Fish & Richardson labor and employment trial team successful against broad class-action certification
PHILADELPHIA – The labor and employment trial team at Fish & Richardson is announcing an important victory on behalf of CROSSMARK, Inc., after a federal district court in Philadelphia denied nationwide class status in a closely watched lawsuit over claims that the company had failed to pay certain employees for all of the time they claimed to have worked.
The ruling stems from a February 2011 federal lawsuit filed by several dozen current and former CROSSMARK employees who alleged the Plano, Texas-based company violated the Fair Labor Standards Act (FLSA) by requiring employees to work “off the clock” without pay. The plaintiffs had sought to represent a class of employees that would have included most of CROSSMARK’s retail representatives, creating a pool of plaintiffs exceeding 20,000 current and former employees and exposing the company to tens of millions of dollars in liability. The case is James Postiglione et al. v. CROSSMARK, Inc., No. 2:11-cv-00960-NS, in the U.S. District Court for the Eastern District of Pennsylvania.
In a ruling released Friday, Nov. 16, Federal District Court Judge Norma L. Shapiro concluded that the plaintiffs had failed to demonstrate that all of the potential class members were “similarly situated,” or that they had been affected by any “nationwide policy or plan” in violation of the FLSA. CROSSMARK’s nationwide pay practices are fully compliant with the FLSA. CROSSMARK requires all of its hourly employees to accurately report all of the time they actually work, and strictly prohibits supervisors from suggesting that employees work “off-the-clock.” The ruling found that the plaintiffs’ allegations, even if taken as true, suggested that a few local supervisors, at most, may have given instructions that were contrary to CROSSMARK’s policy.
“Today’s decision is a complete vindication of CROSSMARK’s pay practices,” says attorney Stephen Fox, a Principal in Fish & Richardson’s Dallas offices. “Going from a class of 20,000 to a ‘class’ of one, this victory is not just a home run, it’s a grand slam. In fact, it’s like hitting two grand slams in the same game. CROSSMARK is a great company, managed by great people who have great people working for them. It treats its employees fairly and pays them equitably.”
A major factor in the Court’s decision was what Judge Shapiro described as the “patently unreliable” nature of the plaintiffs’ evidence, which included dozens of nearly identical affirmations that were not individually drafted for the employees who signed them and contradicted the employees’ own deposition testimony or time sheets and payroll records. One plaintiff claimed in her affirmation that she was only allowed to report a “fixed” 15 minutes per day for certain administrative tasks, regardless of how long they actually took. But her payroll records showed that the amount of “administrative time” she actually reported was widely varied, and, in some weeks, she reported and was paid for as much as 16 hours of such time. A former CROSSMARK supervisor who had submitted an affirmation in support of plaintiffs’ allegations testified in her deposition that she always instructed her employees to report all of the time they actually worked.
In addition to rejecting the plaintiffs’ original motion to certify a class of 20,000 plaintiffs, the judge also denied plaintiffs’ alternative proposal for a “narrowed” class of about 9,000. With this ruling, Judge Shapiro dismissed without prejudice the claims of all except for James Postiglione, the first named plaintiff – reducing the lawsuit to a class of one.
The Court’s decision in Postiglione represents the third time that CROSSMARK has successfully defended attempts to certify classes based on alleged FLSA violations. The Eastern District of Pennsylvania joins two other federal district courts (Kathleen Johnston et al. v. CROSSMARK, Inc. et al., No. 2:08-cv-01525, D. N.J. March 10, 2009; Kathi Bowman et al. v. CROSSMARK, Inc., et al., No. 3:09-cv-16, E.D. Tenn. July 19, 2010) that have denied motions for conditional certification based on essentially similar allegations.