Cunningham v. Elec. Data Sys. Corp..

• Decision Date: 13 December 2010
• Docket Number: Nos. 06 Civ. 3530(RJH), 08 Civ. 10409(RJH).,s. 06 Civ. 3530(RJH), 08 Civ. 10409(RJH).
• Citation: 754 F.Supp.2d 638
• Parties: Kelley CUNNINGHAM, et al., Plaintiffs,v.ELECTRONIC DATA SYSTEMS CORP., et al., Defendants.Brian Steavens, et al., Plaintiffs,v.Electronic Data Systems Corp., Defendants.
• Court: U.S. District Court — Southern District of New York

754 F.Supp.2d 638

Kelley CUNNINGHAM, et al., Plaintiffs,

v.ELECTRONIC DATA SYSTEMS CORP., et al., Defendants.Brian Steavens, et al., Plaintiffs,

v.Electronic Data Systems Corp., Defendants.

Nos. 06 Civ. 3530(RJH), 08 Civ. 10409(RJH).

United States District Court, S.D. New York.

Dec. 13, 2010.

Brian Lewis Bromberg, Bromberg Law Office, P.C., Jeffrey Michael Gottlieb, Berger & Gottlieb, New York, NY, Fran L. Rudich, Klafter, Seth Richard Lesser, Olsen & Lesser, LLP, Rye Brook, NY, Beth R. Rivers, Carey S. McGehee, Maureen M. Crane, Pitt, McGehee, Palmer, Rivers & Golden, Royal Oak, MI, for Plaintiffs.

MEMORANDUM OPINION AND ORDER

RICHARD J. HOLWELL, District Judge:

In this action, plaintiffs allege on behalf of themselves and all others similarly situated that defendant Electronic Data Systems Corp. (“EDS”) misclassified them as exempt, denying them overtime pay for hours they worked in excess of forty per week. This motion seeks certification as a collective action under the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq. (“FLSA”), to facilitate the sending of notice to potential party plaintiffs. ¹ EDS opposes this motion, asserting that plaintiffs cannot show that they are “similarly situated” under the FLSA. For the reasons state below, the motion is GRANTED in part.

BACKGROUND

I. Factual Background

EDS is an information technology (“IT”) outsourcing company. Its personnel work as computer support technicians, analysts, and engineers throughout the world, although the putative plaintiffs here are all in the United States. EDS employees perform a myriad of computer support tasks, ranging from actual physical installation and repair of computers to advising customers on equipment purchases and system upgrades to customization of third-party software applications to meet customers' needs.

The most specific labels used to classify EDS employees are “job codes,” five-digit numeric codes that correspond to a job title and a job description. ( See Lesser Decl. Ex. 36.) Every job code has a salary range, and all EDS employees are assigned a job code. (Lesser Decl. Ex. 40 at 12.) EDS used these job codes as internal employee classifications to ensure consistent treatment of its employees (1) with respect to establishing the market value of the responsibilities associated with and suggested salary range for their job codes ( See Lesser Decl. 1 (Evans Dep.) at 49–50); and (2) with respect to “ensur[ing] compliance with work-related employment laws and regulations.” ( See Lesser Decl. 41 at 4.) The job title associated with the job code is “for internal use and may not be the same title that appears on an organization chart, on a business card, or one that is used with Clients.” (Lesser Decl. Ex. 40 at 5.)

Several job codes aggregate into a job progression, which is “designed as a planned progression of work, with each succeeding level becoming more complex and requiring greater knowledge and expertise.” ( Id. at 9, 11; see also Lesser Decl. Ex. 36.) For example, the “Service Center” job progression consists of the job titles and codes Service Center Analyst (34530), Service Center Analyst Advanced (34540), and Service Center Analyst Senior (34550). (Lesser Decl. Ex. 36.) The “Business Process Improvement” job progression consists of Business Process Improvement Administrator (50900), Business Process Improvement Analyst (31900), Business Process Improvement Specialist (31901), Business Process Improvement Specialist, Senior (31902), and Business Process Improvement Consultant (31903). ( Id.)

The next level of classification involves “job families,” which are “collection[s] of jobs that involve similar types of work.” (Lesser Decl. Ex. 40 at 9.) They describe “a group of jobs relating to the same nature of work ... but requiring different levels of skill, effort, and responsibility.” (Lesser Decl. Ex. 34 at 3.) EDS has twelve different job families, such as “Service Delivery,” “Corporate,” and “Human Resources.” (Lesser Decl. Ex. 40 at 9.) Multiple job progressions aggregate into one job family; for example, the “Service Delivery” job family contains both the “Service Center” and “Business Process Improvement” job progressions. ( See Lesser Decl. Ex. 36.)

The job code classification system is intended to ensure compliance with certain labor laws, including the FLSA. Specifically, whether an employee should be classified as exempt under the FLSA is among the most important considerations in assigning his job code. ( See Evans Dep. at 77–83; Lesser Decl. Ex 43 at 3 (“Getting the exemption status right is the first and most important step.”).) Indeed, EDS training materials relating to job code selection caution that “THE EXEMPTION STATUS MUST COMPLY WITH THE FAIR LABOR STANDARDS ACT.” (Lesser Decl. Ex. 43 at 2.) EDS assigns job codes to employees through a process called “job analysis,” which is the “[p]rocess of defining a job in terms of its component tasks or duties and the knowledge or skills required to perform them.” (Lesser Decl. Ex. 41 at 3.) The person performing job analysis gathers information about a job's context, content, specifications, and the materials and equipment used in that job. ( Id.) This information, among other things, “[s]upports job code matching” and is “[n]ecessary to ensure compliance with work-related employment laws and regulations.” ( Id. at 4.)

The job descriptions associated with a particular job code are intended to be “[a] summary of the most important duties and major responsibilities of the job, including the general nature of the work performed.” (Lesser Decl. Ex. 40 at 13.) EDS training materials advise those assigning job codes to “[s]trive for at least an 80% match between the job code description and the employee's duties and responsibilities.” (Lesser Decl. Ex. 43 at 2.) Because job codes are used throughout the corporation, the descriptions had to be “[b]road-based for internal use globally, across industries and organizations.” (Lesser Decl. Ex. 40 at 8.) Local managers for individual customer contracts “have the responsibility to elaborate on job descriptions when posting their open positions. This provides the substance and direction for each position.” ( Id.)

Instead of centrally assigning job codes, EDS delegates this function to local managers. ( See Evans Dep. 38–44.) Although corporate officials are available for “guidance” on job code assignments, the local manager ultimately makes the decision. ( Id.) Therefore, EDS contends that despite its “intent” to have employees coded correctly, the “reality” was that managers' decisions could be incorrect. ( Id.) EDS's internal investigations have found “that some organizations have up to 50% of employees improperly job coded (incorrect job family progression, incorrect level, or incorrect exemption classification).” (Lesser Decl. Ex. 40 at 14.) Indeed, EDS engaged in an internal audit in 2007–08 that resulted in the reclassification of some of its employees. (Evans Dep. at 101–02, 195–203.)

II. Procedural Background

In most cases, the motion to certify a collective action is brought early in the litigation, but one of the cases in this action has been pending since 2006. As such, some explanation of the procedural history of this action is appropriate.

As of the filing of this motion, this action consisted of two cases consolidated for pretrial purposes, Cunningham, et al. v. Electronic Data Systems Corp., et al., No. 06 Civ. 3530, and Steavens, et al. v. Electronic Data Systems Corp., No. 08 Civ. 10409.² The Cunningham action was commenced on May 10, 2006. In 2006, the parties conducted limited discovery on the issue of whether the “function prong” of the FLSA's air carrier exception, 29 U.S.C. § 213(b)(3) applied. ( See Cunningham, ECF No. 21.) On January 4, 2008, EDS filed a motion for summary judgment on this issue and a motion to dismiss the plaintiffs' claims that it failed to keep adequate records. The Court issued a Memorandum Opinion and Order dated September 30, 2008 that granted the motion to dismiss but denied the motion for summary judgment on the grounds that EDS had misinterpreted the “control prong” of the air carrier exception. Cunningham v. Electronic Data Systems Corp., 579 F.Supp.2d 538 (S.D.N.Y.2008). EDS then filed a motion for leave to file a renewed motion for summary judgment on January 16, 2009, which the Court granted on March 5, 2009. ( Cunningham, ECF No. 47.) That same day, the Court entered an order that, among other things, set an initial discovery period for “discovery relevant to determining whether first phase conditional certification of a class is appropriate.” ( Cunningham, ECF No. 49.) EDS filed its renewed motion for summary judgment on May 8, 2009. By Memorandum Opinion and Order dated March 30, 2010, the Court denied EDS's renewed motion, finding that EDS still had not satisfied its burden in proving the “control prong” of the air carrier exception. Cunningham v. Electronic Data Systems Corp., No. 06 Civ. 3530(RJH), 2010 WL 1223084 (S.D.N.Y. Mar.,30, 2010).

The Steavens action originated in the Eastern District of Michigan. There, the Steavens plaintiffs alleged violations of the FLSA and of the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq. (“ERISA”). On August 12, 2008, the District Court for the Eastern District of Michigan dismissed the ERISA claim, leaving only the FLSA claim. Steavens v. Electronic Data Systems Corp., No. 07–14536, 2008 WL 3540070 (E.D.Mich. Aug. 12, 2008). By Opinion and Order dated November 25, 2008, that court transferred the Steavens action to this Court based on the “first-to-file” rule and Cunningham's earlier filing date. Steavens v. Electronic Data Systems Corp., No. 07–14536, 2008 WL 5062847 (E.D.Mich. Nov. 25, 2008).

On March 5, 2009, the Court consolidated the Steavens and Cunningham actions for pretrial purposes only. ( Cunningham, ECF No. 48; Steavens, ECF No. 13.) On August 14, 2009, the plaintiffs in...