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Drake v. Steak N Shake Operations, Inc.

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

January 25, 2019

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 to Exclude the Report and Testimony of Plaintiffs' Expert. (Doc. 251.) Plaintiffs oppose the motion (Doc. 259), and SnS has filed a reply in support (Doc. 262).

         Background

          Plaintiffs are two classes of current and former Managers who seek unpaid overtime wages for their work in restaurants in SnS's St. Louis Market: a class of 275 Managers proceeding under Missouri Rule of Civil Procedure 23 (“Missouri Managers”) and an opt-in class of eleven Managers proceeding under the Fair Labor Standards Act (“FLSA”) (“FLSA Class”). (Doc. 259 at 2.) Plaintiffs intend to offer the report and testimony of Leisel M. Fox, Ph.D. to assist the jury in determining damages in the event SnS is found liable. (See Doc. 259-1.)

         Dr. Fox's report attempts to calculate a total amount of damages for each plaintiff by multiplying the plaintiff's average hourly rate by the number of hours he or she worked during the class period. (Id.) SnS's records list each plaintiff's pay information. In determining how many hours each Plaintiff worked, Dr. Fox considered four sources of data. (Id.) The first was a questionnaire sent by SnS during discovery. (Id. at 5.) All eleven FLSA Class members and thirty-six Missouri Managers who were then part of the FLSA Class responded. (Id. at 5.) The second was a questionnaire sent by Plaintiffs' counsel to the Missouri Managers. (Id.; Doc. 259-2.) Forty-seven responded, again under oath. (Docs. 259-1, 259-2.) Together, these responses provided a personal average number of hours worked for all eleven FLSA Class members and eighty-three of the 275 Missouri Managers.

         For the remaining 192 Missouri Managers, Dr. Fox first considered a third source: an internal SnS document titled “2016 Overtime Regulation, ” which summarized SnS's examination of Managers' weekly hours conducted to assist in determining whether to convert Managers from salaried employees to hourly employees in response to the Department of Labor's announced change to overtime regulations. (Doc. 259-1 at 5-6.) That survey revealed that the average SnS Manager worked fifty-two to fifty-four hours per week.[1] (Id. at 5.) Dr. Fox's final source was timeclock data from November 2016 to January 2017, during which time SnS did pay Managers as non-exempt hourly employees, which showed an average of 54.2 hours per week. (Id.) In light of those sources, Dr. Fox employed an average of fifty-four hours per week for all plaintiffs who did not provide their own personal average in response to either questionnaire.

         Dr. Fox's use of the various source data to determine each Plaintiff's average hours worked can be summarized as follows:

• For the eleven FLSA Class members and the thirty-six Missouri Managers who were previously part of the FLSA Class: an individualized number based on his or her actual response to SnS's discovery questionnaire, provided under oath;
• For the forty-seven Missouri Managers who responded to Plaintiffs' counsel's questionnaire: an individualized number based on his or her actual response to Plaintiffs' questionnaire, provided under oath;
• For the 192 Missouri Managers who did not respond to Plaintiff's counsel's questionnaire: a general average of fifty-four hours per week, based on SnS's internal survey and timeclock data.

(Doc. 259 at 5.) Using those numbers, Dr. Fox calculated how many hours each plaintiff would have worked during the class period, subtracting hours for vacation time, sick days, holidays, and other time off, as listed on internal SnS records. (Doc. 259-1 at 6-7.)

         Dr. Fox then multiplied the number of hours each plaintiff worked during the class period by that plaintiff's hourly pay. To determine a weekly rate, Dr. Fox divided each Manager's yearly salary by fifty-two, applying salary increases to the week they became effective and thereafter, and accounting for any bonus payments. (Id. at 7-8.) Dr. Fox then divided each Manager's weekly pay rate by fifty hours. (Id. at 7.) She used fifty hours because SnS Managers are scheduled fifty hours per week and because SnS used a fifty-hour workweek to determine each Manager's hourly rate during the period in which it payed Managers as hourly employees. (Id. at 7 n.18.)

         By multiplying each plaintiff's total hours worked by his or her hourly pay rate, Dr. Fox was able to determine the overtime due for all work beyond forty hours. Because Plaintiffs were paid their hourly rate for hours forty to fifty, Dr. Fox multiplied those hours by one half times that plaintiff's hourly rate, adding only the unpaid overtime premium. (Id. at 7-8.) Because Plaintiffs were paid for fifty hours of work, Dr. Fox multiplied any hours above fifty by the full overtime rate of one and one half times hourly rate. (Id.) The result is a chart listing the total unpaid overtime for each of the 286 plaintiffs. (Doc. 259-1 at 15-22.) Dr. Fox also included a calculation of total damages for each. (Id.; see Mo. Rev. Stat. § 290.527 (authorizing liquidated damages in the amount of unpaid overtime).)

         SnS challenges a number of Dr. Fox's assumptions and argues that her calculations are based on unreliable sources. (Doc. 252.) Specifically, it argues that the questionnaires are unscientific surveys which Dr. Fox neither helped prepare nor reviewed and that she did not verify the accuracy of the responses. (Id.) In addition, SnS argues that Dr. Fox failed to account for biases inherent in the surveys, further eroding the reliability of the source material. (Id.) Finally, SnS argues that because Dr. Fox's ...


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