Reeves v. Alliant Techsystems, Inc.

• Decision Date: 29 January 1999
• Docket Number: No. CA 95-237ML.,CA 95-237ML.
• Citation: 77 F.Supp.2d 242
• Parties: Jon C. REEVES and Michael Cavanagh v. ALLIANT TECHSYSTEMS, INC.
• Court: U.S. District Court — District of Rhode Island

Page 242

77 F.Supp.2d 242

Jon C. REEVES and Michael Cavanagh v. ALLIANT TECHSYSTEMS, INC.

No. CA 95-237ML.

United States District Court, D. Rhode Island.

January 29, 1999.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Joseph R. Paulumbo, Jr., Palumbo, Galvin & Boyle, Middletown, R.I., for Plaintiff.

William P. Robinson, III, Marc A. Crisafulli, Edwards & Angell, Provdience, R.I., Thomas B. Hatch, Robbins, Kaplan, Miller & Ciresi, Minneapolis, MN, for Defendant.

MEMORANDUM AND DECISION

LISI, District Judge.

In May 1995, plaintiffs Jon Reeves and Michael Cavanagh filed suit against defendant Alliant Techsystems, Inc. (Alliant) pursuant to the civil remedy provisions of the Fair Labor Standards Act (FLSA) to recover unpaid overtime compensation. Plaintiffs allege that while Alliant classified them as salaried employees, exempt from the overtime provisions of the FLSA, they were in fact treated as non-salaried employees entitled to overtime compensation. Alliant denies any such violation contending that plaintiffs were paid on a salary basis and therefore, that they were exempt employees under the FLSA. This matter was tried before the court sitting without a jury.¹ Having reviewed the evidence presented at trial and the post-trial memoranda submitted by the parties, this matter is now in order for a decision.

I. The Parties

A. Defendant Alliant Techsystems, Inc.

Alliant Techsystems Inc. (Alliant), headquartered in Hopkins, Minnesota, is primarily engaged in the marine and military defense industry, its principal customer being the United States government. Alliant was formed in October 1990 as a spin-off company from Honeywell, Inc. During the relevant time period, Alliant was organized into four business groups — Aerospace, Defense Systems, Emerging Business and Marine Systems. The Marine Systems Group (MSG) had its headquarters in Mukilteo, Washington. Employees of the Engineering Services Center (ESC), a division of the MSG, provided engineering and technical support to the United States Naval Undersea Warfare Center (NUWC). The NUWC is involved in research and development activities relative to the Navy's combat systems.

During the time frame relevant to these claims, the ESC had employees stationed in several locations throughout the United States: Newport/Middletown,² Rhode Island; Maryland; Minnesota; Virginia; San Diego, California; Hawaii; and three sites in Washington (Poulsbo, Keyport, and Mukilteo). The ESC headquarters were located in Poulsbo. Each location had a site manager who reported directly to the Director of the ESC, Lee Moraski (Moraski). Jerry Mortaloni (Mortaloni) supervised ESC employees supporting the NUWC Keyport contract until June 1993 when he was succeeded by Larry Armbruster (Armbruster). From 1992 to about December 1993, Tony Misslin (Misslin) supervised ESC employees supporting the NUWC Newport contract; he was succeeded by Robert Griglak (Griglak). Like his Keyport counterpart, the site manager for Alliant's Newport office, Misslin and then Griglak, reported directly to Moraski.

B. Plaintiffs Reeves and Cavanagh

In 1992, the Navy, as part of its laboratory reorganization, transferred its lightweight torpedo program from San Diego, California to Newport, Rhode Island. In the hope of obtaining a contract from NUWC's Newport division, Alliant established an office in Newport, Rhode Island. Alliant staffed the Newport office with employees who agreed to transfer there on a temporary basis. In 1992, Reeves and Cavanagh were offered temporary assignments to Newport.

Upon acceptance of his temporary assignment to Newport, Reeves was promoted to Chief Engineering Fellow, one of the highest engineering grades within Alliant. In March 1992, Cavanagh also accepted a one year temporary assignment in Newport as Alliant's Senior Principal Customer Service Representative. In this position, Cavanagh was the principal contact with NUWC Newport on contract administration matters.

In December 1993, Reeves accepted a regular assignment in Newport. After only one month in this position, however, Reeves returned to Minnesota, and, for personal reasons, remained there until he was laid off effective April 22, 1996. See Reeves I, Order dated January 29, 1999.

In March 1993, Cavanagh also accepted a regular assignment in Newport. Although Cavanagh was laid off effective February 22, 1995, he was paid his full salary until March 31, 1995.

C. The Opt-in Plaintiffs

The FLSA allows one or more employees to pursue an action in a representative capacity for "other employees similarly situated." 29 U.S.C. § 216(b); see Basch v. Ground Round, Inc., 139 F.3d 6, 10 (1st Cir.1998) (The FLSA "provides for an `opt in' procedure for class actions, requiring individuals to affirmatively consent to the action in order to be a member of the class."). A section 216 collective action affords plaintiffs "the advantage of lower individual costs to vindicate rights by the pooling of resources. The judicial system benefits by efficient resolution in one proceeding of common issues of law and fact." Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 170, 110 S.Ct. 482, 107 L.Ed.2d 480 (1989).

The threshold issue in deciding whether to authorize class notice in a FLSA action is whether plaintiffs have demonstrated that potential class members are "similarly situated." However, neither the FLSA nor its implementing regulations define the term "similarly situated." The First Circuit has not had the opportunity to delineate the appropriate standard for determining whether plaintiffs are "similarly situated," however, several district courts that have considered the question have utilized a two-tiered approach to certification determinations under § 216(b). See, e.g., Vaszlavik v. Storage Tech. Corp., 175 F.R.D. 672, 678-79 (D.Colo.1997); Brooks v. Bellsouth Telecom., Inc., 164 F.R.D. 561, 568 (N.D.Ala. 1995), aff'd, 114 F.3d 1202 (11th Cir.1997); Lusardi v. Xerox Corp., 118 F.R.D. 351, 361 (D.N.J.1987); Allen v. Marshall Field & Co., 93 F.R.D. 438, 445 (N.D.Ill.1982).

Under this two-tiered analysis, the trial court must first determine whether notice of the action should be given to potential class members. See Thiessen v. General Elec. Capital Corp., 996 F.Supp. 1071, 1080 (D.Kan.1998) (quoting Brooks, 164 F.R.D. at 568). This preliminary pronouncement is "usually based only on the pleadings and any affidavits that have been submitted" during the initial stages of litigation. Mooney v. Aramco Services Co., 54 F.3d 1207, 1214 (5th Cir.1995). Because the court has minimal evidence at the "notice stage," this determination "is made using a fairly lenient standard, and typically results in `conditional certification' of a representative class." Id.; but see, Haynes v. Singer Co., Inc., 696 F.2d 884, 887-88 (11th Cir.1983) (district court did not abuse its discretion in refusing to authorize class notice where plaintiff's counsel offered only unsupported assertions of widespread FLSA violations). Courts have held that plaintiffs can meet this burden by simply alleging "that the putative class members were together the victims of a single decision, policy, or plan" that violated the law. Id. at 1214 n. 8 (quoting Sperling v. Hoffman-La Roche, Inc., 118 F.R.D. 392, 407 (D.N.J.1988)); see also Hoffmann v. Sbarro, Inc., 982 F.Supp. 249, 261 (S.D.N.Y.1997).

Once discovery is complete and the case is ready for trial, the party opposing joinder may file a motion for "decertification." At the "post discovery" stage, the court generally has much more information on which to base its decision, and can make a factual determination on the "similarly situated" question. See Mooney, 54 F.3d at 1214. When determining the scope of the class, most courts focus on the following three factors: (1) the disparate factual and employment settings — e.g., whether plaintiffs were employed in the same corporate department, division, and location; (2) the various defenses available to defendant which appear to be individual to each plaintiff; and (3) fairness and procedural considerations. See, e.g., Thiessen, 996 F.Supp. at 1081; Brooks, 164 F.R.D. at 568; Lusardi, 118 F.R.D. at 359. If the record facts reveal that the claimants are not "similarly situated," then the court may decertify the class, and dismiss the opt-in plaintiffs without prejudice. See Mooney, 54 F.3d at 1214; Lockhart v. Westinghouse Credit Corp., 879 F.2d 43, 51 (3d Cir.1989) (overruled on other grounds). If the plaintiffs are "similarly situated," the district court allows the case to proceed to trial as a collective action. See Mooney, 54 F.3d at 1214; see also Hyman v. First Union Corp., 982 F.Supp. 1, 7 (D.D.C.1997) (class members must only be similarly situated, not identically situated).

During the early stages of the instant matter, Plaintiffs Reeves and Cavanagh filed a motion to notify potential class members of the pendency of their action. In support of their motion, Reeves and Cavanagh alleged that they and other potential class members were subject to a series of policies and practices promulgated and enforced by Alliant management, the effect of which was to treat Reeves and Cavanagh as non-exempt employees under the FLSA.³ In February 1996, Magistrate Judge Robert W. Lovegreen granted Plaintiffs' motion and permitted them to notify present and former ESC "exempt" employees who had supported either the NUWC Keyport or NUWC Newport contract during the relevant time period.

Seven months later, after fifty-six persons had "opted-in" and extensive discovery had been conducted, Alliant filed a motion to restrict joinder — or in other words, to "decertify" certain members of the putative class. Although the case was clearly beyond the "notice stage," discovery had not yet concluded. See Thiessen, 996 F.Supp. at 1081 (confronting a similar procedural posture, the court adopted an "intermediate" approach in analyzing the "similarly situated" status of...