Dell FLSA Class Action Defense Cases–Norman v. Dell: Oregon Federal Court Certifies FLSA Class Action Against Dell But Denies Without Prejudice Request To Certify Class Action Of State Law Claims

Jul 17, 2008 | By: Michael J. Hassen

Class Action Complaint Alleging Violations of Federal Fair Standards Labor Act (FLSA) and of Oregon State Labor Laws Conditionally Certified as a Class Action as to FLSA Claims but Denied Without Prejudice as to State Law Claims Oregon Federal Court Holds

Plaintiffs filed a class action complaint against Dell Inc. and other defendants alleging violations of the federal Fair Labor Standards Act (FLSA) and Oregon’s state labor laws; the class action alleged that plaintiffs are “consumer sales representatives” (CSRs) who sell Dell computers via telephone, and that Dell (1) misclassified CSRs as exempt from overtime pay, failed to properly pay incentive compensation, and required CSRs to work “off the clock.” Norman v. Dell Inc., ___ F.R.D.___ (D.Or. July 14, 2008) [Slip Opn., at 1, 3]. Plaintiffs’ lawyer moved the district court to certify the litigation as a class action, id., at 1; specifically, plaintiffs sought an order conditionally certifying the class action complaint’s FLSA claims, and an order certifying under state law a class action of the complaint’s state labor law claims, id., at 2. Defense attorneys opposed any class action treatment. Id., at 1. The district court granted the motion with respect to the FLSA claims, but denied the motion without prejudice as to the state law claims pending expiration of the opt-in period for the federal claims and briefing as to the impact on the opt-in response on certification of the state class action claims. Id., at 2.

The federal court addressed first the request for certification of the FLSA claims. After noting that federal law does not define “similarly situated” under the FLSA, the court utilized the two-tier approach followed by most federal courts. Norman, at 2-3. The first step considers whether, “based on the pleadings and affidavits submitted by the parties,” notice should be given to the putative class, and employs a “fairly lenient standard” that, in the court’s opinion, usually results in class certification. Id., at 2. The second step involves a motion by defense attorneys to decertify the class action following completion of discovery, id., at 3. At the first stage, however, courts look only to whether there are “substantial allegations that the putative class members were subject to a single illegal policy, plan or decision,” but plaintiffs may not rely solely on the allegations in their class action complaint. Id. Under that standard, the district court concluded that plaintiffs adequately established that Dell policies and practices with respect to compensation of the putative class members is essentially uniform, id.

With respect to plaintiffs’ motion to certify a class action with respect to the state law claims, the district court ruled that the motion is “denied without prejudice to refile after the period to opt-in to the collective action has expired.” Norman, at 6. The court directed that the subsequent motion must be “new and focused and address…the opt-in activity during the collective action opt-in period.” Id.

NOTE: The district court agreed with defense attorneys that the class action should not include part-time employees, as they were paid on an hourly basis, Norman, at 4, and additionally agreed that the class does not include CSRs who worked in Roseburg, Oregon, id., at 5. The court refused a defense request to exclude Oregon employees from the class action, id., at 5.

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