“Single, Company-wide Time-shaving Policy” Can Consist Of “Multiple Methods” In FLSA Collective Action
Last week, in Monroe v. FTS, USA, a divided panel of the Sixth Circuit affirmed the certification of a class of workers as sufficiently “similarly situated” under the Fair Labor Standards Act, holding that they were subject to “a single, company-wide time-shaving policy,” even though time was shaved via three separate methods. Some managers simply altered class members’ timesheets to reduce hours, some explicitly ordered class members to under-report their hours, and some pressured employees to under-report by “threat of reprimand, loss of work assignments, or termination.”
The decision cemented a split between the Sixth and Seventh circuits on what it means to be “similarly situated” under the FLSA. Under Rule 23, class members are not similarly situated when “individualized questions predominate,” and the Seventh Circuit applies this same standard to FLSA collective actions. However, the Sixth Circuit has held that “Congress could have but did not import the Rule 23 predominance requirement into the FLSA.” Although the majority also distinguished the recent Seventh Circuit case, Espenscheid v. DirectSat USA, on factual and procedural grounds, it specified that the “controlling distinction” was the difference in standards.
Dissenting from the affirmation of class certification, Judge Sutton argued that the different methods used to shave time were different theories of liability requiring different proof, and that, even under the Sixth Circuit’s statutory interpretation, two or three subclasses should have been certified instead of a single class.
Unlike Espenscheid, which challenged a pretrial certification, the appeal in Monroe came after a full trial and verdict. That, as well as the Sixth Circuit’s acknowledgment of a circuit split, make Monroe a viable contender for SCOTUS review. It will be interesting to see whether defendants pursue that option.