UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
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JEFFREY HEITZENRATER, GERONIMO :
PADILLA, TIMOTHY HAWK, VALLIE :
MASIAS, JASON ROBINSON, and :
MARK GENOVESI, Individually and On :
Behalf of All Others Similarly Situated, :
:
Plaintiffs, : Civil Action No. 1:12-cv-00900-WMS
:
-against- :
:
OFFICEMAX, INCORPORATED and :
OFFICEMAX NORTH AMERICA, INC., :
:
Defendants. :
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PLAINTIFFS’ MEMORANDUM OF LAW IN SUPPORT OF MOTION TO COMPEL
DEFENDANTS’ CORPORATE REPRESENTATIVE TO TESTIFY AS TO
COMMUNICATIONS WITH COUNSEL RELATED TO DEFENDANTS’
AFFIRMATIVE DEFENSES OF GOOD FAITH AND LACK OF WILLFULNESS
Pursuant to Rule 37(a)(3) of the Federal Rules of Civil Procedure, Plaintiffs Jeffrey
Heitzenrater, Geronimo Padilla, Timothy Hawk, Vallie Masias and Mark Genovesi (collectively
“Plaintiffs”) respectfully move to compel the corporate representative designated by Defendants
OfficeMax, Incorporated and OfficeMax North America, Inc. (“OfficeMax” or “Defendants”) to
testify to communications with counsel related to Defendants’ affirmative defenses of good faith
and lack of willfulness asserted by Defendants, as described below.
1
INTRODUCTION
Plaintiffs assert that the Defendants violated the Fair Labor Standards Act (“FLSA”) and
state laws by misclassifying Assistant Managers (“AMs”) as exempt and not paying overtime to
1
Plaintiffs’ counsel has moved to withdraw from representing Plaintiff Jason Robinson (Dkt.
No. 136) and the instant motion has not been brought on Mr. Robinson’s behalf.
2
Plaintiffs and other AMs. Defendants contend that AMs were properly classified as exempt
under federal and state law and were not entitled to overtime wages.
2
Defendants further
contend that, at all times, it acted in good faith and did not willfully violate the law. Answer
(Dkt. 132) at Affirmative Defense at ¶¶ 18, 33, 35, 36.
Defendants designated Chris Richardson (“Richardson”) as their Fed. R. Civ. P. 30(b)(6)
corporate representative to testify on the topics of, inter alia, Defendants’ affirmative defenses
of good faith and lack of willfulness. Richardson refused to testify at his February 26, 2015
deposition regarding communications with Defendants’ in-house counsel, Knox McMillan
(“McMillan”), regarding these defenses upon instruction of counsel on the basis of the attorney-
client privilege despite the fact that McMillan played a “lead role” in Defendants’ decision to
classify AMs as exempt.
3
Defendants’ claim of privilege is fatally flawed. As demonstrated below, Defendants
waived the attorney-client privilege with respect to communications regarding the decision to
classify AMs as exempt by pleading these two affirmative defenses that require it to prove that it
acted in “good faith” when it made the classification decision (and any times that it re-evaluated
the classification decision). Defendants thereby voluntarily injected its “state of mind” into this
case. Whether Defendants ultimately relied on its counsel’s advice is not relevant.
In United States v. Bilzerian, 926 F.2d 1285, 1292 (2d Cir. 1991) (“Bilzerian”) the
Second Circuit held that the attorney-client privilege is waived in virtually identical situations.
District courts throughout the Second Circuit repeatedly have followed Bilzerian regarding at-
2
OfficeMax reclassified the AM position as non-exempt on or about November 2014, in
conjunction with its merger with Office Depot.
3
Defendants did not provide a log of the privileged oral communications required by Local Rule
26(e)(1)(B)(ii).
3
issue waiver. Scott v. Chipotle Mexican Grill, Inc., 2014 U.S. Dist. LEXIS 175775, at *232-34
(S.D.N.Y. Dec. 18, 2014) (citing Bilzerian and holding that defendant’s assertion of good faith
defense waived privilege despite defendants’ “to plead around them by avoiding mention of the
advice of counsel, except to disclaim it.”) (“Chipotle”); Wang v. Hearst Corp., 2012 U.S. Dist.
LEXIS 179609, at *4-8 (S.D.N.Y. Dec. 19, 2012) (same). These cases rest on the sound
rationale that a party cannot maintain privilege when they inject facts into a case which require
examination of its entire state of mind.
Here, Defendants have not only asserted affirmative defenses of good faith and lack of
willfulness that reflect their state of mind (and impact whether liquidated damages will be
imposed and whether the statute of limitations is three years as opposed to two, 29 U.S.C. §§
255, 260), but also expressly state reliance on the advice of counsel to support its decision not to
pay overtime to AMs and to classify them as exempt from overtime under federal and state law.
Plaintiffs have a right to challenge Defendants’ good faith claim and to inquire into what
exactly its counsel advised. The Court should reject the Defendants’ improper privilege claims
and compel Richardson to testify in his capacity as Defendants’ corporate representative
regarding his conversations with McMillan (and any other of Defendants’ attorneys) regarding
the asserted affirmative defenses of good faith and lack of willfulness.
FACTS
In response to Plaintiffs’ claims that Defendants misclassified AMs nationwide,
Defendants asserted, inter alia, the affirmative defenses of good faith and lack of willfulness.
See Dkt. No. 132 (Answer to Amended Complaint) at ¶¶ 17, 18, 27, 33, 34, 35. Plaintiffs
noticed the deposition of Defendants’ corporate representative on numerous topics, including
their good faith and lack of willfulness defenses, specifically:
4
6. The decision to classify AMs as exempt, including the facts and evidence
supporting Defendants’ good faith determination that AMs were properly
classified including, but not limited to:
a. the facts supporting Defendants’ affirmative defenses that Plaintiffs and
the members of the collective and classes are exempt from overtime under
the FLSA;
b. the individual(s) involved in making or approving the decision;
c. the reasons for the decision;
d. the exemptions on which Defendants relied;
e. the existence and location of documents which reflect such decision;
f. the existence and location of documents concerning the process that led to
the decision on how and to classify AMs as exempt; and
g. the affirmative steps that Defendants undertook to ascertain that their
decision to classify AMs as exempt complies with the relevant law and its
requirements.
. . .
8. The factual basis for Defendants’ seventeenth, twenty-seventh, and thirty-third
affirmative defenses that any violation of wage and hour laws related to the
classification of AMs as exempt was not willful.
See Notice of Deposition Pursuant to Fed.R.Civ.P. 30(b)(6), Exhibit A to the Affirmation of
Susan H. Stern (“Stern Aff.”), filed herewith.
Defendants produced Chris Richardson, OfficeMax’s Vice President for the East Region,
as its corporate representative to testify on these topics.
4
Richardson understood that
Defendants had designated him as the corporate representative on the topics enumerated in the
notice, including the affirmative defenses of good faith and lack of willfulness. Id. at 10:2-17.
Richardson’s testimony squarely puts the advice of Defendants’ in-house counsel, Knox
McMillan, at issue in connection with Defendants’ decision to classify AMs as exempt.
Specifically, Richardson testified that he and McMillan were part of a “team” which classified
4
Deposition of Chris Richardson (“Richardson Depo”), Exhibit B to Stern Aff., at 8:11-13.
Since the recent merger, Richardson is employed by Office Depot. Id. at 8:14-18. Prior to that,
Richardson was employed by OfficeMax as Vice President of Store Operations. Id. at 8:18-9:2.
5
the AM position as exempt in 2008 and 2011. Id at 42:3-43:12, 44:16-17, 48:19-49:1.
5
In
classifying the AM position as exempt, Richardson, McMillan and Defendants’ team relied on
the job description (which they wrote), as well as their informal observations in the field. Id. at
123:9-12. Richardson had numerous in-person and telephonic conversations with McMillan in
connection with the job description and the classification of the AM position in both 2008 and
2011. Id. at 128:2-129:6 (2008 job description and exempt classification); 130:13-131:11 (2011
job description and exempt classification).
Critically, Richardson admitted that McMillan was “actively involved” in classifying
AMs as exempt and indeed, that McMillan was the “lead component” in the decision to classify
AMs as exempt. Id. at 125:15-22;126:22-127:22. However, when asked the next logical
question – the substance of the conversations with McMillan – Richardson refused to answer,
based upon the assertion of privilege by Defendants’ counsel and counsel’s instruction not to
respond. Id. at 128:20-129:20; 131:20-23.
After refusing to testify as to the substance of his communications with McMillan,
Richardson reconfirmed that he had consulted with McMillan on the issue of the exempt
classification of AMs in both 2008 and 2011 on “several occasions.” Id. at 156:2-9. Richardson
reiterated that the “team [did] rely on Mr. McMillan’s input . . . in both 2008 and 2011.” Id. at
156:24-157:1. Nonetheless, Defendants’ counsel refused to withdraw his objection on this basis
of the attorney-client privilege, noting that “[t]he instruction [not to answer] still stands.” Id. at
156:12-13; 174: 12-14; 176:15-18; 176:19-20.
Notably, each time Defendants’ counsel invoked the attorney-client privilege and
5
To prepare for his own deposition, Richardson also reviewed McMillan’s deposition given
earlier in the case Id. at 22:7-10.
6
instructed Richardson not to answer, Plaintiffs’ counsel explained the implied/at-issue waiver.
Id. at 128:25-129:20; 157:3-158:1; 176:21-23. After the second invocation of the privilege one
of Plaintiffs’ attorneys contacted the Court on a break in the deposition regarding the issue of
privilege. Id. at 157:16-158:1. The Court advised that Plaintiffs should continue with the
deposition and file a Motion to Compel, thereby giving rise to the instant Motion. Id.
ARGUMENT
A. Standard for Relevancy of Evidence Sought During Discovery
Rule 26(b)(1) of the Federal Rules of Civil Procedure sets the contours for discovery and
provides that parties “may obtain discovery regarding any nonprivileged matter that is relevant to
any party’s claim or defense.” Adams v. Buffalo Pub. Schs, 2014 U.S. Dist. LEXIS 109642, at
*13 (W.D.N.Y Aug. 7, 2014). The relevance standard is broad in scope “to encompass any
matter that bears on, or that reasonably could lead to other matter that could bear on, any issue
that is or may be in the case.” Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351
(1978) (citation omitted). In the context of employment cases, the Supreme Court has explained
that: “liberal civil discovery rules give plaintiffs broad access to employers’ records in an effort
to document their claims.” Baker v. Gerould, 2008 U.S. Dist. LEXIS 28628, at *4 (W.D.N.Y.
March 27, 2008) (citing Wards Cove Packing Co. v. Atonio, 490 U.S. 642, 657 (1989)).
B. Plaintiffs Are Entitled to the Requested Discovery
1. Second Circuit Jurisprudence Demonstrates a Waiver of the Privilege
In Bilzerian, the Second Circuit held that the privilege normally protecting attorney-client
communications regarding the relevant issue “may implicitly be waived when defendant asserts a
claim [like “good faith”] that in fairness requires examination of protected communications.”
Bilzerian, 926 F.2d at 1292. The Court further explained that the defendant’s “conversations
7
with counsel regarding the legality of his schemes would have been directly relevant in
determining the extent of his knowledge and, as a result, his intent.” Id.; accord In re County of
Erie, 546 F.3d 222, 228-29 (2d Cir. 2008) (“the assertion of a good-faith defense involves an
inquiry into state of mind, which typically calls forth the possibility of implied waiver of the
attorney-client privilege.”).
Though Bilzerian involved a case involving securities fraud charges, it is well-settled that
the Second Circuit’s rationale applies equally to a defendant’s assertion of good faith as a
defense in an FLSA action. For example, Magistrate Netburn of the Southern District of New
York recently applied Bilzerian in the FLSA context to deny defendant Chipotle’s motion for a
protective order to prevent the plaintiffs from discovering its “attorney-client communications
regarding the decision to classify apprentices as ‘executive’ and thus exempt from overtime
pay.” Chipotle, 2014 U.S. Dist. LEXIS 175775, at *218-19, *232-34 291. As in the instant
case, Chipotle asserted affirmative defenses of good faith and lack of willfulness. Magistrate
Netburn set forth the law in this Circuit stating that “courts within this Circuit, relying on
Bilzerian, have reaffirmed the broader principle that forfeiture of the privilege may result where
the proponent asserts a good faith belief in the lawfulness of its actions, even without expressly
invoking counsel's advice.” Chipotle, 2012 U.S. Dist. LEXIS at *224 (citation omitted). The
“waiver may apply even if the defendant claims to have ignored the advice of counsel.” Id.
(citations omitted).
6
6
See also Chevron Corp. v. Donziger, 2013 WL 6182744, at *3 (S.D.N.Y. Nov. 21, 2013)
(stating that “even if a party does not attempt to make use of a privileged communication he may
waive the privilege if he asserts a factual claim the truth of which can only be assessed by
examination of a privileged communication”) (citation omitted); MBIA Ins. Corp. v. Patriarch
Partners VIII, LLC, 2012 WL 2568972, at *7 (S.D.N.Y. July 3, 2012) (stating that courts have
“rejected the argument . . . that a party could present state of mind evidence without waiving the
8
In Chipotle, as in this case, there was no dispute that the defendant did, in fact, obtain
the advice of counsel regarding the exempt classification at issue. Id. at *233. Thus, Chipotle
clearly put the advice of its counsel “at issue” and waived the attorney-client privilege with
regard to its communications with its counsel regarding the exempt classification. Id. District
Judge Carter later upheld the order and overruled the defendants’ objections. Scott v. Chipotle
Mexican Grill, Inc., No. 12-cv-8333 (S.D.N.Y.), Order (Dkt. 854).
Chipotle is virtually indistinguishable from the instant case on the issue of implied/at-
issue waiver. Here, it is undisputed that Defendants have asserted good faith and a lack of
willfulness numerous times throughout its Answer. See Dkt. No. 132 (Answer to Amended
Complaint) at ¶¶ 17, 18, 27, 33, 34, 35. It is likewise undisputed that Richardson testified at his
deposition, the corporate representative on the topics of good faith and willfulness, that
Defendants relied on the advice of attorney McMillan regarding the job description for and
classification of the AM position. Richardson Depo, Exhibit B to Stern Aff, at 123:9-12; 125:15-
22; 128:2-129:6; 130:13-131:11; 156:2-9; 156:24-157:1. This is the exact type of sword/shield
practice that the Second Circuit forbade in Bilzerian.
Accordingly, Defendants have waived the attorney-client privilege regarding their
communications about the classification of the AM position and the Court should order
Defendants to reveal the content of such communications that relate to their affirmative defenses
and the classification of the AM position. Bilzerian, 926 F.2d 1285; Chipotle, 2014 U.S. Dist.
LEXIS 175775; Wang, 2012 U.S. Dist. LEXIS 179609.
attorney client privilege, so long as it refrained from relying on the advice of counsel”). Arista
Records LLC v. Lime Gr. LLC, 2011 U.S. Dist. LEXIS 42881, at *11 (S.D.N.Y. Apr. 20, 2011)
(stating that “[e]ven if . . . [Defendant’s] beliefs about the lawfulness of his conduct were
actually separate from legal advice . . . Plaintiffs still would be entitled to know if [Defendant]
ignored counsel’s advice.”) (internal citations and quotation marks omitted).
9
2. Policy and Fairness Support Waiver of the Privilege
Lastly, it would be fundamentally unfair to permit Defendants to shield their
communications with counsel regarding their classification decisions. “Because legal advice that
a party received may well demonstrate the falsity of its claim of good faith belief, waiver in these
instances arises as a matter of fairness, that is, it would be unfair to allow a party to ‘use[ ] an
assertion of fact to influence the decisionmaker while denying its adversary access to privileged
material potentially capable of rebutting the assertion.’” Leviton Mfg. Co., Inc. v. Greenberg
Traurig LLP, 2010 U.S. Dist. LEXIS 128849, at *8 (S.D.N.Y. Dec. 6, 2010) (quoting John Doe
Co. v. United States, 350 F.3d 299, 306 (2d Cir. 2003)).
Put another way, because Defendants have sought the benefits of legal advice -- e.g., as a
limitation on or protection from liquidated damages or the third year of the statute of limitations -
- “on the very issue on which it asserts good faith, it puts its relevant attorney-client
communications at issue and thereby waives the privilege.” Chipotle, 2014 U.S. Dist. LEXIS
175775, at *245. To hold otherwise would effectively allow Defendants to hide behind the
shield of the attorney-client privilege, while at the same time asserting privilege against the
discovery of the substance of those communications as a sword against liability, liquidated
damages, and a longer statute of limitations. John Doe Co. v. United States, 350 F.3d 299, 304
(2d Cir. 2003) (“Forfeiture of this type is premised on the unfairness to the adversary of having
to defense against the privilege holder’s claim without access to pertinent privileged materials
that might refute the claim.”).
Finally, in terms of fairness, Defendants are not without options. Defendants have pled a
“panoply of defenses.” Dkt. No. 183; Chipotle, 2014 U.S. Dist. LEXIS 175775, at *241. If
Defendants do not wish to waive the attorney-client privilege as to the issues of good faith and
10
lack of willfulness, then their option is to seek to amend their answer to withdraw those defenses.
Id. In this way, Defendants may rely on their other defenses while maintaining their privilege.
Id.
CONCLUSION
Plaintiffs respectfully request that the Court enter an Order compelling Defendants to re-
produce Chris Richardson for deposition as its corporate representative to testify on all aspects of
Defendants’ affirmative defenses of good faith and lack of willfulness, including all
communications with Knox McMillan or any other counsel, and granting any other further relief
as this Court may deem just and proper.
Dated: March 16, 2015
Boca Raton, Florida
Respectfully submitted,
By: /s/ SUSAN H. STERN
Susan H. Stern
E-mail: sstern@shavitzlaw.com
Gregg I. Shavitz
E-mail: gshavitz@shavitzlaw.com
Paolo C. Meireles
E-mail: pmeireles@shavitzlaw.com
Michael Palitz
E-mail: mpalitz@shavitzlaw.com
SHAVITZ LAW GROUP, P.A.
1515 South Federal Highway, Suite 404
Boca Raton, FL 33432
Telephone: (561) 447-8888
Facsimile: (561) 447-8831
and
Seth R. Lesser
E-mail: seth@klafterolsen.com
Fran L. Rudich
E-mail: fran@klafterolsen.com
KLAFTER, OLSEN & LESSER, LLP
Two International Drive, Suite 350
Rye Brook, NY 10573
11
Telephone: (914) 934-9200
Facsimile: (914) 934-9220
Attorneys for Plaintiffs, the Collective
and the Classes
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that I electronically filed the foregoing document with the Clerk of
Court using CM/ECF on March 16, 2015. I also certify that the foregoing document is being
served this day on all counsel of record or pro se parties identified on the attached Service List in
the manner specified, either via transmission of Notices of Electronic Filing generated by
CM/ECF or in some other authorized manner for those counsel or parties who are not authorized
to receive electronically Notices of Filing.
/s/ Susan H. Stern
Susan H. Stern
SERVICE LIST
Jeffrey Heitzenrater v. Officemax, Inc., et al
CASE NO.: 1:12-cv-00900-WMS
United States District Court, Western District of New York
Trent M. Sutton
Email: tsutton@littler.com
LITTLER MENDELSON, P.C.
400 Linden Oaks, Suite 110
Rochester, NY 14625
Phone: 585.203.3400
Fax: 585.203.3414
Lee J. Hutton (admitted pro hac vice)
E-mail: lhutton@littler.com
LITTLER MENDELSON, P.C.
1100 Superior Avenue, 20
th
Floor
Cleveland, OH 44114
Phone: 216.623.6140
Fax: 216.649.0522
Meredith C. Shoop (admitted pro hac vice)
Email: mshoop@littler.com
LITTLER MENDELSON, P.C.
1100 Superior Avenue, 20
th
Floor
Cleveland, OH 44114
Phone: 216.623.6098
12
Fax: 216.937.0171
Timothy S. Anderson (admitted pro hac vice)
Email: tanderson@littler.com
LITTLER MENDELSON, P.C.
1100 Superior Avenue, 20
th
Floor
Cleveland, OH 44114
Phone: 216.696.7600
Fax: 216.696.2038
Michael G. Congiu (admitted pro hac vice)
Email: mcongiu@littler.com
LITTLER MENDELSON, P.C.
321 North Clark Street, Suite 1000
Chicago, IL 60654
Phone: 312-372-5520
Fax: 312-372-7880
Attorneys for Defendants
Served via CM/ECF
