Second Circuit Vacates and Remands Certification in Misclassification Class Action

In an unpublished opinion, the Second Circuit vacated the Southern District of New York’s order in Cuevas v. Citizen’s Financial Group certifying a Rule 23 class of assistant branch managers (ABMs) who claimed they were misclassified as exempt.

The Second Circuit agreed with the company that in deciding the plaintiff satisfied the commonality requirement under Rule 23(a), the district court failed to resolve factual disputes regarding the ABMs’ duties. Although the plaintiff had submitted policy documents and job descriptions that suggested the ABMs performed primarily the same duties company-wide, many of the declarations submitted to the district court from the ABMs, bank managers, regional managers, and others suggested that the ABMs’ primary duties varied in material ways. The Second Circuit held that these factual disputes must be resolved to determine whether the claims in the case were capable of class-wide resolution, as required by Dukes. The Second Circuit instructed the district court, on remand, to conduct a more rigorous analysis to make this determination.

For the same reasons, the Second Circuit agreed with the company that the district court erred in concluding Rule 23(b)(3)’s predominance requirement was satisfied. Again, the district court relied on company-wide policies and the bank’s classification of all ABMs as exempt to determine that common issues predominated over individual ones. Reiterating its prior holding in Myers v. Hertz Corporation, 624 F.3d 537, 548 (2010), the Second Circuit stated that determining whether employees are exempt from overtime “should be resolved by examining the employees’ actual job characteristics and duties.” Thus, the Second Circuit concluded, it was essential for the district court to examine all of the evidence before it and resolve the disputed facts to determine whether the ABMs “actually share primary duties such that common issues predominate over individual ones.”

In closing, the Second Circuit noted its decision should not be read to hold certification is never appropriate in misclassification cases. Rather, there must be a rigorous analysis of the record, weighing and resolving conflicting evidence and factual disputes, and a determination that the questions relating to exemption classification can be resolved by evidence applicable on a class-wide basis. Thus, in seeking to defeat class certification in misclassification cases in the Second Circuit, as elsewhere, employers should continue to focus on the material factual disputes and differences in employees’ actual job duties.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.