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Shirley Craig, et al v. Rite Aid Corporation and Eckerd Corporation D/B/A Rite Aid

January 31, 2012

SHIRLEY CRAIG, ET AL., PLAINTIFFS,
v.
RITE AID CORPORATION AND ECKERD CORPORATION D/B/A RITE AID, DEFENDANTS.



The opinion of the court was delivered by: Judge Jones

Magistrate Judge Carlson

MEMORANDUM OPINION AND ORDER

I. INTRODUCTION

A. Overview of the Case

Shirley Craig and others (collectively, "Plaintiffs") initiated this action for overtime compensation under the Fair Labor Standards Act ("FLSA") with the filing of a collective action complaint on December 29, 2009. (Doc. 1) At bottom, the case concerns Plaintiffs' claims that Rite Aid misclassified Assistant Store Managers as exempt employees under the FLSA. The District Court in this case subsequently entered an order conditionally certifying the following collective class for purposes of providing notice of the action and an opportunity to opt-in: "All individuals classified as exempt from the FLSA's overtime pay provisions and employed as salaried Assistant Store Managers during any workweek within the previous three years in any of the 4,901 stores identified in Rite Aid Corporation's April 17, 2009 Annual Report as being operated by Rite Aid Corporation." (Doc. 72) Thus far, more than 1,000 individuals have identified themselves as putative opt-in plaintiffs in the course of this litigation.

B. Plaintiffs' Motion to Stay Briefing on Defendants' Motion for Decertification Pending Completion of Fact Discovery

Prior to the close of fact discovery, Defendants filed a "Pre-Close of Discovery Motion for Decertification." (Doc. 470) In this motion, Defendants request that the Court decertify the conditionally certified class of assistant store managers who have opted into this case -- a number that by now exceeds 1,000 individual employees. Defendants have represented that the motion is properly filed at this juncture in the litigation because, in their view, the claims of the opt-in Plaintiffs simply cannot be adjudicated but in an individualized manner in separate proceedings. Accordingly, Defendants urge the Court to consider the merits of the motion even before discovery is complete.

After Defendant filed this motion, and before responding to it substantively, Plaintiffs filed a motion seeking a stay of all briefing pertaining to Rite Aid's decertification motion. (Doc. 490) In support of their motion, Plaintiffs argue that FLSA decertification motions are typically filed, and ruled on, after the close of fact discovery. Plaintiffs maintain that this custom makes sound practical sense because, as discussed further below, the Court's decertification analysis will necessarily require the Court to evaluate multiple, non-exclusive factors in light of the totality of the evidence and the circumstances of the case. Plaintiffs contend that they have not yet been able to complete discovery that may well be relevant to this multi-factored inquiry, and consideration of Defendants' decertification motion is, therefore, premature.

In this regard, Plaintiffs argue that Defendants' move to decertify the class is simply unfair at this stage of the litigation, because although the motion was filed after Rite Aid had completed most of its own affirmative discovery, Plaintiffs have not had "a meaningful opportunity to obtain corporate-level discovery." (Doc. 491, at 1) Plaintiffs emphasize that such corporate-level discovery will be central to their opposition to Defendants' motion for decertification, and for that reason argue that they should be able to conclude this necessary discovery before the Court considers decertification.

In addition, Plaintiffs underscore that in FLSA collective actions, analysis of the totality of circumstances relevant to questions of decertification motions requires a considerable investment of resources by the parties and the Court. For this reason, Plaintiffs argue that Defendants' suggested seriatim approach to decertification issues, and assertion that they may well seek to file multiple motions for decertification at whatever time they deem appropriate, risks inefficiency and needless expenditure of legal and judicial resources. For these related reasons, Plaintiffs urge the Court to stay all briefing relating to Defendants' decertification motion until after such time as both parties have had an opportunity to conclude their fact discovery, and at time when Plaintiffs contend that the record will be more complete, and permit the Court to consider certification or decertification based upon a full evidentiary record.

In opposing Plaintiffs' motion to stay briefing, Defendants observe that there is no hard and fast rule mandating that defendants refrain from moving for decertification until after the close of discovery, or until after plaintiffs have conducted the fact discovery they believe is necessary to support their request to proceed collectively. For their part, Defendants see Plaintiffs' proposal as yet another attempt to prolong litigation that has already grown expensive and burdensome for all parties, and particularly because Defendants believe that the current evidentiary record -- and the facts revealed during the representative discovery of opt-in Plaintiffs -- cuts sharply against final certification of the class of plaintiffs. Defendants argue that the discovery already taken demonstrates that this action cannot proceed as a collective FLSA action, and, therefore, whatever additional discovery Plaintiffs claim to need will do nothing to make final certification appropriate. Accordingly, Defendants maintain that the parties should brief the outstanding issue of certification now, without any additional discovery, and that the Court should consider the issue without delay.

Upon consideration, although we agree with Defendants that there is no procedural, statutory, or other legal requirement mandating that decertification motions be filed, and considered, only after the conclusion of fact discovery, we also find it clear that in most cases the parties and courts consider the issue of decertification at the conclusion of fact discovery. Indeed, the Third Circuit recently issued a decision that suggests the Court approves of this traditional two-stage approach to certification questions in FLSA cases, with the decertification stage occurring after the parties have completed, or largely concluded, fact discovery.

We also find that this practice has much to recommend it generally, particularly given the fact that, although plaintiffs have a relatively light burden of having a class conditionally certified at the outset of a putative collective FLSA action, they face a much more stringent burden at the second stage of the process, when the parties argue for and against final certification. Because plaintiffs have a greater burden at this later stage, and because a determination of certification questions at the second stage is a more fact-intensive inquiry, we find that the custom of considering decertification motions after the parties have concluded discovery is sound.

Moreover, with respect to this action in particular we find that this traditional practice is especially warranted, as the nationwide group of more than 1,000 opt-in Plaintiffs in this case is relatively large, and the factual questions raised at the certification stage may well implicate centralized corporate-level policies and uniform operating procedures -- precisely the kind of information that Plaintiffs contend they have not yet had an opportunity to fully discover and review. Given that the Court's adjudication of decertification will entail a multi-faceted legal and factual inquiry, and consideration of the totality of the evidence and circumstances bearing upon the suitability of the plaintiffs to proceed collectively, we believe that consideration of Defendants' decertification motion should await the conclusion of fact discovery, when a ruling ...


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