Labor & Employment Law Daily Expert’s time and motion studies admissible but not his conclusion assistant managers were FLSA-exempt
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Wednesday, September 25, 2019

Expert’s time and motion studies admissible but not his conclusion assistant managers were FLSA-exempt

By Lisa Milam, J.D.

Burlington Coat Factory assistant managers said they performed mostly nonexempt work. A time and motion study by the defendant’s expert classified certain tasks as exempt without foundation.

In a long-running overtime collective action brought by Burlington Coat Factory assistant store managers who claim they were misclassified as overtime-exempt, a federal court granted in part the employee’ motion to preclude the employer’s expert testimony. His time and motion study was admissible, the court found after a Daubert hearing, rejecting the employees’ contention that his methodology was unreliable. But the expert’s ultimate conclusion that the employees spent the majority of time performing managerial studies, and thus were properly deemed exempt from overtime, lacked foundational support. The expert’s conclusion that individualized inquiries were needed to determine the managers’ exempt status was also stricken from the report (Goodman v. Burlington Coat Factory, September 19, 2019, Rodriguez, J.).

Overtime suit. The plaintiff, who worked at a Burlington store from 2005 to 2009, filed suit alleging that he and other assistant store managers (ASMs) were misclassified as exempt and shorted on compensation for the overtime hours they worked. The ASMs claimed they spent the majority of their time doing the same nonexempt duties performed by their hourly subordinates, such as working on the sales floor, unloading trucks, stocking shelves, cashiering, and cleaning the bathrooms. The plaintiff asserted that “the company wanted 80 to 90 percent of the time to be doing floor work, not supervising,” and said the managers were told that if they were in their office more than 10-20 percent of their time, then they “weren’t doing their job.” The court conditionally certified the FLSA collective action.

FLSA litigation expert. Burlington brought in a labor studies and complex data analysis expert to testify to the ASMs daily work activities and evaluate the nature of those activities to prove that they are properly classified as exempt employees, and also to establish that they are not similarly situated for purposes of pursuing a collective action. The expert devised a time and motion study to evaluate the daily tasks performed by 60 ASMs in various Burlington stores—randomly selected from those ASMs who, for whatever reason, were not part of the opt-in class.

He hired observers to shadow the ASMs and to track and log their daily activities to discern the percentage of their primary duties that are managerial. Observers were instructed to classify the discrete tasks performed by the ASMs as “managerial,” “nonmanagerial,” or dual.” Within these categories were sub-tasks preselected by the expert and designated by him into one of the three categories. Each time the ASM performed a task, the observer would push a button associated with the activity and the area of the store where the activity was performed. Every time a button was pushed, a record was created in the database, which recorded the activity, location in the store, start time, and duration.

Conclusions. The expert presented a statistical analysis of the findings, which concluded that more than 50 percent of the ASMs’ work time on both a daily and weekly basis was spent on managerial duties; he also reported that the “wide variation” in the nature of the ASMs’ work made it hard to predict the amount of managerial time spent by the ASMs as a whole—and “significantly undercuts” their assertion that they are similarly situated for class certification purposes. The plaintiffs moved to preclude the expert’s report as unreliable.

Wrong universe of workers? The ASMs argued that the study was “inherently unreliable” because it observed the “wrong universe of workers,” as it did not observe any opt-in plaintiffs. Indeed, the expert was “careful to avoid” any opt-in plaintiffs in his sample. But the court said that the findings regarding the sample population were “sufficiently reliable to inform the potential behavior of the opt-in Plaintiffs,” adding that “Courts in this Circuit have permitted behavioral evidence of populations that are not part of the proposed class as reliable evidence against an opt-in subset of that population.”

The employees’ argument in support of final certification undermined their objection here: The ASMs’ main assertion in support of their bid for final certification was that the company’s comprehensive policies and procedures defined their job duties in a uniform way. “Using that barometer of similarity, observation of ASMs, even those who did not choose to opt-in, is informative and has the sufficient hallmarks of a reliable study,” the court concluded. The expert’s “attempt to extrapolate conclusions based upon a sample population of ASMs who chose not to opt-in to inform the expected behavior of the opt-in class is admissible, useful, and reliable.”

The expert conceded he lacked comparative data on the opt-in plaintiffs. While this might be deemed a deficiency in his methodology, the court said it was not so deficient that it would undermine the admissibility of the study. To the extent his findings are based on a class of employees not named in the current dispute, they are subject to scrutiny—but any such challenge would go to the weight and value of the findings, not to their inherent reliability or admissibility, the court explained.

Data points without context. The employees also argued that the expert had made an impermissible legal conclusion that more than 50 percent of the ASMs’ activities were managerial and also that this conclusion lacked sufficient foundation and information. According to the plaintiffs, the expert’s descriptions of activities as managerial “pigeonholed” his team in determining the nature of the tasks observed. Exacerbating the erroneous methodology, they argued, was that observers were instructed to purposefully avoid actually interacting with the ASMs as they shadowed them, so they gained no further insight into the nature of the tasks the ASMs were engaged in at any given time.

Managerial in the eye of the beholder? For example, if an ASM was seen stocking a shelf alongside a subordinate, the observer would code that time as managerial because the ASM may have been training the associate or coaching the employee to work faster. Or, the ASM might simply have been stocking the merchandise. Observers were instructed to avoid communicating with the ASMs; they did not inquire as to why the ASM was performing the task. “Without talking to the ASM or obtaining declarations, there is no way, other than to guess, what the purpose of the ASM’s activities are.” Likewise, when ASMs even spoke to associates these moments were categorized as managerial. But “[u]nrecorded conversations between two people at work, regardless of their hierarchal relationship, could be anything from friendly small talk, to mentoring, to managing,” the court noted.

Therefore, while the expert can opine as to what was observed, how much time was spent on each observation, the manner in which it was coded and categorized, and how he trained the observers in making the coding determination, he could not offer his conclusion that the ASMs performed managerial work a majority of the time. Because he lacked context for certain observations of the tasks performed or sufficient foundational evidence, the “gap in observation and unsupported speculation is too great to lend reliability” to this overall conclusion, the court explained. Again, while the report is admissible with the impermissible finding stricken, the expert’s methodology is subject to challenge on cross-examination.

Class certification. Nor could the defense expert offer his opinion that the nature of the tasks performed by the ASMs was too variant to permit classwide resolution. The expert asserted that the significant variation in the ASMs’ work experiences meant that any attempt to extrapolate the individual situations of the shadowed ASMs to the 250 or so class members would result in significant error. As such, individualized inquiries would be needed to determine the amounts of time “absent” ASMs spend on specific tasks and managerial duties overall. But the court held this finding lacks foundation and was an impermissible legal conclusion.

The plaintiffs also moved for final certification of their collective action, and Burlington filed a motion to decertify the action. The court presented a number of facts related to the merits of the certification issue: The same job descriptions apply to all ASM positions across the United States, regardless of the store’s location, size, or hours of operation, and only one job description is in effect at any given time. They are subjected to the same uniform training requirement. Burlington compensates all ASMs in the same manner and classifies them all as exempt regardless of the individual ASM’s tenure, his or her supervisor or manager, or the store’s location, size, sales volume, or hours of operation. All ASMs are subject to the same policies and procedures regardless of the store’s size, location, or geographic region in which they work. However, the court tabled a ruling on the merits, noting that it would issue a separate opinion and order within the next few weeks.

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