion of collective action certification in the Eleventh Circuit,

requires that notice issue when a class of employees have the same job description and

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are subject to the same claimed exemption from the wage-hour laws. Prince does not

provide a pinpoint cite for this proposition, opting instead for a pincushion cite:

“Morgan, 551 F.3d at 1233, 1241, 1243, 1245–46, 1249, 1251–54, 1259–65 and [n.]

46.” (Doc. 35 at 14). Prince’s proposed rule is a dubious reading of Morgan, and

although embracing her view would be an expeditious way to dispose of this motion, the

court declines to do so. This motion can be resolved without creating a new, bright-line

rule.

III-A. DUTIES AND PAY

Prince argues that she has been wrongfully denied overtime pay in violation of

section 207. In particular, she claims that Cato fails to pay her overtime because it has

wrongfully misclassified her as an exempt worker. The classification is wrongful, she

says, because her primary job duty is not management; it is sales generation and customer

service. Additionally, she has little to no independence from direct supervision by a

district manager. Cf. id. at 1248–58 (describing a similar relationship between Family

Dollar’s district and store managers).

Prince’s testimony is presumably intended to be exemplary of Cato managers. She

describes her typical duties as opening the store, doing bank deposits, assisting

customers and helping them match clothes, receiving shipment, breaking down boxes,

putting clothes on the floor, cleaning bathrooms, and dusting the store. (Doc. 39-7 at

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117:13–118:3). Prince’s work schedule, as well as that of her assistant managers, is set

by Cato and, although she does fill in the blanks in the schedule, the available blanks

rotate from week to week. (Id. at 88:22–91:1). She is also unable to request additional

merchandise for the store, id. at 150:17–23, and she has no authority to deviate from the

displays in the store. (Id. at 192:13–20).

It is Prince’s position that the policy of misclassification is implemented

nationwide, creating a class of “similarly situated” employees. She presents evidence of

a common job description, doc. 39-2 at 4–5, that the store managers’ subordination to

district managers is the product of nationally implemented regulation of minutiae, doc.

35 at 14–17, and that the decision to classify the store managers as exempt was done

wholesale; i.e., there was not any individualized determination of classification.

Cato responds by saying that a common job description—which is applied

nationwide without regard to variations in store size or geography, doc. 39-1 at

52:21–53:7—is not enough to establish that employees are similarly situated (true, see

Pickering v. Lorillard Tobacco Co., No. 2:10-CV-633-WKW, 2012 WL 314691, at *11

(M.D. Ala. Jan. 30, 2012)), that the job description Prince uses is read selectively, that

the minutiae-regulating policies are not probative, and that a common policy of

exemption is insufficient. The problem with Prince’s objections is that its divide and

conquer strategy—describing each fact as individually insufficient, and hence,

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collectively insufficient—is contrary to the law. Because facts can (and often do) form

a gestalt, the court must assess them in their totality. See, e.g., Whineglass v. Smith, No.

8-11-CV-2784-T-23TGW, 2012 WL 6163067, at *9 (M.D. Fla. Nov 12, 2012).

Cato objects to Prince’s reading of the job description on two grounds. First, by

emphasizing the function weights, which reflect a task’s relative importance, doc. 39-1

at 53:23–54:8, assigned to each job task, Prince ignores the fact that the store manager

is vested with “responsibil[ity] for all activities and objectives in one store.” (Doc 39-2

at 4). Second, Cato says it is entirely unremarkable that a retail manager’s most important

duty is sales. All that is true, but the job description, when itemizing the function weights,

provides that well over fifty-percent of the function weight assigned to the store

manager’s responsibilities are for duties that are not obviously management duties, like

sales and loss prevention, which at least suggestive that the store manager is not, in fact,

managing.

Additionally, Cato’s 30(b)(6)

1

deponent, Vice President for Associate Relations,

1 FED. R. CIV. P. 30(b)(6) provides that:

(6) Notice or Subpoena Directed to an Organization. In its notice or subpoena, a party may

name as the deponent a public or private corporation, a partnership, an association, a governmental

agency, or other entity and must describe with reasonable particularity the matters for examination.

The named organization must then designate one or more officers, directors, or managing agents, or

designate other persons who consent to testify on its behalf; and it may set out the matters on which

each person designated will testify. A subpoena must advise a nonparty organization of its duty to

make this designation. The persons designated must testify about information known or reasonably

available to the organization. This paragraph (6) does not preclude a deposition by any other

procedure allowed by these rules.

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Risk Management, and Cato Overseas Human Resources, John Warsinsky, confirmed that

sales generation and customer service are the most important tasks the store manager

performs. (Doc. 39-1 at 54:22–55:2). So the job description is at least vague as to

whether the store manager actively sells products and serves customers more than

managing other employees doing so, and Prince’s reading of the description is buttressed

by her deposition, the affidavits she has provided from other store managers, and Cato’s

Vice-President. Further, the performance of managerial tasks alongside non-managerial

tasks does not necessarily mean that the employee is a manager. See Rodriguez v. Farm

Grocery Stores, Inc., 518 F.3d 1259 (11th Cir. 2008). At this early stage, there is

sufficient evidence buttressing Prince’s reading of the job description to rely on it, at

least in part, in concluding that notice should issue.

Prince summarizes the minutiae-regulating policies as showing that the store

managers uniformly lack authority to hire, fire, and manage personnel, doc. 35 at 9–10;

that district managers and/or the corporate offices uniformly control store operations

id. at 10–11; that store managers uniformly lack control over budget and payroll, id. at

11; they uniformly lack control over employee hours, work schedules, and payrolls, id.

at 12; they uniformly lack control over merchandising, marketing, and Plan-O-Grams, id.;

and they uniformly lack control over store maintenance and vendors. Id. In support of

each of these contentions, Prince cites divers Cato policies, depositions, and affidavits.

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Cato does not appear to dispute the veracity of Prince’s underlying evidence,

except to the extent Cato disputes Prince’s and the opt-in plaintiffs’ typicality (a

discussion reserved for section IV-A, infra). Rather, Cato appears to argue that, first, the

treatment of these policies as probative of similar situation lacks a limiting principle;

“any company seeking to implement uniform policies across all operations will

necessarily have created a situation where all persons employed in a given capacity are

similarly situated.” (Doc. 40 at 15). Cato’s second apparent argument on the point is that

these “randomly selected” policies do not suggest that the store managers are similarly

situated in their “day-to-day duties.” (Id. at 14–15). The first argument was implicitly

rejected by the Eleventh Circuit when that court explicitly relied on comparable policies

in affirming a finding of similar situation. Morgan, 551 F.3d at 1248–51 (describing the

extent to which corporate policies regulated the lilliputian details of a store manager’s

duties). As to the second argument, if Prince has cherry-picked these policies, Cato has

introduced no evidence ofit.

III-B. OTHER EMPLOYEEINTEREST

Prince has presented affidavits from two other former Cato store managers in

North Alabama. (See docs. 39-8 and 39-9). One is from Tracy Ford, who worked as a

store manager from June 2007 to October 21, 2011 in Muscle Schoals and Russellville,

Alabama. (Doc. 39-8, ¶¶ 2–3). The other is from Kimberly Terrell, who worked as a

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store manager from February 2010 to February 2013 in Muscle Shoals and Florence,

Alabama. (Doc. 39-9, ¶ 2).The affidavits describe their experience working as store

managers and reflect that they regularly worked in excess of forty-five hours per week

(docs. 39-8, ¶ 25; 39-9, ¶ 25), that they received a fixed salary and were not paid

overtime (docs. 39-8, ¶ 4; 39-9 ¶ 4), that approximately 90% of their time at work was

spent performing manual labor (docs. 39-8, ¶ 5; 39-9, ¶ 5), and that the job duties for

store manager are essentially the same as for assistant manager, except assistant

managers receive overtime. (Docs. 39-8, ¶ 8; 39-9, ¶ 9).

The district manager or someone higher in the corporation “had direct control over

the stores[’] payroll budget, hiring procedures, employee benefits, scheduling of

employees, banking procedures, employee testing procedures, salary determinations,

merchandise ordering procedures, merchandise selection, merchandise location,

security, maintenance, overtime, and the store hours,” docs. 39-8, ¶ 21; 39-9, ¶ 21, and

the store managers had little to no input in these activities. (Docs. 39-8, ¶ 12; 39-9, ¶

12).

The foregoing reveals that there are individuals aside from Prince who desire to

opt-in and are similarly situated with regard to their job duties and pay provisions,

satisfying Dybach’s absolute minimum. See 942 F.2d at 1567–68. Furthermore, a

number of the facts deemed sufficient in Morgan are also present here: (1) they work

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more than forty hours per week; (2) the managers receive a fixed salary and no overtime

pay; (3) they spend 75 to 90% of their time on non-managerial tasks such as stocking

shelves, running the cash registers, unloading trucks, and performing janitorial duties; (4)

they lack the authority to discipline or terminate employees without first obtaining

permission from their district managers; and (5) they cannot select outside vendors

without their district managers' permission. Thus, Prince has made a sufficient showing

to facilitate notice. However, no one has opted in from outside of north

Alabama—Morgan featured opt-ins from several states prior to conditional certification,

551 F.3d at 1242—and no acting store managers have opted in, so the court will not

include acting store managers, nor managers outside of north Alabama, within the

conditionally certified class. Cf. Guerra v. Big Johnson Concrete Pumping, Inc., No.

05-14237-CIV, 2006 WL 2290512, at *4 (S.D. Fla. May 17, 2006) (indication of

interest from opt-in plaintiffs raises lead plaintiff’s contention beyond “pure

speculation”).

IV-A. CATO’S AFFIDAVITS AND NON-TYPICALITY

Cato presents affidavits from other store managers and marshals them in support

of its contention that Prince, Ford, and Terrell are atypical of Cato managers. As Prince

points out, weighing the credibility of dueling affidavits is better reserved for step two,

when the plaintiffs’ burden is heavier. See Anderson, 488 F.3d at 953 (the burden is

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heavier at step 2); Thiessen v. Gen. Elec. Capital Corp., 267 F.3d 1095, 1102 (10th Cir.

2001) (Step one “require[s] nothing more than substantial allegations that the putative

class members were together the victims of a single decision, policy, or plan.”);

Pendlebury v. Starbucks Coffee Co., No. 04-CV-80521, 2005 WL 84500, at *3 (M.D.

Fla. Jan. 3, 2005) (reserving credibility determinations, unless overwhelming, for step

two). The same goes for Cato’s concurrent duty, 29 C.F.R. § 541.106, argument.

Cato attacks the affidavits from Ford and Terrell on the ground that they contain

hearsay and speculation based on conversations with other Store Managers, see, e.g., doc

39-8 ¶¶ 9–11, although Cato cites no authority for the proposition that conditional

certification must be decided on the basis of admissible evidence. To the extent Cato’s

hearsay objection is an objection directed to the reliability of the declaration, the point

is taken, and the court does not rely on the hearsay portions of the affidavits.

Additionally, Cato suggests that the affidavits are “cookie-cutter” and self-serving, which

(aside from being dubiously probative of the affidavits’ truthfulness) are credibility

arguments more appropriately considered in step two.

IV-B. CATO’S ATTACK ON THELIMITATIONS PERIOD

A final matter: the class period will differ depending on whether Cato’s alleged

violations of the FLSA are willful; three years if so, and two years if not. 29 U.S.C. §

255(a). Prince, in her initial brief, argued that willfulness is a jury question, so notice

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should issue for a three year period. Cato, in its response, argued that because it

constantly assesses exempt status, it cannot be found to be willful. Prince is correct; the

notice will go back three years.

V.

Accordingly, it is ORDERED that:

A class within the Northern District of Alabama, as

defined in 28 U.S.C. § 81(a), consisting of any person who

satisfies the following criteria:

1. Current and former employees of Cato

Fashions who served as a Store Manager

between September 17, 2011 and the present;

2. Who were paid on a salary basis; and,

3. Worked at least 40 hours in any one week while

paid on a salary basis

is hereby conditionally certified.

The parties are further ORDERED, at the decertification stage, to comply with

Appendix II (governing summary judgment) of the court’s uniform initial order in

presenting their arguments. (See doc. 4 at 14–21). The court must emphasize that

citations to depositions or affidavits in the supporting briefing for step two must contain

pinpoint cites.

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DONE and ORDERED this 25th day of May, 2016.

VIRGINIA EMERSON HOPKINS

United States District Judge

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