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Drake v. Steak N Shake Operations, Inc.

United States District Court, E.D. Missouri, Eastern Division

December 22, 2017

SANDRA DRAKE and RANDY SMITH, on behalf of themselves and others similarly situated, Plaintiffs,
v.
STEAK N SHAKE OPERATIONS, INC., Defendant.

          MEMORANDUM AND ORDER

          JOHN A. ROSS, UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Plaintiffs' Motion to Certify (Doc. 130) and Defendant's Motion to Decertify (Doc. 134).

         Background

         As set out in the Court's previous orders, Plaintiffs are forty-six current and former salaried managers at Steak-N-Shake (“SnS”). Plaintiffs filed a class action under Federal Rule of Civil Procedure 23, alleging that SnS failed to properly pay them overtime wages in violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 216(b), and Missouri law. SnS maintains that the Plaintiffs are exempt from overtime protection because their primary job duties are executive or administrative. On December 17, 2015, the Court granted the parties' joint stipulation of conditional certification of a putative class of plaintiffs. (Doc. 39.) The parties conducted limited discovery on the issue of certification.

         On May 30, 2017, Plaintiffs moved to formally certify a class of “All persons who worked as Defendant Steak N Shake (‘SnS') Managers at all corporate owned retail restaurants located in the State of Missouri at any time from September 8, 2012 to the present.” (Doc. 130.)

         The same day, Defendant moved to decertify the conditional FLSA class. (Doc. 134.) The motions are now fully briefed and pending before the Court.

         Discussion

         I. SnS's Motion for Decertification

         SnS moves the Court to decertify the conditional FLSA class because “Plaintiffs are not similarly situated with respect to the key issues underlying their claims, the experiences of one Plaintiff is not representative of any other and, as such, the claims of the group cannot be adjudicated without inquiring into each individual's particular circumstances.” (Doc. 135 at 4.) The standard for obtaining conditional certification is not rigorous; Plaintiffs must only show a “colorable basis for their claim” and “that a class of similarly situated plaintiffs exists.” White v. 14051 Manchester Inc., 301 F.R.D. 368, 372 (E.D. Mo. 2014) (citation omitted). The standard for avoiding decertification, however, is much stricter.

         A. Legal Standard

         A collective action under the FLSA to recover overtime compensation may be maintained “by any one or more employees for and in behalf of himself or themselves and other employees similarly situated.” 29 U.S.C. § 216(b). “Plaintiffs seeking to maintain an opt-in class action bear the burden to show that they are similarly situated.” Kautsch v. Premier Comm'ns, No. 06-CV-04035-NKL, 2008 WL 294271, at *1 (W.D. Mo. Jan. 31, 2008). “If the [class members] are similarly situated, the district court allows the representative action to proceed to trial. If not, the district court decertifies the class, dismisses without prejudice the opt-in plaintiffs, and allows the class representative[s] to proceed to trial on [their] individual claims. The decision to certify or decertify a collective action under section 216(b) is within the district court's discretion.” White v. Baptist Mem'l Health Care Corp., 08-2478, 2011 WL 1883959, at *4 (W.D. Tenn. May 17, 2011), aff'd, 699 F.3d 869 (6th Cir. 2012); Baptist Mem'l, 2011 WL 1883959, at *4 (citations and internal quotation marks omitted).

         That said, similarly situated “does not necessarily mean identical.” Arnold v. Directv, LLC, No. 4:10-CV-352-JAR, 2017 WL 1251033, at *2 (E.D. Mo. Mar. 31, 2017). Every group of plaintiffs will necessarily include individuals with different experiences. “[T]he question is simply whether the differences among the plaintiffs outweigh the similarities of the practices to which they were allegedly subjected.” 14051 Manchester, 301 F.R.D. at 372 (quoting Baptist Mem'l., 2011 WL 1883959, at *4).

         Courts analyze three factors based on information gained from discovery to determine whether the Plaintiffs are similarly situated: (1) the disparate factual and employment settings of the individual plaintiffs; (2) the various defenses available to defendant that appear to be individual to each plaintiff, and (3) fairness and procedural considerations. 14051 Manchester, 301 F.R.D. at 372 (citation omitted). “In ruling on the Motion for Decertification, the Court recognizes the remedial purpose of the FLSA.” Id. at 374 (citing Gomez v. Tyson Foods, Inc., 8:08CV21, 2013 WL 7045055, at *8 (D. Neb. Feb. 11, 2013); Brennan v. Plaza Shoe Store, Inc., 522 F.2d 843, 846 (8th Cir.1975) (“The Fair Labor Standards Act is remedial in nature, its purpose is to protect employees, and it must be interpreted in a manner consistent with that purpose.”).

         B. Analysis

         First, SnS moves for decertification on the ground that Plaintiffs' employment experiences differ significantly from store to store, supervisor to supervisor, and shift to shift. It argues that those differences outweigh the similarities and are more relevant to the plaintiffs' classification as exempt salaried employees. Second, SnS argues that it has a variety of defenses against individual plaintiffs that it would not be able to assert against the class as a whole or test through representative testimony. Last, SnS argues that, if the Plaintiffs were allowed to proceed as a class, it would be unfair and procedurally untenable because the action would require numerous “mini-trials” in which SnS cross-examines each Plaintiff as to his or her specific employment experiences. It asserts that Plaintiffs' trial plan is inadequate to explain how the Court would manage those procedural difficulties.

         1. “Single, FLSA-Violating Policy”

         “Plaintiffs may be similarly situated when ‘they suffer from a single, FLSA-violating policy, and when proof of that policy or of conduct in conformity with that policy proves a violation as to all the plaintiffs.'” Bouaphakeo v. Tyson Foods, Inc., 765 F.3d 791, 796 (8th Cir. 2014), aff'd and remanded, 136 S.Ct. 1036 (2016) (quoting O'Brien v. Ed Donnelly Enters., Inc., 575 F.3d 567, 585 (6th Cir. 2009)). Plaintiffs allege that they all suffer from the same SnS corporate policy of misclassifying Managers as exempt executive or administrative employees. (Doc. 142 at 24.)

         Exempt classification under the FLSA turns largely on an employee's primary duties. An employee is an exempt executive when (1) he or she meets the minimum compensation requirements; (2) his or her primary duty is management of the enterprise or one of its departments or subdivisions; (3) he or she customarily and regularly directs the work of two or more other employees; and (4) he or she has the authority to hire or fire other employees or particular weight is given to his or her suggestions and recommendations as to another employee's hiring, firing, advancement, promotion or other change of employment status. 29 C.F.R. § 541.100. An employee is an exempt administrator when (1) he or she meets the minimum compensation requirements; (2) his or her “primary duty is the performance of office or non-manual work directly related to the management or general business operations”; and (3) his or her “primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.” 29 C.F.R. § 541.200. Employees whose primary duties involve a combination of exempt administrative and exempt executive work still qualify as exempt. 29 C.F.R. § 541.708.

         When trying to ascertain an employee's primary duty, the Court considers the following factors: “the relative importance of the exempt duties as compared with [other] duties; the amount of time spent performing exempt work; the employee's relative freedom from direct supervision; and the relationship between the employee's salary and the wages paid to other employees for the [same] nonexempt work.” 29 C.F.R. § 541.700. “The amount of time spent performing exempt work can be a useful guide in determining whether exempt work is the primary duty of an employee” but “is not the sole test”; “[e]mployees who do not spend more than 50 percent of their time performing exempt duties may nonetheless meet the primary duty requirement.” Id. That said, employees who perform both exempt and non-exempt work but are “closely supervised and earn little more than the nonexempt employees . . . generally would not satisfy the primary duty requirement.” Id.

         Plaintiffs all shared the same job title: Manager. According to SnS, each restaurant is run by a General Manager (“GM”). (Doc. 135 at 5-6.) The Manager is directly below the GM. (Id. at 6.) Below the Manager is the Operations Supervisor, who directs the Production and Service Trainers, who are senior to the front-line production and service associates. (Id. at 6.) Some stores also employ a Restaurant Manager, a position SnS describes as a GM waiting for his or her own store. The Restaurant Manager has a lateral relationship with the Manager, reporting directly to the GM. (Id.) General Managers report to a District Manager, who supervises multiple stores throughout a geographical region. (Id.) Above the District Manager is the Division President. (Id.)

         SnS's corporate job description makes Managers responsible for supervising each shift; maintaining food safety; “train[ing, ] coach[ing, ] and inspir[ing] Associates”; making decisions and solving problems; and ensuring adherence to state and federal law. (Doc. 135 at 7.) On paper, Managers are expressly authorized to discipline associates and participate in hiring, promotion, and termination. (Id. at 7-8.) In addition, SnS regularly asks Managers to review and sign a “Certification of Job Duties, ” which states that a Manager “should devote the majority of your work day to your primary ‘management' tasks.” (Doc. 135-31 at 1.) The form lists those tasks as follows:

Identify and solve operations issues[;]
Communicate shift expectations and goals to associates[;]
Manage and direct associates' work and evaluate their performance[;]
Review clock in and out times of hourly ...

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