On February 15, 2011, Judge Peter Sheridan of the District of New Jersey decertified a conditionally certified class of Merchandising Assistant Store Managers (“MASMs”) in a lawsuit against home improvement giant Home Depot. See Aquilino v. Home Depot, U.S.A., Inc., 2011 U.S. Dist. LEXIS 15759 (D.N.J. Feb. 15, 2011). The assistant store managers in Aquilino alleged that they were misclassified as exempt from the overtime compensation requirements of the federal Fair Labor Standards Act (“FLSA”) because Home Depot only paid them a salary. “MASMs are the second-highest ranking employee in a Home Depot, subordinate only to the store manager. Each store employs between one and seven MASMs.” Id. at *5. Each MASM can potentially oversee several departments within each Home Depot location. When the case was conditionally certified, notice was sent out to approximately 12,728 workers, 1,502 opt-ed into the lawsuit. Id. at *4.
The Aquilino Court provides a detailed analysis of the two step process in certifying a class pursuant to 29 U.S.C. § 216(b) within the Third Circuit. Id. at 16-17. At the initial or “conditional” certification stage, the “analysis occurs early in the litigation when the court only has minimal evidence; thus the analysis uses a ‘fairly lenient standard’ and usually results in the grant of conditional certification.” Id. “Once conditional certification is granted, notice is sent to the potential members of the collective action.” Id. “The secondary inquiry, commonly known as the ‘decertification stage,’ occurs later in the litigation when the case is readying for trial. If the defendant moves to decertify the conditional collective action, the court will again consider whether the plaintiffs are similarly situated to the remainder of the members of the collective action.” Id. (internal citations omitted). At the second stage, the burden is higher for the plaintiffs.
The Aquilino Court detailed the three factors courts review at the decertification stage. Id. at *18. These are (1) the disparate factual and employment settings of the individual plaintiffs, (2) the various defenses available to defendants, and (3) the fairness and procedural considerations. Id. Upon reviewing each of these factors, the Court decertified the case finding that the nationwide class of MASMs was not similarly situated.
The question now is: What will the plaintiffs and Home Depot do from here? When collective actions are decertified, the claims of opt-in members are dismissed without prejudice, which means they can re-file their cases elsewhere. The named plaintiff, however, will now proceed to trial before Judge Sheridan. As a result, instead of litigating Home Depot’s policy of classifying MASMs as exempt in one court, the company is now faced with potentially 1,500 individual suits in federal courts across the country. As has been seen in the lawsuits on behalf of store managers against Dollar General, this can lead to inconsistent rulings on whether a standardized position is exempt. Kind of makes you think that corporate America should be careful what they wish for when moving to decertify these cases.