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O'Hearn v. Les Schwab Warehouse Center, Inc.

United States District Court, W.D. Washington, Seattle

November 24, 2014

RICHARD O'HEARN, individually and on behalf of all others similarly situated, Plaintiff,
v.
LES SCHWAB WAREHOUSE CENTER, INC. and LES SCHWAB TIRE CENTERS OF WASHINGTON, INC., Defendants.

ORDER

THOMAS S. ZILLY, District Judge.

THIS MATTER comes before the Court on plaintiff's motion for class certification, docket no. 20. Having reviewed all papers filed in support of, and in opposition to, plaintiff's motion, the Court enters the following order.

Background

Defendant Les Schwab Tire Centers of Washington, Inc. ("Les Schwab") operates 114 stores in Washington. Hueske Decl. at ¶¶ 2 & 4 (docket no. 25). Les Schwab is affiliated with defendant Les Schwab Warehouse Center, Inc. ("LSWCI"), but neither defendant is the parent or subsidiary of the other. See id. at ¶ 2; Corporate Disclosure Statement (docket no. 8). Les Schwab stores provide a limited range of parts and services for motor vehicles, including replacement wheels and tires, as well as brake, battery, and alignment services. Hueske Decl. at ¶ 5. Some Les Schwab stores focus exclusively on passenger vehicles or "retail" customers, while others have a mix of business, including maintenance of fleets, construction or logging equipment, commercial trucks, and/or farm or ranch equipment, depending on location. Id. Les Schwab has a decentralized structure in which each store operates like an independent business, with a store's management having almost complete control over how its own store is run. Id. at ¶ 12.

Les Schwab stores generally open at 8:00 a.m. six days a week, and close at 6:00 p.m. on weekdays and 5:00 p.m. on Saturdays. Id. at ¶ 6. The hours may vary by store and as a result of weather or business conditions. Id. Prior to January 1, 2013, Les Schwab stores generally had a Store Manager, one or more Assistant Managers, and hourly positions in three departments, namely Sales & Service, Brake & Alignment, and Sales & Administrative. See id. at ¶ 8; O'Hearn Decl. at ¶ 8 (docket no. 22-19). Store Managers are entitled to four weeks of vacation per year, generally do not work every other Saturday, and might be away from their stores for meetings, training, or other business reasons; when the Store Manager is absent, an Assistant Manager supervises the store. See Hueske Decl. at ¶ 19.

Until January 1, 2013, Assistant Managers were compensated on a salary and profit-sharing basis, and were not paid for overtime. Id. at ¶¶ 13, 32-33 (indicating that, between November 2010 and December 2012, Store Managers and Assistant Managers shared roughly 30-40% of the net profits of their respective stores); see also Ex. Z to Breckenridge Decl. (docket no. 21-32) (indicating that, on average, Assistant Managers earned in excess of $80, 000 per year). Effective January 1, 2013, Assistant Managers became hourly employees, and the second and third Assistant Manager positions were eliminated. Hueske Decl. at ¶¶ 32-34; see Bodin Decl. at ¶¶ 4-5 (docket no. 22-3).

Les Schwab had been in the process of phasing-out the second and third Assistant Manager positions since 2008. Hueske Decl. at ¶ 34. In 2008, Les Schwab established a training program via which hourly employees could get promoted to Assistant Manager. Id. at ¶ 21. Under this program, a trainee would hold the newly created, hourly position of Sales & Service Professional for approximately two years, and then be eligible for promotion. Id. at ¶¶ 21-22. Thirty-six of the 114 stores in Washington now have a Sales & Service Professional. Id. at ¶ 21. When the remaining second and third Assistant Manager positions were eliminated in 2013, the individuals holding those jobs were allowed to work for one year as a Sales & Service Professional. Id. at ¶ 34. If, at the end of the transition year, they did not secure an Assistant Manager position, they could opt to work in the Sales & Service department. Id. Many of them, including plaintiff Richard O'Hearn, elected instead to quit. Id.; O'Hearn Decl. at ¶ 5.

Plaintiff was a second Assistant Manager at Store No. 304, located in Bothell, Washington, from February 2005 until December 2012, and a Sales & Service Professional at the same store from January 2013 until July 2013, when he resigned. O'Hearn Decl. at ¶¶ 3, 5, 8. In this litigation, he makes three claims under three different Washington statutes, namely RCW 49.46.130, RCW 49.48.010, and RCW 49.52.050. Complaint at ¶¶ 53-70 (docket no. 1). The crux of his claims is that Les Schwab's Assistant Managers are not exempt from Washington's requirement that employees be compensated at 1½ times their regular rate for work in excess of forty hours per week. See RCW 49.46.130(1); see also RCW 49.46.010(3). In this motion, plaintiff asks the Court to certify a class of all Assistant Managers employed by Les Schwab stores in Washington during the three-year limitations period and until December 31, 2012, [1] who were classified as "exempt" from Washington's overtime pay regulations.[2] See Motion at 14 (docket no. 20 at 21).

Plaintiff suggests "[t]his has been done before." Id. at 1 (docket no. 20 at 8). He points to cases in Oregon and California in which a similar class was certified, and indicates that "it's Washington's turn." Id. In support of his certification request, plaintiff contends that the Oregon and California cases are analogous to this one, and that Les Schwab and LSWCI collectively control "all aspects" of store operations through detailed policies, manuals, and job descriptions, as well as training programs. His basic premise is that Les Schwab and LSWCI together ensured uniformity among all Assistant Managers in Washington with respect to their daily activities, which did not qualify them as "exempt" from overtime compensation. Plaintiff argues that any variation in the responsibilities of Assistant Managers from store to store did not alter the nature of their "primary duty, " which did not distinguish them from non-exempt, hourly employees.

Contrary to plaintiff's assertion, however, the order certifying an "overtime subclass" in the Oregon case, Ellis v. Les Schwab Tire Ctrs. of Portland, Inc., Ex. H to Hollingsworth Decl. (docket no. 24-1 at 185-203), which did not apply the standards for class certification that govern in federal court, and which predated the United States Supreme Court's decision in Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541 (2011), is of no persuasive value. Indeed, in the Oregon case, unlike in this case, the five defendants (only one of which, namely LSWCI, is also sued in this case) did not even dispute that the commonality requirement for class certification had been met. Order at 9 (docket no. 24-1 at 193). In addition, the two California cases on which plaintiff relies involved classes certified solely for settlement purposes, see Hueske Decl. at ¶¶ 27-29; see also Stipulation at ¶ 2.7, Rogers v. Les Schwab Tire Ctrs. of Cal., Inc., Ex. E to Breckenridge Decl. (docket no. 21-5 at 13) ("Defendant... denies that, for purposes other than the settling of this Action, any part of this Action is appropriate for class treatment."), and a third case from California, which was before the same judge as one of the two cases cited by plaintiff, Hueske Decl. at ¶ 27, contradicts plaintiff's representation that certification of the proposed class "has been done before, " see Gerard v. Les Schwab Tire Ctrs. of Cal., Inc., Ex. G to Hollingsworth Decl. (docket no. 24-1 at 176-183).[3]

As a result, the Court now begins its analysis with the proverbial clean slate. Having thoroughly reviewed the materials submitted by the parties, the Court concludes that the record does not reveal the type of homogeneity among Assistant Managers concerning their duties or the manner in which their duties were performed that would justify certifying a class.

Discussion

A. Standard for Class Certification

Rule 23 operates as "an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only." Comcast Corp. v. Behrend, 133 S.Ct. 1426, 1432 (2013) (quoting Califano v. Yamasaki, 442 U.S. 682, 700-01 (1979)). To maintain a class action, plaintiff must "affirmatively demonstrate" compliance with Rule 23. Id. (citing Wal-Mart, 131 S.Ct. at 2551). The prerequisites of Rule 23 are not mere pleading standards, but rather are evidentiary thresholds. Id. Thus, plaintiff bears the burden of proving, not just simply alleging, that all four requirements of Rule 23(a) are satisfied, and that ...


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