Morgan v. Family Dollar Stores, Inc.
| Decision Date | 16 December 2008 |
| Docket Number | No. 07-12398.,07-12398. |
| Citation | 551 F.3d 1233 |
| Parties | Janice MORGAN, Barbara Richardson, on behalf of themselves and all others similarly situated, et al., Plaintiffs-Appellees, v. FAMILY DOLLAR STORES, INC., Defendant-Appellant. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Scott Burnett Smith, Bradley, Arant, Rose & White, Huntsville, AL, James Walker May, T. Matthew Miller, Bradley, Arant, Rose & White, LLP, Birmingham, AL, Philip Lane Ross, Littler Mendelson, San Francisco, CA, Robert A. Long, Jr., Covington & Burling, Washington, DC, for Defendant-Appellant.
Robert L. Wiggins, Jr., Gregory O. Wiggins, Herman N. Johnson, Jr., Kevin Wade Jent, Wiggins, Childs, Quinn & Pantazis, P.C., Peter Mark Petro, Jospeh Allen Schreiber, Schreiber & Petro, P.C., Birmingham, AL, for Plaintiffs-Appellees.
James M. Finberg, Peder J. Thoreen, Altshuler Berzon, LLP, San Francisco, CA, for Amici Curiae.
Appeal from the United States District Court for the Northern District of Alabama.
Before DUBINA, HULL and FAY, Circuit Judges.
The Court sua sponte issues this corrected opinion.
An opt-in class of 1,424 store managers, in a collective action certified by the district court, sued Family Dollar Stores, Inc. ("Family Dollar") for unpaid overtime wages under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201-219. During an eight-day trial, the Plaintiffs used Family Dollar's payroll records to establish that 1,424 store managers routinely worked 60 to 70 hours a week and to quantify the overtime wages owed to each Plaintiff. Family Dollar focused on its affirmative defense that the store managers were executives within the meaning of the FLSA and exempt from its overtime pay requirements.
The jury found that the Plaintiff store managers were not exempt executives and that Family Dollar had willfully denied them overtime pay. The jury awarded $19,092,003.39 in overtime wages. The court entered a final judgment of $35,576,059.48 against Family Dollar consisting of $17,788,029.74 in overtime wages and an equal amount in liquidated damages.
Because of the complex procedural history from 2001 to 2005 that led to the case being certified as a collective action, the subsequent eight-day trial in 2006, and Family Dollar's myriad challenges on appeal, we preface the opinion with a table of contents:
I. PROCEDURAL HISTORY FROM 2001-2005 ..................................... 1241
A. Complaint ......................................................... 1241
B. April 2001 Motion to Facilitate Nationwide Notice ................. 1242
C. October 2001—Second Motion to Facilitate Nationwide Notice .. 1242
D. July 2002 Notice .................................................. 1242
E. October 2002—Third Motion to Facilitate Nationwide Notice ... 1242
F. November 2002 Order and Fact Findings ............................. 1243
G. December 2002 Notice to Potential Opt-Ins ......................... 1243
H. Discovery Disputes ................................................ 1243
I. May 2004 Motion to Decertify the Collective Action ................ 1245
J. January 2005 Order and Fact Findings .............................. 1246
K. First Jury Trial .................................................. 1247
II. SECOND JURY TRIAL IN 2006 ............................................. 1247
A. Corporate Structure ............................................... 1248
B. Store Managers .................................................... 1248
C. Family Dollar Executives .......................................... 1251
D. District Managers ................................................. 1254
E. Salary Compared to Hourly Wages ................................... 1257
F. Judgment/Verdict .................................................. 1258
III. DECERTIFICATION ....................................................... 1258
A. FLSA's Similarly Situated Requirement ............................. 1258
B. Two-Stage Procedure for Determining Certification ................. 1260
C. District Court's Denial of Decertification ........................ 1262
IV. EXECUTIVE EXEMPTION DEFENSE ........................................... 1265
A. FLSA's Executive Exemption ........................................ 1265
B. Primary Duty Is Management ........................................ 1266
C. Family Dollar's Motion for Judgment as a Matter of Law ............ 1269
D. Other Circuits' Cases ............................................. 1271
E. 163 Individual Plaintiffs Granted Judgment on Executive Exemption
Defense ......................................................... 1273
V. REPRESENTATIVE TESTIMONY .............................................. 1276
VI. WILLFULNESS AND LIQUIDATED DAMAGES .................................... 1280
A. Willful Violation ................................................. 1280
B. Good Faith and Liquidated Damages ................................. 1282
VII. JURY INSTRUCTIONS ..................................................... 1283
VIII. CONCLUSION ............................................................ 1285
I. PROCEDURAL HISTORY FROM 2001-2005
Family Dollar is a nationwide retailer that operates over 6,000 discount stores that sell a wide assortment of products, including groceries, clothing, household items, automotive supplies, general merchandise, and seasonal goods.1 In January 2001, Janice Morgan and Barbara Richardson, two store managers, filed a Complaint on behalf of themselves "and all other similarly situated persons," alleging that Family Dollar willfully violated the FLSA by refusing to pay its store managers overtime compensation.
The first Complaint asserted that Family Dollar paid store managers a salary, required them to work 60 to 90 hours a week, and refused to compensate them for overtime. According to Plaintiffs, store managers are managers only in name and actually spend the vast majority of their time performing manual labor, such as stocking shelves, running the cash registers, unloading trucks, and cleaning the parking lots, floors, and bathrooms. Store managers spend only five to 10 hours of their time managing anything. Plaintiffs sought unpaid benefits, overtime compensation, and liquidated damages due to Family Dollar's willful FLSA violations.
The Complaint urged the district court to issue notice of the action to all similarly situated Family Dollar employees nationwide, and to inform them of their right to opt into the suit as a collective action. Plaintiffs relied on 29 U.S.C. § 216(b), which authorizes courts to maintain a case as one collective action so long as the employee-plaintiffs are similarly situated.
Family Dollar's Answer raised a number of affirmative defenses. It asserted that its store managers were exempt executives2 and denied any violations were willful. Family Dollar also argued that a collective action, under § 216(b), was impermissible because (1) the store managers were not similarly situated, (2) Plaintiffs' claims were not representative of others in the group, and (3) Plaintiffs could not satisfy § 216(b)'s requirements for maintaining a collective action.
In May 2001, Plaintiffs filed their Third Amended Complaint on behalf of Morgan and Richardson, and added Cora Cannon and Laurie Trout-Wilson as Plaintiffs. The Third Amended Complaint raised the same claims for overtime pay and, again, urged the district court to notify other similarly situated store managers of the action.
In April 2001, Plaintiffs moved the district court to (1) certify the case as a collective action, (2) authorize notice "by first class mail to all similarly situated management employees employed by Family Dollar Stores, Inc. at any time during the three years prior to the filing of this action to inform them of the nature of the action and their right to opt-into this lawsuit," and (3) order Family Dollar to "produce a computer-readable data file containing the names, addresses, Social Security number and telephone numbers of such potential opt-ins so that notice may be implemented." In May 2001, the court denied the motion for immediate notice, but indicated the motion was "overruled without prejudice."
In September 2001, the district court issued a scheduling order pursuant to Rule 16(b).3 The order indicated that the parties mutually agreed to "an initial period of discovery limited to identification of claims and their factual basis," and that, despite Family Dollar's opposition, Plaintiffs would request the court to facilitate notice on or before February 2002. Discovery was to expire on October 1, 2002.
In October 2001, Plaintiffs renewed their motion to facilitate notice. Family Dollar twice opposed Plaintiffs' motion and urged the district court to delay ruling to allow more discovery. At oral argument in April 2002, the court withheld ruling pending additional discovery by Family Dollar, and ordered Plaintiffs' counsel to make all named Plaintiffs available for deposition. In April 2002, before the court ruled on the renewed motion, the parties jointly agreed to send limited notice of the suit to current and former store managers that worked in the regions where the named Plaintiffs worked from July 1, 1999 to the present. As a result, the court denied Plaintiffs' October 2001 motion as moot.
In July 2002, the parties notified 784 potential class members in Region 4 (which contains 15 Family Dollar districts in Alabama, Mississippi, Louisiana, Georgia, and Tennessee), district 39 (in Georgia), and district 118 (in New York). The...
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