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postponing "class certification because further discovery is needed regarding the predominance test of FED. R. CIV. P. 23(b)"
Summary of this case from In re Allergan Biocell Textured Breast Implant Prods. Liab. Litig.Opinion
Civil Action No. 2:03-CV-0032
April 16, 2003
MEMORANDUM AND ORDER
Presently before this court is Plaintiff Mark A. Goldman's Motion for Conditional Certification of a Federal Fair Labor Standards Act ("FLSA") Claim and Facilitation of Notice Pursuant to 29 U.S.C. § 216(b), and for Class Certification of Pennsylvania Minimum Wage Act ("MWA") and Wage Payment and Collection Law ("WPCL") Claims Pursuant to FED. R. CIV. P. 23 filed on February 14, 2003 [Docket #18]. Plaintiff's motion will be granted in part and postponed in part. We will grant Plaintiff's motion for conditional certification of the FLSA claim. We also believe that the proposed state law class action meets all the requirements of FED. R. CIV. P. 23(a) and the superiority requirement of FED. R. CIV. P. 23(b)(3), but we will postpone class certification because further discovery is needed regarding the predominance test of FED. R. CIV. P. 23(b)(3). We will therefore refrain from a complete Rule 23(a) and partial Rule 23(b)(3) inquiry until we rule on the entire Rule 23(b)(3) motion.
I. Background Procedural History
Goldman brings a three count complaint against Defendant RadioShack Corporation ("RadioShack") on behalf of himself and all other similarly situated plaintiffs. He worked at RadioShack from November 1985 to September 2001. Goldman alleges that RadioShack violated federal and state minimum wage laws because it did not pay its "Y" Store Managers overtime wages when they worked in excess of forty hours per week. RadioShack claims that Store Managers are exempt from both federal and Pennsylvania overtime pay requirements because they are exempt executive personnel under 29 U.S.C. § 213(a)(1), or 29 C.F.R. § 541.1-541.119. Goldman alleges that the Store Managers were actually nothing more than sales associates with a few extra tasks to preform. He alleges that RadioShack merely put an executive sounding label on the Store Managers to avoid paying overtime wages. Goldman has filed affidavits of himself and four other former "Y" Store Managers that describe their day-to-day activities. Each affidavit and the complaint alleges that Store Managers performed sales associate tasks including: sales; restocking shelves; and cleaning. Moreover, they do not have the discretionary powers associated with executive or managerial positions, including but not limited to: merchandising; hiring or terminating employees; determining employee salaries; controlling inventory levels; setting store hours; training employees; and designing store layout.
RadioShack "Y" stores are RadioShack locations that had over $500,000 in annual gross revenues in fiscal year 2000 and thereafter.
Goldman further alleges that Store Managers were required to keep their managerial activities to less than 22% of their work week through the RadioShack "7-1-1" plan. The "7-1-1" plan required Store Managers to work as sales associates for seven out of every nine hours worked. The "1-1" in the plan refers to one hour of paperwork and one hour of training per day. See Pl.'s
Motion for Conditional Certification: Exs. 6 7, filed on Feb. 14, 2003 [#18]. The plan also required Store Managers to work at least 54 hours per week without any overtime compensation. In defense, RadioShack argues that the percentage of time spent on managerial duties is not the correct test for whether an employee is exempt from the overtime pay statutes; and that the Store Managers are exempt employees because they are actual managers.
Goldman filed his complaint against RadioShack in Court of Common Pleas of Philadelphia County on December 17, 2002. Defendant properly removed the complaint to this court in January 2003. Goldman now moves to conditionally certify an FLSA opt-in representative action, and moves to certify a Rule 23(b)(3) opt-out class action alleging violations of MWA and WPCL. The FLSA suit would therefore include only those plaintiffs who expressly decide to take part while conversely the state actions consist of "all persons who were employed by RadioShack as a "Y" Store Manager in Pennsylvania at any time on or after December 11, 1999." See Pl.'s Motion filed on Feb. 14, 2003, at 2 [Docket #18].
Goldman's complaint defines both the FLSA and the MWA/WCPL classes as:
All persons who were employed by RadioShack as a "Y" store manager in Pennsylvania at any time on or after December 11, 1999, and during at least one workweek during that period worked in excess of 40 hours without receiving compensation for the excess hours at a rate not less than one and one-half times the regular rate at which the person was employed.
See Def.'s Notice of Removal Exhibit: Pl.'s Complaint filed on Jan. 3, 2003 [#1].
II. Jurisdiction
This case was properly removed to this court pursuant to 28 U.S.C. § 1441. We have original federal question jurisdiction over Plaintiff's FLSA claim pursuant to 28 U.S.C. § 1331. We have supplemental jurisdiction over Plaintiff's state law claims pursuant to 28 U.S.C. § 1367(a) because the MWA and WPCL claims form part of the same controversy between the parties as the FLSA claim. The FLSA and the MWA require overtime pay for each hour in excess of forty hours per week that the employee works. Compare 29 U.S.C. § 207(a); with PA. STAT. ANN. tit. 43 § 104(c). The WPCL requires overtime compensation to be paid in the next period. See PA. STAT. ANN. tit. 43 § 260.3. If the overtime wages are not timely paid, then the employer may be liable for liquidated damages under the WPCL. See PA. STAT. ANN. tit. 43 § 260.10. The FLSA, MWA and WPCL comprise the same case or controversy between Goldman, the proposed class and RadioShack.RadioShack argues that we do not have jurisdiction over the state law claims brought on behalf of proposed class members who do not opt-into the FLSA representative action because in the absence of an accompanying individual federal claim we would not have original jurisdiction over their individual claims. RadioShack argues that the state law class should not encompass any proposed plaintiff that does not expressly opt-into the FLSA representative action. It argues that to exercise jurisdiction would be an impermissible and unauthorized use of so-called "pendent-plaintiff" jurisdiction. See Def.'s Mem. in Opp'n, at 44-45 filed on Feb. 2, 2003 [#26-1].
In support, RadioShack cites two types of cases. First, RadioShack lists a series of cases decided before § 1367 was extensively altered in 1990. See Sperling v. Hoffman-La Roche, Inc., 118 F.R.D. 392, 411-14(D.N.J. 1988) (finding no pendent-party question because plaintiff voluntarily defined the Rule 23 state claims class as only those members in the opt-in ADEA representative class); Robinson v. Sizes Unlimited, Inc., 685 F. Supp. 442, 444-49 (D.N.J. 1988) (exercising discretion to refuse pendent-party jurisdiction over state law claims because court wanted to "effectively eliminate defendant's concerns" regarding the jurisdictional problems but not deciding the jurisdictional issues when the ADEA class and the New Jersey state law class have few overlapping plaintiffs); Pirrone v. No. Hotel Assocs., 108 F.R.D. 78, 83-84 (E.D. Pa. 1985) (exercising discretion to refuse pendent-party jurisdiction because Congress had not yet extended pendent-party jurisdiction beyond the scope of the FLSA); Isaac v. Wm. H. Pflaumer Sons, Inc., Civ. A. No. 90-1622, 1990 WL 102808 (E.D.Pa. July 17, 1990) (exercising discretion pursuant to § 1441(c) to remand pendent-party class members to state court). In each of these four cases, the court declined to reach the issue of whether pendent-party jurisdiction existed.
Instead, in three of the cases, court refrained from reaching the issue by exercising discretion pursuant to § 1441 or § 1367 to remand or refuse jurisdiction over the pendent-parties. In Sperling, the court did not face the question because the plaintiff did not move the court to exercise jurisdiction over non-opt-in potential class members. These cases are not analogous to the instant case.
Moreover, these cases have no relevance since Congress altered § 1367 to overrule the Supreme Court's Finley decision. In Finley, the Supreme Court held that exercising pendent-party jurisdiction in federal question cases exceeded the statutory authority granted to the courts by Congress. See Finley v. United States, 490 U.S. 545, 549 (1989). The 1990 amendments to § 1367 combined pendent and ancillary jurisdiction into supplemental jurisdiction, and allowed supplemental jurisdiction to extend to the full limits of Article III in federal question cases, thus overruling Finley. Section 1367(a) states:
[I]n any civil action of which the district courts have original jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution. Such jurisdiction shall include claims that involve the joinder or intervention of additional parties.28 U.S.C. § 1367(a) (emphasis added).
The text of the statute does not limit the additional parties to defendants, as RadioShack argues. Instead, § 1367(a) expressly allows supplemental jurisdiction over "additional parties" which we believe would include related claims of any additional party. By creating a class of all Pennsylvania "Y" Store Managers under Rule 23, Goldman is seeking their joinder to this action as additional parties with claims that form part of the same case or controversy. See Zahn v. International Paper Co., 414 U.S. 291, 296, 299-300 n. 6 (comparing class action and joinder cases) (citations omitted); Snyder v. Harris, 394 U.S. 332, 397 (1969) (same); 7A Charles Alan Wright et al., Federal Practice and Procedure, § 1752 (discussing history of Rule 23, spurious class actions and joinder). Goldman is properly using § 1367(a). The proposed opt-out class members are "additional parties" bringing "claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy." 28 U.S.C. § 1367(a).
Second, RadioShack cites four post-1990 cases for the proposition that courts do not have supplemental jurisdiction over state law claims related to an FLSA representative action. See Marquis v. Tecumseh Prods., 206 F.R.D. 132, 162-65 (E.D.Mich. 2002) (exercising discretion to decline certifying state law class action which included pendent-parties, because the named plaintiffs failed to exhaust their administrative remedies regarding their Title VII claims that gave court original jurisdiction and state law issues predominated); Zelaya v. J.M. Macias, Inc., 999 F. Supp. 788, 782-83 (E.D.N.C. 1998) (questioning federal jurisdiction over pendent-plaintiffs and declining jurisdiction under the court's discretion pursuant to § 1367(a)); Ballaris v. Wacker Siltronic Corp., No. Civ. 00-1627-KI, 2002 WL 926272, at *3 (D.Or. Feb. 7, 2002) (noting absence of pendent-party issue because plaintiff intended to move for certification of a state law Rule 23 class that consisted of only the FLSA opt-in members); De La Fuente v. FPM Ipsen, No. 02-C-50188, 2002 WL 31819226, at *1-2 (N.D.Ill. Dec. 16, 2002) (declining to rule on class certification until the conclusion of discovery; not addressing jurisdictional concerns). Zelaya is the only case cited by Defendant that is on point, because the court in the other three cases did not reach the pendent-plaintiff jurisdictional issue. We decline to follow Zelaya.
Zelaya was concerned with the risk that plaintiffs could manufacture original jurisdiction over the case in an attempt to gain federal jurisdiction over the tenuously related state law claims. See Kelley v. SBC, Inc., [5 Wages-Hours] Lab. L. Rep. (BNA) 16, 1998 U.S. Dist. LEXIS 18643, at *38 (N.D.Cal. Nov. 13, 1998) (exercising supplemental jurisdiction over state law claims when original jurisdiction was founded upon FLSA claims and distinguishing Zelaya because Kelley was removed by the defendant). No such risk exists here because Goldman filed in state court and it was RadioShack which chose to remove this case to federal court.
RadioShack had the option of litigating the claims in state court because the FLSA allows concurrent state and federal court jurisdiction. See 29 U.S.C. § 216(b) ("An action . . . may be maintained against an employer in any Federal or State court of competent jurisdiction. . . .") (parenthetical omitted). If the case had remained in Pennsylvania state court, Goldman would have been able to maintain the FLSA opt-in representative action and bring the state law claims under Pennsylvania's opt-out class action mechanism. See PA. R. CIV. P. 1702 1708 (listing requirements and factors to be considered for certifying a class). Goldman did not choose the federal forum to gain federal jurisdiction over tenuously related state claims.
We note also that Zelaya has not received a welcomed reception in federal courts. See Ansoumana v. Gristede's Operating Corp., 201 F.R.D. 81, 95-96 (S.D.N.Y. 2001) (criticizing Zelaya and citing cases holding that supplemental jurisdiction is proper) (citations omitted); Kelley, 1998 U.S. Dist. LEXIS 18643, *38 (distinguishing Zelaya and exercising supplemental jurisdiction). Zelaya has not been followed. District Courts routinely exercise supplemental jurisdiction over related state labor law claims when the original jurisdiction is founded on 28 U.S.C. § 1331 and the plaintiffs are bringing an FLSA representative action. See Scott v. Aetna Servs., Inc., 210 F.R.D. 261 (D.Conn. 2002) (certifying FLSA opt-in and Rule 23 opt-out classes without limiting opt-out class to only opt-in members); O'Brien v. Encotech Const. Servs., 203 F.R.D. 346, 350-53 (N.D.Ill. 2001) (same); Ansoumana, 201 F.R.D. at 89-96 (providing an extensive history and discussion of the topic and exercising supplemental jurisdiction because § 1367(a) retained the pre-1990 restrictions only for cases where original jurisdiction was founded solely on § 1332 diversity jurisdiction); Brychnalski v. Unesco, Inc., 35 F. Supp.2d 351 (S.D.N.Y. 1999) (same as Scott, 210 F.R.D. 261); Ladegaard v. Hard Rock Concrete Cutters, Inc., No. 00-C-5755, 2000 WL 1774091 (N.D.Ill. Dec. 1, 2000) (same); DeAsencio v. Tyson Foods, Inc., [8 Wages-Hours 2d] Lab. L. Rep. (BNA) 190, 2002 WL 1585580, at *5 (E.D.Pa. July 17, 2002) (exercising supplemental jurisdiction); Kelley, 1998 U.S. Dist. LEXIS 18643, at *38 (same); cf. Dunlop-McCullwn v. Parham, No. 97-Civ.-0195, 2002 WL 31521012, at ** 9-10 (S.D.N.Y. Nov. 13, 2002) (exercising supplemental jurisdiction over state law claims when original jurisdiction was founded on §§ 1331 1337 when plaintiff brought a LMRDA case).
The clear weight of authority is in favor of exercising supplemental jurisdiction. We find that § 1367(a) gives us the power to exercise supplemental jurisdiction over the opt-out plaintiffs who are not opt-in members of the FLSA action. The question remains as to whether we will exercise that power because § 1367 allows us to exercise our discretion and retain or remand these claims. We choose to retain these claims. It is prudent to try these related claims together in the interest of judicial economy. See West Mifflin v. Lancaster, 45 F.3d 780, 788 (3d Cir. 1995) (" `[C]onsiderations of judicial economy, convenience and fairness to litigants' weigh in favor of hearing the state law claims at the same time as the federal law claims.") (quoting United Mine Workers v. Gibbs, 383 U.S. 715, 726 (1966)). The FLSA and WPCL claims "are premised on the same events" and "parallel one another." De Asencio, 2002 WL 1585580, at *5. "It is likely that the two claims will either prevail or fail together." Id. If we were to remand certain class members, the two cases would be so related that any decision on the merits in one action would have preclusive effects on the other action. If the preclusive effects did not come to fruition, the cases may result in conflicting findings or judgments.
Proceeding in both forums would needlessly increase litigation expenses for both parties. Moreover, we do not want to create incentives for defendant forum shopping. This action could have easily been maintained in state court because the Pennsylvania courts have jurisdiction over the FLSA and state law claims. RadioShack choose this forum. Defendants might be encouraged to remove to federal court, not because they are an out of state defendant, but because the federal forum's jurisdictional limitations would complicate plaintiffs' case and increase plaintiffs' litigation expenses.
Judge Hellerstein stated the reasoning well:
If the related FLSA and [state] Minimum Wage Act claims were to be litigated in parallel fashion, . . ., there would be great potential for confusion of issues; considerable unnecessary costs, inefficiency and inconsistency of proceedings and results; and other problems inherent in parallel class action litigation. . . . Congress enacted § 1367 to avoid such problems. Defendants short-sightedly argue to reverse the Congressional wisdom. I decline to do so.
See Ansouman, 201 F.R.D. at 96; see De Asencio, 2002 WL 1585580, at *5 (exercising discretion for the sake of judicial economy).
Pursuant to § 1331, we have original jurisdiction over the opt-in FLSA representative class. For the reasons stated, we will exercise our discretion to assume supplemental jurisdiction pursuant to § 1367(a) over the related state law claims and the proposed Rule 23 opt-out class as well.
III. FLSA Representative Class A. Applicable Law
Employers are required to pay time and a half for each hour in excess of forty hours that the employee works. See 29 U.S.C. § 207(a). There are exceptions to the rule, including one which provides that employees who are employed in a bona fide executive capacity are not entitled to overtime wages. See 29 U.S.C. § 213(a)(1). An employee may bring an action on behalf of himself and other similarly situated employees pursuant to 29 U.S.C. § 216(b). FLSA claims are not subject to the usual Rule 23 class action requirements. Instead, 29 U.S.C. § 216(b) provides a special opt-in representative action mechanism for joining claims and plaintiffs. Each employee who wishes to join the action must affirmatively consent to be a member of the action by filing written consent to that effect. See 29 U.S.C. § 216(b); Lusardi v. Lechner, 855 F.2d 1062, 1068 n. 8 (3d Cir. 1988).
Although the FLSA creates an opt-in mechanism, district courts nevertheless have wide discretion in managing joinder of parties and notice to parties. See FED. R. CIV. P. 83(b) (allowing court discretion to manage cases when the rules are silent on an issue); cited by Sperling, 493 U.S. at 170-72 (urging early trial court management of the notice process in § 216(b) opt-in actions to ensure that parties are made aware of the action's benefits and avoiding multiple lawsuits); De Ansencio v. Tyson Foods, Inc., 130 F. Supp.2d 660, 662 (E.D.Pa. 2001).
Before facilitating notice, we must first find that the action can proceed as an FLSA representative action. See De Ansencio, 130 F. Supp.2d at 662. There are only two requirements under § 216(b) for an action to proceed as a representative action: (1) class members must be "similarly situated"; and (2) all members must affirmatively consent to join the action. See 29 U.S.C. § 216(b); Sperling, 862 F.2d at 444, aff'd 493 U.S. 165; De Ansencio, 130 F. Supp.2d at 662. The statute does not provide an express test for determining who are "similarly situated" employees under § 216(b). In the absence of Third Circuit or Supreme Court guidance, a two-tiered test structure has developed among the district courts in the Third Circuit. See De Ansencio, 130 F. Supp.2d at 662-63; Mueller, 201 F.R.D. 425, 427-28 (W.D.Pa. 2001); Morisky v. Public Serv. Elec. Gas Co., 111 F. Supp.2d 493, 497 (D.N.J. 2000); Lusaridi v. Xerox Corp., 118 F.R.D. 351 (D.N.J. 1987), modified 122 F.R.D. 463 (D.N.J. 1988) (decertifying class because representative action members not "similarly situated"); Bunnion v. Consol. Rail Corp., [5 Wages-Hours 2d] Lab. L. Rep. (BNA) 717, 1998 WL 372644, at * 17 (E.D.Pa. May 14, 1998); see also Hipp v. Liberty Nat. Life Ins. Co., 252 F.3d 1208 (11th Cir. 2001) (adopting the two-tiered approach and citing Lusardi, 118 F.R.D. 351); Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1213-14 (5th Cir. 1995) (adopting the Lusardi, 118 F.R.D.351, two-tiered test).
The first tier of the test occurs at the beginning of the case when the court has minimal evidence. See De Asencio,, 120 F. Supp.2d at 662-63. At this stage, the court may only conditionally certify the class so that the Plaintiff may send notice to the potential representative action members. Id.; Mueller, 201 F.R.D. at 428. "A court may conditionally certify the class for purpose of notice and discovery under a comparatively liberal standard, i.e., by determining that the members of the putative class `were together the victims of a single decision, policy or plan.'" Mueller, 201 F.R.D. at 428 (quoting Sperling, 118 F.R.D. at 407). The conditional certification is by no means final.
The second tier of the test occurs after all opt-in forms have been received and discovery has concluded. At that time, the court may make a more thorough finding regarding the "similarly situated" requirement. Id. The court will conduct a "fact-specific review of each class member who has opted-in, taking into account factors such as employment setting," variations in employment activities, employment oversight and instruction, and discretionary powers entrusted to individual opt-in plaintiffs. See id. If the court then decides that the plaintiffs are not "similarly situated," the FLSA representative action will be decertified and the plaintiffs will proceed with their individual claims. See De Asencio, 130 F. Supp.2d at 663.
B. RadioShack's Arguments Against Conditional Certification
RadioShack argues that the first tier conditional certification is unwarranted in this case because: (1) there is a pending FLSA representative action in United States District Court of the Northern District of Illinois which has yet to be certified; (2) Goldman is not an appropriate representative because he is an exempt employee under the FLSA; and (3) the proposed representative action members are not "similarly situated." We do not find RadioShack's arguments persuasive.
1. The Illinois Action
Comity does not dictate that we postpone first tier conditional certification until certification of the FLSA representative action in Illinois is decided. RadioShack claims that Pennsylvania "Y" Store Managers could simply join the nationwide representative action in Illinois, rendering this action redundant. RadioShack's arguments fail for two reasons. First, we are dealing with two different opt-in actions. If the Illinois court was entertaining a motion to certify a nationwide opt-out class, then our proceeding with a Pennsylvania-wide action could well complicate and frustrate our sister court's jurisdiction. Creating two overlapping opt-out classes would create conflict. This is not the present situation. We are dealing with two opt-in actions. No plaintiff will be a member of both representative actions because they must choose one or the other.
If RadioShack is dissatisfied with this result it may make a 28 U.S.C. § 1407 request for transfer to the Judicial Panel on Multidistrict Litigation to consolidate the two actions. See Manual for Complex Litigation § 31.13 (discussing multidistrict transfers under § 1407).
Second, while the two cases are similar, they provide different relief and benefits. The Illinois FLSA action does not include any state claims. Therefore, the opt-in plaintiffs will be entitled to two years of back overtime wages if they prevail. They could also recoup three years of back overtime wages but only if they prove RadioShack's alleged willfulness to the court.
Damages under the FLSA are limited to "the payment of wages lost and an additional equal amount as liquidated damages." 29 U.S.C. § 216(b). The FLSA statute of limitations is not tolled until the employee opts-in.
The Pennsylvania action in our case may allow greater relief to class members because Goldman filed a class action alleging violations of the MWA and the WPCL. Unlike the FLSA, the state statute of limitations is three years without the extra burden of proving willful conduct.
Damages under the MWA and the WPCL amount to the unpaid wages, plus liquidated damages equal to the greater of $500 or 25% of the lost wages due, plus reasonable attorney's fees and costs. See PA. STAT. ANN. tit. 43 §§ 260.10 333.113. Thus, the Pennsylvania action allows a longer period of recovery without the extra burden of proving willful conduct, but provides for lower liquidated damages. The Illinois case does not provide these extra opportunities for recovery.
Moreover, the opt-out nature of the potential Rule 23(b)(3) class allows potential class members to be included in the class without making a public declaration. Although the FLSA protects current workers from employer retribution, the reality is that some current employees may be hesitant to join a opt-in class out of fear of retribution. The opt-out class will allow current employees relief-albeit not identical relief-as the opt-in plaintiffs without the same concerns regarding retribution.
2. Goldman's Exempt Status Is Irrelevant At This Stage
RadioShack argues that Goldman should not be allowed to pursue an FLSA representative action because he is an exempt employee who is not entitled to overtime wages.
See Def.'s Memo. in Opp'n, at 19-31, filed on Mar. 21, 2003 [#26]. We will not consider the substance of RadioShack's arguments on the merits at this stage because only a motion for conditional certification is presently before us. See Eisen v. Carlisle Jacqueline, 417 U.S. 156, 178 (1974) ("In determining the propriety of a class action, the question is not whether the plaintiff or plaintiffs have stated a cause of action or will prevail on the merits. . . ."); Ansoumana, 201 F.R.D. at 85 (merits of the case are irrelevant to class certification); Hoffman v. Sbarro, Inc., 982 F. Supp. 249, 262 (S.D.N.Y. 1997) (merits of the case are irrelevant to "similarly situated" test); Jackson v. New York Tel. Co., 163 F.R.D. 429, 432 (S.D.N.Y. 1995) (merits of the case irrelevant to motion for authorization of notice). All of RadioShack's arguments on this issue go to the merits of Goldman's case. The conditional certification inquiry only focuses on the lenient first tier "similarly situated" test. At this stage, with little evidence before us, we believe that Goldman and other "Y" Store Managers were similarly situated because they all had the same minimum weekly hours and did not receive overtime compensation. If Goldman is an exempt employee under the FLSA, it is likely that the other "Y" Store Managers are also exempt employees. However, the merits of the plaintiff's case are not at issue today because this is a motion for conditional certification and not a summary judgment motion.
RadioShack's discussion of Department of Labor's newly proposed regulations, 68 Fed. Reg. 15560, governing exemptions to the FLSA's overtime requirements are not relevant. See Def.'s Supp. Br. in Opp'n filed on Apr. 8, 2003 [#31]; Def.'s Notice of Errata filed on Apr. 10, 2003 [#32]. First, the regulations defining exempt employees go to the merits of the case which are not currently at issue. Second, the proposed regulations are just that, only proposed regulations and not actual regulations. If and when they are enacted, and if they are binding on this case which was filed before 68 Fed. Reg. 15560 was proposed, the new regulation will be relevant only when the merits of Goldman's case are at issue.
3. A Fact-Specific "Similarly Situated" Inquiry Is Premature
RadioShack contends that Goldman was a special "Y" Store Manager that was not similar to regular "Y" Store Managers because: (1) his store had fifteen employees instead of the normal two employees; (2) Goldman was trained three times to become a District Manager; and (3) Goldman was designated a "Hiring Manager" with the responsibility to hire employees at several locations; and (4) RadioShack labeled Goldman a "Team Captain."This may or may not be the case, but we will not delve into a fact-specific "similarly situated" inquiry at this time. As discussed supra Section III.A., conditional certification requires a lax showing of "similarly situated." During this first-tier inquiry, we ask only whether the plaintiff and the proposed representative class members allegedly suffered from the same scheme. A fact-specific inquiry is conducted only after discovery and a formal motion to decertify the class is brought by the defendant. Moreover, any class certification effort should not turn on the merits of the case even after the discovery period has closed. See Eisen, 417 U.S. at 178; Ansoumana, 201 F.R.D. at 85; Hoffman, 982 F. Supp. at 262; Jackson, 163 F.R.D. at 432. It is simply premature to do so now because we lack sufficient evidence to conduct a more rigorous inquiry.
C. Conditional Certification is Warranted
We find that the potential members of Goldman's FLSA representative action are "similarly situated" under the first tier test because they were all subjected to the same employment contract with RadioShack. They were all required to work at least 54 hours per week and all were denied overtime pay. We will conditionally certify the FLSA representative action at this time so that Goldman may send notification to potential opt-in plaintiffs. To this end, we will order RadioShack to produce the names and last known addresses of all potential members of the FLSA representative action. This potential group consists of all RadioShack "Y" Store Managers who worked at Pennsylvania RadioShack locations at any time on or after December 11, 1999.
This group may be over inclusive after a more thorough analysis of the FLSA statute of limitations. For our present purposes, we would rather be over inclusive rather than under inclusive so that potential action members may state their claim and influence any future statute of limitations debate.
IV. MWA and WCPL Rule 23(b)(3) Class Action
Unlike the FLSA claims, Pennsylvania's MWA and WCPL do not provide independent joinder mechanisms. Therefore, the proposed MWA and WCPL class actions are opt-out classes governed by FED. R. CIV. P. 23. In order to certify a class under Rule 23, the class representative must fully comply with the four requirements of Rule 23(a) and fulfill the requirements of either Rule 23(b)(1), 23(b)(2) or (b)(3). See Monahan v. City of Wilmington, 49 Fed. Appx. 383, 384 (3d Cir. 2002). Goldman seeks to certify a Rule 23(b)(3) class of all Pennsylvania RadioShack "Y" employees who worked as Store Managers at any time on or after December 11, 1999. At this time, we believe that Goldman's proposed Rule 23(b)(3) class complies with all of the requirements of Rule 23(a) and the superiority requirement of Rule 23(b)(3). However, we believe it is premature to find that the proposed class complies with the predominance requirement of Rule 23(b)(3). Specifically, we are concerned that common issues may not predominate over individual issues relating to each manager's employment setting, employment activities, and discretionary powers. RadioShack discussed how Goldman's "Y" store differed from other stores because the larger number of employees meant that he may have spent more time on managerial duties and less time on sales associate duties when compared to average "Y" Store Managers. RadioShack mentioned these allegations and theories in an effort to prevent conditional certification of the FLSA claim. We have already stated that such discussions are premature during an FLSA conditional certification inquiry. However, we believe they are relevant to a Rule 23(b)(3) class certification analysis because it is not a conditional or preliminary certification mechanism. In light of RadioShack's contentions, a more developed record is obviously required before we rule that common issues of fact and law predominate over individual variations.We will postpone a Rule 23(b)(3) finding, pursuant to Local Rule 23.1(c), until the close of discovery, at which time Goldman may move anew for 23(b)(3) class certification. See E.D. PA. R. 23. 1(c) ("In ruling upon a motion, the Court may allow the action to be so maintained, may disallow and strike the class action allegations, or may order postponement of the determination pending discovery or such other preliminary procedures as appear to be appropriate and necessary in the circumstances.") (emphasis added); Slater v. Philadelphia Hous. Auth., 1999 WL 997758, at * 5 (E.D.Pa. Nov. 2, 1999) (denying defendant's motion to dismiss plaintiff's class action complaint because the court's earlier denial of class certification without prejudice was a delay of the class action certification pending discovery pursuant to Local Rule 23.1(c) and not a denial on the merits) (citations omitted); Gomberg v. Western Union Corp., 1997 WL 338938, *5 (E.D.Pa. June 16, 1997) (allowing motion for certification to proceed following discovery pursuant to Local Rule 23.1(c) when the parties treated the action as a class action throughout litigation, defendant refused to participate in discovery unless the motion was delayed, and defendant suffered no undue hardship); see also De La Fuente, 2002 WL 31819226, at *1-2 (declining to rule on class certification until after discovery concluded). We will not discuss the requirements of Rule 23 because any such discussion would be dicta at this time. We acknowledge receipt of RadioShack's March 21, 2003 letter requesting oral arguments on all certification issues. We believe that oral arguments may well be appropriate, but it would be more productive if the oral arguments and accompanying testimony were heard following discovery. The parties should remember that a proposed class action shall proceed as if it is a class action until class certification is denied or the class is decertified. See Manual for Complex Litigation § 30.11 ("When an action has been filed as a class action, the court must treat it as one until it has determined otherwise.").
V. Conclusion
We will conditionally certify Goldman's proposed FLSA federal representative action because he has fulfilled the first tier test for certification. RadioShack's fact-specific arguments on the merits are premature. We will postpone Goldman's motion for class certification of the state claims until discovery is concluded. We believe that it is proper to rule on the final FLSA certification and the Rule 23 class certification at the same time because: (1) the parties and the court will have a better understanding of the facts after conducting discovery; and (2) the second tier of the similarly situated inquiry overlaps with the Rule 23 inquiry such that they are properly analyzed together. Goldman may move for class certification after discovery and the parties may request oral argument at that time.
An appropriate Order follows.
ORDER
AND NOW, this 16th day of April, 2003, upon consideration of Plaintiff Mark A. Goldman's Motion for Conditional Certification of the Federal Fair Labor Standards Claim Pursuant to 29 U.S.C. § 216(b) and for Class Certification of the Pennsylvania Minimum Wage Act and Wage Payment and Collection Law Claims Pursuant to FED. R. CIV. P. 23 filed on February 14, 2003 [Docket #18]; Plaintiff's Supplemental Memorandum in Support filed on February 25, 2003 [#21]; Defendant RadioShack Corporation's Memorandum in Opposition filed on March 21, 2003 [#26]; Plaintiff Mark A. Goldman's Reply Memorandum filed on April 4, 2003 [#30]; and Defendant RadioShack Corporation's Supplemental Brief in Opposition filed on April 8, 2003 [#31], it is hereby ORDERED consistent with the foregoing memorandum that:
1. Plaintiff Mark A. Goldman's Motion for Class Certification of the Pennsylvania Minimum Wage Act and Wage Payment and Collection Law Claims Pursuant to FED. R. CIV. PRO. 23(b)(3) is DENIED at this time pursuant to Local Rule E.D. PA. R. 23.1(c) WITHOUT PREJUDICE to Plaintiff Mark A. Goldman's right to move for Class Certification of these Pennsylvania claims following the close of discovery;
2. Plaintiff Mark A. Goldman's Motion for Conditional Certification of the Federal Fair Labor Standards Act Claim and Facilitation of Notice Pursuant to 29 U.S.C. § 216(b) is GRANTED at this time subject to further review as set forth in our memorandum;
3. Pursuant to 29 U.S.C. § 216(b) and FED. R. CIV. P. 83, this Court conditionally certifies an opt-in Class of all former or current employees of RadioShack Corporation (and/or Tandy Corporation) who managed a RadioShack "Y" store in Pennsylvania at any time on or after December 11, 1999, for the claim under the Federal Fair Labor Standards Act;
4. Plaintiff Mark A. Goldman is conditionally designated as the representative of the Class;
5. Plaintiff's Counsel, Roda Nast, P.C. and the Wexler Firm, are hereby appointed as Counsel for the Class;
6. Within thirty (30) business days from the date of this Order, Defendant RadioShack Corporation SHALL PRODUCE to Plaintiff's Counsel a list of the names and last known addresses of all potential members of the Class described in the Paragraph Three of this Order;
7. Plaintiff's Counsel SHALL CAUSE to be sent by first-class mail, to all members of the Class described in Paragraph Three of this Order, a Notice Packet consisting of a Notice and Notice of Consent form that are substantially in the form of Exhibits Six and Nine attached to Plaintiff's Supplemental Memorandum in Support filed on February 28, 2003 [Docket #21]; and
8. Any person who fits within the Class described in Paragraph Three of this Order may join this action by sending a completed Notice of Consent form to Plaintiff's Counsel postmarked on or before July 31, 2003. Any person who does not send a completed Notice of Consent form to Plaintiff's Counsel postmarked on or before July 31, 2003 SHALL NOT be permitted to participate in the Federal Fair Labor Standards Act Representative Action.
BY THE COURT: