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Costello v. Kohl's Illinois, Inc.

United States District Court, S.D. New York

September 4, 2014

AMANDA COSTELLO and LONIECE REED, individually and on behalf of all other persons similarly situated, : Plaintiffs,
v.
KOHL'S ILLINOIS, INC., KOHL'S CORP., and KOHL'S DEPARTMENT STORES, INC., Defendants.

MEMORANDUM OPINION AND ORDER

GREGORY H. WOODS, District Judge.

Plaintiffs Amanda Costello and Loniece Reed (collectively, "Plaintiffs") bring this lawsuit on behalf of themselves and other similarly situated employees against Kohl's Illinois, Inc., Kohl's Corp., and Kohl's Department Stores, Inc. (collectively, "Kohl's" or "Defendants") alleging that Kohl's violated provisions of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq. [1] Plaintiffs allege that they and other Children, Footwear, and Home Assistant Store Managers ("CFH ASMs") and Apparel and Accessories Assistant Store Managers ("AA ASMs") (collectively, "ASMs")[2] were misclassified as exempt from the FLSA and are thus entitled to overtime for hours worked in excess of forty hours per week. Before the Court is Plaintiffs' motion to conditionally certify an opt-in collective action pursuant to 29 U.S.C. § 216, to require Kohl's to disclose the names and contact information of former and current ASMs, and to authorize the sending of notice to those ASMs. For the reasons that follow, the motion is granted.

I. Background

Kohl's is a department store that operates approximately 1, 160 stores nationwide. Shields Dep.[3] 36; Shields Decl. ¶ 3. Kohl's organizes its stores into four territories, 18 regions, and 91 districts, which each contain approximately 12 to 14 stores. Shields Dep. 36-37. Kohl's employs various territory and regional managers, as well as one district manager per district. Shields Dep. 40, 45. Within each store, Kohl's employs a store manager, up to five types of assistant store managers (including the two ASM positions at issue in this suit), and various associates. Shields Dep. 45-46. There are approximately 3, 500 AA and CFH ASMs nationwide. See Def. Br at 1.[4]

Kohl's contends that the AA ASM position has "overall management responsibility for the sales area of a Kohl's store" for apparel and accessories and "is generally responsible for the supervision of, on average, anywhere from approximately 20 to 60 Kohl's associates." Shields Decl. (Dkt. No. 58-2) ¶ 6. Likewise, Kohl's contends that the CFH ASM position has "overall management responsibility for the sales area of a Kohl's store" for children's, footwear, and home goods and "is generally responsible for the supervision of, on average, anywhere from approximately 30 to 35 Kohl's associates." Shields Decl. ¶ 7. Both CFH and AA ASMs have shared a job position description since at least 2006. See Shields Dep. 58-67; Position Descriptions (Dkt. No. 44-3). The most recent job position description, which is similar to prior descriptions, summarizes the ASM position as follows: "These positions play an integral role as part of the Store Management Team. Each has the responsibility of management and supervision of all Associates in these areas. Responsibilities include leading the Store in the following areas: Associate development, supervision of merchandise sales areas to ensure execution according to Kohl's Best Practices, communications, analysis of business operations, expense management, and general management of the Store as part of the Store Management Team." Position Descriptions at Bates KCO_04571. Kohl's classifies all ASMs nationwide as exempt from the overtime provisions of the FLSA and pays them on a salary, rather than hourly, basis. Id.; Shields Dep. 46, 54.

Costello and Reed were both employed by Kohl's as ASMs. Costello was an ASM in two stores in Woodbury and Wallkill, New York from approximately April 2010 through December 2012. Compl. ¶ 8; Costello Dep. 53-54. Reed was an ASM in two stores in Stafford and Culpepper, Virginia from approximately June 2008 through March 2010. Compl. ¶ 11; Reed Dep. 92-93. Costello and Reed allege that they worked more than 40 hours per week, during which they performed primarily routine, non-managerial work. Compl. ¶¶ 34-37; see also, e.g., Costello Dep. at 121-22, 226; Reed Dep. at 209-10. Both before and after the instant motion was filed, ten other ASMs who have worked in stores in eleven states - including Wisconsin, New Mexico, Minnesota, North Carolina, West Virginia, Pennsylvania, Illinois, Texas, Missouri, Alabama, and Nebraska - have opted-in as plaintiffs in this case. See Backhuas Dep. at 139-40; Alexander Dep. at 39-40; Escoto Decl. (Dkt. No. 44-8) ¶ 2; Land Decl. (Dkt. No. 44-9) ¶ 1; Shields Decl. ¶ 16; Consents to Join filed by Nohr, McCorkle, Hughes, and Boruch (Dkt. Nos. 62-64, 68).

Discovery in this case was bifurcated to first permit discovery related to the instant motion. Scheduling Order (Dkt. No. 25) ¶ 6. Thus, the opt-in plaintiffs who joined relatively early on in the case - Costello and Reed, as well as Vonda Backhaus and Homer Alexander - were deposed. Three corporate representatives from Kohl's were deposed pursuant to Fed.R.Civ.P. 30(b)(6). The parties also exchanged documentary discovery, some of which has been submitted to the Court in connection with this motion. In addition to this discovery, both sides have submitted various declarations: plaintiffs submitted declarations from Yuri Escoto and Londrell Land, who joined the action after the limited discovery period had closed but before the instant motion was filed, and Kohl's submitted six declarations from current and former ASMs who spend only a small percentage of their time on non-management duties.

II. Discussion

A. Standard for Conditional Certification of an FLSA Collective Action

The FLSA requires employers to pay their employees overtime wages at a rate of time and a half for hours worked in excess of 40 hours a week, unless the employees are exempt from the provisions of the FLSA. 29 U.S.C. § 207. The FLSA provides an exemption for "any employee employed in a bona fide executive, administrative, or professional capacity." 29 U.S.C. § 213(a)(1).

The FLSA provides that an action for unlawful employment practices may be brought "by any one or more employees for and on behalf of himself or themselves and other employees similarly situated." 28 U.S.C. § 216(b). Unlike class actions, FLSA collective actions need not satisfy the requirements of Fed.R.Civ.P. 23, and only plaintiffs who "opt in" by filing consents to join the action are bound by the judgment. Mendoza v. Ashiya Sushi 5, Inc., No. 12 Civ. 8629 (KPF), 2013 WL 5211839, at *2 (S.D.N.Y. Sept. 16, 2013). District courts have "discretion, in appropriate cases, to implement [§ 216(b)]... by facilitating notice to potential plaintiffs' of the pendency of the action and of their opportunity to opt-in as represented plaintiffs." Myers v. Hertz Corp., 624 F.3d 537, 554-55 (2d Cir. 2010) (quoting Hoffman-La Roche Inc. v. Sperling, 493 U.S. 165, 169 (1989) (alteration in original)).

The Second Circuit has endorsed a two-step method to certify FLSA collective actions. Myers, 624 F.3d at 555. "The first step involves the court making an initial determination to send notice to potential opt-in plaintiffs who may be similarly situated' to the named plaintiffs with respect to whether a FLSA violation has occurred." Id. Courts may approve sending notice if "plaintiffs make a modest factual showing' that they and potential opt-in plaintiffs together were victims of a common policy or plan that violated the law.'" Id. (quoting Hoffman v. Sbarro, Inc., 982 F.Supp. 249, 261 (S.D.N.Y. 1997) (Sotomayor, J.)). The Second Circuit has explained that, in a case such as this that involves an exemption to the FLSA, plaintiffs meet their burden "by making some showing that there are other employees... who are similarly situated with respect to their job requirements and with regard to their pay provisions, ' on which the criteria for many FLSA exemptions are based, who are classified as exempt pursuant to a common policy or scheme." Id. (quoting Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1259 (11th Cir. 2008)). Although "unsupported assertions" are not sufficient, the factual showing required "should remain a low standard of proof because the purpose of this first stage is merely to determine whether similarly situated' plaintiffs do in fact exist." Id.

"This initial burden is limited, in part, because the determination that the parties are similarly situated is merely a preliminary one and may be modified or reversed" at the second stage of the inquiry. Lynch v. United Servs. Auto. Ass'n, 491 F.Supp.2d 357, 369 (S.D.N.Y. 2007) (quotations omitted). The second stage occurs after notice is sent, the opt-in period ends, and discovery closes. Mendoza, 2013 WL 5211839, at *2. At that stage, the district court will have a "fuller record" and can then "determine whether a so-called collective action' may go ...


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