United States District Court, D. Alaska
LAURA LEE PETERSON, Individually and on Behalf of All Others Similarly Situated, and MATTHEW SMITH, HILARY FISHER, AND JENNIFER CARGILE, Plaintiffs,
v.
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC., and ALASKA COMMUNICATIONS SYSTEMS HOLDINGS, INC., dba ALASKA COMMUNICATIONS, Defendants.
ORDER ON PLAINTIFFS' MOTION FOR CERTIFICATION OF
A RULE 23 CLASS ACTION (DKT. 278)
TIMOTHY M. BURGESS, UNITED STATES DISTRICT JUDGE
I.
INTRODUCTION
The
matter comes before the Court on the Motion for Certification
of a Rule 23 Class Action (the “Motion”) by
Plaintiff Laura Lee Peterson and opt-in Plaintiffs Sharon
Hubbs and Carrie (McDermott) Shephard (all together,
“Plaintiffs”, unless otherwise noted) based on
violations of the Alaska Wage and Hour Act
(“AWHA”).[1] Defendants Alaska Communications System
Group, Inc. and Alaska Communications Systems Holdings, Inc.
(together, “ACS”), oppose the
Motion.[2] The Motion was fully briefed by the
parties.[3] The parties did not request oral argument,
and the Court finds that it would not be helpful. For the
reasons stated below, Plaintiffs' Motion for
Certification of a Rule 23 Class Action is
GRANTED.
II.
BACKGROUND[4]
Plaintiff
Laura Peterson, a former sales employee at ACS, sued ACS on
behalf of herself, additional named plaintiffs, and a class
of potential plaintiffs for allegedly violating the overtime
provisions of the Fair Labor Standards Act
(“FLSA”) and the AWHA.[5] The instant dispute centers
on Plaintiffs' allegation that ACS improperly classified
them and other Client Account Managers (“CAMs”)
as exempt under the outside sales exemption, and that ACS
failed to pay overtime in violation of state and federal
law.[6]
Plaintiffs
sought, [7] and the Court granted, [8] conditional
certification of a collective action under the FLSA. Since
conditional certification, 21 individuals have opted-in to
the FLSA collective action.[9] To the date of this Order, six of
these opt-in Plaintiffs have either withdrawn or been
dismissed, and are no longer part of the FLSA collective
action.[10] ACS also filed a motion in limine to
exclude Plaintiff Peterson's deposition
errata.[11] After briefing by the parties,
[12]
the Court denied the motion without prejudice but noted that
ACS “may also argue that those nine changes warrant
little, if any, weight on any other motions (including
certification and decertification
motions).”[13]
Plaintiffs
filed the instant Motion on September 29, 2017, seeking to
certify a class based on violations of the
AWHA.[14] Plaintiffs state that they seek to
appoint Plaintiff Laura Lee Peterson and opt-in Plaintiffs
Carrie Shephard and Sharon Hubbs as class representatives of
the proposed class.[15] Plaintiffs propose the following class
definition:
All full-time exempt employees who work or worked for ACS in
the job position which is currently titled “Client
Account Manager (I, II, or III), ” (formerly known as
“Account Executive” or, in the case of the
Carrier/Federal group, “Senior Manager” or
“Sr. CAM”), in the ACS Anchorage office from
April 30, 2010 through the date of judgment.[16]
Plaintiffs
note that they have narrowed the class definition from the
proposed definition in the First Amended
Complaint.[17] ACS did not raise any objection or
concern with the narrowing of the proposed class definition
from the First Amended Complaint.
ACS
filed its Response in Opposition on November 16, 2017,
opposing certification of the proposed class.[18] Plaintiffs
filed their Reply to the Response in Opposition on January
24, 2018.[19]
III.
JURISDICTION
As a
preliminary matter, ACS raises three jurisdictional arguments
in its opposition to class certification: (1) the Court
should decline jurisdiction over those class members that did
not opt into the conditionally certified FLSA collective
action;[20] (2) the Court should decline to exercise
supplemental jurisdiction because the state law claims would
predominate over federal law claims because of the low
proportion of opt-in plaintiffs under the FLSA (16
individuals) as compared to the total number of class members
under the state law claims (67 individuals);[21] and (3) the
Court should decline to exercise supplemental jurisdiction
because of the exceptional circumstances and compelling
reasons that exist as evidenced by six putative class members
withdrawing their prior FLSA consents.[22] For the
reasons stated below, the Court disagrees that it lacks
jurisdiction over those class members that did not opt into
the FLSA collective action, and further concludes that it
must continue to exercise supplemental jurisdiction over the
related state law claims.
It is
undisputed that the FLSA, as a federally enacted statute,
confers federal question subject-matter jurisdiction to the
Court.[23] Moreover, this Court has recognized-in a
prior analogous case regarding an FLSA collective action-that
the statute conferring supplemental jurisdiction, 28 U.S.C.
§ 1367(a), only permits a court to decline supplemental
jurisdiction under one of the four specifically enumerated
categories in subsection (c).[24] The language conferring
supplemental jurisdiction is clear: “…in any
civil action of which the district courts have original
jurisdiction, the district courts shall have
supplemental jurisdiction over all other claims that are so
related to claims in the action within such original
jurisdiction that they form part of the same case or
controversy under Article III of the United States
Constitution.”[25] Courts that have considered the word
“shall” have indicated that the court
must exercise this jurisdiction absent exceptions
enumerated in subsection (c).[26] Under this rationale, the
Court exercised supplemental jurisdiction here over
Plaintiffs' AWHA claim.
ACS'
first argument-that the Court should decline jurisdiction
over those class members that did not opt into the FLSA
collective action-is without merit. ACS' solely cited
case, Bartleson v. Winnebago, addressed whether it
was appropriate to grant leave to amend to include class
allegations and corresponding state law claims that related
to the FLSA claim already asserted.[27] Bound by Eighth Circuit
precedent, [28] the Bartleson court held that
only employee “class members who have asserted a
FLSA claim in this action are properly in federal court;
supplemental jurisdiction cannot extend to [employee] class
members who have no FLSA claim.”[29] The
Bartleson court concluded that amendment to include
state law claims of employees who were not already opt-in
plaintiffs in the FLSA certified action would be
“futile” or
“frivolous.”[30] The court further denied the motion
for certification of a class pursuing relief under the
related state law, because the only class members consisted
solely of the opt-in plaintiffs, totaling twenty-one members,
which was far below the numerosity threshold required under
Fed.R.Civ.P. 23(a).[31]
ACS
argues that the Court should follow the Bartleson
court's lead by concluding that the Court lacks
jurisdiction over the class members that did not opt in to
the FLSA collective action.[32]But this Court is neither bound
nor persuaded by Bartleson.[33] ACS' argument is
contrary to the overwhelming authority in the Ninth Circuit,
which routinely exercises supplemental jurisdiction over
state law claims brought in a Rule 23 class action in
conjunction with claims under the FLSA, including state law
claims of class members who did not opt in to the FLSA
collective action.[34]Plaintiffs' FLSA claim and the
putative class members' AWHA state law claim derive from
a common nucleus of operative fact-ACS' allegedly
improper classification of them as exempt
employees[35]-and therefore satisfy the plain language
of section 1367 extending supplemental jurisdiction to
“all other claims that are so related to claims in the
action within such original jurisdiction that they form part
of the same case or controversy.”[36] Accordingly,
the Court rejects ACS' assertion that it lacks
jurisdiction over the class members that did not opt in to
the FLSA collective action.
ACS'
second and third arguments are based on exceptions enumerated
in subsections (c)(2) and (c)(4) of section 1367. The two
categories relevantly state that a district court “may
decline to exercise supplemental jurisdiction over a claim .
. . if-- . . . (2) the claim substantially predominates over
the claim or claims over which the district court has
original jurisdiction, . . . or (4) in exceptional
circumstances, there are other compelling reasons for
declining jurisdiction.”[37] The Court accordingly
addresses each exception in turn.
ACS'
argument based on subsection (c)(2) of section 1367-that the
low proportion of opt-in plaintiffs to the total class
members would lead to state law claims predominating in the
litigation[38]-does not persuade the Court that it can
decline supplemental jurisdiction of the AWHA claim. It is
well-settled that where state law claims essentially
replicate the FLSA claims, they do not predominate such that
courts must decline to exercise supplemental jurisdiction
under subsection (c)(2), and courts have rejected arguments
that numerical disparity between the opt-in class and the
proposed Rule 23 class alone is a reason for declining
supplemental jurisdiction.[39]Declining supplemental
jurisdiction would be appropriate where “it appears
that the state issues substantially predominate, whether in
terms of proof, of the scope of the issues raised, or of the
comprehensiveness of the remedy sought.”[40] As discussed,
the AWHA and the FLSA claims are both based on the purported
misclassification of employees as exempt, and the AWHA claim
essentially replicates the FLSA claim.[41] The Court
cannot thus hold that the AWHA claim would
“substantially predominate” over the FLSA claim,
and therefore cannot decline supplemental jurisdiction under
subsection (c)(2).
ACS'
argument based on (c)(4) of section 1367-that the number of
withdrawn prior FLSA consents evidences exceptional
circumstances and compelling reasons-is also unavailing. As
Plaintiffs have correctly noted, other courts do not
generally find withdrawn FLSA consents, without more, to
constitute evidence of exceptional
circumstances.[42] Moreover, the Ninth Circuit has defined
“compelling reasons” as used in subsection (c)(4)
to mean instances where declining jurisdiction would
“‘best accommodate the values of economy,
convenience, fairness, and comity.'”[43] The Court
does not find that there are compelling reasons to decline
supplemental jurisdiction, nor does the Court find that the
six withdrawn FLSA consent forms are an exceptional
circumstance where application of subsection (c)(4) is
warranted. Six withdrawn FLSA consents, without additional
information or factors present, is not sufficient for this
Court to conclude that subsection (c)(4)
applies.[44] The Court therefore cannot decline
supplemental jurisdiction under (c)(4).
For
these reasons, the Court finds that it continues to have both
federal question jurisdiction over the FLSA claim, and
supplemental jurisdiction over the AWHA claim.
IV.
LEGAL STANDARD
Fed. R.
Civ. P. 23 governs the appropriateness of certifying a class
action in federal court. The decision whether to certify the
class “involve[s] a significant element of
discretion” by the district court.[45] “The
class action is ‘an exception to the usual rule that
litigation is conducted by and on behalf of the individual
named parties.'”[46] Rule 23's requirements are
not merely a pleading standard to be met.[47] “[A]
district court facing a class certification motion is
required to conduct ‘a rigorous analysis' to ensure
that the Rule 23 requirements are
satisfied.”[48] This analysis “will entail some
overlap with the merits of [Plaintiffs'] underlying
claims.”[49] However, the Court “is required to
examine the merits of the underlying claim[s] . . . only
inasmuch as it must determine whether common questions exist;
not to determine whether class members could actually prevail
on the merits of their claims.”[50]
“Sometimes the issues are plain enough from the
pleadings to determine whether the interests of the absent
parties are fairly encompassed within the named
plaintiff's claim, and sometimes it may be necessary for
the court to probe behind the pleadings before coming to rest
on the certification question.”[51]
The
first step in the analysis of a motion for class
certification is to determine whether the proposed class
meets the requirements of Rule 23(a).[52] These four
requirements are: (1) numerosity; (2) commonality; (3)
typicality; and (4) adequacy.[53]
If
these four Rule 23(a) requirements are met, the analysis
proceeds to a determination of whether the proposed class
meets the applicable requirements of Rule
23(b).[54] Here, Plaintiffs seek certification
under subsection (b)(3).[55] Rule 23(b)(3) provides that
certification is appropriate where “the court finds
that the questions of law or fact common to class members
predominate over any questions affecting only individual
members, and that a class action is superior to other
available methods for fairly and efficiently adjudicating the
controversy.”[56] In other words, parties seeking
certification must meet these two predominance and
superiority tests before a class action can be certified
under Rule 23.[57] Only if all of the above Rule 23
requirements are satisfied is class certification
appropriate.
Although
ACS will bear the burden on the merits of any AWHA claim,
Rule 23 “governs the class certification issue even if
the underlying claim arises under state
law.”[58] Under Rule 23, “[t]he party
seeking class certification bears the burden of demonstrating
that the requirements of Rules 23(a) and (b) are
met.”[59] Accordingly, Plaintiffs bear the burden
of demonstrating that class certification is appropriate.
Here,
as explained below, the Court holds that Plaintiffs have
satisfied the requirements of Rule 23, and
GRANTS the Motion for Certification of a
Rule 23 Class.
V.
ANALYSIS
A.
Opt-In Plaintiffs Sharon Hubbs and Carrie Shephard May Be
Appointed Class Representatives Without Formal Amendment
Prior
to undertaking the Rule 23 analysis, the Court must first
address a disagreement between Plaintiffs and ACS that
impacts the Rule 23 analysis. Plaintiffs seek in the Motion
to appoint opt-in Plaintiffs Sharon Hubbs and Carrie Shephard
as class representatives. In the alternative, Plaintiffs
state that opt-in Plaintiffs Hubbs and Shephard are willing
to serve as named plaintiffs in this action if the Court
requires formal amendment in order to serve as additional
class representatives.
In its
opposition, ACS urges the Court to neither permit Hubbs and
Shephard to serve as class representatives of the proposed
Rule 23 class or to allow Plaintiffs to amend the First
Amended Complaint to include Hubbs and Shephard as additional
named plaintiffs. ACS states that Plaintiffs' request is
not diligent and is prejudicial to ACS, as ACS' defense
was based on Plaintiff Peterson's status as the sole
class representative, and ACS has not had the opportunity to
vet either Hubbs or Shephard as class
representatives.[60] ACS argues that Fed.R.Civ.P. 15 and 16
provide the framework with which to analyze Plaintiffs'
request to appoint Hubbs and Shephard as a class
representatives or, alternatively, whether amendment to add
Hubbs and Shephard as additional plaintiffs is appropriate,
and that the Court should decline both of Plaintiffs'
requests under this framework.
The
Court agrees that Rule 16 would provide the governing
framework in reviewing a request to amend a complaint to add
additional named plaintiffs beyond the deadline imposed by
the scheduling and planning order.[61] The Court disagrees,
however, that such framework is applicable in determining
whether Hubbs and Shephard may be appointed class
representatives in addition to named Plaintiff Peterson. As
Plaintiffs correctly point out, “Rule 23(a) does not
explicitly require that a class representative must be a
named plaintiff in the action.”[62] Courts that
have considered the rare circumstance of whether to appoint a
non-named plaintiff as an additional class representative
have not undertaken a Rule 15 or Rule 16 analysis, nor have
they required the pleadings be amended to include class
representatives as a named plaintiff in the
action.[63] The Court thus declines both to
undertake an analysis under Rule 16 that it is not required
to do or to require Plaintiffs to amend the First Amended
Complaint to add Hubbs and Shephard as named
plaintiffs.[64]
The
Court is sensitive to ACS' concerns that the appointment
of Hubbs and Shephard is prejudicial. However, the Court
finds that there is not any prejudice to ACS here from
considering and appointing Hubbs and Shephard as class
representatives of the proposed class. Plaintiffs relevantly
point out that both Hubbs and Shephard have-as opt-in
Plaintiffs in the FLSA collective action-extensively
participated in discovery by responding to interrogatories,
complying with document requests, and individually being
deposed for a significant time.[65] As the Court stated
earlier, the FLSA and AWHA claims are essentially replicated
claims based on the same facts and circumstances; any unique
defense against Hubbs or Shephard regarding their FLSA claim
would also be generally applicable to their AWHA claim, and
related and necessary documents would already be disclosed
through discovery by Hubbs and Shephard. Thus, the Court
fails to see any need for additional discovery as to Hubbs
and Shephard.[66] The Court finds no prejudice to ACS and
can see no other reason to deny Plaintiffs' request to
consider and potentially appoint Hubbs and Shephard as class
representatives.
For the
following reasons, the Court holds that opt-in Plaintiffs
Hubbs and Shephard may be appointed class representatives -
pending satisfaction of the Rule 23 requirements - without
formal amendment of the First Amended Complaint.
B.
Whether the Requirements of Fed.R.Civ.P. 23(a) Have Been
Met
1.
Numerosity
The
numerosity requirement in Rule 23 is satisfied when
“the class is so numerous that joinder of all members
is impracticable.”[67] Although the Supreme Court has
instructed that the “numerosity requirement . . .
imposes no absolute limitations, ”[68] in
application, a proposed class consisting of less than 16
individuals fails to meet the numerosity
requirement.[69] On the other hand, courts have held that
classes of at least 40 individuals easily satisfy the
numerosity requirement under Rule 23.[70] A class size
between 16 and 39 individuals presents a closer question of
whether numerosity can be satisfied, although courts have
found the numerosity requirement satisfied where a class has
consisted of 18 or 20 individuals.[71]
Here,
the parties do not dispute that there are 67 potential class
members in the proposed class. Under prior precedent, the
proposed class would satisfy the numerosity requirement under
Rule 23(a)(1) because joinder of this many individuals would
be impracticable.
ACS,
however, argues that the correct number to use for the
numerosity analysis is not the 67 potential class members,
but rather the 16 individuals who have opted-in to the FLSA
collective action as plaintiffs. For this proposition, ACS
cites Thiebes v. Wal Mart Stores, Inc. as its sole
authority.[72] However, as Plaintiffs correctly
identify, Thiebes is the minority holding amongst
district courts in the Ninth Circuit, and the prevailing
trend is to consider the overall proposed putative class size
for the numerosity requirement, not just the number of opt-in
plaintiffs to a related FLSA collective action.[73] The Court
agrees with the prevailing trend that a Rule 23 class
numerosity determination is a separate inquiry that is not
bound by the number of opt-in plaintiffs in a related FLSA
collective action.[74] Thus, the Court bases its numerosity
analysis on the 67 individuals identified by the parties.
Accordingly,
the Court holds that the numerosity requirement is satisfied.
2.
Commonality
The
commonality requirement is satisfied where “there are
questions of law or fact common to the
class.”[75] Commonality requires a showing that
“the class members have suffered the same injury”
and “does not mean merely that they have all suffered a
violation of the same provision of law.”[76] The class
claims “must be of such a nature that it is capable of
classwide resolution-which means that determination of its
truth or falsity will resolve an issue that is central to the
validity of each one of the claims in one
stroke.”[77] For the purposes of commonality,
“even a single common question will
do.”[78] The commonality requirement is
“less rigorous than the companion requirements of Rule
23(b)(3), ” and is “construed
permissively.”[79] Finally, “[c]ourts ordinarily find
that the commonality requirement is satisfied where a
putative class of employees challenges their classification
as exempt from overtime requirements under state
law.”[80]
Here,
Plaintiffs Peterson, Hubbs, Shephard, and potential class
members all work or worked for ACS during the proposed class
period as CAMs and challenge their classification as exempt
from overtime requirements under the AWHA. Plaintiffs have
pointed to evidence in the record that: (1) the primary job
duties of CAMs are similar;[81] (2) their job duties and
practices are performed pursuant to common job descriptions,
job postings, and performance appraisals;[82] (3) CAMs are
trained on and expected to follow an ACS sales
process;[83] (4) CAMs' job duties and the ACS
sales policies require that CAMs work from Defendants'
place of business to perform their job;[84] (5) CAMs
regularly have to work over 40 hours per work in order to
perform their job;[85] (6) CAMs are paid pursuant to the
similar compensation policies and are not compensated for
overtime work;[86] and (7) ACS classifies CAMs as exempt
under the outside sales exemption.[87]Based on this evidence,
Plaintiffs identify several factual and legal questions that
are common to the class, including:
1. What
are the principal job duties and tasks performed by CAMs?
2. What
are the indispensable components of the sales efforts
performed by CAMs?
3. Were
most or virtually all of the indispensable components of
CAMs' sales efforts performed outside the office?
4. Did
ACS classify all CAMs as exempt from overtime based upon the
outside sales exemption?
5. Can
ACS prove beyond a reasonable doubt that CAM's
“primary duty” was “making sales or
contracts for sales, consignments, or shipments, or obtaining
orders for services” under the AWHA?
6. Can
ACS prove beyond a reasonable doubt that CAMs were
“customarily and regularly engaged away from the
employer's place of business” under the
AWHA?[88]
These
identified legal and factual questions get at the heart of
the litigation: whether employees working as CAMs were
properly classified as exempt under the AWHA. Thus,
Plaintiffs have demonstrated there are questions of law or
fact common to the class.
ACS
argues that commonality cannot be satisfied where there is no
uniform policy dictating how, when, and where CAMs performed
duties and spent work hours. ACS cites to evidence in the
record that the percentage of time spent on certain tasks
varied between individual CAMs.[89] ACS does not otherwise
argue that the CAMs employees are situated differently in
their tasks or duties.[90] But under Ninth Circuit authority,
“[t]he existence of shared legal issues with divergent
factual predicates is sufficient, as is a common core of
salient facts coupled with disparate legal remedies within
the class.”[91] In other words, class members do not
have to be identical - they only have to be similar enough to
satisfy the commonality requirement.[92] Here, the Court concludes
that the class members are similarly situated enough that
there are common questions of law and fact that can be
resolved through classwide resolution.
ACS'
argument is essentially that individual issues predominate
among the class; this an argument more appropriate for the
predominance inquiry under Rule 23(b)(3) than for the
commonality analysis under Rule 23(a).[93] Rule
23(a)'s “less rigorous” commonality analysis
only requires identifying a single common legal or factual
question, which Plaintiffs have satisfied. Arguments advanced
by ACS, including that there is a lack of common proof such
as the absence of company-wide policies governing how
employees spend their time or the absence of uniformity in
work experiences, are more appropriately discussed under the
more rigorous predominance analysis in subsection
(b)(3).[94] The Court therefore addresses these
arguments under the predominance inquiry.
Thus,
the Court holds that the commonality requirement is
satisfied.
3.
Typicality
The
typicality requirement is satisfied where “the claims
or defenses of the representative parties are typical of the
claims or defenses of the class.”[95] “The
test of typicality is whether other members have the same or
similar injury, whether the action is based on conduct which
is not unique to the named plaintiffs, and whether other
class members have been injured by the same course of
conduct.”[96] This requirement is “permissive,
such that representative claims are ‘typical' if
they are reasonably coextensive with those of absent class
members; they need not be substantially
identical.”[97] “A court should not certify a
class if ‘there is a danger that absent class members
will suffer if their representative is preoccupied with
defenses unique to it.'”[98]
Plaintiffs
contend that they allege similar injuries and pursue the same
claims as the proposed class members based on the same course
of conduct and the same legal theory: that ACS improperly
classified CAMs as exempt outside salespeople and that this
misclassification violates the AWHA. Plaintiffs argue that
their claims are therefore “reasonably
coextensive” with those of absent class members. ACS,
on the other hand, argues that typicality fails due to three
reasons: (1) Plaintiffs failed to produce evidence that the
job duties were similar across the class; (2) Plaintiff
Peterson will be subject and preoccupied with responding to
alternative exemption defenses that are not otherwise common,
typical or predominant; and (3) Plaintiff Peterson will be
subject and preoccupied with responding to attacks to her
credibility on material issues related to her work.
The
Court agrees that Plaintiffs have demonstrated that their
claims are “reasonably coextensive” with those of
the absent class members. First, despite ACS'
contentions, Plaintiffs have demonstrated significant
similarities between CAMs, including: performance of the same
job duties and tasks; performance of these duties and tasks
under similar job descriptions, postings, and performance
appraisals; training on and expectations of adhering to a
specific sales process; performance of these duties and tasks
primarily from the ACS office in Anchorage; expectation of
working more than 40 hours a week; payment under the same
compensation policies, which did compensate for overtime; and
their classification as exempt under the outside sales
exemption.[99]Plaintiffs have provided evidence that
they have been injured by ACS' failure to provide
overtime compensation, that they share this injury with
members of the proposed class, and that this injury stems
from the same conduct, including classification as exempt,
similar policies and practices, and similar duties and
tasks.[100] Plaintiffs have therefore demonstrated
that their claims are reasonably co-extensive with those of
the proposed class members.
ACS'
contention that Plaintiff Peterson is subjected to unique
defenses is also without merit. ACS raises the specter of a
defense unique to Plaintiff Peterson - that there is an
alternate basis for her exemption - without adequately
establishing or explaining how such defense would be unique
or applicable as to her. The record demonstrates that ACS
classified all CAMs, including Plaintiff Peterson, as subject
only to the outside sales exemption.[101] Moreover,
as Plaintiffs relevantly point out, ACS later contends that
numerous other class members, including Plaintiff Peterson,
are subject to these same defenses, suggesting that any such
defense would not be unique to Plaintiff Peterson and could
potentially be resolved through classwide
resolution.[102] Because ACS does not demonstrate how
Plaintiff Peterson is subject to a unique defense-and the
Court cannot determine how these defenses are unique to or
applicable to Plaintiff Peterson-the Court rejects ACS'
argument that Plaintiff Peterson's AWHA claim is not
typical.[103]
Finally,
the Court rejects ACS' contention that Plaintiff Peterson
is atypical because of credibility concerns. Some courts do
not consider credibility part of the typicality analysis,
[104] while other courts consider that
credibility for both the adequacy and typicality
analyses.[105] Where courts have considered
credibility in assessing the appropriateness of a class
representative, they have held that “credibility issues
will defeat typicality only where those credibility problems
are directly relevant to the issues in the case, and are
‘so sharp as to jeopardize the interests of absent
class members.”[106] Courts that have considered
credibility explain that “th[is] standard is extremely
difficult to satisfy, ” and is limited to
“flagrant cases where putative class representatives
display an alarming unfamiliarity with the suit, display an
unwillingness to learn about the facts underlying their
claims, or are so lacking in credibility that they are likely
to harm their case.”[107]
ACS'
argument is an extension of a dispute between the parties
involving Plaintiff Peterson's deposition testimony, and
her subsequent errata sheet which altered responses Plaintiff
Peterson gave during her deposition.[108] ACS at
the time categorized the nine challenged and inconsistent
statements into three categories: (1) statements regarding
Plaintiff Peterson's resume; (2) statements regarding her
responsibilities at ACS; and (3) familiarity with duties
performed by other sales employees.[109]
While
some of these statements may have relevance to the issues in
the litigation, the Court cannot conclude, on the basis of
the evidence in the record, that such credibility issues are
so sharp as to jeopardize absent class members, nor is this a
flagrant case where credibility concerns are likely to
predominate or preoccupy the litigation. Plaintiff Peterson
previously explained that many of her clarifications to her
deposition transcript in the errata were consistent with
statements made throughout the deposition.[110] Based on
the record before it, including the deposition
transcript[111]and the explanations offered by
Plaintiff Peterson, the Court determines that Plaintiff
Peterson's corrections to her testimony do not rise to
the level that would implicate the typicality
requirement.[112]As ACS does not otherwise make any
other credibility challenges under typicality, the Court
rejects ACS' argument that Plaintiff Peterson is atypical
based on credibility concerns.
Thus,
the typicality requirement is satisfied.
4.
Adequacy
The
adequacy requirement is satisfied where “the
representative parties will fairly and adequately protect the
interests of the class.”[113] A determination of
adequacy involves a two-part inquiry: “(1) do the named
plaintiffs and their counsel have any conflicts of interest
with other class members and (2) will the named plaintiffs
and their counsel prosecute the action vigorously on behalf
of the class?”[114] In this determination, courts have
reviewed numerous factors, including “the
qualifications of counsel for the representatives, an absence
of antagonism, a sharing of interests between representatives
and absentees, and the unlikelihood that the suit is
collusive.”[115]
Here,
Plaintiffs assert that they harbor no known conflicts of
interest with the potential class members, that they are
fully prepared to prosecute this action, and that their
counsel is well qualified and experienced in labor class
actions.[116] The Court agrees that there is no
indication of conflicts of interest between Plaintiffs and
other class members, and that Plaintiffs and their counsel
appear ready to prosecute the action vigorously on behalf of
the class. On this basis, Plaintiffs appear to have met the
adequacy requirement under subsection (a)(4).
ACS
does not dispute these points. Instead, ACS argues that
Plaintiffs Peterson and Hubbs are not adequate class
representatives due to credibility issues.[117] The Court
has already determined Plaintiff Peterson's credibility
issues do not rise to the level where they would implicate
her typicality; the Court extends its reasoning to hold that
it does not implicate her adequacy to serve as a class
representative.[118] Plaintiff Hubb's potential
credibility issues- namely, ACS' assertion that her
deposition testimony is inconsistent with a resume or
application she drafted after she left ACS-are similarly not
significant enough to implicate the adequacy
analysis.[119]
Accordingly,
the adequacy requirement is satisfied.[120] Thus,
Plaintiffs have demonstrated that the proposed class has
satisfied the requirements of Rule 23(a).
C.
Whether the Requirements of Fed. R. Civ. P 23(b) Have Been
Met
1.
Predominance of Common Questions
Rule
23(b)(3) first requires that “the questions of law or
fact common to class members predominate over any
questions affecting only individual
members.”[121] “The predominance inquiry
focuses on ‘the relationship between the common and
individual issues' and ‘tests whether proposed
classes are sufficiently cohesive to warrant adjudication by
representation.'”[122] “While Rule 23(a)(2)
asks whether there are issues common to the class, Rule
23(b)(3) asks whether these common questions
predominate.”[123] Although courts have noted there is
overlap between the commonality requirement under (a)(2) and
the predominance inquiry under (b)(3), the predominance
inquiry “is far more demanding.”[124]
The
Ninth Circuit has provided additional guidance and
considerations in determining whether to certify a class
action challenging employees' exemption classification.
First, the Ninth Circuit has made it clear that a uniform
exemption policy, while “a permissible factor for
consideration under Rule 23(b)(3), ”[125] cannot by
itself be used to establish that common issues predominate,
and cannot be used “to the near exclusion of other
factors relevant to the predominance
inquiry.”[126] Second, the outside salesperson
exemption “will militate against certification because
. . . it requires a fact-intensive inquiry into each
potential plaintiff's employment
situation.”[127] Third, certification of a class
challenging the outside salesperson exemption is appropriate
where there are “centralized rules . . . suggest[ing] a
uniformity among employees that is susceptible to common
proof, ”[128] and where “the employer
exercised some level of centralized control in the form of
standardized hierarchy, standardized corporate policies and
procedures governing employees, uniform training programs,
and other factors susceptible to common
proof.”[129]
The
Court begins by noting that determining whether common
questions will predominate over individual questions here is
a close question. Evidence pointed to by both ACS and
Plaintiffs have made this an especially tough determination.
Having considered the record before it, the Court determines
that Plaintiffs have demonstrated that common questions will
predominate over individual questions.
First,
Plaintiffs pointed to evidence in the record that CAMs in the
Anchorage office all performed the same job duties and tasks,
and that these duties and tasks were reflected in job
descriptions, job postings, and performance appraisal
materials.[130] Second, ACS exercised close control
over the sales process, by both training CAMs on their
specific sales process, and expecting CAMs to follow this
sales process when interacting with clients.[131] For
instance, the “Alaska Communications Sales
Process” is defined by a seven step process, including:
(1) “Call Preparation/Pre-Work;” (2)
“Customer Appointment;” (3) “Vision
Confirmation;” (4) “Solution Development;”
(5) “Proposal Preparation;” (6) “Working
the Power map;” and (7) “Client
Decision/Closing.”[132] Testimony from current and
former CAMs, as well as ACS management, reflect that this
sales process is closely followed by CAMs, and that ACS
exercised control over this process through controlling the
pricing of products, establishment of sales revenue quotas,
and routine check-in meetings of CAMs work.[133] Third,
evidence shows that CAMs - following the ACS sales process -
conducted these duties and tasks primarily from the ACS
office in Anchorage, and this process regularly required CAMs
to work in an excess of 40 hours per week.[134] Finally,
CAMs' work schedules were subject to control by ACS, CAMs
were paid under the same compensation policies, and all CAMs
were classified as exempt under the outside sales
exemption.[135]
The
collective evidence demonstrates that there is uniformity
that is susceptible to common proof. The proposed class is
unlike the proposed classes in Vinole[136]or In
re Wells Fargo;[137] here, Plaintiffs have pointed to
several uniform policies and practices beyond just the
uniform outside sales exemption. For instance, Plaintiffs
have pointed to the uniform job descriptions and job
appraisal forms of CAMs, the uniform ACS sales process for
which CAMs receive training, and are expected to adhere to in
their employment, ACS' close management and supervision
of CAMs, and the uniform policy of requiring CAMs to work
more than 40 hours per week. Plaintiffs have also highlighted
deposition testimony that demonstrates that, while the
percentage of time spent on certain tasks and duties varies
by each CAM, the jobs and duties of CAMs closely follow the
ACS sales process. Although the percentages of the tasks and
duties performed by CAMs varied by individual, CAMs only
varied in their time spent out of the office between 10% and
30%, and otherwise performed the same tasks and duties and
were subject to the same supervision, training, and guidance.
District courts have found the predominance inquiry satisfied
under similar factual and evidentiary
circumstances.[138] Moreover, to the extent that ACS
argues that the proposed class members lack common proof as
to each member's damages due to a lack of time keeping
records, individualized damages alone cannot defeat a finding
that the predominance inquiry is satisfied.[139]
Accordingly, as Plaintiffs have provided evidence that common
questions predominate over the individual questions, the
predominance inquiry is satisfied.
ACS
additionally argues that individual issues will predominate
because some class members may have to defend against the
invocation of two additional exemptions: (1) the
administrative exemption; and (2) the highly compensated
exemption. But neither of these affirmative defenses will
lead to individual issues predominating over the common
questions of law and fact, as-based on the evidence in the
record demonstrating similarly situated CAMs- both the
administrative exemption and the highly-compensated exemption
are amenable to classwide resolution.
Alaska
law provides that individuals employed “in a bona fide
executive, administrative, or professional capacity”
are exempt under the AWHA.[140] The AWHA states that the
meaning of “bona fide executive, administrative, or
professional capacity” has the meaning as interpreted
under the FLSA.[141] In interpreting the FLSA, the Ninth
Circuit has noted that the administrative exemption covers
work which “contributes to running the business
itself” or “determin[es the business']
overall course or policies.”[142] FLSA guidelines
further highlight that the selling of products or services
generally does not qualify for the administrative
exemption.[143] Additionally, under the FLSA,
“[a]n employee with annual compensation of at least
$100, 000 is deemed exempt . . . if the employee customarily
and regularly performs any one of more of the exempt duties
or responsibilities of an executive, administrative or
professional employee.”[144] The highly compensated
exemption is not satisfied where the primary role of an
employee is sales.[145]
To the
extent these exemptions are applicable in the present case,
they would not raise the type of individualized inquiries
which defeat predominance. In contrast to cases in which
putative class members had different job titles and performed
a wide range of tasks, [146] CAMs at ACS all held the
same job and performed substantively the same duties and
tasks under a uniform sales process.[147] Whether
the common duties and tasks of CAMs contributed to the
running of ACS, or of determining ACS' overall course or
policies is a question ...