The opinion of the court was delivered by: Conti, District Judge.
THIS DOCUMENT RELATES TO: All Actions
MEMORANDUM OPINION AND ORDER
Eight cases*fn1 brought against Enterprise Rent-A-Car Company and a number of affiliated companies were consolidated by the Judicial Panel on Multidistrict Litigation for pretrial purposes in this court. (See transfer order (Docket No. 132, Civ. No. 07-1687).) On September 18, 2009, an amended master complaint was filed in the multidistrict litigation. (Docket No. 35, Misc. No. 09-210.) The amended master complaint alleges that the plaintiffs were assistant branch managers and branch managers employed at various rental locations, and allege that they were wrongfully classified by their employers as exempt from certain federal and state wage law protections, including the requirement of premium overtime pay. The plaintiffs claim that they regularly worked in excess of forty hours per week, without receiving premium overtime compensation for those hours worked that exceeded forty hours per week. Because the plaintiffs allege that, as managers, they were not exempt employees, and because defendants failed to pay managers premium overtime compensation for the hours worked in excess of forty hours per week, the plaintiffs claim that their employers violated the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. §§ 201 et seq. ("FLSA"). (See id.)
Pending before this court is a motion for conditional certification (Docket No. 73, Misc. No. 09-210) filed on October 22, 2009 by plaintiffs*fn2 seeking: (1) conditional collective class certification pursuant to the FLSA; (2) issuance of notice to all members of the putative class in accordance with Hoffman-La Roche v. Sperling, 493 U.S. 165 (1989); and (3) production to plaintiffs‟ counsel of the names and addresses of all members of the putative class. The motion for collective action certification is brought only with respect to assistant branch managers and not branch managers. Plaintiffs filed a memorandum of law in support of the motion (Docket No. 75), and a declaration of attorney Robert W. Biela (Docket No. 76). Exhibits in support of the motion were attached to the declaration.
On February 26, 2010, defendants*fn3 filed a memorandum in opposition to plaintiffs‟ motion (Docket No. 129), and an appendix of exhibits in support of defendants‟ opposition (Docket Nos. 130 and 131). On March 29, 2010, plaintiffs filed a reply brief in support of the motion (Docket No. 151), and a declaration of attorney Peter A. Muhic, to which supportive exhibits were attached (Docket No. 152). On June 25, 2010, plaintiffs filed a notice of supplemental authority (Docket No. 183). On July 7, 2010, defendants filed a response to the notice of supplemental authority (Docket No. 193). On August 6, 2010, plaintiffs filed a second notice of supplemental authority (Docket No. 196).
A. Nature of Corporate Relationships and Operations
ERAC-Missouri is a Missouri corporation that maintains its principal place of business in St. Louis. (Appendix of exhibits in support of defendants‟ opposition to motion for conditional certification ("Defs.‟ App.") (Docket Nos. 130-31), Ex. 1 ¶ 3). ERAC-Missouri is the parent corporation of thirty-eight operating subsidiaries engaged in the business of renting and selling vehicles within the United States. (Id. ¶ 5.) In the consolidated cases, nine operating subsidiaries were sued and joined as defendants in the amended master complaint. (See Docket No. 35.) ERAC-Missouri does not rent vehicles, but instead is a company that holds the stock of operating subsidiaries and offers a range of administrative services to its operating subsidiaries. (Id. ¶¶ 13-16.) It is economically beneficial for ERAC-Missouri to provide these services to the subsidiaries, because it can achieve economies of scale. (Id. ¶ 18.)
The operating subsidiaries are assigned regions in which they rent and sell vehicles to consumers. (Id. ¶ 21.) They build their businesses according to strategies and policies adopted based upon their circumstances and preferences. (Id. ¶ 25.) Each operating subsidiary is a separate and distinct company.*fn4 (Id. ¶ 6.) Internal documents refer to ERAC-Missouri and all operating subsidiaries collectively as "Enterprise." (See, e.g., declaration of Robert Biela in support of plaintiffs‟ motion for conditional certification ("Pls.‟ App."), Ex. C at E-002425.) Edward Adams ("Adams"), senior vice president, human resources of ERAC-Missouri, testified that ERAC-Missouri and the operating subsidiaries refer to themselves as "the Enterprise brand." (Pls.‟ App., Ex. D at 50-51.) Timothy Nettles ("Nettles"), the vice president and general manager of ERAC-Pittsburgh, testified to the importance of establishing and maintaining a certain level of consumer expectations consistent across the Enterprise network:
Q: What is the Enterprise brand? What does that refer to?
A: Well, I don‟t think that there is a definition per se. I can tell you what it means to me.
A: It is the trade dress that we put on the buildings. If I want to be consistent, I want my customers to know that it‟s an Enterprise branch when they walk into it. From that standpoint, I want consistency as far as the interiors look. We talked about the dress code. I want my people looking a certain way. To me, that‟s the part of the brand.
Any type of sales collateral that we use, I want that to be consistent.
I think our whole customer service model, ESQi, how we treat customers, I think that becomes part of the Enterprise brand. How we react in the community, we are very active in the local community here. I‟m on several boards. Diversity is a big topic for me. I want a diverse work force. I think that reflects on our brand.
Q: Does Enterprise Pittsburgh derive any benefits from being associated or affiliated with the Enterprise brand?
A: Well, I think that‟s why I don‟t have Hertz or Avis or Budget or National above the door. It‟s Enterprise Rent-A-Car. And we all have worked very hard in our subsidiaries to build that brand, build our customer base, which is also part of the brand, so that we can continue to grow and continue to make money for both the company and our employees.
Q: So the Enterprise brand, that‟s important for the business.
Q: It‟s important to you.
Q: And it‟s important to Enterprise-Pittsburgh.
Q: Do you think that Enterprise brand is also important to the parent company?
A: I would hope so. (Pls.‟ App., Ex. E at 202-03.)
Each operating subsidiary maintains authority over its day-to-day operations, including operating hours, prices, and purchases and sales of vehicles. (Defs.‟ App., Ex. 1 ¶¶ 28-31, 33).
Each is headed by a general manager. (Id. ¶ 24.) The general managers are given broad decision-making authority. (See, e.g., Defs.‟ App., Ex. 2 ¶ 25.) Each subsidiary has discretion over its employment policies and practices, including hiring, termination, promotion, and compensation for almost all employees, including assistant branch managers. (Defs.‟ App., Ex. 1 ¶ 30.) In exercising that discretion, each operating subsidiary determines the duties and responsibilities of its employees and determines whether employees should be classified as exempt from overtime laws.*fn5 (See, e.g., Defs.‟ App., Ex. 2 ¶ 43; Defs.‟ App., Ex. 3, ¶¶ 31-32; Defs.‟ App., Ex. 4 ¶¶ 38-43.). Several operating subsidiaries developed unique operating practices and procedures. (See, e.g., Defs.‟ App., Ex. 2 ¶¶ 54-56, Defs.‟ App., Ex. 3 ¶¶ 53-58; Defs.‟ App., Ex. 4 ¶¶ 53-56.) Some subsidiaries have divisions or regions, which have a level of autonomy. (See, e.g., Defs.‟ App., Ex. 3 ¶ 58.)
Vehicle rental activities occur in branches operated by the subsidiaries. (See Defs.‟ App., Ex. 1 ¶ 21.) The branches are staffed, based primarily on their volume and type of business, with varying combinations of branch managers, assistant branch managers, management assistants, management trainees, car preps, drivers, and interns. (See, e.g., Defs.‟ App., Ex. 2 ¶ 48; Defs.‟ App., Ex. 3 ¶ 47.) The kind of customer varies depending upon the particular clientele of the branch: branches that primarily service corporate accounts have a high percentage of business travelers; whereas, branches that primarily service insurance companies and repair shops rent cars to persons whose vehicles are under repair. (See, e.g., Defs.‟ App., Ex. 3 at ¶¶ 44-46.)
The services provided by ERAC-Missouri to the operating subsidiaries include the creation of materials on human resources matters, such as recommended job descriptions (Pls.‟ App., Ex. D at 115; see, e.g., Pls.‟ App., Ex. F), performance review forms (Pls.‟ App., Ex. D at 141), a management compensation guide (see id. at 221), and recommendations concerning whether certain positions should be exempt from the overtime provisions of the FLSA (see id. at 297). Adams testified that ERAC-Missouri created job descriptions for positions at the operating subsidiaries and distributed them to the operating subsidiaries. (Pls.‟ App., Ex. D at 115.) The job descriptions list responsibilities for various positions. (Id. at 116.) For example, Adams acknowledged that a job description was provided that represented ERAC-Missouri‟s "determination of general duties and responsibilities of an assistant branch manager." (Id. at 118.) The subsidiaries do not maintain their own job descriptions for the positions. (Id. at 123.) The descriptions are compiled in a job description database maintained on the intranet managed by ERAC-Missouri‟s corporate human resources department. (Id. at 134.)
Another service offered by ERAC-Missouri to the operating subsidiaries was the creation and distribution of a "Management Compensation Guide." (Defs.‟ App., Ex. 19 ¶¶ 10-11; Pls.‟ App., Ex. G.) The compensation guide was created based upon a review of the practices being used by the subsidiaries. (Defs.‟ App., Ex. 19 ¶ 10.) The compensation guide recommended compensation for various employees, including assistant branch managers. (Pls.‟ App., Ex. G at E-001641, E-001642.) It recommended that assistant branch managers be paid an annual salary ranging from $26,400 to $29,700, and a percentage of monthly profits generated by the branch. (Id.) ERAC-Missouri recommended the subsidiaries classify assistant branch managers as exempt under the FLSA from receiving overtime compensation. (Pls.‟ App., Ex. D at 297.)
Adams testified that, even though the recommendations were not binding upon the subsidiaries, all subsidiaries outside of California followed the recommendations and classified assistant branch managers as exempt from the FLSA overtime provisions:
A:... We would recommend to the subs that these are exempt positions.
A: It is for them to decide.
Q: To your knowledge, do any of the subsidiaries pay -- despite the recommendations made in the compensation guide, pay assistant branch managers on an hourly basis?
Q: Okay. To your knowledge, are the -- are those locations within California?
A: To the best of my knowledge, they're in California.
Q: Okay. To your knowledge, do any of the subsidiaries outside of California pay assistant branch managers on an hourly basis?
Q: Okay. To your knowledge, despite the recommendation in the compensation guide, do any operating subsidiaries pay branch managers on an hourly basis?
Q: Okay. And that's both within California, outside of California?
A: That is correct. (Id.)
Operating subsidiaries doing business in the United States, with the exception of subsidiaries in California, employ approximately 3,000 assistant branch managers. (Defs.‟ App., Ex. 19 ¶ 9.) The recommended primary duty of each assistant branch manager reflected on the job description is to participate in the management of the assigned branch, its employees, and its operations. (Pls.‟ App., Ex. F.) On the job description, each assistant branch manager‟s recommended job responsibilities focused upon the areas of management of customer service and operations, human resource management, sales and marketing, financial performance, and fleet management and maintenance. (Id.) Each recommended management area includes a broad spectrum of duties and responsibilities. The job description noted that the daily duties and responsibilities of each assistant branch manager, however, varied "from individual to individual, location to location, and over time, depending on a number of factors." (Id.)
B. Plaintiffs' Declarations and Testimony
Various plaintiffs, who were assistant branch managers, submitted substantially the same declarations portraying their daily job responsibilities as primarily comprised of nonexempt duties. (See Pls.‟ App., Exs. H-K, M-R, T-Z, AA-CC, FF, GG.) They allege they were employed by both ERAC-Missouri and the relevant operating subsidiary. (See, e.g., Ex. H ¶ 2.) They assert that their management responsibilities were limited, and they did not have authority to hire, fire, promote, demote, or discipline employees. (See, e.g., Ex. H ¶¶ 5, 6.) Instead, branch managers and general managers made those decisions. (Id.) Those plaintiffs assert they did not make recommendations regarding these matters. (Id.)
Plaintiffs aver in the declarations that all assistant branch managers shared substantially similar job duties and responsibilities. (See, e.g., Ex. H ¶ 14.) They assert that they spent the majority of time performing tasks related to the renting of vehicles, such as cleaning and washing cars, picking up and dropping off cars, and completing rental paperwork. (See, e.g., Ex. H ¶ 7.) Assistant branch managers completed the same tasks as management trainees, and that their base compensation as assistant branch managers was less than when they were management trainees. (See, e.g., Ex. H ¶ 7; Ex. FF ¶ 7.) They also assert that at no point during their employment did anyone from upper management ever ask them what their duties were or inquire about what they did on a daily basis. See, e.g., Ex. H ¶ 17.)
2. Testimony of Sample Plaintiffs*fn6
During his deposition, Hagler, an assistant branch manager at a branch in Tuscaloosa, Alabama, testified that he "assumed" he was "employed by Enterprise Leasing Company South Central." (Defs.‟ App., Ex. 23 at 29.) With respect to whether he had the authority to hire employees or participate in their interviews, he testified as follows:
A: It‟s just based off of, I guess, what I‟ve seen as my time as a -- as a management trainee, management assistant downtown, and even there in Tuscaloosa. That just wasn‟t the form for an assistant manager to bring someone off the street and hire them on as a driver.
Q: Okay. And are you also saying that in other areas or in Tuscaloosa --
Q: -- when drivers are hired, assistant managers don‟t participate in the interview process?
A: I‟m not -- I‟m not for certain.
Q: You don‟t know one way or the other?
A: I haven‟t participated in an interview -- interview of a driver.
Q: Right. Well, I understand. We established that.
Q: When you were an assistant manager, no drivers were hired?
Q: What I‟m asking is whether to your knowledge assistant managers participated in the interview process of hiring drivers?
A: To my knowledge, I don‟t know.
Q: Okay. So they might?....
A: It would be highly unlikely. I -- I would say.
Q: Why -- why would you say that? If you don‟t know, why would -- how do you have any basis to -- to -- to assess the relativeness of that?
A: Because I never was told that we had the ability to hire a driver. (Id. at 74-75.)
Hagler had no personal knowledge regarding the duties of assistant branch managers outside of ERAC-South Central. (Id. at 104-05.) He testified that the duties may vary somewhat between branches:
Q: Now, tell me how there might be differences between branches as to what assistant managers may do?
A: Well, I think the -- the rental mix has a -- has a large part to do with it. You may have a branch that may be insurance heavy. You may have a branch that may be retail. I guess just from a general standpoint it‟s all, I guess, the same duties, but sometimes there may be different -- different actions taken by those different assistant managers depending upon the environment that their -- their office is in.
Q: Okay. Can -- can you give me an example of how the rental mix might change the duty of an assistant manager?
A: If -- if -- if -- I guess in maybe a smaller branch there may not be as many cars to -- to fleet manage or as many employees to try to kind of motivate, you know. So their duties may be a little bit less, and a smaller branch may not have as many duties as it would be maybe in a larger branch.
Q: And like, for example, are you familiar with what they to at the airport branch at all?
Q: Okay. Do you know if the assistant managers have the similar back-end responsibilities at the airport branch that they might have at a home city branch?
A: It‟s my assumption that it would be a little different because the airport, this is a little bit different set-up. (Id. at 105-07.)
Hagler testified that his branch manager and area manager, although they may not have inquired what his duties were, "had a pretty good idea" and "knew" what he "did most days." (Id. at 109-10.) Hagler was asked if he was compensated more as an assistant branch manager than as a management trainee, and he answered "[r]oughly"; he testified, however, that he could not recall exactly because he did not "have it here in front of" him. (Id. at 110.)
During his deposition, Bajkowski, an assistant branch manager at branches in Chicago, Des Plains, and Skokie, Illinois, testified that the duties of assistant branch managers might vary depending on the business mix of their branches:
Q: Okay. What about managing the fleet? And let‟s talk about when you‟re at C1. Tell me about the business mix at C1?
A: Mostly insurance business.
Q: Okay. And was there retail business, too?
A: Yeah, there was some retail business, too.
Q: Okay. Were there any corporate accounts?
A: Yeah, there were some corporate accounts.
A: So mostly was -- was insurance business of all body of the body shops. Probably like 70 percent and then the 30 percent was all retail or -- or corporate.
Q: What was the business mix of same at NH as it was at C1?
A: C -- at -- there was at NH it was more dealership. So it was probably like 40 percent ...