By Gerald L. Maatman, Jr., Natalie Bare, and Harrison Weimer
Duane Morris Takeaways: A recent ruling by Judge Joshua Wolson of the U.S. District Court for the Eastern District of Pennsylvania highlights important distinctions in how courts analyze conditional certification motions under the Fair Labor Standards Act (“FLSA”) and class certification motions under Rule 23 of the Federal Rules of Civil Procedure. In Fayad v. City of Philadelphia, Case No. 23-CV-32 (E.D. Pa. Mar. 18, 2024), the Court conditionally certified plaintiff’s FLSA overtime claims on behalf of a proposed collective action of paralegals at the City of Philadelphia District Attorney’s Office, but denied Rule 23 class certification of the same claims under the Pennsylvania Minimum Wage Act (“PMWA”). According to the Court, conditional certification was appropriate because the District Attorney’s Office had a uniform policy of classifying paralegals as administratively exempt under the FLSA and therefore not paying overtime wages. However, the same evidence fell short of clearing the higher hurdle posed by the predominance requirement of Rule 23. The decision reminds employers to factor these differing standards into their litigation strategy.
Case Background
On January 4, 2023, Plaintiff Marybelle Fayad, a former paralegal for the City of Philadelphia District Attorney’s Office, sued her former employer, alleging that it misclassified paralegals and those with similar job duties as exempt and failed to pay them overtime wages in violation of the FLSA and the PMWA.
Plaintiff moved for conditional certification under 29 U.S.C. § 216(b) of the FLSA and for class certification of the PMWA claims under Rule 23 based on deposition testimony from Unit supervisors, job descriptions, company policies, and declarations of putative plaintiffs establishing that the District Attorney’s Office uniformly classified paralegals (and others with similar job duties) as exempt. In opposing both motions, the District Attorney’s Office argued that due to the paralegals’ varying job duties, responsibilities, working conditions, hours, shifts, and units, they were not similarly situated and individualized issues would predominate.
The Court’s Ruling
On March 18, 2024, Judge Wolson granted Plaintiff’s FLSA conditional certification motion, but denied her Rule 23 class certification motion, explaining that, “Rule 23 class certification and FLSA collective action certification are fundamentally different creatures.” Id. at 20.
While Judge Wolson declined to include non-paralegals with “substantially similar job duties” in the collective action membership, he found that Plaintiff met her relatively light burden to make a “modest factual showing” that the paralegals were “similarly situated” because the “evidence shows the DAO has a policy of classifying paralegals as administratively exempt under the FLSA, and that it therefore fails to pay the paralegals overtime.” Id. at 20-21. The Court also noted that it would reach the same result applying a heightened intermediate standard.
Judge Wolson opined that Rule 23, however, requires more; specifically, it requires the Court to conduct a “rigorous assessment” of the available evidence and the methods by which the plaintiff proposes to use that evidence to prove the requirements of Rule 23, including the requirement that “questions of law or fact common to class members predominate over any questions affecting only individual members.” Id. at 22.
The Court explained that showing predominance required Plaintiff to “proffer class-wide evidence to show that a) the DAO improperly classified paralegals under the PMWA and b) the paralegals worked overtime hours.” Id. According to the Court, Plaintiff did the former but not the latter. Specifically, Plaintiff did not “proffer common proof to show that the DAO’s paralegals worked over forty hours in a given week.” Id. As a result, Judge Wolson concluded “individual issues will predominate” because there would be no way of knowing each paralegals hours worked without individual inquiry. Id.
The Court found Plaintiff’s testimony from one Unit supervisor fell short of the “common evidence” of hours the paralegals worked required to show predominance under Rule 23 because the testimony did not apply to all 200 paralegals employed by the District Attorney’s Office. This single supervisor’s testimony was not common evidence to prove injury in fact to all paralegals. Id.
The Court also explained that the common proof “doesn’t have to be time records, but it has to be ‘sufficient to show the amount of the employees’ work as a matter of just and reasonable inference.’” Id. Plaintiff offered no alternate to time records; rather, as the Court put it: “She just asks me to draw an inference from the absence of records.” Id. The Court clarified that demonstrating predominance does not require a plaintiff “to prove the measure of each paralegal’s damages,” but rather the plaintiff “must be able to demonstrate the fact of damage (meaning injury or impact) on a class-wide basis.” Id.
Implications For Employers
The Fayad decision underscores the low burden that plaintiffs must typically meet to demonstrate that their proposed FLSA plaintiffs are “similarly situated” for purposes of conditional certification. As we reported in the Duane Morris Class Action Review [https://blogs.duanemorris.com/classactiondefense/2024/01/09/it-is-here-the-duane-morris-class-action-review-2024/], courts granted 75% of FLSA conditional certification motions in 2023.
Employers facing both class and collective actions in the same litigation should be proactive and strategic in managing the timing of discovery and motion practice in light of the differences in how courts will analyze FLSA conditional certification motions versus Rule 23 class certification motions. The decision also provides a helpful analysis for employers opposing class certification of misclassification claims in cases where plaintiffs offer no common method of providing overtime work