Johnson v. Big Lots Stores, Inc.
| Decision Date | 02 April 2009 |
| Docket Number | Civil Action No. 05-6627.,Civil Action No. 04-3201. |
| Citation | 604 F.Supp.2d 903 |
| Parties | John JOHNSON, et al. v. BIG LOTS STORES, INC. |
| Court | U.S. District Court — Eastern District of Louisiana |
Philip Bohrer, Bohrer Law Firm, Baton Rouge, LA, Hartley Hampton, Michael A. Josephson, Hartley Hampton, Fibich, Hampton & Leebron, LLP, Houston, TX, John B. MacNeill, Kevin E. Gay, MacNeill
& Buffington, PA, Flowood, MS, Peter Joseph Wanek, McCranie, Sistrunk, Metairie, LA, Sam M. Brand, Jr., Attorney at Law, Jackson, MS, Andre Jude Lagarde, U.S. Attorney's Office, New Orleans, LA, for John Johnson, et. al.
David A. Scott, Elizabeth K. Deardorff, Paul E. Hash, Rachel D. Ziolkowski, Jackson Lewis, LLP, Dallas, TX, James E. Davidson, John P. Gilligan, John J. Krimm, Jr., John C. McDonald, Paul L. Bittner, Schottenstein, Zox & Dunn Co., LPA, Columbus, OH, Judy Y. Barrasso, Stephen H. Kupperman, Barrasso, Usdin, Kupperman, Freeman & Sarver, LLC, New Orleans, LA, for Big Lots Stores, Inc.
ORDER AND REASONS
From January 26-27, 2009, the Court conducted a bench trial in this overtime pay and misclassification collective action brought under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201, et seq. After considering all the evidence presented at trial and deposition testimony that the Court reviewed after the live trial concluded, the Court rules as follows. To the extent a finding of fact constitutes a conclusion of law, the Court adopts it as such. To the extent a conclusion of law constitutes a finding of fact, the Court adopts it as such.
Defendant Big Lots Stores, Inc. is a nationwide retailer of "closeout" and "overstock" merchandise. It operates approximately 1,400 stores in 46 states across the country. Big Lots sells consumer goods ranging from futons to food and utilizes second- and third-generation retail space.
At each store, Big Lots typically employs a salaried store manager, at least one salaried assistant store manager (ASM), an hourly associate store manager, a customer service specialist (CSS), associate hourly employees such as cashiers and stockers, and an office manager or bookkeeper. Depending on a store location's size, sales volume, number of employees, and performance history, two ASMs and only one associate manager may be employed, or the store will employ only one ASM and two associate managers. Some stores also include furniture departments and employ a furniture sales manager. Big Lots classifies both store managers and ASMs as exempt executive employees for purposes of the overtime pay provisions of the FLSA. Thus ASMs do not receive overtime pay when they work more than 40 hours in a week. ASMs are eligible for quarterly and annual bonuses based on store sales, the average amount of a purchase within their store, and controllable profit. With the exception of the furniture sales manager, none of Big Lots' nonexempt associates is eligible for bonuses.
Big Lots' formal description of the ASM job position states that ASMs are responsible for interviewing and hiring hourly associate employees, supervising the work of hourly associates, and providing for the safety of persons in the store and security of Big Lots' property. Depending on whether someone is an ASM for Merchandising or Operations, that individual's job description also includes either overseeing freight delivery and the unloading and stocking of merchandise known as the "Dock-to-Stock" (DTS) process, or supervising the work of hourly associates in the store and the cashiering operation, respectively. Big Lots stores are supposed to operate on a management model in which there is always a member of management in the store, known as the manager on duty, and in which the managers work in overlapping shifts. Big Lots' model management schedule provides that ASMs are to work a minimum of five, nine-hour shifts per week, opening and closing the store depending on the hours of their shifts.
On November 23, 2004, a group of plaintiffs sued Big Lots, asserting that it misclassified ASMs as executive employees and thereby unlawfully denied them overtime pay in violation of § 207(a)(1) of the FLSA. Plaintiffs styled their complaint as a collective action under § 216(b) of the FLSA and brought their overtime pay and misclassification claims on behalf of themselves and all other similarly situated individuals.1 (See R. Doc. 1). Plaintiffs specifically contended that although their formal job descriptions included managerial responsibilities, their actual managerial duties were de minimis and did not meet the criteria for exempt executive employees. Plaintiffs asserted that in reality they consistently worked more than 40 hours per week and that they spent the vast majority of their time performing, under strict corporate guidelines, nonexempt tasks that had little to do with managing the store, such as unloading merchandise from delivery trucks, organizing storerooms, stocking merchandise on shelves, operating cash registers, and cleaning their stores.
Utilizing the two-stage certification approach employed by the majority of courts in determining whether to certify a case as a collective action under § 216(b) of the FLSA, the Court conditionally certified the matter as collective action on July 5, 2005. (R. Doc. 36). The parties then sent notices to individuals employed by Big Lots as ASMs on or after November 23, 2001. In response, roughly 1,200 plaintiffs consented to join the litigation as opt-in plaintiffs. The nationwide class of plaintiffs was later reduced to 936 current and former Big Lots ASMs. A little over two years later on June 1, 2007, Big Lots moved to decertify the class. Based on the evidence before it at the time and in light of plaintiffs' claim that Big Lots maintained a de facto policy and practice of misclassifying the ASM job position, the Court denied Big Lots' motion to decertify. (R. Doc. 113). The Court first conducted a bench trial in this matter on May 7, 2008. The Court heard evidence about Big Lots' national operation and the operations of some individual stores. It became clear at trial that Big Lots did not maintain a nationwide de facto policy of misclassifying ASMs and that an ASM's duties often varied from store to store. After considering all of the evidence, the Court determined that the matter was not fit for adjudication as a nationwide collective action and issued an order decertifying the class. (R. Doc. 401).
The Court then had to determine how to proceed with the named plaintiffs still remaining in the case. The Court and the parties identified the plaintiffs who would proceed to trial individually. Plaintiffs John Johnson, Robert Burden, and James Alford were selected for trial on January 26, 2009. Each of the three plaintiffs worked as an assistant manager at various Big Lots stores in Florida. Johnson worked as an assistant manager at Big Lots stores in Venice, Port Charlotte, and Fort Myers, Florida. Burden worked as an assistant manager at a Big Lots store in Port Charlotte, Florida. Alford worked at Big Lots stores in Hollywood, Lauderdale Lakes, Coconut Creek, and Fort Lauderdale, Florida.
The Court limited the number of witnesses for each plaintiff's case to three on each side and also allowed the parties to incorporate the trial testimony of Big Lots' corporate representative Brad Waite. After hearing 43 hours of testimony about Big Lots' corporate operation and the operation of some of the individual stores in the first bench trial, it became clear that an individual case could be tried fairly if the Court heard seven witnesses per case, since the universe of relevant witnesses seemed to consist of the plaintiff, his supervisor, and coworkers. Although Big Lots objected, the Court has not been shown that this prejudiced either party. Big Lots did not even use the allotted three witnesses in Burden's case. Nor did it attempt to make any demonstration of prejudice. At no time before trial did Big Lots file a motion with the Court to have the numerical limitation lifted.
The Court held a bench trial on plaintiffs' claims on January 26-27, 2009. After trial, plaintiff Alford moved to be dismissed from the case because he no longer sought to prosecute his claims against Big Lots. (R. Doc. 497). The Court granted his motion and will only consider the claims of Johnson and Burden in this opinion.
The FLSA requires that employers pay their employees at a rate of at least one and one-half times their regular rate for the hours an employee works in excess of a 40-hour workweek. 29 U.S.C. § 207(a)(1). But employers do not have to pay time-and-a-half to individuals "employed in a bona fide executive, administrative, or professional capacity." Id. § 213(a)(1). The FLSA itself does not further define these "white-collar" exemptions. Instead it delegates authority to the Secretary of Labor to promulgate rules that define these exemptions. Id. The white-collar exemptions are affirmative defenses to overtime pay claims. The employer bears the burden of proving that a plaintiff is properly classified as an exempt employee. See Corning Glass Works v. Brennan, 417 U.S. 188, 196-97, 94 S.Ct. 2223, 41 L.Ed.2d 1 (1974); Idaho Sheet Metal Works, Inc. v. Wirtz, 383 U.S. 190, 209, 86 S.Ct. 737, 15 L.Ed.2d 694 (1966); Dalheim v. KDFW-TV, 918 F.2d 1220, 1224 (5th Cir.1990); Kastor v. Sam's Wholesale Club, 131 F.Supp.2d 862, 865 (N.D.Tex.2001).
Two sets of regulations are pertinent to this case: those in effect before August 23, 2004 (the "pre-2004 regulations" or "old regulations"), and those that went into effect on August 23, 2004 (the "post-2004 regulations" or "current regulations"). Under the so-called "short test" of the old regulations, an employee who was paid a salary of at least $250 per week (which was true of both remaining plaintiffs) qualified as an executive if...
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