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Jennifer Myers v. the Hertz Corporation

October 27, 2010

JENNIFER MYERS,
PLAINTIFF-APPELLANT,
v.
THE HERTZ CORPORATION,
DEFENDANT-APPELLEE.



The opinion of the court was delivered by: Debra Ann Livingston, Circuit Judge:

08-1037-cv

Myers v. Hertz Corp.

Argued: August 4, 2009

Before: POOLER, HALL, and LIVINGSTON, Circuit Judges.

Plaintiff-Appellant Jennifer Myers brought this action in 2002 asserting claims against Defendant-Appellee The Hertz Corp. ("Hertz") for violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 et seq., and various provisions of New York state law. Myers appeals from a July 24, 2007 decision of the United States District Court for the Eastern District of New York (Cogan, J.) denying her motion pursuant to Federal Rule of Civil Procedure 23 to certify a class of station managers at Hertz facilities in New York based on Hertz's purported violations of New York Labor Law § 191 with respect to the class. We affirm the district court's denial of class certification. We additionally conclude that we will not exercise pendent appellate jurisdiction to review the earlier order of the district court (Hurley, J.) that denied Myers's motion, pursuant to 29 U.S.C. § 216(b), to certify an opt-in "collective action" on her FLSA claim. Whether or not this earlier ruling was in error, however, we conclude finally that the district court is not bound by a prior denial of "collective action certification" and may consider a renewed motion, brought by the plaintiffs, to send notice to potential opt-in participants in the action.

AFFIRMED.

In this procedurally convoluted case, plaintiffs seek overtime wages they contend they were unlawfully denied by their employer. The plaintiffs apparently initially intended this case to be a nationwide "collective action" under § 216(b) of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 216(b), through which employees seeking to recover under FLSA's substantive provisions may assert claims on behalf of other "similarly situated" employees. Unlike in traditional "class actions" maintainable pursuant to Federal Rule of Civil Procedure 23, plaintiffs in FLSA representative actions must affirmatively "opt in" to be part of the class and to be bound by any judgment. See, e.g., Hipp v. Liberty Nat'l Life Ins. Co., 252 F.3d 1208, 1216 (11th Cir. 2001) (per curiam); 1 Joseph M. McLaughlin, McLaughlin on Class Actions § 2:16 (5th ed. 2009). To this end plaintiffs requested from the district court an order allowing them to send court-facilitated "notice" of their lawsuit to potential plaintiffs to allow such persons to "opt in." When this request was denied, plaintiffs changed their strategy and sought certification of a Rule 23 class action on a New York state law claim for the "timely" payment of wages. This claim was, as we will explain, entirely derivative of plaintiffs' FLSA claim. The district court denied class certification and this appeal followed. We affirm, concluding that it was not an abuse of discretion for the district court to deny class certification. Although plaintiffs urge us to review the district court's earlier denial of their request to send notice to potential FLSA plaintiffs, we conclude that we lack appellate jurisdiction to consider the merits of this earlier ruling.

I. Background

The background facts relevant to our disposition of this case are briefly stated and are undisputed except where noted. Beginning in 1998, Jennifer Myers was employed as a "Station Manager" at a car rental facility of The Hertz Corporation ("Hertz") at Long Island MacArthur Airport in Ronkonkoma, New York. Am. Compl. ¶¶ 4, 18. Myers's complaint alleges that her job as a station manager required her to work a significant number of overtime hours, but that Hertz has not paid its station managers the time-and-a-half wage for that overtime guaranteed by FLSA. Id. ¶¶ 19-23, 34. Instead, Hertz classifies station managers as "exempt" from FLSA's guarantees on the ground that station managers perform tasks characteristic of "executive" employees. Id. ¶ 24; see also 29 U.S.C. § 213(a)(1) (exempting from FLSA's minimum wage and maximum hour requirements those employees who work "in a bona fide executive . . . capacity" as defined by Labor Department regulations). Myers contends that this designation is incorrect: Hertz station managers do not, she asserts, have the authority to hire, fire, promote, or set the salaries of other Hertz employees, and any tasks performed by station managers characteristic of "management" form only a small part of the overall duties of a station manager. Am. Compl. ¶¶ 26-28. Hertz's policy on the exemption of certain of its employees from FLSA, known as "Policy 2-50," does not specifically list station managers as exempt from FLSA's guarantees. Instead it sets forth "guidelines [and] general criteria used by [Hertz] to determine an employee's status." Employees classified as "Executive Employees" under the Policy include those who spend 80% or more of their time managing a company subdivision, directing the work of other employees, performing tasks relating to their authority to make personnel decisions, and generally acting in a supervisory capacity and exercising discretion in their work. It appears that Hertz did not analyze the duties of individual station managers to determine whether managers at individual Hertz business locations were exempt, but rather determined that all such employees across Hertz facilities meet the Policy's criteria for exemption as "executives." According to Hertz, station managers fall within this category because their primary responsibilities are managerial, involving the supervision of the other workers at the locations, enforcement of Hertz policies, and management of the inventory, among other tasks. Myers does not contend that the terms of Policy 2-50 are inconsistent with applicable administrative regulations; instead, as mentioned earlier, Myers disputes Hertz's characterization of a station manager's duties. This appeal does not require us to resolve this dispute or the underlying merits of Myers's FLSA claim.

Myers's complaint asserts four causes of action: first, that Hertz violated FLSA § 7, 29 U.S.C. § 207, which requires employers to pay employees who work over forty hours per week "not less than one and one-half times the regular rate at which [the employees are] employed" for those overtime hours; second, that Hertz violated "NY Labor Law § 198," Am. Compl. ¶ 42, by misclassifying Myers as "exempt" under FLSA and failing to pay her overtime wages; third, that Hertz violated New York Labor Law § 191, which guarantees the timely payment of wages by employers; and fourth, that Hertz violated New York Labor Law § 162, which requires employers to allow their employees to take meal breaks. Myers attempted to bring these claims on her own behalf and on behalf of a class of "all current and former employees of Hertz who have worked in the positions of 'Senior Station Manager,' 'Station Manager' or 'Station Manager-B' at any Hertz location in the United States from August 1, 1999 through the date the Court orders notice to be sent to putative class members." Id. ¶ 6. Myers sought recovery of her allegedly wrongfully withheld overtime as well as liquidated damages, and she also sought to bring her FLSA claim as a so-called "collective action." Id. ¶¶ 1, 6, 34-37. She invoked 29 U.S.C. § 216(b), which provides:

Any employer who violates [FLSA's substantive provisions relating to minimum wages or maximum hours] shall be liable to the employee or employees affected in the amount of their unpaid [wages], and in an additional equal amount as liquidated damages. . . . An action to recover the liability prescribed [in the preceding sentence] may be maintained against any employer . . . in any Federal or State court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated. No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought.

29 U.S.C. § 216(b). Using § 216(b)'s "consent" procedure, four additional plaintiffs opted in to Myers's action in January 2003, each also a current or former station manager at MacArthur Airport. This appeal follows four rulings of the district court. First, in March 2005 the district court (Denis J. Hurley, District Judge) denied Hertz's motion for summary judgment on plaintiffs' FLSA claim, concluding that disputes regarding material facts -- such as whether plaintiffs' salaries were subject to reduction for violations of Hertz's attendance policy and how plaintiffs' duties should be characterized -- precluded summary judgment on that claim. The court also allowed plaintiffs' Labor Law § 191 claim to proceed, concluding that Hertz's failure to pay overtime at all, if proven to be unlawful, would also support a conclusion that it failed to pay plaintiffs' wages on time as required by § 191. The court dismissed plaintiffs' other two state law claims, concluding that plaintiffs' New York Labor Law § 198 claim, which plaintiffs characterized as a claim for attorneys' fees, was not supported by the plaintiffs' allegations, and that plaintiffs' § 162 claim failed because Labor Law § 162 does not provide a private right of action. The plaintiffs apparently did not attempt to amend their complaint to add additional state law claims following this ruling. In March 2006, after Hertz moved for reconsideration, the district court reversed its earlier conclusion that questions of fact existed regarding whether plaintiffs were "paid on a salary basis," one of the criteria of an "executive" employee set forth in Labor Department regulations. Instead, the court determined that plaintiffs' salaries were not "subject to deduction" and therefore that plaintiffs were "paid on a salary basis" as a matter of law. The court adhered to its previous determination, however, that questions of fact regarding plaintiffs' duties precluded summary judgment for Hertz.

While the summary judgment motions were pending, Myers sought leave to send notice to other potential opt-in plaintiffs "similarly situated" to herself in order to obtain their consent to participate in a "collective action" pursuant to FLSA § 216(b). Myers's motion covered all Hertz employees who had served in station manager positions from August 1, 1999 through the time notice would be sent. Hertz opposed the motion, contending that plaintiffs had failed to make a factual showing regarding the activities conducted by station managers at airports other than MacArthur, and that plaintiffs' allegations that Hertz had engaged in an "unlawful policy or scheme . . . to evade the FLSA" by "misclassifying" station managers as exempt were merely conclusory. Hertz further contended that plaintiffs could not show that other station managers were "similarly situated" because FLSA's similarity analysis requires an individualized assessment of what each potential plaintiff did on the job. The district court agreed with this latter argument, and denied the plaintiffs' motion. See Myers v. Hertz Corp., No. 02-CV-4325 (DRH) (MLO), slip op. at 10 (E.D.N.Y. May 18, 2006) (hereinafter "Collective Action Order"):

[T]he Court finds that Plaintiffs' motion suffers from a fatal flaw that further discovery cannot cure: because liability as to each putative plaintiff depends upon whether that plaintiff was correctly classified as exempt pursuant to . . . Policy 2-50, any collective action would require the Court to make a fact-intensive inquiry into each potential plaintiff's employment situation. Thus, regardless of the possibility that other Station Managers are improperly being classified as exempt pursuant to . . . Policy 2-50, any determination as to their right to overtime would require a highly individualized analysis as to whether the duties they performed fell within that exemption.

Id. at 9.

Plaintiffs thereafter explored the possibility of having the district court certify the Collective Action Order for immediate interlocutory appeal pursuant to 28 U.S.C. § 1292(b). By this time, the case had been reassigned to Judge Brian M. Cogan. Judge Cogan suggested in an August 2006 hearing that he would deny a certificate of appealability. Plaintiffs subsequently moved pursuant to Federal Rule of Civil Procedure 23 to certify a class of Hertz station managers employed in New York State from August 1, 1996, through the time of the motion. The proposed class was to be certified based on the New York Labor Law § 191 claim only. Plaintiffs' counsel indicated to the district court that the class certification motion would be used as a vehicle to get Judge Hurley's earlier rulings, and in particular the Collective Action Ruling, before this Court on an interlocutory basis if the district court were to deny the motion.

On July 24, 2007, Judge Cogan denied plaintiffs' motion for class certification. See Myers v. Hertz Corp., No. 02 Civ. 4325 (BMC) (MLO), 2007 WL 2126264 (E.D.N.Y. July 24, 2007). He noted that, "[p]ursuant to the 'law of the case' doctrine," he "w[ould] not revisit" Judge Hurley's earlier decisions in the case, including the Collective Action Order. Id. at *2. He then concluded that the plaintiffs failed to satisfy Rule 23's commonality, typicality, and predominance requirements because the main issue to be decided in the case, whether each potential plaintiff was properly classified as "exempt" from FLSA's overtime guarantees, required, as Judge Hurley had found earlier in the Collective Action Order, a "fact-intensive inquiry into each potential plaintiff's employment status under the FLSA." Id. at *4 (internal quotation marks omitted). That plaintiffs' proposed class only encompassed New York station managers (rather than all managers nationwide, as in plaintiffs' earlier putative FLSA collective action) did not matter because "individualized proof" would still be needed to determine whether any particular plaintiff was wrongly classified and thus entitled to overtime pay. Id. The evidence plaintiffs proffered, consisting principally of the testimony of ...


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