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Southern District Declines to Consider Declarations Proffered by Employer in Granting Rule 23 Class Certification Of NYLL Claims

In Benavides v. Serenity Spa NY, Inc., the Court granted the plaintiffs’ motion for class certification of their minimum wage and overtime claims under the New York Labor Law (“NYLL”). See No. 15-CV-9189 (JLC) (S.D.N.Y. Sept. 1, 2017). In so doing, the Court declined to consider the declarations of five employees submitted by the employer in opposition to the motion. The Court’s ruling highlights the need for employers to exercise care in developing an evidentiary record to oppose class certification.

First, the Court found that the employer failed to demonstrate that the declarants had notice of their rights and how their declaration testimony might affect their interests. While the employer argued that the declarants had notice of their rights by virtue of the “court-authorized notice” that was sent to employees following conditional certification of an FLSA collective, the Court found the declarations to be dated prior to the date upon which such notice would have been received. The Court noted that this issue might have been avoided had the declarants attested in their declarations that they were aware of their rights, but that they failed to do so.

Second, the Court found that because the declarations were from current employees, they may have been obtained under coercive circumstances. As a policy matter, the Court held that permitting the use of such declarations would incentivize defendants to engage in “improper and potentially coercive communications with members of a putative class.” Although the Court did not rule that current employee declarations could never be considered in connection with a class certification motion, the Court found it problematic in this instance given, as discussed above, the absence of information demonstrating that the declarants were on notice of their rights.

Third, the Court found the declarations to be of limited evidentiary value. Each of the declarants testified that they were paid the minimum wage and overtime in compliance with the FLSA and NYLL. However, the Court held that such testimony did not bear on the inquiry it faced on the pending motion: “whether plaintiffs’ claims depend upon a common contention of such a nature that it is capable of classwide resolution and whether a classwide proceeding is capable of generating common answers apt to drive the resolution of the litigation.”

Employers must be cognizant of the various pitfalls that exist in communicating with putative class members, particularly where their help is enlisted to defend a lawsuit. As Benavides makes clear, ensuring that potential declarants are on notice of their rights and the effect that their execution of a declaration may have on their claims is paramount. An employer would be well served to memorialize the steps it has taken to provide such notice including, for example, appending an executed “Notice of Rights” to the executed declaration, also signed by the declarant, setting forth disclaimers concerning the effect of the declaration, the voluntary and non-coercive nature under which it was obtained, and the right to seek independent counsel, among others.

Copyright © 2017, Sheppard Mullin Richter & Hampton LLP.

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About this Author

Brian D. Murphy, Labor and Employment Legal Specialist, Sheppard Mulllin
Attorney

Brian D. Murphy is an associate in the Labor & Employment practice group in the firm's New York office.

Areas of Practice

Mr. Murphy has extensive experience in all areas of labor and employment law, including discrimination and wrongful discharge cases, wage and hour cases, restrictive covenant and non-competition agreements, breach of contact cases, arbitrations and collective bargaining. Mr. Murphy has also focused on class and collective wage and hour litigation in New York and California federal and state courts. He also advises clients on matters...

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