Jirak v. Abbott Laboratories, Inc.

• Decision Date: 22 July 2008
• Docket Number: No. 07 C 3626.,07 C 3626.
• Citation: 566 F.Supp.2d 845
• Parties: James JIRAK and Robert Pederson, on behalf of themselves and all others similarly situated, Plaintiffs, v. ABBOTT LABORATORIES, INC., Defendant.
• Court: U.S. District Court — Northern District of Illinois

566 F.Supp.2d 845

James JIRAK and Robert Pederson, on behalf of themselves and all others similarly situated, Plaintiffs, v. ABBOTT LABORATORIES, INC., Defendant.

No. 07 C 3626.

United States District Court, N.D. Illinois, Eastern Division.

July 22, 2008.

Charles E. Joseph, Joseph & Herzfeld LLP, New York, NY, Darren M. Cohen, Eric B. Kingsley, Kingsley & Kingsley, APC, Encino, CA, James A. Jones, Gillespie, Rozen, Watsky, Motley & Jones, PC, Dallas, TX, David Sanford, Shayna Michelle Bloom, Sanford Wittels & Heisler, LLP, Washington, DC, Gregory N. Karasik, Robert Ira Spiro, Spiro Moss Barness LLP, Los Angeles, CA, Terry Rose Saunders, Thomas Arthur Doyle, Saunders & Doyle, Chicago, IL, for Plaintiffs.

Michael J. Gray, Brent Daniel Knight, Efrat R. Schulman, Jones Day, Chicago, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

RUBEN CASTILLO, District Judge.

James Jirak and Robert Pederson ("Plaintiffs") bring this putative class action against Abbott Laboratories, Inc. ("Defendant") for alleged violations of the overtime provisions of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201, et seq. (R. 49, First Am. Compl. ("FAC").) Presently before the Court is Plaintiffs' motion for conditional certification of the class and approval of Plaintiffs' proposed notice to potential class members. (R. 54, Pl.'s.' Mot. for Conditional Cert.) For the reasons stated below, the Court grants the motion for conditional certification but declines to approve the notice proposed by Plaintiffs.

RELEVANT FACTS & PROCEDURAL HISTORY

The named Plaintiffs were employed by Defendant as pharmaceutical representatives.¹ (R. 49, FAC ¶¶ 8-9.) They allege that during their employment they regularly worked in excess of 40 hours per week but did not receive overtime pay as required by the FLSA. (Id.) Defendant has allegedly employed thousands of pharmaceutical representatives throughout the country, and none have been paid overtime in accordance with the FLSA. (Id. ¶¶ 12-13.) According to Plaintiffs, Defendant improperly classifies its pharmaceutical representatives as exempt from the FLSA's overtime requirements; Plaintiffs allege that such positions are not exempt and that they are thus entitled to thousands of dollars in overtime pay. (Id. ¶¶ 1, 23-28.)

Plaintiffs move for conditional class certification and Court-authorized notice to potential class members pursuant to Section 16(b) of the FLSA, 29 U.S.C. § 216(b). (R. 54, Pl.'s Mot. for Conditional Class Cert.) Plaintiffs seek to send notice to 4,708 individuals who are working or have worked as pharmaceutical representatives and were subject to Defendant's "company-wide policy or plan that it would not pay overtime to pharmaceutical representatives."² (Id. at ¶¶ 12, 5.)

ANALYSIS

The FLSA provides: "[N]o employer shall employ any of his employees who in any workweek is engaged in commerce ... for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed." 29 U.S.C. § 207(a)(1). Section 16(b) of the FLSA allows for a collective action "against any employer ... by any one or more employees for and on behalf of himself or themselves and other employees similarly situated." 29 U.S.C. § 216(b). Collective actions under the FLSA are different than class actions authorized by Federal Rule of Civil Procedure 23, because in FLSA cases the plaintiff is given notice and an opportunity to opt in, rather than notice and an opportunity to opt out. 29 U.S.C. § 216(b) ("No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought."); Woods v. N.Y. Life Ins. Co., 686 F.2d 578, 579-80 (7th Cir.1982) (explaining differences between collective action under FLSA and class action certified pursuant to Rule 23). Potential class members who choose not to opt in are not bound by the Court's decision. Vanskike v. Peters, 974 F.2d 806, 812-13 (7th Cir. 1992); Woods, 686 F.2d at 580.

The FLSA does not specify the details of how collective actions are to proceed, and thus, the management of these actions has been left to the discretion of the district courts. See Hoffmann-La Roche v. Sperling, 493 U.S. 165, 170-72, 110 S.Ct. 482, 107 L.Ed.2d 480 (1989). Although the Seventh Circuit has not decided the issue, the majority of courts—including this Court—have adopted a two-step process for determining whether an FLSA lawsuit should proceed as a collective action. See Mielke v. Laidlaw Transit, Inc., 313 F.Supp.2d 759, 762 (N.D.Ill.2004); see also Cameron-Grant v. Maxim Healthcare Servs., 347 F.3d 1240, 1243 (11th Cir.2003); Thiessen v. Gen. Elec. Capital Corp., 267 F.3d 1095, 1102-03 (10th Cir.2001); Heckler v. DK Funding, 502 F.Supp.2d 777, 779 (N.D.Ill.2007); Flares v. Lifeway Foods, 289 F.Supp.2d 1042, 1045 (N.D.Ill.2003),

In the first step, "Plaintiffs only need to make a minimal showing that others in the potential class are similarly situated." Mielke, 313 F.Supp.2d at 762. This determination is made using a "lenient interpretation" of the term "similarly situated." Id. "[A] court requires nothing more than substantial allegations that the putative class members were together the victims of a single decision, policy, or plan." Thiessen, 267 F.3d at 1102. If the plaintiff ban make this minimal showing, the class is conditionally certified and notice is sent to potential class members, giving them an opportunity to opt in. Heckler, 502 F.Supp.2d at 779; Mielke, 313 F.Supp.2d at 762.

In the second step, which occurs after the parties have engaged in discovery and the opt-in process is completed, "the court's inquiry is more stringent." Mielke, 313 F.Supp.2d at 762. Once it is known which employees will be part of the class, the Court must reevaluate the conditional certification "to determine whether there is sufficient similarity between the named and opt-in plaintiffs to allow the matter to proceed to trial on a collective basis." Heckler, 502 F.Supp.2d at 779. At step two, the Court must consider: (1) whether the plaintiffs share similar or disparate employment settings; (2) whether affirmative defenses raised by the defendant would have to be individually applied to each plaintiff; and (3) any fairness and procedural concerns. Mielke, 313 F.Supp.2d at 762.

I. Conditional Certification

Here, Plaintiffs argue that conditional certification is appropriate because Defendant "had a company-wide policy or plan that it would not pay overtime pay to pharmaceutical representatives." (R. 54, Pls.' Mot. for Conditional Cert. ¶ 2.) In Plaintiffs' view, permitting this case to proceed as a collective action "allows [for] the efficient resolution in one proceeding of common issues of law and fact, and provides plaintiffs with the opportunity to lower individual costs to vindicate rights by the pooling of resources." (R. 56, Pls.' Mem. in Supp. of Mot. at 7).

Defendant opposes the motion, arguing that Plaintiffs have "failed to meet their burden to establish a common and unlawful policy" under the FLSA, and further, that there are "significant differences in the job duties of putative class members" such that conditional certification of the class is not appropriate. (R. 60, Def.'s Opp'n to Pls.' Mot. at 8, 10.) Defendant asserts that its pharmaceutical division is comprised of six different "franchises"— primary care, immunology, neurology, virology, renal care, and acute care—and that "the responsibilities of sales representatives vary greatly depending upon franchise, position, product and customer." (Id.) In Defendant's view, pharmaceutical representatives may fall under one of the FLSA exemptions, including the outside sales exemption, 29 U.S.C. § 213(a)(1), or the administrative exemption, 29 U.S.C. § 213(a)(1), and that making this determination will require an individualized inquiry. (Id. at 9-13.) Defendant claims that it performed a "separate and independent review of each sales position" to determine the exempt status of each position, and thus, there is no policy decision common to all potential class members. (Id. at 9.)

Contrary to Defendant's argument, there is evidence in the record developed thus far showing that the potential class members are similarly situated. First, despite some variations in their job duties, there is evidence that pharmaceutical representatives have the same essential responsibility: calling on physicians and promoting Defendant's pharmaceutical products. (See R. 57, Pls.' App., Ex. N; R. 60, Def.'s Opp'n, App., Ex. E; Ex. G; Ex. I; Ex. K; Ex. W.) Moreover, Plaintiffs do not have to show that the potential class members have identical positions for conditional certification to be granted; plaintiffs can be similarly situated for purposes of the FLSA even though there are distinctions in their job titles, functions, or pay.³ See Delgado v. Ortho-McNeil, No. 07-263, 2007 WL 2847238, at *3 (C.D.Cal. Aug. 6, 2007) ("[W]hile the jobs of the various [pharmaceutical] sales representatives are not identical, they bear sufficient similarity to warrant conditional certification for the purpose of distributing notice."); Perry v. Nat'l City Mtge., Inc., No. 05-891, 2007 WL 1810472, *3-4 (S.D.Ill. June 21, 2007) (conditionally certifying class of 5,500 loan originators despite defendant's argument that job duties varied depending on their classification, because loan originators had the same "overall mission"); Garza v. CTA, No. 00-438, 2001 WL 503036, at *3 (N.D.Ill. May 8, 2001) ("That the plaintiffs and other potential plaintiffs may have different jobs ... [and] earn different amounts of money ... does not mean that they are not operating under the same policies that allegedly entitle them to overtime pay.").

There is also evidence that the pharmaceutical representatives were...