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Qazi v. Stage Stores, Inc.

United States District Court, S.D. Texas, Houston Division

June 19, 2019

MALEEHA QAZI, et al, Plaintiffs,


          Hon. Keith P. Ellison, United States District Court Judge.

         Pending before the Court is Plaintiffs' Motion to Conditionally Certify Collective Action and to Approve and Facilitate Notice to Similarly Situated Employees (the "Certification Motion.") (Doc. No. 42.) Plaintiffs ask the Court to conditionally certify a nationwide class and allow for notice to be distributed to the potential opt-ins in the present lawsuit. Defendant asks the Court to deny the Certification Motion.

         I. BACKGROUND

         Plaintiffs brought this Fair Labor Standards Act ("FLSA") case as a putative class action on behalf of themselves and other employees of Defendant Stage Stores, Inc. or Specialty Retailers, Inc. d/b/a Peebles ("Defendant.")[1] (Doc. No. 42 at 8.) Plaintiffs were employed as Store Managers, working in eight different stores across four states at various times. Id. Defendant classified Store Managers as exempt from the FLSA's overtime provisions at all times relevant to this lawsuit. Id. Plaintiffs argue that this exempt classification violated the FLSA because they spent "the majority of their workdays performing non-exempt duties such as selling merchandise; working on the sales floor; restocking products; marking down sale items; keeping clothing organized; operating the register; and other general customer service duties, working on assignments provided by corporate; and filling in for hourly associates." Id. Plaintiffs argue that they are similarly situated to each other as well as members of the potential class because (1) they were all subject to the same uniform policy regarding compensation, (2) the job description for Store Managers is the same regardless of store location or size, and (3) Store Managers had similar "customer service, sales, and operations job duties," (Doc. No. 42 at 8, 11-12.) Plaintiffs support their contentions with declarations from each of the potential class representatives, as well as fifteen uniform job postings, and deposition testimony of Defendant's corporate representative. (Doc. No. 42 at 8; Doc. No. 82 at 7.) When deposed by Plaintiffs, Defendant's corporate representative admitted that the variations that existed between store manager positions in various stores did not affect whether the manager was considered exempt. (Doc. No. 82 at 18.)

         Defendant argues that the Court should deny the Certification Motion. Defendant claims that nationwide certification is inappropriate because many issues would need to be individually determined, and the only company-wide policy applicable to Plaintiffs is an official policy which is legal. (Doc. No. 44 at 25.) Defendant supports its position by comparing the declarations and depositions of Plaintiffs with the deposition of current Store Manager Holly Watts and the declarations of eleven current Store Managers. (Doc. No. 80 at 7.)

         Defendant also opposes notification of some potential class members on the basis that they may be bound to individually arbitrate their claims. (Doc. No. 44 at 17.) Defendant states that 16 members of the proposed putative class have arbitration agreements. Id. Plaintiffs do not challenge the validity of these arbitration agreements, but rather argue that arbitration concerns should not be addressed at this stage of litigation. (Doc. No. 51 at 8.)


         The Fair Labor Standards Act allows employees to sue an employer for violations of the Act's overtime provisions. Suits to recover overtime pay "may be maintained against any employer ... by any one or more employees for aid on behalf of himself or themselves and other employees similarly situated." 29 U.S.C. § 216(b).

         Conditional Class Certification

         To determine whether employees are "similarly situated" under § 216(b), courts in the Fifth Circuit look to the two-step Lusardi approach. See e.g., Walker v. Hongua Am., LLC, 870 F.Supp.2d 462, 465 (S.D. Tex. 2012). At the first step of the Lusardi approach, courts must decide whether notice of the action should be given to potential class members. Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1213-14 (5th Cir. 1995), overruled on other grounds by Desert Palace, Inc. v. Costa, 539 U.S. 90 (2003). The court's decision at this stage is made using a "fairly lenient standard, [which] typically results in 'conditional certification' of a representative class." Id. at 1214; see also Tolentino v. C & J Spec-Rent Servs. Inc., 715 F.Supp.2d 642, 647 (S.D. Tex. 2010) ("The remedial nature of the FLSA and § 216 militate strongly in favor of allowing cases to proceed collectively."). A plaintiff may proceed collective:y only if the challenged conduct is a generally applicable rule, policy, or practice. McKnight v. D.Houston, Inc., 756 F.Supp.2d 794, 801 (S.D. Tex. 2010) (quoting England v. New Century Fin. Corp., 370 F.Supp.2d 504, 507 (M.D. La. 2005)). Therefore, conditional certification should be denied when the action arises from circumstances purely personal to the plaintiff. Id.

         In order to obtain conditional certification, the plaintiff must make a "minimal showing" that: (1) there is a reasonable basis for crediting the assertions that aggrieved individuals exist, (2) those aggrieved individuals are similarly situated to the plaintiff in relevant respects given the claims and defenses asserted. Aguirre v. SBC Commc'ns, Inc., No. H-05-3198, 2006 WL 964554, at *6 (S.D. Tex. April 11, 2006). With regard to the second factor, "the relevant inquiry is whether the potential class members performed the same basic tasks and were subject to the same pay practices." Tice v. AOC Senior Home Health Corp., 826 F.Supp.2d 990, 995-96 (E.D. Tex. 2011). In making this assessment, "the court need not find uniformity in each and every aspect of employment to determine that a class of employees is similarly situated." Jones v. SuperMedia Inc., 281 F.R.D. 282, 288 (N.D. Tex. 2012).


         The Fifth Circuit has held that in a FLSA class action, where an employee has entered into a valid arbitration agreement, "it is error for a district court to order notice to be sent to that employee as part of any sort of certification." In re JPMorgan Chase & Co., 916 F.3d 494, 503 (5th Cir. 2019).

         III. ...

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