There was insufficient evidence of a companywide policy, and too many factual complexities among the class, with no plan for managing them through sampling or other means.
Customer engineers who repair ATM machines and point-of-sale devices like cash registers and pin pads for NCR Corp. could not establish a sufficient factual or legal nexus binding them together as an FLSA collective on their pre- and post-shift, off-the-clock overtime claims, a federal court in Illinois held. Discovery revealed that individual managers had considerable discretion to pay overtime (or not) and to discourage off-the-clock work, as well as the absence of any unwritten, companywide policy or practice that might explain the alleged instances of uncompensated overtime work. Moreover, the named plaintiff had no plan for how to overcome these factual differences through sampling or other trial management strategies. Therefore, the court granted the employer’s motion to decertify the 1,600-member collective (Meadows v. NCR Corp., March 4, 2020, Shah, M.).
NCR Corp. operates in all 50 states, and the company splits states into more than 70 geographic territories, which are serviced by customer engineers (CEs), hourly nonexempt workers. The CEs are dispatched from home each morning and head directly to their first repair job of the day. They first check in with company dispatchers on their phones or laptops to get the job location. According to the named plaintiff, he also had to read emails 30 minutes prior to his shift, and review work orders and communicate with the operations center to arrange for pickup (or drop-off) of parts at FedEx. He also spent pre-shift time making and receiving calls from the operations center. After he clocked out for the day, he did a number of work-related tasks such as unloading his company car, ordering parts for the work the following day, and entering his time for payroll purposes. In addition, he asserted that his lunch break was usually interrupted by calls from his managers. In all, he said, he was directed to work off the clock for an additional 1.3 hours per workday.
He filed an FLSA collective action and the district court, in a 2017 ruling, granted conditional certification to a class of 1,600 customer engineers based on a “thin record” of an unwritten companywide policy or practice of encouraging the CEs to perform off-the-clock work. But the CEs could not, following extensive discovery, produce sufficient evidence to prevent decertification.
Company handbook. The plaintiffs relied in part on NCR’s company handbook to establish a common, companywide policy of denying pay for CEs’ pre- and post-shift work activities. The handbook provides that, 30 minutes prior to the beginning of their shift, a CE must check in with his manager to update his whereabouts and also check his mobile device to determine the location of his first customer worksite for the day—a de minimis task, to have the employer tell it. The first 30 minutes of the CE’s commute to the first customer worksite of the day is not compensated, and the handbook instructs CEs not to perform any work (e.g., taking calls or answering emails for more than one or two minutes) during that time. The same policy applies to the last 30 minutes of the commute home from the last customer worksite of the day.
The handbook also states that “[a]ll work time is compensable time,” that CEs are “required to document and report all time worked,” and that CEs are strictly prohibited from performing any work (aside from the momentary task of checking for their first work assignment). The handbook provides specific examples of prohibited off-the-clock work, including answering work-related phone calls, reading or responding to NCR email, and processing or ordering parts. And supervisors are prohibited from “requiring, encouraging, or even suggesting” that CEs work off-the-clock. It was obvious that the handbook rules “apply to a uniform, identifiable subset of employees,” the court acknowledged, “but one would have to stop reading there to conclude the policy bound those employees ‘as victims’ of the violations alleged.” Although the handbook may have underestimated the time it takes the CEs to check the location of their first assignment each morning, “it also unequivocally states that all time spent working must be recorded.” Consequently, the plaintiff could not avoid a motion to decertify based on “a patently lawful written policy that applies uniformly to the entire collective.”
“Five Star” program The CEs also pointed to NCR’s new “Five Star” program—launched one month after the company was notified of this lawsuit, and two months after the conditional certification was granted—to support a factual nexus. (The court rebuffed any notion that prejudice would result from denying a bid to decertify based on a policy that was not in existence at the time the collective was conditionally certified; certainly there were cases in which prejudice would result, but those circumstances were not present here).
The Five Star program was the company’s new means for measuring CE productivity. Some of the CEs said that the program discourages them from recording any time that is not tied to a specific work order (such as answering general emails or fielding work calls) because that time counts against the metrics used to calculate their “Five Star” score. One CE attested that he believed he would get a raise if he earned a strong Five Star score. Yet while some CEs are under the impression they can boost their productivity metrics by not recording pre- and post-shift work, managers countered that the Five Star program eliminates any such incentives by balancing a “utilization” metric against a “productivity” metric.
In the end, the plaintiffs failed to present evidence of how the Five Star program even works, let alone that it operates in such a way as to discourage CEs from reporting their time. And, even if such evidence had been produced, the court was persuaded by other courts which have rejected the notion that such programs can serve as evidence of an FLSA violation causing classwide injury. “Encouraging efficiency during working hours is not the same thing as encouraging unpaid overtime work,” said the court, “and a policy that does the former does not bind together as victims the people subject to that policy.”
Unwritten practice? The CEs could still prevail if they could demonstrate there was an unwritten practice of policies being applied (or ignored) in such a way that violates the FLSA. Indeed, the court noted, it was this inference that justified conditional certification. And while the lead plaintiff produced evidence that CEs were performing “plenty of off-the-clock work,” he did not present evidence of any pattern of “frequency, manner or duration” of such work so as to support an inference that NCR had a common policy or practice of violating the Act, for purposes of continuing certification of the collective. Nor was there evidence of “a nationwide culture or attitude that encouraged overtime work without pay.”
The CEs claimed that the handbook rules are “often broken,” and that they regularly work off the clock despite the employer’s express instructions. They gave a number of different reasons for not recording their time: it’s a “hassle,” their managers balk at the extra time (there was testimony that one manager lets CEs record no more than 10 or 15 minutes of work; another manager did not allow CEs to record any time for pre-shift activities), and NCR’s timekeeping system can only record time in increments of seven minutes, making it unfeasible to record shorter bursts of work. CEs variously said that they worked off-the-clock as a “matter of survival,” to “be a good employee,” or to “help out” their coworkers.
Each CE’s explanation was unique, and so was the work they performed. “Some worked off the clock for personal reasons, some did so because they did not believe their individual managers would apply NCR’s policies as written, and only some believed they might obtain a higher Five Star rating,” the court observed. “Some checked their email, some prepared their tools, and others made calls.” And in each instance, the individual managers retained discretion to approve the off the clock work and to reduce the pressures that the CEs might feel to work off the clock in the first place. Whether the CEs “were encouraged to work off-the-clock depends on the individual circumstances of each manager-engineer relationship and interaction.” These questions could not be broadly and efficiently resolved through collective litigation.
Disparate facts. Looking at the specific factors weighing for or against continued certification of the collective, the court first found there were disparate factual and employment settings in play. The CEs start their day at home, travel to remote locations spread across a geographic territory, and do not congregate together to perform their work. Although they generally perform the same tasks, they do so in isolation, their schedules dictated by individual managers and the unique needs of any given customer. There is no common supervision (for the most part) and their individual managers have discretion to approve overtime pay and to authorize extra work. The CEs did many different types of off-the-clock work; some were paid differently because they were subject to collective bargaining agreements, worked on special assignments requiring them to be on-call 24 hours a day, or worked under distinct state laws (i.e., California, Washington, and New York). These numerous differences favored decertification.
Affirmative defenses. Moreover, NCR’s various affirmative defenses would have to be applied individually to each CE. (Granted, some of these asserted defenses were unsound: the fact that some CEs are working under a CBA is not a sufficient reason to avoid a collective action, as the FLSA rights in question are independent of the collective bargaining process.) Still, “when decisions made by individual managers affect the pressures that employees feel to work off the clock the analysis of at least some of NCR’s affirmative defenses requires further individualized inquiry.”
The lead plaintiff argued this point, urging that NCR knew, or should have known, that the CEs were performing work off-the-clock based on the company’s own “policies, admissions, and data,” so no individualized inquiry would be needed. However, he failed to cite to the specific policies, admissions, or data that could establish such constructive knowledge. “Vague and unsubstantiated assertions that NCR’s affirmative defenses do not require individualized inquiry are insufficient,” wrote the court, finding the second factor weighed in favor of decertification as well.
Fairness and procedural concerns. The court also determined that the “myriad of individualized factual issues” raised in the case could not be resolved on a collective basis without the risk of “significant unfairness” to the employer here. The lead plaintiff failed to present a thoughtful trial plan; he failed to explain “how to minimize or eliminate the difficulties associated with managing a collective action of nearly 1,600 customer engineers in a case where his claims depend on using the collective testimony of those engineers to encourage the trier of fact to draw an inference about the existence of a nationwide, unwritten policy or practice.”
Although he pointed to classwide data that could simplify damages calculations, he offered nothing in the way of classwide proof to establish liability. There was no effective use of subclasses or bifurcation here to simplify the initial determination of liability. The plaintiffs’ theory of liability is “largely dependent on circumstantial inferences drawn from voluminous individual testimony,” but he has no plan “for managing the large number of witnesses that would need to testify or the potentially voluminous documents that would likely be necessary to establish liability on a class-wide basis for the theories he relies on.” The case at hand is not as simple as reading the company handbook or the terms of the Five Star program, or of securing the testimony of a few executives responsible for the unlawful unwritten practices or policies. But the plaintiff offered little more than “unpersuasive assurances that he and his fellow customer engineers would limit their presentation to the trial testimony of a representative subset of the collective.”
Sampling. Nor could he offer a reason why such a sampling would prove as easy as he says—or as reliable to establish liability as to each class member. The problem here is that, “to the degree the deposition testimony hints at the existence of an unwritten policy or procedure, that unwritten policy or procedure played out only in the context of individual manager-engineer relationships around the country,” the court said. Consequently, “sampling would be of little help because the other members of the collective could not rely on representative testimony to establish that the same violation occurred in their case; whether it did would depend on whether their managers approved overtime or took other actions to alleviate any pressures they might have felt to work off-the clock.”
“There are some instances when sample evidence can be a trustworthy and efficient proxy for a larger body of evidence but, at the least, such sampling usually requires the use of statistical methods to create a random assortment of collective members as witnesses,” the court noted. Here, the lead plaintiff offered no explanation of what type of sampling methods he would use “or how he might go about selecting a truly random, representative sample of customer engineers to testify.” Undermining his sampling strategy, the court added, is that only 36 of 81 plaintiffs subpoenaed by the employer actually appeared for their depositions—casting doubt on whether the plaintiff could in fact obtain testimony “from anyone other than the representatives most interested in winning the case—a subset that is not representative of the collective as a whole.” What’s more, it was unclear how the chosen sample of CEs could assuage concerns that some CEs were underreporting their pre- and post-shift time “for any of the many benign reasons that were suggested during their depositions.”
Again, the need to individually prove damages is not reason enough to certify a collective. However, in this case, “the factual complexities extend not only to the issue of damages but to the threshold issue of liability as well.” The plaintiff’s theory depends on producing enough CEs to testify “that a trier of fact will be able to infer the existence of a nationwide unwritten policy or practice that violates the FLSA. The use of circumstantial evidence to encourage this type of inference is permissible, but [the plaintiff] has not marshaled enough evidence to suggest that it is possible here.”
Lunch breaks and other claims. For similar reasons, the court also decertified the CEs’ claims that they performed off-the-clock work during meal breaks and on their days off. The plaintiff’s mealtime claims allege that CEs answered calls, texts, and emails during their lunch breaks, but offered no facts to show that NCR required or even encouraged them to do so. And again, each CE gave different explanations for why they worked during meals or on their days off—none of which appear to have been based on a companywide policy or practice, the legality of which could be determined on a collective basis.
Interested in submitting an article?
Submit your information to us today!Learn More
Labor & Employment Law Daily: Breaking legal news at your fingertips
Sign up today for your free trial to this daily reporting service created by attorneys, for attorneys. Stay up to date on labor and employment legal matters with same-day coverage of breaking news, court decisions, legislation, and regulatory activity with easy access through email or mobile app.