Last week, a federal judge in the Northern District of Illinois lifted the weight of collective action certification off Life Time Fitness, Inc. and refused to certify a proposed collective of more than 6,000 personal trainers because each trainer’s employment varied too much to resolve their potential claims on a collective basis.
The trainers in Steger v. Life Time Fitness, Inc. alleged that Life Time had an unofficial policy of intimidating and pressuring trainers to work off the clock. Life Time trainers are paid based on commissions. The trainers presented evidence that some managers encourage trainers to underreport their hours in order to prevent “draws” against those commissions. According to the trainers, this evidenced a broader, common policy discouraging trainers from reporting all hours worked. Life Time, however, argued that its corporate policies mandate accurate timekeeping, and any encouragement of off-the-clock work was highly individualized based on a trainer’s location, job title and duties, productivity, and personal decisions.
The district court agreed with Life Time, since plaintiffs’ evidence that some managers pressured employees to underreport hours also demonstrates that some managers did not. It also credited Life Time’s corporate policies, which require all employees to accurately report their time, and of which, at least some class members were aware. Ultimately, the district court found certification inappropriate, as the resolution of class members’ claims would require a highly individualized analysis to determine the extent to which each trainer worked off the clock.
This case comes on the heels of a pair of wage and hour certification decisions in the Seventh Circuit relating to off-the-clock work. In both Ross v. RBS Citizens, N.A., which this blog covered here, and Bell v. PNC Bank, plaintiffs alleged that their employers had unofficial policies encouraging off-the-clock work. After the Seventh Circuit affirmed class certification in Ross, the Supreme Court vacated the lower court’s judgment and remanded the case to the Court of Appeals “for further consideration in light of Comcast Corp. v. Behrend,” a decision in which the Supreme Court determined that an inability to show that damages can be measured on a class-wide basis may be fatal to a collective action.
Although Ross settled before the Seventh Circuit could apply Comcast, the Seventh Circuit chimed in again in Bell. There, it affirmed class certification, reasoning that whether plaintiffs can ultimately prove the existence of an unofficial policy encouraging off-the-clock work is irrelevant at the certification stage. Rather, plaintiffs simply must show that the denial of overtime pay came from an alleged broader, informal company policy rather than from the discretionary decisions of individual managers.
Bell suggests that a way to defeat class or collective action certification of an “unofficial policy” claim is to show that the pressure to work off the clock was the result of individual decisions by managers at the local level. That is precisely what happened here. The district court reasoned that the claim at issue was driven, not by a uniform unwritten corporate policy, but rather by the individual actions of specific managers acting contrary to corporate policy. Moreover, and encouragingly for employers defending collective actions and used to the invocation of the phrases “lenient standard” and “modest showing” at the conditional certification stage, the district court was able to recognize this at the early stage of the case and deny notice to the putative collective action members.