Cruz v. Lawson Software Inc.

• Decision Date: 27 January 2011
• Docket Number: Civil No. 08–5900 (MJD/JSM).
• Citation: 764 F.Supp.2d 1050
• Parties: Oswaldo CRUZ, et al., Plaintiffs,v.LAWSON SOFTWARE, INC., and Lawson Software Americas, Inc., Defendants.
• Court: U.S. District Court — District of Minnesota

764 F.Supp.2d 1050

Oswaldo CRUZ, et al., Plaintiffs,

v.LAWSON SOFTWARE, INC., and Lawson Software Americas, Inc., Defendants.

Civil No. 08–5900 (MJD/JSM).

United States District Court, D. Minnesota.

Jan. 27, 2011.

Clayton D. Halunen, Shawn J. Wanta, and Susan M. Coler, Halunen & Associates, and Christine E. Webber, Cohen Milstein Sellers & Toll PLLC, for Plaintiffs.Brian T. Benkstein, Ruth S. Marcott, and Sara Gullickson McGrane, Felhaber Larson Fenlon & Vogt, PA, for Defendants.

MEMORANDUM OF LAW & ORDER

MICHAEL J. DAVIS, Chief Judge.I. INTRODUCTION

This matter is before the Court on Defendants' Motion for Decertification [Docket No. 222] and on Defendants' Motions for Summary Judgment and Dismissal [Docket No. 233]. The Court heard oral argument on November 12, 2010.

II. SUMMARY OF THE COURT'S OPINION

The Court grants Defendants' motion to decertify the FLSA class and dismisses, without prejudice, the Opt-in Plaintiffs. This matter is inappropriate for collective adjudication because the consultants' jobs are unique, vary in material ways, and are minimally supervised; multiple defenses are likely to apply to some, but not all, consultants and will require fact-intensive inquiry; and collective adjudication would be inefficient because representative testimony would be inadequate.

The Court further grants summary judgment to Lawson on the basis that all Named Plaintiffs fall under the administrative exemption.

III. BACKGROUNDA. Factual Background

Defendants Lawson Software, Inc. and Lawson Software Americas, Inc. (collectively, “Lawson”) develop enterprise resource planning software and sell it to clients. The software is developed to manage large-scale systems of clients, such as Human Capital, Financial, and Supply Chain Management Systems. Certain systems, such as Supply Chain Management, have separate versions for the manufacturing and distribution industries and the service industries.

Lawson also sells consultant time to service Lawson products. It offers the services of Systems Consultants (“SCs”), Business Consultants (“BCs”), and Technical Consultants (“TCs”). Lawson consultants generally provide their services at client sites and are expected to travel approximately 80% of the time.

B. Procedural Background

1. General Procedural Background

On May 20, 2008, Plaintiffs Oswaldo Cruz, Mary Martha Littlejohn, and Robert Greg Winn filed a Complaint against Defendants Lawson Software, Inc., and Lawson Software Americas, Inc. The Complaint was filed in the Southern District of New York. On October 28, 2008, the case was transferred to this District pursuant to 28 U.S.C. § 1404(a).

On January 2, 2009, Plaintiffs Cruz, Littlejohn, Winn, and Randall S. Preston filed an Amended Complaint against Defendants Lawson Software, Inc., and Lawson Software Americas, Inc. The Amended Complaint alleged: Count I: Violations of the Fair Labor Standards Act (“FLSA”); Count II: Violation of the Minnesota Fair Labor Standards Act (“MFLSA”) Overtime Requirements; Count III: Violation of the MFLSA Record Keeping Requirement; Count IV: Violation of ERISA § 502(a)(3) Failure to Maintain Records; Count V: Violation of ERISA § 1001, et. seq.; and Count VI: Unjust Enrichment.

On March 31, 2009, this Court conditionally certified the FLSA class, dismissed the ERISA counts, and denied the motion to dismiss the claim for unjust enrichment.

Defendants filed a Second Motion to Dismiss, seeking to dismiss Counts II and III of the Amended Complaint (the MFLSA claims) based on lack of standing because none of the named Plaintiffs had ever lived or worked in Minnesota. On May 21, 2009, the Court granted Defendants' morion. [Docket No. 114]

On July 9, 2009, Plaintiffs, plus new Minnesota-based Plaintiff Terry Roepke, filed a Second Amended Collective and Class Action Complaint (“Second Amended Complaint”). [Docket No. 149] The Second Amended Complaint alleges: Count I: Violations of the FLSA; Count II: Violation of the MFLSA Overtime Requirements; Count III: Violation of the MFLSA Record Keeping Requirement; and Count IV: Unjust Enrichment.

On January 5, 2010, 2010 WL 890038, the Court denied Plaintiffs' Motion for Class Certification of the state law claims under Federal Rule of Civil Procedure 23. [Docket No. 217]

Lawson now moves to decertify the FLSA class and for summary judgment on all claims against it.

2. The Current FLSA Class

In its March 31, 2009 Order conditionally certifying the FLSA class, the Court ordered notice to “all persons employed by Lawson in the United States as Business Consultants, Systems Consultants, and Technical Consultants, or in substantially similar positions, from May 19, 2005 to the present.” (Mar. 31, 2009 Order at 36 [Docket No. 101].)

The conditionally certified class consists of the 5 named Plaintiffs and 62 opt-in plaintiffs. Plaintiffs assert that they now seek to divide the class into three subclasses: a BC subclass consisting of 47 Plaintiffs; an SC subclass consisting of 12 Plaintiffs; and a TC subclass consisting of 9 Plaintiffs. (Plaintiff Eckerson would be in both the SC and TC subclasses.)

On October 15, 2010, during the briefing on these motions, David Bogden withdrew his consent to opt into this case.

IV. DISCUSSIONA. Motion to Decertify

1. Legal Standard

The Court performs a two-step process to determine whether a case should be certified under the FLSA:

First, the court determines whether the class should be conditionally certified for notification and discovery purposes. At this stage, the plaintiffs need only establish a colorable basis for their claim that the putative class members were the victims of a single decision, policy, or plan. In the second stage, which occurs after discovery is completed, the court conducts an inquiry into several factors, including the extent and consequences of disparate factual and employment settings of the individual plaintiffs, the various defenses available to the defendant that appear to be individual to each plaintiff, and other fairness and procedural considerations.

Dege v. Hutchinson Tech., Inc., Civil No. 06–3754 (DWF/RLE), 2007 WL 586787, at *1 (D.Minn. Feb. 22, 2007) (unpublished) (citations omitted).

In the first step,

the Court only must determine whether Plaintiffs have come forward with evidence establishing a colorable basis that the putative class members are the victims of a single decision, policy, or plan. The court does not make any credibility determinations or findings of fact with respect to contrary evidence presented by the parties at this initial stage.

Id. at *2 (citations omitted). This Court held that Plaintiffs met the first step when it issued its Order conditionally certifying the FLSA class on March 31, 2009. This case is now at the second step.

At this stage, the court has much more information on which to base its decision, and makes a factual determination on the similarly situated question. If the claimants are similarly situated, the district court allows the representative action to proceed to trial. If the claimants are not similarly situated, the district court decertifies the class, and the opt-in plaintiffs are dismissed without prejudice. The class representatives—i.e. the original plaintiffs—proceed to trial on their individual claims.

Carlson v. C.H. Robinson Worldwide, Inc., Civ. Nos. 02–3780 (JNE/JJG), 02–4261 (JNE/JJG), 2006 WL 2830015, at *3 (D.Minn. Sept. 26, 2006) (quoting Mooney v. Aramco Servs., Inc., 54 F.3d 1207, 1213–14 (5th Cir.1995) (footnote omitted), overruled on other grounds by Desert Palace, Inc. v. Costa, 539 U.S. 90, 123 S.Ct. 2148, 156 L.Ed.2d 84 (2003)). The merits of the plaintiffs' claims are not considered at the decertification stage. Nerland v. Caribou Coffee Co., Inc., 564 F.Supp.2d 1010, 1019 (D.Minn.2007). The Court's decision regarding decertification is within its discretion. Id. at 1018. “Plaintiffs bear the burden of establishing that they are similarly situated.” Id. (citation omitted).

2. Whether Plaintiffs Are Similarly Situated

a) Similarly Situated Standard

An action under the FLSA may be maintained against “any employer ... 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).

At the second stage, the district court conducts a fact-intensive inquiry of several factors, including: (1) the extent and consequence of disparate factual and employment settings of the individual plaintiffs; (2) the various defenses available to defendant which appear to be individual to each plaintiff; and (3) fairness and procedural considerations. Employees bear the burden of demonstrating that they are similarly situated. Another question the Court considers is if Plaintiffs can demonstrate that the Defendant[ ] had a common policy or plan in violation of the FLSA that negatively impacted the original and opt-in Plaintiffs.

Burch v. Qwest Commc'ns Int'l, Inc., 677 F.Supp.2d 1101, 1114 (D.Minn.2009) (citations omitted).

b) Common Policy

Plaintiffs note that Lawson adopted one position description for each of the three consultant positions at issue. They claim that this weighs in favor of collective determination.

The Court holds that, in this case, the common job descriptions do not weigh in favor of classification. As many Plaintiffs testified, Lawson's job descriptions do not come close to “fully describ[ing] the scope of duties performed by the [plaintiffs].” Nerland, 564 F.Supp.2d at 1020. Moreover, the job descriptions are so vague as to not be helpful to the FLSA analysis. The existence of these job descriptions does not eliminate the need for the Court to conduct a detailed analysis of actual job duties. See Smith v. Heartland Auto. Servs. Inc., 404 F.Supp.2d 1144, 1151 (D.Minn.2005) (finding description not useful when plaintiffs “largely disavow reliance on the job description”).

The Court further notes that the testimony of both Lawson witnesses and Plaintiffs shows that Plaintiffs' jobs...