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Indergit v. Rite Aid Corp.

June 16, 2010

YATRAM INDERGIT, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
RITE AID CORPORATION, RITE AID OF NEW YORK, INC., AND FRANCIS OFFOR AS AIDER & ABETTOR, DEFENDANTS.
ANGEL NAULA AND JOSE FERMIN, ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
RITE AID OF NEW YORK D/B/A RITE AID, RITE AID CORPORATION AND JOHN DOES 1 THROUGH 100, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Paul G. Gardephe, U.S.D.J.

MEMORANDUM OPINION

In this putative collective and class action*fn1 , Plaintiff Yatram Indergit asserts claims under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 et seq., and the New York Labor Law ("NYLL"), §§ 650 et seq., on behalf of himself and all others similarly situated, for failure to pay overtime compensation. Plaintiff also asserts individual claims for age discrimination under the Age Discrimination in Employment Act, 29 U.S.C. §§ 621 et seq. ("ADEA"), the New York State Human Rights Law, Executive Law §§ 290 et seq. ("NYSHRL"), and the New York City Human Rights Law, N.Y.C. Admin. Code §§ 8-107 et seq. ("NYCHRL"), and for retaliation under the NYLL and FLSA.*fn2 Plaintiff seeks, for himself and others similarly situated, monetary damages and injunctive relief.

In an order dated March 31, 2010, this Court granted Indergit's motion for court-authorized notice to potential opt-in plaintiffs pursuant to 29 U.S.C. § 216(b)*fn3 , indicating that a written opinion would follow.*fn4 (Docket No. 93 ("March 31, 2010 Order")).

BACKGROUND

On October 31, 2008, Indergit brought suit on behalf of himself and others similarly situated against his former employer, Rite Aid Corporation and Rite Aid of New York (collectively "Rite Aid"), alleging that Rite Aid had failed to pay him, other store managers, and assistant managers overtime wages in violation of the FLSA and NYLL. Rite Aid hired Indergit as a store manager in 1979, and he went on to spend most of his professional career working at a Rite Aid store in the Bronx, New York. (Amended Cmplt. ¶ 45) On November 30, 2007, Rite Aid terminated Indergit's employment. (Id.)

Indergit's Amended Complaint includes, inter alia, a collective action claim under the FLSA and a class action claim based on alleged violations of the NYLL. (Id. ¶¶ 57-77) The FLSA claim is based on Rite Aid's failure to pay overtime compensation to its store managers, while the NYLL claim is based on Rite Aid's failure to pay overtime compensation to both its store managers and assistant store managers.*fn5

The core allegation of the Amended Complaint is that Rite Aid misclassified Indergit and other store managers as executive employees who were exempt from the FLSA's overtime provisions when, in fact, they were performing primarily non-managerial work and were entitled to overtime pay. (Id. ¶¶ 13, 35-40, 42) Indergit claims that Rite Aid -- as part of a corporate nationwide program to reduce the amount of overtime compensation paid to non-exempt employees -- has a policy of requiring its store managers to work overtime to perform the duties of non-exempt employees, such as cashiers and stock handlers. (Id. ¶¶ 37, 38) The Amended Complaint alleges that store managers are required "to work up to 80 hours a week and/or six or seven days a week" in order to "make up all the hours previously worked by non-exempt employees."*fn6 (Id. ¶ 38)

Rite Aid previously moved for summary judgment on Indergit's FLSA overtime compensation claim, arguing that he plainly fell under the "bona fide executive exemption" to the FLSA and had been properly classified. Rejecting these arguments as premature, this Court denied Rite Aid's motion on March 31, 2010. See generally Indergit v. Rite Aid Corp., No. 08 Civ. 9361 (PGG), 2010 U.S. Dist. LEXIS 32322 (S.D.N.Y. Mar. 31, 2010).

DISCUSSION

Rite Aid argues that Indergit has not shown "that he, as a Store Manager . . . is similarly situated to the approximately 8,400 current and former [Store Managers] . . . employed by subsidiaries of Rite Aid," and that accordingly he has failed to establish a "prerequisite for conditional certification." (Def. Br. 1) Indergit, however, contends that "all of the Collective Plaintiffs suffered from Defendants' illegal practice of failing to pay overtime" and that all salaried Store Managers "were. . .victims of Defendants' policy[,] which sought to raise profits by decreasing the hours worked by hourly employees and transferring their job duties to Management." (Pltf. Br. 1) (emphasis in original). Indergit contends that Rite Aid consistently reduced the number of work hours he was allowed to assign to hourly employees and that "[a]s he decreased the hours worked by non-exempt employees, in accordance with this national policy, Plaintiff, along with his assistant managers, had no choice but to perform those tasks formerly being performed by those non-exempt employees." (Pltf. Br. 2) According to Indergit, the overtime hours he worked each week were "spent not on managerial work" but rather "almost completely [on] menial tasks that are not exempt from overtime laws." (Pltf. Br. 2) Similarly, opt-in Plaintiff Neil Rand, who served as a store manager from June 1996 to February 2006 (Rand Aff. ¶ 1), alleges that he spent about one hour a day performing managerial work during his fifty-five to sixty hour work week, and that the rest of his time was spent performing "menial jobs around the store that should have been completed by hourly employees, not Management." (Pltf. Br. 3 (citing Rand Aff. ¶ 3)). Indergit alleges that all store managers were victims of a common national Rite Aid policy because "all policies which relate to the individual stores and management are produced on a national level with oversight from District and Regional management." (Pltf. Br. 4)

I. THE EXECUTIVE EXEMPTION

The FLSA requires that employers pay their employees time-and-a-half after the employee has worked more than 40 hours during a work week. 29 U.S.C. § 207(a)(1). Employers do not have to pay time-and-a-half, however, to individuals "employed in a bona fide executive, administrative, or professional capacity." 29 U.S.C. § 213(a)(1).

Congress did not further define these exemptions in the FLSA, but instead delegated this responsibility to the Department of Labor. Because the executive exemption is an affirmative defense to overtime pay claims, the employer bears the burden of proving that a plaintiff has been properly classified as an exempt employee. See Corning Glass Works v. Brennan, 417 U.S. 188, 196-97 (1974); Clougher v. Home Depot U.S.A., Inc., No. 06 Civ. 5474 (RRM), 2010 U.S. Dist. LEXIS 24238, at *9-10 n.4 (E.D.N.Y. Mar. 11, 2010) ("In the context of overtime wage claims . . . application of the 'executive exemption' is an affirmative defense, which any defendant employer bears the burden of proving by a preponderance of the evidence." (citing Bilyou v. Dutchess Beer Distribs., Inc., 300 F.3d 217, 222 (2d Cir. 2002)). "[B]ecause the FLSA is a remedial act, its exemptions, such as the 'bona fide executive' exemption . . . are to be narrowly construed." Martin v. Malcolm Pirnie, Inc., 949 F.2d 611, 614 (2d Cir. 1991).

Department of Labor regulations set forth the following requirements for application of the executive exemption:

(1) [The employee is] [c]ompensated on a salary basis at a rate of not less than $455 per week (or $380 per week, if employed in American Samoa by employers other than the Federal Government), exclusive of board, lodging or other facilities;

(2) [The employee's] primary duty is management of the enterprise in which the employee is employed or of a customarily recognized ...


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