Chipotle recently obtained decertification of a conditionally certified collective action of salaried “apprentices” under Section 216(b) of the Fair Labor Standards Act (“FLSA”) in Scott et al. v. Chipotle Mexican Grill, Inc. et al., Case No. 12-CV-8333 (S.D.N.Y. Mar. 29, 2017), a case in New York federal court involving claims of unpaid overtime based on misclassification. In that case, Chipotle effectively leveraged disparities between the job duties and activities of putative class and collective action members across six states to show that they were not similarly situated.
Chipotle could not repeat its success in a more recent FLSA collective action brought by plaintiff employees and former employees filed in Minnesota federal court. In Harris et al. v. Chipotle Mexican Grill, Inc., Case No. 13-CV-1719 (D. Minn. June 12, 2017), hourly employees who worked in Chipotle’s Crystal, Minnesota restaurant asserted claims for unpaid wages and overtime under the FLSA and Minnesota law. The Minnesota federal court found that the named and opt-in plaintiffs were similarly situated for purposes of pursing their claims in an FLSA collective action, and denied Chipotle’s motion to decertify.
In Harris, five named plaintiffs holding various hourly positions – including crew member, kitchen manager and service manager – claimed that Chipotle had a company-wide unwritten policy of requiring hourly employees to work “off the clock” without pay. Specifically, the plaintiffs alleged that after the restaurant stopped serving the public and the closing shift ended, employees were required to clock out and continue working until the restaurant was fully cleaned and all work was completed. Chipotle’s timekeeping system also reset at a certain time each night, automatically clocking out any employee who had not already done so. These unwritten policies, the plaintiffs alleged, resulted in hours of unpaid work time each week.
Early on in the Harris litigation, the court conditionally certified as a collective employees at Chipotle’s Crystal, Minnesota restaurant who either (1) were automatically punched off the clock by the timekeeping system and continued to work, or (2) otherwise worked “off the clock” during closing shifts, resulting in non-payment of regular wages or overtime wages. Twenty-three opt-in plaintiffs subsequently filed a consent to join the collective action.
Chipotle argued in its recent motion to decertify that the only “superficial common thread” binding the putative collective action members was the location of the restaurant at which they worked, and that the alleged unpaid after-hours work stemmed from scattered and unrelated causes, rather than a common policy (i.e., managerial directive versus automatic clock-out, among other reasons). Disagreeing with Chipotle’s argument, the court pointed out that the FLSA collective it had conditionally certified encompassed both types of off-the-clock work, and noted that the collective was “limited to a single store, a single shift, and to a relatively small number of plaintiffs who worked in generally three positions (crew member, kitchen manager, and service manager), for a limited number of general managers and apprentice managers.” The court also rejected Chipotle’s contention that the alleged FLSA violations were attributable to different types of work for varying amounts of time. To the contrary, the court held, the collective action members at issue performed the same duties in one restaurant: cleaning, counting money, prepping food, locking up, and attending meetings. Viewing the facts in this context, the court held that decertification was not appropriate.
The court further found that Chipotle’s assertion of individualized defenses against certain named and opt-in plaintiffs similarly did not warrant decertification, including the following: (1) lack of notice to Chipotle of any work performed after an automatic clock out due to the timekeeping system’s nightly reset; (2) lack of evidence that managers issued directives to work off-the-clock; (3) certain types of activities allegedly performed by the plaintiffs did not constitute compensable work; (4) work allegedly performed off-the-clock was de minimis and therefore not compensable; (5) employees failed to utilize Chipotle’s procedures for accurately recording hours or remedying errors in recorded work time; and (6) criminal history of certain plaintiffs affecting their credibility. The court held that each of these defenses went to the merits of the plaintiffs’ claims and did not weigh in favor of decertification.
Based on the lack of discernible differences among the named and opt-in plaintiffs, the court found that the issues in the case were appropriate for classwide resolution and that a collective action would serve the interests of judicial economy and more efficiently resolve the plaintiffs’ claims.
* * *
The Harris decision highlights the types of issues owners/operators in the hospitality industry face when defending against collective actions under the FLSA, even those in which the universe of putative plaintiffs may be small or limited to one or two locations. Minor nuances in the nature of work performed, variety in the reason for the work, and individualized defenses that go to the merits of the claims at issue may not be sufficient to decertify a collective action. In seeking to obtain decertification, owners/operators should emphasize as many disparities as possible in the policies and practices governing work time and timekeeping that may result in differences that would prevent a putative collective group of employees from being considered a similarly situated class.