As the wave of collective FLSA actions continues to flourish amongst larger employers, the United States District Court for the Eastern District of New York on August 26, 2014 rendered a decision in favor of three major food concession employers - HMSHost Corporation, Host International, Inc., and Host Services of New York (collectively, "defendants"), when it decertified a conditional class of 275 plaintiffs.
In Easton Stevens, et al. v. HMSHost Corporation, et al., 10 CV 3571, plaintiffs, a group of assistant managers that worked at defendants' food and beverage concessions at numerous airports, highway travel facilities, and shopping malls across the United States, argued that they were improperly classified as "exempt" managerial employees and thus wrongfully denied overtime pay for the time they worked in excess of 40 hours per week. The restaurants operate under the defendants' names, as well as other brand names such as Burger King, Starbucks, Chili's, Quizno's, California Pizza Kitchen, KFC and Pizza Hut.
After significant discovery, which included the deposition of 19 of the class members, defendants moved to decertify on principally two grounds. First, defendant employers argued that the assistant managers had widely varying employment settings due to significant differences in location, size, brand and type of restaurant. For example, the defendants run restaurants ranging from "grab and go" food outlets to fast food venues, casual sit down restaurants, bars, wine bars, brew pubs, and higher end dining establishments. The court ultimately was not persuaded by this argument because the record did not support that the different employment venues necessarily meant that the assistant managers had different job duties.
However, the court did find the disparities in job duties, in particular, as testified to by the 19 deponents, undermined commonality. For example, the court highlighted that some of the plaintiffs testified that they had scheduling authority, while others stated they could only schedule with approval of their managers, and still others testified that they had no scheduling authority. Also, some of the assistant managers indicated that they did have the ability to directly discipline subordinates hourly employees, but then again, others did not. Thus, the court held this disparity in job duties greatly undermined that "representative proof [would]....prove the correctness of the executive (exempt) classification or...rebut such a showing." As a result, decertification was granted.
While the employers ultimately prevailed here, they paid considerable legal fees in defeating this class certification. It is therefore critical for employers to regularly audit how they classify their employees (exempt vs. non-exempt) and ensure that the job duties and descriptions are truly reflective of the work being done in making this FLSA determination.