Generic Seal.bmpCo-authored by:  Jeremy W. Stewart and Kyle Petersen

On January 10, 2013, U.S. District Judge Barbara Crabb of the United States District Court for the Western District of Wisconsin issued an order denying the plaintiffs’ motion for class and collective action certification of unpaid meal period claims in Boelk, et al. v. AT&T Teleholdings, Inc., et al., No. 3:12-cv-0040-bbc (W.D. Wis. 2013).   This decision is significant for employers because the Court follows the instruction given by the Supreme Court in Wal-Mart Stores, Inc. v. Dukes to perform a “rigorous analysis” to determine if Rule 23(a)’s commonality requirement has been met, and because it provides guidance for defeating conditional certification — a challenging task — of a FLSA collective action under 29 U.S.C. § 216(b).

The Boelk plaintiffs are current and former non-exempt, field service technicians who claim that defendants failed to pay them and other field service technicians all wages owed because: (1) the defendants’ restrictions on where technicians take breaks and what they can do during their breaks are such that the breaks are not bona fide, and are therefore compensable, and (2) defendants’ efficiency rating system compels employees to work through meal breaks without reporting the time as hours worked.  Plaintiffs attempted to pursue these claims as a “hybrid” collective action under the FLSA and Rule 23 class action under Wisconsin’s Wage Payment Act.

Plaintiffs argued that their first claim satisfies the commonality requirement of Rule 23(a) because the primary question to be resolved as to all proposed class members is “whether the restrictions limited technicians’ breaks so much that the breaks should have been compensated.”  Judge Crabb held that this “common question” is insufficient because it is not framed in terms of the actual elements of a claim under state or federal law, which is critical because, “as the Supreme Court made clear in Dukes, commonality is not simply a matter of common questions, ‘even in droves,’ but rather, whether the class proceeding can generate ‘common answers, apt to drive the resolution of litigation.’”  Here, the plaintiffs cited no law supporting the proposition that an employer must pay employees for meal breaks because employer restrictions prohibit employees from doing what they want on break, regardless of whether employees are performing work or activities that predominantly benefit the employer.  The failure to properly frame the common question in terms of whether the meal period restrictions result in technicians engaging in activities that predominantly benefit defendants, which is compensable, coupled with a lack of individual or classwide evidence that the restrictions resulted in such activities, doomed the first claim. 

In reaching her decision, Judge Crabb, who also decided Espenscheid v. DirectSat USA (discussed here) and Ruiz v. Serco, Inc., two of the most employer friendly wage and hour decisions in recent memory, distinguished this case from the Seventh Circuit’s decisions in Ross v. RBS Citizens, N.A. (overtime), and McReynolds v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (race discrimination), by noting that, unlike Ross and McReynolds, the plaintiffs failed to offer proof of companywide policy that resulted in the alleged violation.  Instead, the evidence suggested that local supervisors were charged with significant discretion in the enforcement of meal break restrictions.  Accordingly, the plaintiffs failed to show that common questions could be resolved on a classwide basis using common proof.

Judge Crabb also held that plaintiffs’ second claim – defendants’ efficiency rating system compels employees to work through meal breaks without reporting the time as hours worked – fails to satisfy the commonality requirement of Rule 23.  With respect to this claim, Judge Crabb identified the “crucial question” as “why plaintiffs and other technicians worked through all or part of their meal breaks without reporting their doing so.”  According to Judge Crabb, this question is incapable of resolution on a class-wide basis because the answer turns on fact-intensive, individualized inquiries as to why a technician worked during a meal period on any given day. 

After determining that  Rule 23 class certification was inappropriate for the Boelk plaintiffs’ state law claims, the Court turned to plaintiffs’ FLSA claim.  Because the plaintiffs were seeking conditional certification, they urged the Court to apply the lenient standard typically used by Courts at the first stage of the two-step certification process.  The Court rejected the plaintiffs’ argument because “the parties have conducted significant discovery.”  Specifically, the record contained declarations, all six named plaintiffs had been deposed, two potential opt-ins had been deposed, and plaintiffs had taken a Rule 30(b)(6) deposition.  The Court held that, accordingly, “it is appropriate to apply more scrutiny to plaintiffs’ claim than would normally be applied at the conditional certification stage.”  In doing so, the Court referred to its Rule 23 commonality analysis and concluded that the plaintiffs failed to establish that they and the putative class members “were victims of a common policy or plan that resulted in common injuries.”  Rather, the  “plaintiffs’ experiences with respect to the meal break restrictions were not common and varied depending on their individual practices and particular supervisor.”  Thus, the Court held that plaintiffs were not similarly situated to the putative class they sought to represent and denied plaintiffs’ motion for conditional certification under the FLSA.

This case shows that, despite the so-called lenient standard, courts are willing to scrutinize motions for conditional certification, especially where discovery has been taken.  Employers defending collective actions should consider taking early discovery aimed at identifying individualized issues that may ultimately result in a determination that a common answer(s) cannot resolve the claims at issue.