CUNNINGHAM v. ELECTRONIC DATA SYSTEMS CORP

mitted); see also Chowdhury v. Duane Reade, Inc., No. 06 Civ. 2295 (GEL), 2007 WL 2873929, at *3 (S.D.N.Y. Oct. 2, 2007) ("[I]t would be inappropriate to make more than a `preliminary determination' at this time, or to require plaintiff to meet a more stringent standard than that typically applied at the early stages of litigation.").

Defendant cites two cases within this Circuit in support of its contention that "[o]nce an adequate factual record pertaining to § 16(b) certification has been developed through discovery, courts routinely recognize that the inception standard is inapplicable even in regard to first phase certification motions." (Def.'s Mem. at 16.) First, EDS cites Amendola v. Bristol-Myers Squibb Co., 558 F. Supp. 2d 459, 467 (S.D.N.Y. 2008), asserting that the court there "applied a heightened level of scrutiny and denied § 16(b) certification based on evidence revealed in just five depositions and 6,000 documents produced by the defendant." (Def.'s Mem. at 16.) Defendant's reliance on Amendola is misplaced. Amendola did not proceed to the second-stage inquiry because of the amount of discovery that had occurred. Rather, Amendola reinterpreted the first-stage inquiry to hold that "where . . . a defendant employer shows . . . that it will likely succeed at trial in proving that the employees are not entitled under the FLSA to overtime compensation, a court may refuse to authorize notice. . . ." Amendola, 558 F. Supp. 2d at 467. Amendola offered no direct citation for its holding that a court may refuse to authorize notice based on a merits analysis, but in a footnote cited In re Initial Pub. Offering Sec. Litigation ("In re IPO"), 471 F.3d 24 (2d Cir. 2006), which held that in Rule 23 class actions, a court's obligation to determine that each Rule 23 requirement has been met is not lessened by overlap between such requirements and a merits issue. Amendola, 558 F. Supp. 2d at 467 n. 9. In general, courts have scrupulously avoided conflating Rule 23 requirements with FLSA collective action requirements, but Amendola seeks to meld the two together. See, e.g., Cuzco, 477 F. Supp. 2d at 632; Young, 229 F.R.D. at 54. It also appears from the Second Circuit's recent decision in Myers that the first-stage inquiry is unaffected by In re IPO; that test continues to use

a lenient standard in evaluating plaintiff's showing of being "similarly situated." Myers, 2010 WL 4227452, at *13. The Court therefore declines to follow Amendola's approach.

Second, EDS cites to Torres v. Gristede's Operating Corp., 04 Civ. 3316 (PAC), 2006 WL 2819730 (S.D.N.Y. Sept. 29, 2006). But Torres involved a situation in which all fact discovery had been completed. See Memorandum of Defendants in Opposition to Motion for Class Certification and Collective Action Notice at 7, Torres, 2006 WL 2819730, ECF No. 148 ("Here, all fact discovery has been completed.") (emphasis in original); see also Torres, 2006 WL 2819730, at 7 n. 7 ("The proceedings in this case do not mirror the traditional two-stage process described. Plaintiffs moved for certification of collective action class after discovery had already been conducted."). Here, in contrast, discovery has been limited to those issues that arose on the summary judgment motions preceding this motion and to that which was relevant to first-phase certification. Torres simply does not apply. Moreover, not all courts in this Circuit have followed Torres. See Gortat, 2010 WL 1423018, at *9 n. 12 ("In one case cited by the magistrate judge, Torres . . ., the court explicitly endorsed the application of heightened scrutiny in a post-discovery, but pre-notice, context. . . . This Court declines to follow Torres.").

EDS also cites to several out-of-Circuit cases to support its position that heightened scrutiny applies here because of the amount of discovery that has taken place. However, in three of the cases cited, Harris v. FFE Transportation Services, Inc., No. Civ. A. 3:05cv0077-P, 2006 WL 1994586 (N.D. Tex. May 15, 2006), England v. New Century Financial Corp., 370 F. Supp. 2d 504 (M.D. La. 2005), and Basco v. Wal-Mart Stores Inc., No. Civ. A. 00-3184, 2004 WL 1497709 (E.D. La. July 2, 2004), the decisions contained alternative holdings — one refusing to certify the class based on a first-stage analysis and one refusing to certify based on a second-stage analysis. See Harris, 2006 WL 1994586, at *3-5; England, 370 F. Supp. 2d at 509 ("[T]he Court will consider the criteria for both the first and second steps in deciding whether it should certify this matter.") (quoting Basco, 2004 WL 1497709, at *4); Basco, 2004 WL 1497709, at *5-8. None of these decisions, therefore, rested its holding solely on the second-stage analysis. In another case EDS cites, Baroni v. BellSouth Telecommunications, Inc., No. Civ. A. 02-009, 2004 WL 1687434 (E.D. La. July 27, 2004), the parties "agree[d] that no additional evidence need be introduced at a class and collective action certification hearing, . . . and that the motion for class and collective certification is to be submitted on the basis of the motion, memoranda of counsel, and documentary exhibits." 2004 WL 1687434, at * 11. This is not the case here. Finally, the last case EDS cites for its heightened scrutiny argument, Pacheco v. Boar's Head Provisions Co., 671 F. Supp. 2d 957 (W.D. Mich. 2009), appears to apply the same standard that courts in this Circuit apply in a first-stage analysis. Compare Pacheco, 671 F. Supp. 2d at 960 ("Where the plaintiffs have been afforded discovery on the issue of whether or not the action should proceed as a collective action, courts typically apply a more restrictive, but still lenient standard, requiring the plaintiffs to demonstrate at least `modest' factual support for the class allegations in their complaint.") with Myers, 2010 WL 4227452, at *13 (using the "modest factual showing" standard); Lynch, 491 F. Supp. 2d at 368 ("Plaintiff need only make a modest factual showing that plaintiff and potential collective action members were victims of a common policy or plan that violated the law.") (internal quotation marks omitted), and Cuzco, 477 F. Supp. 2d at 633 (using the "modest factual showing" standard). Given that courts in this Circuit continue to apply the first-stage test until at least the completion of fact discovery, and the inapplicability of the cases EDS cites, this Court will apply the more lenient first-stage test, although it will consider the evidence obtained in discovery and submitted by both parties in that analysis. See Cuzco, 477 F. Supp. 2d at 632 n. 3 ("Since discovery is ongoing here and both

parties have submitted evidence gathered in discovery in support of their positions, this Court will consider the additional information in making the first-step determination.").

III. First-Stage Analysis

Plaintiffs seek to certify three "classes" with exempt job codes as follows:

Class A: Service Delivery Job Family — consisting of Systems Administrators (34060, 34070, 34080); Telecommunications Analysts (34500, 34510, 34520), and Service Center Analysts (34530, 34540, 34550)

Class B: Technical Delivery Job Family — consisting of Infrastructure Analysts (34260, 34270, 34280), and Information Analysts (34330, 34200, 34210, 34220); and

Class C: Corporate Job Family — consisting of Information Security Analysts (33700, 33710, 33720, 33730).

These are not true "classes," but for convenience's sake, and because the plaintiffs have so styled them, this opinion will refer to "Classes" A, B, and C.

(Pl.'s Mem. at 3.)

A. Myers and the First-Stage Test

Before applying the first-stage test to these putative collective action groups, it is necessary to determine how the first-stage test is applied in an FLSA exemption case, since the parties dispute the relevant standard. Plaintiffs maintain that they have satisfied their burden because they "have shown that EDS has the requisite `uniform business practice' — EDS' `Job Analysis' classification system." (Pl.'s Reply at 7 (quoting Damassia v. Duane Reade, Inc., No. 04 Civ. 8819 (GEL), 2006 WL 2853971, at *5 (S.D.N.Y. Oct. 5, 2006)).). EDS, in contrast, contends that "numerous courts have held that putative § 16(b) class members cannot be similarly situated where their duties are covered by even one exemption." (Def.'s Mem. at 22 (emphasis in original).) Under that standard, the Court would have to do at least a preliminary analysis of the FLSA exemptions as part of the first-stage inquiry.

The Second Circuit's recent opinion in Myers, however, belies EDS's argument. "In a FLSA exemption case," plaintiffs satisfy 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,' . . . who are classified as exempt pursuant to a common policy or scheme." Myers, 2010 WL 4227452, at *13 (quoting Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1259 (11th Cir. 2008)). It is not necessary, therefore, for plaintiffs to defend against arguments that individualized inquiries may predominate or that an FLSA exemption covers the plaintiffs at this stage. These arguments, rather, are left to the second stage. See, e.g., Ravenell v. Avis Budget Car Rental, LLC, No. 08-CV-2113 (SLT) (ALC), 2010 WL 2921508, at *6 (E.D.N.Y. July 19, 2010) ("To be sure, [defendant] has referenced some differences that are pertinent to the Plaintiffs' claims regarding the managerial exemption. However, as explained above, Plaintiffs have met their burden under the preliminary standard for conditional certification, and [defendant] cannot prevent the Plaintiffs from proceeding as a collective action by relying on the declarations it has submitted."); Parks v. Dick's Sporting Goods, No. 05 Civ. 6590 (CJS), 2007 WL 913927, at *4 (W.D.N.Y. Mar. 23, 2007) ("Although defendant has cited a number of cases in which district courts denied conditional certification because they found that class certification would require a fact-specific inquiry into potential class members' job duties, . . . the Court finds . . . that such considerations should be addressed later, at the second stage of the certification analysis."); Herring v. Hewitt Associates, Civ. No. 06-267 (GEB), 2007 WL 2121693, at *8 (D.N.J. July 24, 2007) ("While Defendant claims that the highly individualized positions of the benefits analysts prevent this case from being treated as a collective action, courts have permitted exemption lawsuits to be treated as collective actions as

long as class members are found to be similarly situated at the notice stage.") (internal citations omitted).

At oral argument, EDS argued that this would be a misreading of Myers. According to EDS, Myers instead emphasizes "that the exemption inquiry requires examination of the duties that the employee actually performs, and they involve evidence tending to show that the plaintiffs' jobs were similar in ways material to the establishment of the exemption criteria." Myers, 2010 WL 4227452, at *8 (internal quotation marks and citations omitted). Because Myers noted that Department of Labor "regulations make clear that [exemption] questions should be resolved by examining the employees' actual job characteristics and duties," EDS maintains that that inquiry is also required here. Id. at *7. These excerpts from the Myers opinion, however, rest squarely within its discussion of the Rule 23 predominance requirement, not its discussion of § 16(b) collective actions. Although EDS urges a blending of the rationales behind the two "admittedly similar" requirements, Myers is clear that the first-stage collective action "question is quite distinct from the question whether plaintiffs have satisfied the much higher threshold of demonstrating that common questions of law and fact will `predominate' for Rule 23 purposes in the eventual action." Id. at *13. It seems unwarranted, therefore, to extrapolate a rule of decision for deciding first-stage collective action certification motions from Myers's Rule 23 discussion.

On the other hand, plaintiffs' interpretation of their burden creates a lower standard than that which Myers endorsed. Plaintiffs contend that their showing of a "uniform business practice" in EDS's "Job Analysis" system is sufficient, but according to Myers, plaintiffs must show that they are similarly situated not only with respect to the employer's conduct toward them, but also in their job responsibilities. At oral argument, plaintiffs' counsel conceded that Myers set forth this two-pronged inquiry. The test articulated by Myers, therefore, requires plaintiffs in FLSA exemption cases to show both that there are other employees who are similarly situated with respect to their job requirements and pay provisions, and that they are classified as exempt pursuant to a common policy or scheme. That showing is sufficient for court-facilitated notice, and courts are not required to engage in a rigorous analysis of individualized responsibilities once this showing has been made.

B. Application of the Myers Test

Plaintiffs have satisfied their burden in this case. First, they have shown that potential plaintiffs were classified as exempt pursuant to a common policy or scheme, namely EDS's "job analysis" resulting in their classification as exempt. ( See Pl.'s Reply at 7-8.) It is undisputed that all of the proposed class members are paid on a salaried basis, classified as exempt, ineligible for overtime pay, and do not receive overtime pay; and further, that their job codes determine their exempt status throughout the United States. ( See Evans Dep. at 131-32, 136-37, 140.) EDS argues that plaintiffs "fail to identify a particular EDS policy or practice that resulted in all 19,500 proposed class members being misclassified as exempt." (Def.'s Opp'n at 27.) But plaintiffs' showing is sufficient to demonstrate a common policy or scheme classifying employees as exempt. See Lynch, 491 F. Supp. 2d at 370 (finding that because "the policies and practices relative to the misclassification of [plaintiffs] do not vary, but rather affect all [plaintiffs] the same nationwide," the plaintiff had sufficiently alleged a common policy or plan); Young, 229 F.R.D. at 55 (finding it sufficient to show that the defendant "classified [a position] as exempt from the FLSA and that it did in fact have a policy not to compensate [employees in that position] for hours worked in excess of 40 hours per week"). Furthermore, defendant's argument on this prong of the test is largely a rehash of its argument about the individualized responsibilities of the potential plaintiffs, not a claim that EDS did not have a uniform policy of classifying potential plaintiffs as exempt. To the extent that this argument is relevant, it applies to the prong relating to similarity of job requirements and pay provisions, not to the one about defendant's common policy or scheme.

Plaintiffs have advanced two arguments to show that they are similarly situated with respect to job duties and pay provisions. First, plaintiffs argue that because all opt-in and potential plaintiffs share computer-related responsibilities in a broad sense, they are similarly situated. For example, plaintiffs assert that employees in Class A are similarly situated to each other because they "perform[] non-managerial technical support work that does not involve running EDS' business; i.e., have as their primary duties installing, maintaining, and/or supporting computer hardware or software." (Pl.'s Mem. at 7.) They assert that Class B members "all perform similar non-managerial duties consisting of installing, maintaining, and/or supporting computer hardware and/or software." (Pl.'s Mem. at 10.) Class C members are alleged to be similarly situated because they "performed the same non-managerial duties related to access to the computer networks, providing proper passwords or resetting the passwords of the users of the networks, virus protection and quarantine of websites that have been attacked by viruses, adding websites to a firewall, installing virus protection and detecting and scanning for viruses on end users [sic] computers." (Pl.'s Mem. at 12.) EDS argues that these descriptions use "imprecise, meaningless terms." (Def.'s Opp'n at 24.) Additionally, because plaintiffs describe the responsibilities of both Class A and B members as "installing, maintaining, and/or supporting computer hardware and/or software," EDS maintains that the "`install/maintain/support' mantra is meaningless in terms of describing exempt duties." ( Id. at 24.)

Defendant has the better of the argument with respect to these descriptions of potential class members' responsibilities. If the Court were to certify a collective action based on those descriptions, it would make the "job duties and pay provisions" prong of the first-stage test in FLSA cases an virtually useless test in the information technology industry. "Installing, maintaining, and/or supporting computer hardware and/or software" could include both a low-level technician who checks whether computers are switched on and a programmer who writes software patches involving complex cryptographic code.

Plaintiffs' stronger argument relies on EDS's own internal structure. According to plaintiffs, because EDS's "Job Analysis system" was intended to ensure compliance with labor laws, including the FLSA, "EDS knew full well that the job codes assigned to individuals on a prescribed, systematic basis whose importance was emphasized had significance for FLSA purposes." ( See Pl.'s Mem at 5.) Mindful of the FLSA implications of job coding, "EDS groups employees who perform similar work into . . . job codes." (Pl.'s Mem at 4.) Plaintiffs argue that since EDS itself assigned these job codes to its employees, emphasizing both the FLSA exemption implications of incorrect matching and the importance of creating a substantial match between actual duties performed and the job code assigned, that the use of job codes to group "similarly situated" plaintiffs together is appropriate. The Court agrees.

Plaintiffs are required only to make a "modest" factual showing, and EDS's own documentation indicates that "[g]etting the exemption status right is the first and most important step" in selecting an employee's job code and that job codes are "used to identify a given set of duties and responsibilities assigned to individuals whose work is of the same nature and level." ( See Lesser Decl. Ex. 33 at 4; Lesser Decl. Ex. 43 at 3.) All job codes were associated with job descriptions that had to "be broad enough for use throughout EDS." (Lesser Decl. Ex. 40 at 8.) "Plaintiffs need not show that they and [other potential plaintiffs] are identically situated," only similarly situated. Hallissey v. America Online, No. 99 Civ. 3785 (KTD), 2008 WL 465112, at *2 (S.D.N.Y. Feb. 19, 2008). Plaintiffs have carried their low burden on this prong with respect to employees sharing a single job code by showing that the EDS employees within a given job code share the same job description, and that EDS relied upon these job codes in determining exemption status.

EDS further argues that "Plaintiffs' reliance on EDS job codes for class certification . . . is incompatible with the merits of their claims." (Def.'s Opp'n at 29.) In support of its argument, EDS relies on the fact that some of the job codes involved here (1) were adjudicated as exempt in a separate class action under California law and (2) are associated with job descriptions that list some exempt duties. See generally Heffelfinger v. Electronic Data Systems Corp., 580 F. Supp. 2d 933 (C.D. Cal. 2008) (awarding summary judgment to EDS on the issue of whether employees in that action were exempt under California law); (Wyman Decl. Ex. 43.) These facts certainly increase plaintiffs' burden on the merits of their claim, but a merits consideration is inappropriate at this stage of the litigation. Lynch, 491 F. Supp. 2d at 368. Plaintiffs' reliance on EDS job codes, therefore, is justified.

Finding that employees within a single job code are similarly situated, however, does not answer the question of whether the Court should certify plaintiffs' proposed classes. Plaintiffs have not sought to certify collective actions composed of individual job codes, but of whole job families. Therefore, to answer that question, the Court must address three related, but distinct "similar job duties questions": first, whether employees within a single job code (e.g., Service Center Analyst (34530)) are similarly situated in that respect; second, whether employees within a single job progression (e.g., the Service Center job progression: Service Center Analysts

(34530), Service Center Analysts Advanced (34540), and Service Center Analysts Senior (34550)) within a job family are similarly situated; and third, whether employees in different job progressions within the same job family (e.g., the System Administrator, Telecommunications Analyst, and Service Center job progressions within the Service Delivery job family) are similarly situated.

Plaintiffs' argument recited thus far answers only the first of these questions. EDS argues that the answers to the other questions must be in the negative. According to EDS, even assuming that employees within a given job code are similarly situated to each other, it does not follow that employees within a given job family, which contains multiple job codes, are also similarly situated. Plaintiffs counter that "[n]otwithstanding that they had different job codes, they were . . . part of the same job progression in the same job family, which, as EDS acknowledges, means succeeding levels of similarly situated jobs that become more complex and require greater knowledge." (Pl.'s Reply at 6.)

To the extent that EDS's argument relies solely on the presence of multiple job codes existing within one job family, it fails, as "[c]ourts routinely grant conditional certification of multiple-job-title classes such as Plaintiffs' class." Lewis v. Wells Fargo, 669 F. Supp. 2d 1124, 1128 (N.D. Cal. 2009). This does not mean that both the second and third questions must automatically be answered in the affirmative. But plaintiffs can rely on EDS's job code structure to prove that employees in a given job progression are similarly situated to each other; this answers the second question in the affirmative. A single job progression is composed of a series of job codes that represent related work at different levels of expertise; ascending job codes within a job progression represent similar duties commensurate with greater experience, not a wholesale difference in job duties. Cf. Richards v. Computer Sciences Corp., No. 3:03cv630 (DJS), 2004 WL 3517039, at *4 (D. Conn. Sept. 28, 2004) (certifying a collective action containing two levels of Customer Support Analysts ("CSA") because "CSAs Level II are merely a more expansive version of CSAs Level I and not a unique or more skilled class of employee").

However, this structure does not show that employees in different job progressions, even if in the same job family, are similarly situated, so the third question must be answered in the negative. A job family contains multiple job progressions. ( See Lesser Decl. Ex. 36.) The "Service Delivery" job family that plaintiffs seek to certify, for example, appears to include "Business Process Improvement" and "Business Service Analyst" job progressions, whose duties, at least from the job titles themselves, would appear not to be similar to the Service Center Analysts, Telecommunications Analysts, and Systems Administrators that plaintiffs seek to include in Class A. ( See id.) This implies that the third question, whether different job progressions can be included in a single class, should be answered in the negative.

The Court finds it appropriate, therefore, to certify each job progression that plaintiffs identify as containing potential plaintiffs, rather than to certify classes by job family. Although subdivision is typically done at the second stage of litigation, because plaintiffs rely on EDS's job classification system, and because their reliance is justified only up to the point of specific job progressions, rather than whole job families, the Court finds it appropriate to subdivide Class A into the job progressions of Systems Administrators, Telecommunications Analysts, and Service Center Analysts, and Class B into Infrastructure Analysts and Information Analysts. See Rubery, 569 F. Supp. 2d at 337-38 (subdividing the collective action at the first stage); ( see also Pl.'s Reply at 12 n. 8 (arguing for the creation of subclasses if the Court does not wholesale

certify the classes as presented).) Class C need not be subdivided as it contains only a single job progression.

It may very well be that job duties within a given job code or job progression vary too much to allow an efficient resolution of claims. These inquiries, however, are to be addressed at the second stage of collective-action certification. It is sufficient here that plaintiffs have made a modest showing that they share similar duties and are uniformly subject to EDS's policy of classifying them as exempt.

IV. Form of Notice

Plaintiffs have included a proposed notice to be sent to potential class members, but EDS has indicated that it objects to the form of the notice. (Def.'s Opp'n at 30 n. 13.) The parties did not address the issue of the propriety of the notice extensively in their papers or at oral argument. Accordingly, the Court declines to address the issue of the form of notice at this time.

CONCLUSION

For the foregoing reasons, the Court GRANTS in part plaintiff's motion to certify [06cv3530 Docket No. 140, 08cv10409 Docket No. 87] this action as a collective action. The parties are directed to confer about the form and content of the notice that will be sent to potential opt-in plaintiffs. A joint proposed notice shall be submitted to this Court within three weeks of this opinion. If the parties cannot agree on a form of notice, they shall submit letter memoranda by that date.

SO ORDERED.

Dated: New York, New York December 13, 2010