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Drake v. Steak N Shake Operations, Inc.

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

July 30, 2018

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 Defendant Steak N Shake Operations, Inc.'s ("SnS") Motion for Protective Order. (Doc. 223.) Plaintiffs oppose the motion (Doc. 225), and SnS has replied (Doc. 226).

         I. Background

         On June 26, 2018, Plaintiffs noticed a deposition of SnS CEO Sardar Biglari. (See Doc. 223.) Plaintiffs intend to ask Biglari about SnS's 2016 decision to reclassify Managers as non-exempt, overtime-eligible employees and subsequent decision to return them to exempt status. (See Doc. 225 at 2.) Plaintiffs suggest that these decisions reflect Biglari's view of Managers' qualification for exempt status and that only he can say for sure why Managers were reclassified. (Id.) SnS asserts that the change in classification was motivated by the Department of Labor's proposed amendment to salary requirements and that Managers' job duties were not discussed. (Doc. 224 at 1-2.) Because this case turns on the issue of Managers' job duties, SnS argues that the 2016 decision has no relevance to this suit. Plaintiffs respond that Biglari's participation is relevant to SnS's knowledge of the FLSA and Plaintiffs' allegation that SnS willfully violated the statute or otherwise acted in bad faith. (Doc. 225.)

         II. Legal Standard

         District Courts may limit the frequency or extent of discovery when the information sought is cumulative or duplicative, could be obtained from a more convenient source, or is outside the scope of discovery. Fed.R.Civ.P. 26(b)(2)(C). To that end, a court may enter a protective order forbidding a deposition to protect a party from undue burden or expense. Fed.R.Civ.P. 26(c)(1). Information that is not relevant to a claim or defense is outside the scope of discovery. Fed.R.Civ.P. 26(b)(1).

         In addition, courts are often skeptical of attempts to depose high-level corporate executives in light of the increased risk of harassment or abuse directed at a defendant's leadership. This so-called "apex deposition doctrine" prohibits plaintiffs from deposing high-level corporate officials unless the plaintiff can show that "(1) the executive has unique or special knowledge of the facts at issue, and (2) other less burdensome avenues for obtaining the information sought have been exhausted." Gladue v. Saint Francis Med. Ctr., No. 1:13-CV-00186-CEJ, 2014 WL 7205153, at *1 (E.D. Mo. Dec. 17, 2014) (quoting Ingersoll v. Farmland Foods, Inc., No. 10-6046-CV-SJ-FJG, 2011 WL 1131129, at *7 (W.D. Mo. Mar. 28, 2011)).

         III. Analysis

         a. The "Facts at Issue"

         The Court finds that Plaintiffs cannot make the required showing. At issue in this case is whether SnS Managers are properly classified as exempt administrative or executive employees under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 216(b), and Missouri law. (Doc. 1 at 6-8.) To establish that Managers qualify for either, SnS must show that they meet minimum compensation requirements ("the salary test") and that their job duties align with those listed in the exemptions ("the duty test"). See 29 C.F.R. § 541.100, .200. Plaintiffs do not dispute that they meet the salary test. Instead, they argue that their actually daily work activity does not meet the duty test under either exemption. Accordingly, the "facts at issue" in this case, for purposes of the apex deposition doctrine, are those that relate to Managers' job duties.

         b." Unique or Special Knowledge "

         The Court concludes that Plaintiffs have not shown that Biglari has unique or special knowledge of Managers' job duties. SnS asserts that the reclassification decision was based on the higher threshold for the salary test and not the duty test, and that therefore Biglari does not possess unique or special knowledge regarding the facts at issue in this case. That assertion is supported by the deposition testimony of SnS COO Scott Moore (Doc. 224-2 at 5 (testifying that the reclassification decision was the result of the Department of Labor's amended regulations)), the sworn statement of SnS CFO Duane Geiger (Doc. 224-3 at 1-3 (stating that the reclassification decision was based on the increase salary requirement and did not include a discussion of job duties)), and the timing of the change (See Id. at 2 (stating that SnS Managers were reclassified as overtime-eligible in November 2016)); Fact Sheet: Final Rule to Update the Regulations Defining and Delimiting the Exemption for Executive, Administrative, and Professional Employees (May 2016), https://www.dol.gov/whd/overtime/final2016/overtime-factsheet.pdf (stating that the increased minimum compensation requirements would go into effect on December 1, 2016).

         Plaintiffs argue that Biglari was the ultimate decision-maker and that "[m]is classification cases involve ... the reasons why an employer classified an employee as overtime exempt in the first place." (Doc. 225 at 8.) However, the Court does not see how a CEO making a final decision as to compensating employees necessarily indicates that he or she possesses some unique or special knowledge, especially concerning a statutory provision that did not affect the decision. Indeed, Moore testified that Biglari's final decision to reclassify Managers amounted to little more than a blessing of Moore's proposed solution. (Doc. 224-2 at 7.)

         To the extent the reclassification decision is relevant to Plaintiffs' claims, others-some of whom have testified already and at least one other who will do so soon-have comparable knowledge. (Moore Depo. Doc. 224-2; Geiger Decl. Doc. 224-3; Doc. 226 at 2 (representing that Plaintiffs have noticed a deposition of Mike Conner, an SnS employee involved in the ...


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