Pennsylvania Federal Court Decertifies FLSA Off-the-Clock Collective Action Against Citizens Bank

In Martin v. Citizens Financial Group, Inc., No. 2:10-cv-00260 (E.D. Pa. Mar. 27, 2013), Judge Goldberg of the Eastern District of Pennsylvania decertified an FLSA collective action involving 843 opt-in plaintiffs who had worked in a variety of hourly positions at over 1,000 bank branches in nine states. The plaintiffs alleged that the defendant’s unlawful practices included prohibiting employees from recording all time worked in excess of 40 hours in a week, erasing or modifying employees’ time records to eliminate or reduce overtime hours, providing “comp time” in subsequent weeks in lieu of paying overtime, and requiring employees to work during unpaid breaks. The district court held that the plaintiffs had failed to establish they met the FLSA’s “similarly situated” requirement.

Although the court found the plaintiffs’ evidence tended to establish that the putative class members may have been denied overtime, the plaintiffs were unable to produce “substantial evidence of a single decision, policy, or plan” that affected employees in the same way. Rather, the plaintiffs reported that the overtime denial decisions were made independently, either at the branch or regional level, and were in direct conflict with the company’s written policy requiring compliance with all state and federal overtime compensation rules. The court noted that the 435 declarations submitted by the plaintiffs themselves showed frequent disparities in the methods in which the plaintiffs alleged they were denied overtime.

The district court also found that the company’s individualized defenses weighed against certification. First, the district court noted contradictions between the plaintiffs’ and managers’ declarations as to whether overtime was denied. “In order to resolve the question of liability, a fact-finder would need to determine whether the employee or the manager was being truthful,” and resolving the dispute as to one plaintiff and one manager would not resolve the issue for any of the others. Second, the district court found that cross-examination about statements by particular plaintiffs in their declarations and depositions would not resolve credibility disputes as to other plaintiffs. Such individualized defenses “destroy the efficiency sought to be gained through a collective action.”

Finally, the court found that a representative sampling of plaintiffs would prejudice the parties. The court stated that “the multitude of differences in the factual and employment settings of Plaintiffs, Plaintiffs’ inability to provide evidence of an overarching illegal policy, and concerns of individualized defenses, . . . [as well as] fairness and procedural considerations” required decertification. Although mindful of the potential problem that would result if hundreds of opt-in plaintiffs initiated suits on an individual basis, the court noted that “lower costs and pooling of resources are not the only considerations. Any efficiency gained through bringing this action collectively would be outweighed by the substantial likelihood of ‘mini-trials’ and the risk of prejudice to both parties.”

While this case provides additional case authority to support decertification arguments such as individualized factual settings and the resulting “mini-trials,” it is perhaps most helpful in its commentary on the need to resolve, on an individualized basis, factual disputes and credibility issues.

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