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Alix v. Wal-Mart Stores

December 4, 2008


The opinion of the court was delivered by: Kavanagh, J.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Calendar Date: October 8, 2008

Before: Mercure, J.P., Spain, Carpinello, Kane and Kavanagh, JJ.


Appeal from an order of the Supreme Court (Platkin, J.), entered June 12, 2007 in Albany County, which, among other things, denied plaintiffs' motion for class action certification.

Plaintiffs, two former employees of defendant, commenced this action alleging that defendant failed to properly compensate them and other similarly situated employees and former employees in violation of 12 NYCRR part 142 and Labor Law articles 6 and 19*fn1. Plaintiffs thereafter moved for class action certification pursuant to CPLR article 9, and sought to be designated as representatives of a proposed class of approximately 200,000 individuals employed or formerly employed by defendant in its stores located throughout the state. Supreme Court denied the motion and plaintiffs now appeal.

To obtain class action certification, a party must establish that "the class is so numerous that joinder of all members, whether otherwise required or permitted, is impracticable"; that questions of law or fact exist that are common to the entire class and predominate over any questions that affect only individual members; that the claims or defenses of the representative plaintiffs typify those of the entire class; that the nominative plaintiffs will fairly and adequately protect the interests of the entire class; and that alternatives are not available that are superior to a class action in terms of insuring a "fair and efficient adjudication of the controversy" (CPLR 901 [a] [1], [2], [3], [4], [5]; see Rife v Barnes Firm, P.C., 48 AD3d 1228, 1229 [2007], lv dismissed and denied 10 NY3d 910 [2008]; Rallis v City of New York, 3 AD3d 525, 526 [2004]; Solomon v Bell Atl. Corp., 9 AD3d 49, 51-52 [2004]). Each requirement is an essential prerequisite to class action certification, and whether each has been established by the representative plaintiffs is a decision that "rests within the sound discretion of the trial court" (Small v Lorillard Tobacco Co., 94 NY2d 43, 52 [1999]; see CLC/CFI Liquidating Trust v Bloomingdale's, Inc., 50 AD3d 446, 447 [2008]; Lauer v New York Tel. Co., 231 AD2d 126, 130 [1997]). Here, Supreme Court concluded that plaintiffs failed to establish the existence of any of these prerequisites and, as a result, denied class action certification. We agree and affirm the court's order.

Plaintiffs' complaint, in essence, is that defendant used its store level managers to implement a corporate-wide policy that systematically deprived many of its employees of proper compensation through the manipulation of time records and the implementation of employment practices designed to compel employees to work off the clock without compensation. In pursuit of these claims, plaintiffs propose a class that includes "persons employed by defendant as hourly employees . . . in the State of New York at any time on or after August 9, 1999 . . . whether employed by Wal-Mart stores, SuperCenters or Sam's Club stores." As defined, it would include 200,000 current and former hourly associates employed over a 12-year period in 110 stores owned and operated by defendant in the state. Initially, it is noted that the class, as proposed by plaintiffs, would include numerous individuals who deny that they were victimized by these workplace practices employed by defendant and deny that they were not properly compensated for the time they actually worked (see Batas v Prudential Ins. Co. of Am., 37 AD3d 320 [2007]). In that regard, the record contains deposition testimony and 49 affidavits from current and former employees of defendant who deny that they were required to work without pay, work through breaks, work off the clock, or were denied overtime compensation, as alleged by plaintiffs.

Both plaintiffs allege that they were required to work off the clock and, as a result, were not properly compensated for the work that they performed during this period. Neither claims that their time records were in any way altered or manipulated by supervisory personnel or that they were victimized by the deceptive practices that they maintain were perpetrated against other members of the proposed class. Their claims, as stated, are markedly different from that of the proposed class and that contrast is made even more evident by the fact that neither alleges that they were forced or directed to work off the clock by any of defendant's supervisory personnel. As such, plaintiffs have not satisfied the prerequisite of typicality (see CPLR 901 [a] [3]; Small v Lorillard Tobacco Co., 94 NY2d at 53; Ackerman v Price Waterhouse, 252 AD2d 179, 201 [1998]).

Plaintiffs must also show that they can fairly and adequately protect the interests of all of the members of the proposed class who they seek to represent. However, by including all employees paid on an hourly basis who were employed by defendant during this 12-year period, the proposed class includes approximately 8,000 managerial employees, many of whom were involved in implementing the labor practices that are the subject of plaintiffs' complaint. The conflict that exists between the interests of these managerial personnel and the other members of the proposed class is self-evident and so substantial that it is simply not possible to conclude that plaintiffs can fairly and adequately represent the interest of each member of the class (see CPLR 901 [a] [4]).

Similarly, plaintiffs have not established that "there are questions of law or fact common to the class which predominate over any questions affecting only individual members" (CPLR 901 [a] [2]). In that regard, it is not enough for plaintiffs to prove that issues exist that are common to the entire class, or even that they are substantial and significant; plaintiffs must show that these issues predominate over unique circumstances that may well characterize each aggrieved employee's complaint (see Lieberman v 293 Mediterranean Mkt. Corp., 303 AD2d 560, 561 [2003]; Mitchell v Barrios-Paoli, 253 AD2d 281, 291 [1999]). Here, plaintiffs have alleged essentially four improper employment practices that they contend were routinely implemented by defendant to deprive employees of proper compensation. Specifically, they charge that defendant's supervisory personnel were encouraged to manipulate employee time cards so as to avoid paying employees for wages earned during rest breaks or overtime or, in some instances, for the entire time that an employee may have worked during a shift*fn2. Plaintiffs also allege that supervisory personnel were ordered to reduce payroll by the arbitrary elimination of personnel which, in turn, created staff shortages that required other employees to work off the clock without compensation to complete their assigned duties.

Establishing the existence of these practices and their impact on a given employee would necessarily require a detailed analysis of the specifics of each employee's complaint. For example, the damages to which each class member would be entitled would necessarily depend upon his or her individual circumstances and could only be accurately ascertained by a fact-specific inquiry into each individual complaint (see Evans v City of Johnstown, 97 AD2d 1, 3 [1983]). Such an inquiry, because of the proposed size of the proposed class, would simply overwhelm consideration of the issues common to the entire class and compromise any goal that might otherwise be achieved by class action certification.

Recognizing the problems inherent in such a fact-specific analysis, plaintiffs propose to employ a statistical analysis of defendant's corporate payroll records to establish the existence of these workplace practices and their impact on defendant's personnel. While these records may establish that employee time cards were changed or altered, this fact, standing alone, does not prove that these entries were improper or part of a deliberate and purposeful scheme designed to deprive employees of their lawful compensation. To reach such a conclusion, the admission of these records would almost certainly have to be supplemented by testimony from witnesses describing the specific circumstances by which these entries were made that resulted in changes on an employee's time card. In addition, if such a statistical analysis is admissible,*fn3 fundamental fairness would require that defendant be allowed the right to explore the ...

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