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DeSilva v. North Shore-Long Island Jewish Health Sytem, Inc.

United States District Court, E.D. New York

June 5, 2014

CLAUDIA DESILVA, et al., on behalf of themselves and all other employees similarly situated, Plaintiffs,

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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For Gregg Lambdin, on behalf of themselves and all other employees similarly situated, Plaintiff: James Nelson Thomas, LEAD ATTORNEY, Jessica Lynne Witenko, Michael J. Lingle, Sarah Cressman, Thomas & Solomon LLP, Rochester, NY; Justin Michael Cordello, LEAD ATTORNEY, Thomas & Solomon, Rochester, NY.

For Eileen Bates-Bordies, on behalf of themselves and all other employees similarly situated, Margaret Hall, on behalf of themselves and all other employees similarly situated, Kelly Iwasiuk, on behalf of themselves and all other employees similarly situated, Brenda Gaines, on behalf of themselves and all other employees similarly situated, Claudia Desilva, on behalf of themselved and all other employees similarly situated, Plaintiffs: James Nelson Thomas, LEAD ATTORNEY, Jessica Lynne Witenko, Michael J. Lingle, Sarah Cressman, Thomas & Solomon LLP, Rochester, NY; Justin Michael Cordello, Thomas & Solomon, Rochester, NY.

For North Shore-Long Island Jewish Health System, Inc. North Shore-Long Island Jewish Health System, also known as, North Shore-Long Island Jewish Health Care, Inc., Forest Hills Hospital, Franklin Hospital, Glen Cove Hospital, also known as Glen Cove Hospital-The Mildred and Frank Feinberg Campus, Huntington Hospital Association Huntington Hospital, also known as, Long Island Jewish Medical Center, North Shore University Hospital, Plainview Hospital, Schneider Children's Hospital, Southside Hospital, Staten Island University Hospital, Staten Island University Hospital, Syosset Hospital, Michael J. Dowling, Joseph Cabral, North Shore-Long Island Jewish Health System 403B Plan, Long Island Jewish Hospital, Zucker Hillside Hospital, Defendants: Anthony J. D'Auria, LEAD ATTORNEY, Winston & Strawn LLP, New York, NY; Amanda C. Sommerfeld, Jennifer Rappoport, Monique Ngo-Bonnici, Winston & Strawn LLP, Los Angeles, CA; Joan B Tucker Fife, Winston & Strawn LLP, San Francisco, CA.

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PAMELA K. CHEN, United States District Judge.

Plaintiffs bring this putative class and collective action against Defendant North Shore--Long Island Jewish Health System, Inc. and associated organizations (" Defendants" or " LIJ" ) for failure to pay wages and overtime compensation in violation of the Fair Labor Standards Act, 29 U.S.C. § § 201 et seq. (" FLSA" ) and parallel provisions of the New York Labor Law (" NYLL" ). On March 8, 2012, Judge Bianco, then-presiding,[1] conditionally certified the matter as an FLSA collective action and authorized notice to potential individual plaintiffs. (Dkt. 212.) After notice issued, 1,196 Plaintiffs[2] opted in to the action. (Dkt 392-1 (" Pl. Cert. Mem." ) at 3.) Following discovery, on the basis of a voluminous evidentiary record, LIJ moved, on October 14, 2013, to decertify the collective action. On the same date, Plaintiffs moved for Rule 23 class certification, in addition to final FLSA collective action approval. (Dkt. 392.) Each party also submitted a motion to strike a supporting document offered by the opposing party, and in addition, Defendants moved for sanctions against Plaintiffs and their counsel. (Dkts. 389-391.) The Court held oral argument on the motions on December 12, 2013.

After a thorough review of the vast record and careful consideration of the parties' arguments, the Court concludes that Plaintiffs have failed to demonstrate that they are similarly situated to the degree necessary to maintain an FLSA collective action. In the time since this action was initially filed, mounting precedent supports the proposition that LIJ's timekeeping system and system-wide overtime compensation policies are lawful under the FLSA. Given the evolving caselaw, in order to maintain a collective action, Plaintiffs are required to demonstrate that LIJ's lawful policies are or were consistently and systematically violated in such a way that would be possible to generalize across the 1,196 opt-in Plaintiffs in this case. Plaintiffs have failed to do so. In fact, discovery has borne out the opposite. The record demonstrates that Plaintiffs work or worked in a wide variety of departments at a vast array of locations and held a diverse collection of positions. As a result, Plaintiffs' job duties differed and their compensation

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--or lack thereof--for overtime work performed during meal breaks likewise differed accordingly. Analyzing each Plaintiff's unique employment situation would require the kind of individualized inquiry that is antithetical to collective action treatment. See, e.g., Zivali v. AT & T Mobility, LLC, 784 F.Supp.2d 456, 459 (S.D.N.Y. 2011) (citing Hinojos v. Home Depot, Inc., 06--CV--00108, 2006 WL 3712944, at *3 (D. Nev. Dec. 1, 2006). Moreover, Defendants offer a number of plausible, highly individualized defenses in an attempt to combat Plaintiffs' varied factual allegations. Accordingly, the Court finds that the presentation of purportedly representative evidence would hinder, rather than advance, considerations of procedure and fairness. See, e.g., Zivali, 784 F.Supp.2d at 459; Beauperthuy v. 24 Hour Fitness USA, Inc., 772 F.Supp.2d 1111, 1131 (N.D. Cal. 2011) (" Ultimately, the decision whether to proceed as a collective or class action turns on whether this device is the superior way of resolving a controversy." ); Johnson v. Big Lots Stores, Inc., 561 F.Supp.2d 567, 574 (E.D. La. 2008) (" [T]he more dissimilar plaintiffs are and the more individuated [defendant's] defenses are, the greater doubts there are about the fairness of a ruling on the merits--for either side--that is reached on the basis of purportedly representative evidence." ). Therefore, decertification is warranted.

For largely the same reasons, common issues do not predominate, and Plaintiffs' motion for Rule 23 class certification is therefore denied. Plaintiffs' motion to strike the expert report of Dr. Joseph Krock (the " Report" ) is denied because the limited propositions from the Report on which the Court relies are relevant, permissible, and uncontroverted. Because the Court does not rely on the Rule 23 Affirmation of Sarah E. Cressman, Defendants' motion to strike that affirmation is denied as moot. Finally, although Plaintiffs have engaged in questionable tactics and conduct in pursuing this case, the Court, exercising its discretion, declines to impose Rule 11 sanctions on Plaintiffs and their counsel.

I. Background[3]

Named Plaintiffs in this action are or were LIJ employees at various locations throughout the North Shore-Long Island Jewish Health System (" LIJ Health System" ) during the time period relevant to this litigation. DeSilva II, 2012 WL 748760 at *1. Defendants are health care facilities and officials involved in the LIJ Health System. (TAC ¶ 15.) Managers at

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LIJ locations use a timekeeping system called " Kronos," or colloquially " myTime," to track employee time worked. (Dkt. 394-1 (" myTime Training Manual" ) at 5, 7, 59-86.) The program enables managers to enter employees' schedules into the system, and employees verify their hours by " badging" (swiping a security badge) in and out. ( Id. at 5 (" Employees swipe at the Badge Reader and the time is collected and sent to myTime" ); Dkt. 395-2 (" Bosco Dep." ) at 51:14-53:10.) Employees do not badge in and out for meal periods; rather, Kronos is programmed to automatically deduct a half-hour meal period for employees who work six or more hours in a single day. (Dkt. 417 (myTime Rules for Managers) at 10; Bosco Dep. 54:4-57:22.) Employees are paid for their scheduled shift hours minus the automatic meal deduction, unless a manager cancels the automatic meal deduction in Kronos to add time worked during a meal period to the employee's time card. (Dkt. 395-1 (myTime policy document).) Moreover, only supervisors have the ability to approve overtime and adjust the employee's work hours and pay accordingly. (myTime Training Manual at 38.) Plaintiffs allege that, as a result of the myTime system and policy, they were not compensated for meals and breaks, despite working through those breaks, in violation of the FLSA. (TAC ¶ ¶ 100, 103, 105-06, 111.)[4]

II. FLSA § 216(b) Certification

Courts in this Circuit use a two-step method in assessing whether to certify a collective action. Myers v. Hertz Corp., 624 F.3d 537, 554 (2d Cir. 2010). At the conditional certification stage, Judge Bianco found Plaintiffs' allegations sufficient to satisfy the " modest factual showing" required at that stage to determine whether the named plaintiffs and potential opt-in plaintiffs " together were victims of a policy or plan that violated the [FLSA]." Hoffmann v. Sbarro, Inc., 982 F.Supp. 249, 261 (S.D.N.Y. 1997); see also Chowdhury v. Duane Reade, Inc., 06-CV-2295 (GEL), 2007 WL 2873929, *2 (S.D.N.Y. Oct. 2, 2007). He certified the following class for an FLSA collective action: " Hourly employees involved in direct patient care responsibilities whose scheduled hours include a deduction for an unpaid meal break and who would have had to report performing work during meal breaks in order to be paid for such work." [5] (Dkt. 212.)

Now at the second stage, on LIJ's post-discovery motion for decertification, the Court must apply heightened scrutiny in determining whether Plaintiffs are similarly situated for the purposes of the FLSA.[6]

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Myers, 624 F.3d at 555 (" At the second stage, the district court will, on a fuller record, determine whether a so-called 'collective action' may go forward by determining whether the plaintiffs who have opted in are in fact 'similarly situated' to the named plaintiffs." ); see also Jacobs v. N.Y. Foundling Hosp., 483 F.Supp.2d 251, 265 (E.D.N.Y. 2007) (noting that second-stage certification requires the court to exercise " a more heightened scrutiny" in determining whether the potential plaintiffs are similarly situated); Zivali, 784 F.Supp.2d at 460 (citing Damassia v. Duane Reade, Inc., 04-CV-8819, 2006 WL 2853971, at *3 (S.D.N.Y. Oct. 5, 2006)). Although the Second Circuit has yet to endorse a set of criteria appropriate for consideration on a motion for decertification, district courts generally analyze whether the following factors counsel for or against maintaining a collective action: " (1) disparate factual and employment settings of the individual plaintiffs; (2) defenses available to defendants which appear to be individual to each plaintiff; and (3) fairness and procedural considerations." Laroque v. Domino's Pizza, LLC, 557 F.Supp.2d 346, 352 (E.D.N.Y. 2008) (quoting Guzman v. VLM, Inc., 07-CV-1126, 2007 WL 2994278, at *3 (E.D.N.Y. Oct. 11, 2007)); see also, e.g., Zivali, 784 F.Supp.2d at 460; Ayers v. SGS Control Servs., Inc., 03--CV--9078, 2007 WL 646326, at *5 (S.D.N.Y. Feb. 27, 2007). If the court concludes that the plaintiffs are similarly situated, the action proceeds collectively; if not, " the class is decertified, the claims of the opt-in plaintiffs are dismissed without prejudice, and the class representative may proceed on his or her own claims." Zivali, 784 F.Supp.2d at 460 (citing Lee v. ABC Carpet & Home, 236 F.R.D. 193, 197 (S.D.N.Y. 2006)).

* * *

Here, LIJ's official time-keeping and overtime compensation policies, as written, comply with the FLSA. Consequently, Plaintiffs have failed to identify any unlawful system-wide policy or practice that was applied uniformly to each of the named Plaintiffs. Cf. White v. Baptist Mem'l Health Care Corp., 08-2478, 2011 WL 1883959 (W.D. Tenn. May 17, 2011) aff'd, 699 F.3d 869 (6th Cir. 2012) (" To bind together otherwise differently situated employees, an alleged common policy must potentially violate the FLSA." ) To the contrary, Plaintiffs contend the alleged FLSA violations arise from a hodgepodge of procedures implemented in varying ways by different managers across numerous departments and locations. As a result, a determination on the merits is not susceptible to generalized proof; it would require individualized inquiries regarding the procedures in place at each department, and the conduct of individual managers and employees. For those reasons, decertification of Plaintiffs' collective action is warranted.

A. Legality of LIJ's Compensation Policies

To the extent Plaintiffs assert that a collective action is appropriate due to

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Defendants' common policy of automatically deducting 30 minutes per employee shift for lunch, their argument fails because, as courts in this circuit have recognized, automatic meal deduction policies are not per se illegal. See, e.g., Wolman v. Catholic Health Sys. of Long Island, Inc., 853 F.Supp.2d 290, 2012 WL 566255, at *7 (E.D.N.Y. Feb.16, 2012); see also Ellis v. Common Wealth Worldwide Chauffeured Transp. of NY, LLC, 10-CV-1741 DLI JO, 2012 WL 1004848, at * 9-10 (E.D.N.Y. Mar. 23, 2012). Without more, a legal automatic meal deduction for previously scheduled breaks cannot serve as the common bond around which an FLSA collective action may be formed. See, e.g., White, 2011 WL 1883959 at *8 (the defendant's " mere adoption of a system that, by default, deducts meal breaks from its employees' compensation does not constitute a unified policy of FLSA violations capable of binding together the Opt-in Plaintiffs" ); Camesi v. Univ. of Pittsburgh Med. Ctr., No. 09-85J, 2011 WL 6372873, *5 (W.D. Pa. Dec. 20, 2011) (the defendant's " implementation of an automatic deduction policy does not, in and of itself, warrant final certification" ); Camilotes v. Resurrection Health Care Corp., 286 F.R.D. 339, 350 (N.D.Ill. 2012) (same) (collecting cases). Though not controlling, the sheer number of district courts that have decertified " automatic deduction" collective actions in the context of hospital breaks, and the rationales on which they have relied, are persuasive. See, e.g., Camilotes, 286 F.R.D. at 351 (decertifying collective action in the context of automatic deduction policy at hospital); Kuznyetsov v. W. Penn Allegheny Health Sys., Inc., 10-CV-948, 2011 WL 6372852 (same); Camesi, 2011 WL 6372873; White, 2011 WL 1883959 (same); Frye v. Baptist Mem'l Hosp., Inc., No. 07-2708, 2010 WL 3862591, *3 (W.D. Tenn. Sept. 27, 2010), aff'd 495 F.App'x 669, 2012 WL 3570657 (6th Cir. 2012) (same).

An employer's timekeeping policies are legal as long as they " allow[] for the complete and accurate recording of all time worked." Zivali, 784 F.Supp.2d at 461. Here, Plaintiffs concede that LIJ's formal policies and procedures made it at least possible for employees to receive proper compensation. LIJ's relevant overarching polices were " to ensure that pay received by health system employees accurately reflects each employee's time worked" and " to provide eligible health system employees with an opportunity to take rest periods and meal breaks during the course of a workday." (Santiago Decl. Exs. 5, 6.[7] Employees were required to review their facility's timekeeping policies and participate in timekeeping training. (Dkt. 388-1 at 7-8, n. 15 (incorporating accompanying exhibits).) Supervisors were trained to provide employees opportunities for meal and rest breaks, and to ensure employees were compensated for all time worked, including how to provide proper pay when employees worked, in whole or in part, through meal periods. ( Id. at n. 16 (incorporating accompanying exhibits).)

Perhaps in recognition of the precedent mounting against them, Plaintiffs now argue that it is not merely the " auto-deduct" policy itself that violates the FLSA, but Defendants' implementation of the automatic deduction policy.[8] Specifically,

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Plaintiffs have pivoted from an " auto-deduct" policy to an " overtime approval" policy as the basis for their FLSA claim. (Dkt. 403 at 12) (" Plaintiffs here are not relying on an argument that defendants' auto-deduct policy, in and of itself, is illegal . . . ." ) Plaintiffs' new argument is essentially that three of Defendants' separate policies converge to form a single FLSA violation: (1) automatically deducting meal time; (2) relying on employees to report missed meal period work; and (3) paying only for reported time that is approved by a manager.

The problems with Plaintiffs' new collective action theory are three-fold. First, Plaintiffs " approval policy" class was never conditionally certified, and only raised for the first time, in the long history of this case, in Plaintiffs' certification-related briefs. As discussed supra, Judge Bianco conditionally certified a collective action for " [h]ourly employees involved in direct patient care responsibilities whose scheduled hours include a deduction for an unpaid meal break and who would have had to report performing work during meal breaks in order to be paid for such work." (Dkt. 212.) Thus, the " approval policy" class that Plaintiffs now seek to have finally certified was never conditionally certified. While conditional certification may not be an absolute prerequisite to final certification, it would be unfair and inefficient to allow Plaintiffs to change their legal theory after obtaining conditional certification, sending notice to potential class members, and conducting discovery based on that theory. This is especially so where, as here, Plaintiffs knew, or should have known, the facts giving rise to their new theory at the outset, namely that compensation for work performed during a meal break had to be approved by a supervisor.

Second, Plaintiffs' latest iteration of the " auto-deduct" policy theory is no more persuasive than the original. Tacking the " reporting policy" and " approval policy" onto the lawful " auto-deduct" policy is not enough to convert LIJ's legal compensation scheme into a FLSA violation. While " meal periods are compensable under the FLSA when employees during a meal break perform duties predominantly for the benefit of the employer," Reich v. S. New Eng. Telcomms. Corp.., 121 F.3d 58, 65 (2d Cir. 1997), the FLSA does not prescribe any particular form of recordkeeping. See, e.g., 29 C.F.R. § 516.1(a) (" No particular order or form of records is prescribed by the regulations in this part." ). Moreover, though an employer may not prevent an employee from reporting overtime work that he or she actually performed, there is no specific prohibition against requiring an employee to report having worked in order to receive pay for time worked. See Kuebel v. Black & Decker Inc., 643 F.3d 352, 355-57 (2d Cir. 2011). There is also no legal requirement that employers contemporaneously record time worked. Zivali, 784 F.Supp.2d at 461. It simply cannot be the case that merely establishing a process for an employee to report overtime worked transforms a legal policy, namely " auto-deduct," into an illegal one. See e.g., White v. Baptist Mem'l Health Care Corp., 699 F.3d at 876 (citation omitted) (holding that when an employer merely sets up a " reasonable process for an employee to report uncompensated time," it " is not liable for

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non-payment if the employee fails to follow the established process." ) It would be impossible for an organization as large as LIJ to keep track of their employees' extemporaneously performed overtime without the employees notifying a manager or personally amending their time charts to reflect overtime worked.

Third, Plaintiffs' new " approval policy" theory makes the relevant inquiry even more individualized and further cuts against their argument that Plaintiffs were subject to a system-wide policy. See, e.g., Blaney v. Charlotte--Mecklenburg Hosp. Auth., 10--CV--592--FDW--DSC, 2011 WL 4351631, *7 (W.D.N.C. Sept. 16, 2011) (denying certification of a FLSA collective action where " Defendant ha[d] established that many of the alleged common policies the Plaintiffs complain of are actually left to the decentralized discretion of the individual units and their exempt and non-exempt management staff." ) As the certification-related ...

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