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Goodman v. Burlington Coat Factory

United States District Court, D. New Jersey

September 19, 2019

STEVEN GOODMAN, et. al. Plaintiffs,
v.
BURLINGTON COAT FACTORY, et. al., Defendants.

          OPINION

          HON. JOSEPH H. RODRIGUEZ, UNITED STATES DISTRICT JUDGE.

         These matters come before the Court on several motions of the parties: Plaintiffs' Motion [338] to Preclude the Testimony of Robert Crandall, Pursuant to Daubert v. Merrell Dow Pharmaceuticals. Inc. 509 U.S. 579 (l993); Defendants' Motion [341] to Decertify the Class; Plaintiffs' Motion [348] to Certify Class - Final Certification of Fair Labor Standards Act Collective Action; and Plaintiffs Motion [350] To Seal Exhibits Al-Ay of Plaintiffs' Motion For Final Certification of Fair Labor Standards Collective Action. This Opinion addresses Plaintiffs' Motion [338] To Preclude Testimony of Robert Crandall and Motion [350] To Seal.[1]

         Over the course of four non-consecutive days, the Court conducted a Daubert hearing on the admissibility and reliability of the testimony of Defendants' expert, Robert Crandall.[2] In addition, the Court heard argument on the competing motions to certify and decertify. The Court has considered the initial written submissions of the parties, the testimony and arguments presented at the hearings on December 8-9, 2015 and March 16-17, 2016, and the supplemental briefing submitted by the parties. The Motion to Preclude is denied in part and granted in part and the Motion to Seal is granted.[3]

         I. Factual and Procedural History

         The Court reincorporates the relevant factual background set forth in Goodman v. Burlington Coat Factory, No. 11-CV-4395 (D.N.J. Nov. 20, 2012). Burlington is a nationwide retail department store chain that sells merchandise through 465 brick-and-mortar stores in 44 States across the United States. Ansara Dep. Tr. 13. The named Plaintiff, Steven Goodman, worked as an operations manager at Burlington from approximately August 2005 until August 2009. Goodman Dep. Tr. 911; 182:9. Mr. Goodman alleges that Burlington misclassified him and other assistant store managers (ASMs)[4] as exempt under the FLSA and failed to pay them for all hours worked as well as overtime for hours worked above 40 in a workweek, in violation of the FLSA. Am. Compl. ¶1.

         Plaintiffs allege that Burlington's classification of the ASM position as "exempt" under the FLSA was wrongful, as ASMs perform non-managerial work "that requires little skill and no capital investment and their duties and responsibilities do not principally include any managerial responsibilities or the exercise of independent judgment" and ASMs "do not have the authority to hire or fire other employees, and they are not responsible for making hiring and firing recommendations." Id. at ¶ 29. Additionally, Plaintiffs claim that they spent the majority of their time performing work typically assigned to employees, such as working on the sales floor, opening boxes, ticketing merchandise, stocking shelves, cashiering, unloading trucks, and cleaning the bathrooms.[5] Plaintiffs complain that they were required to work more than 40 hours in a workweek and did not receive overtime compensation.[6]

         Through the testimony of its Rule 30(b)(6) corporate representative, Burlington indicates that all ASMs are subject to the same policies and procedures. Burlington creates an employee handbook, system of core values, code of business conduct and ethics, and workplace rules and policies that apply to all Burlington employees regardless of the store's size, location, or geographic region in which they work. Pls. Mot. Exs. A, L-R; Ansara Dep. Tr. 36-37, 42-47, 50-55- The same job descriptions apply to all ASM positions across the United States, regardless of the store's location, size, or hours of operation and only one job description is in effect at any given time. Ansara Dep. Tr. 82-83, 89, 9193. ASMs are subject to the same training requirements, as Burlington requires all new ASMs to attend a classroom-style training program, which is uniform throughout the country and taught by a Burlington Regional Human Resource Director. Ansara Dep. Tr. 29-30. Burlington also requires ASMs to complete computer-based e-learning modules and remain up to date through Burlington's internal intranet messaging system "portal.coat.net, " the content of which is the same for all ASMs across the country. (Ansara Dep. Tr. 69-71; Pis. Mot. Ex. J (E-learning modules)).

         Further, Burlington compensates all ASMs in the same manner and classifies all ASMs as exempt.[7] Burlington's Salary Guidelines Brochure and Mr. Ansara's testimony both indicate that all ASMs are paid a fixed annual salary and they do not receive overtime compensation. Pis. Mot. Ex. K (Burlington Salary Guidelines Brochure) at BCF 109-110; Ansara Dep. Tr. 99. Burlington classifies all ASMs as exempt from the overtime requirements of the FLSA, regardless of the individual ASM's tenure, the ASM's supervisor or manager, or the store's location, size, sales volume, hours of operation. Ansara Dep. Tr. 99-102.

         Burlington also commissioned an expert to evaluate the nature of the work that ASMs perform on a daily basis in order to prove that the ASMs are not misclassified as exempt under the FLSA and/or not similarly situated in a manner that compels class certification. Burlington's expert, Robert Crandall, is a frequent FLSA litigation expert who, infer alia, re-examines a company's qualitative data, including scheduling, timekeeping, customer flow, and payroll, and juxtaposes that data with employee job descriptions, performance evaluations and current employee declarations to formulate the likelihood of whether the company has misclassified certain employee positions. Crandall Curriculum Vitae, Crandall Report, Attachment A.

         Here, as will be discussed further in detail, Crandall created and implemented a time and motion study to evaluate the daily tasks performed by randomly selected ASMs in various Burlington stores. The study observed sixty (60) ASMs who are not part of the opt-in Plaintiff group and did not include any discussions with or declarations from these workers. Crandall's findings are laid out in a statistical analysis report, replete with attachments and exhibits which graphically depict his findings. The report is offered by Burlington as proof that the tasks performed by ASMs are not only primarily managerial but also demonstrate that the variance in the manner each ASM performs work significantly undercuts Plaintiffs' argument that they are similarly situated for class certification purposes.[8]

         The voluminous record evidence in this case includes expert testimony in support of the parties' competing certification motions. Both expert opinions bear directly on the Court's final certification considerations. Plaintiffs move to strike the opinion of Defendants' expert, Robert Crandall. Because the scope and content of Crandall's opinion materially impacts the final certification analysis, the Court will turn its attention to that motion first so that the contours of the Court's analysis on final certification are established.

         II. Motion to Preclude Expert Robert Crandall

         Plaintiffs move to strike Defendants' expert Robert Crandall pursuant to Daubert, 509 U.S. 579 and Fed.R.Evid. 702. Defendants offer Crandall as a labor studies and complex data analysis expert for the purpose of testifying to the daily work activities of ASMs in the Burlington Factory stores. The opt-in ASMs pursuing final certification aver that their activities were mischaracterized by Burlington as primarily performing managerial tasks which exempt them from overtime pay under the FLSA.[9]

         To challenge that assertion, Robert Crandall and his team from Resolution Economics studied the work performed by ASMs on a daily basis in order to discern the percentage of Plaintiffs' primary duties that are managerial under the FLSA. Crandall created a time and motion study and employed a number of "observers" to study a random population of ASMs who did not elect to join the class. Crandall opines that his job was to study and make conclusions related to the following:

1) the amount of time Burlington ASMs spend performing managerial duties; 2) whether the data supports the theory that Burlington's policies, practices, procedures, training, and supervision resulted in ASMs spending uniform and consistent amounts of time on the various tasks they perform and managerial tasks in the aggregate, 3) what factors influence the tasks that ASMs perform; 4) how Burlington's business model influences the role of the ASMs; 5) whether data suggests that Burlington's expectations that the ASM position is managerial is reasonable; and, 6) how my findings impact the use of representative testimony and statistical extrapolation in connection with class or collective certification and making merits determinations.

         Crandall. Dec. 1:12-26.

         Crandall's team randomly selected a population of sixty ASMs to observe at various Burlington store locations, careful to avoid any opt-in Plaintiffs.[10] During the course of one work week, Crandall's observation team captured 246, 000 work events during the 2, 473 hours of observation of the ASMs. Crandall Decl, 3:20-23. Crandall's conclusions are detailed in his report. In general terms, Crandall concludes that the observed ASMs allocated more than 50% fifty percent of their work time to managerial duties, there is a wide variation in the percentage of time ASMs allocate to managerial/dual tasks on both a day-to-day and weekly basis, and that the different cultures, traffic and other attributes in each Burlington store make it difficult to predict the amount of managerial time spent by the ASMs as a whole. Id. at 4:1-2; Crandall Report at 3-9.

         Plaintiffs move to preclude Crandall's report as unreliable under the dictates of Daubert.

         A. Federal Rule of Evidence 702 and Daubert

         The guiding principles that inform the Court's judgment are found in Federal Rule of Evidence 702 and Daubert, 509 U.S. 579. Federal Rule of Evidence 702 provides:

If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.

Fed. R. Evid. 702. Consistent with that Rule, Daubert established a "trilogy of restrictions" on the admissibility of expert testimony relating to scientific knowledge. See Calhoun v. Yamaha Motor Corp., 350 F.3d 316, 321 (3d Cir. 2003).[11] This "trilogy" consists of "qualification, reliability and fit." Id. Here, the issue is whether Crandall's opinions are reliable; there is no challenge to his qualification or to the fit of his testimony.

         With respect to reliability, the focus is on the "principles and methodology, not on the conclusions that they generate." Daubert. 509 U.S. at 595. Four benchmarks help determine whether a theory or technique qualifies as "scientific knowledge" such that it will assist the trier of fact. See Id. at 593. The Court considers: (1) whether the theory can be or has been tested; (2) whether the theory or technique has been subjected to peer review and/or publication; (3) the rate of error; and (4) whether the theory or technique has been generally accepted within the putative expert's respective community. Id. at 593-94. The Third Circuit adds other factors, including: (5) the existence and maintenance of standards controlling the technique's operation; (6) the relationship of the technique to methods which have been established to be reliable; (7) the qualifications of the expert testifying based on the methodology; and (8) the nonjudicial uses to which the method has been put. In re Paoli R.R. Yard PCB. Litis., 35 F.3d 717, 742 n. 8 (3d Cir. 1994). When considering these factors, the Court's inquiry must be a "flexible one." Id.

         The reliability factors are not exclusive. They "are intended to serve only as 'useful guideposts, not dispositive hurdles that a party must overcome in order to have expert testimony admitted.'" Yarchak v. Trek Bicycle Corp., 208 F.Supp.2d 470, 495 D.N.J. 2002) (quoting Heller v. Shaw Industries, Inc., 167 F.3d 146, 152 (3d Cir. 1999))-With the help of these guideposts, the Court performs its essential gatekeeper role under Federal Rules of Evidence 702.

         B. Daubert Hearing

         Rule 104(a) permits a preliminary inquiry in the form of a Daubert hearing, wherein the burden of proof on admissibility of an expert is set at a preponderance of the evidence. See Fed.R.Evid. 104(a); Daubert, 509 U.S. at 592 n.10 (referring to Rule 104(a) and holding that such preliminary "matters should be established by a preponderance of proof."). The Third Circuit stresses "the importance of in limine hearings under Rule 104(a) in making the reliability determination required under Rule 702 and Daubert." See In re TMI Litigation, 199 F.3d 158, 159 (3d Cir. 2000) (quoting Padillas v. Stork-Gamco. Inc., 186 F.3d 412, 417 (3d Cir. 1999))- The importance of such a hearing is heightened when either party advances a Daubert challenge "in the context of a summary judgment motion or where summary judgment will inevitably be granted if the proffered evidence is excluded." In re TMI Litigation. 199 F.3d at 159. Fully aware that a "failure to hold [an in limine] hearing" in this context "may be an abuse of discretion, " see id (quoting Padillas. 186 F.3d at 418), this Court set aside three days for the above-mentioned Daubert challenges by way of Letter Order. (Letter Order [Dkt. Entry No. 393], filed Oct. 2, 2015).

         C. Analysis

         On December 8 and 9, 2015 and March 16 and 17, 2016, the Court conducted a Daubert hearing and heard ensuing oral argument on the pending motions to, inter alia, flush out concerns with Crandall's report. After consideration of the written submissions, both pre and post hearings, and the testimony and arguments advanced at the hearings, the Court finds that Crandall's report is generally reliable, but also unreliable in part as follows.

         Plaintiffs object to Crandall's testimony for several reasons. First, Plaintiffs complain that Crandall's study did not include observation of any of the opt-in Plaintiffs and is inherently unreliable because it considers the wrong universe of workers. Second, Plaintiffs argue that Crandall's Report is unreliable because his methodology cannot support his conclusion that more than 50% percent of the ASMs' activities are managerial, is based upon speculation, lacks sufficient foundational evidence and information to support his conclusions, and has not been subject to peer review.

         After consideration of the expert report, the testimony offered and arguments cultivated during the many hours of the Daubert hearing and subsequent oral argument, and the thorough written submissions of the parties, Plaintiffs' motion is granted as it relates to Crandall's penultimate conclusion that ASMs perform managerial work a majority of the time and denied as to all other claims of unreliability. Specifically, the Court finds that Mr. Crandall cannot opine that certain tasks are indicative of management because such conclusions lack sufficient foundational evidence and information to support his findings. However, the Court finds that Crandall's method has been subject to peer review and is generally accepted in the field. In addition, Plaintiffs' claim that Crandall observed the wrong population of workers, who are not part of the class, is without merit. The findings as to the population observed are sufficiently reliable to inform the potential behavior of the opt-in Plaintiffs.

         Crandall's observations of the sample population are not inherently unreliable simply because the observed ASMs chose, for whatever reason, not to opt into the class. Plaintiffs' chief argument in support of final certification is that Burlington's comprehensive corporate policies and procedures define the job duties of the ASMs and It in favor of a finding that the ASMs are similarly situated.[12] Using that barometer of similarity, observation of ASMs, even those who did not choose to opt-in, is informative and has the sufficient hallmarks of a reliable study. See Big Lots Stores, Inc., 561F.Supp.2d at 587 (rejecting plaintiffs' argument that "consideration of evidence from non-opt-in ASMs who hold the same ASM job position was improper because they were unrepresentative[.]").

         The Third Circuit classified several characteristics as indicative of a properly conducted survey:

A proper universe must be examined and a representative sample must be chosen; the persons conducting the survey must be experts; the data must be properly gathered and accurately reported. It is essential that the sample design, the questionnaires and the manner of interviewing meet the standards of objective surveying and statistical techniques. Just as important, the survey must be conducted independently of the attorneys involved in the litigation. The interviewers or sample designers should, of course, be trained, and ideally should be unaware of the purpose of the survey or the litigation.

Pittsburgh Press Club v. United States, 579 F.2d 751, 758 (3d Cir. 1978) (citing Judicial Conference Study Group, Handbook of Recommended Procedures for the Trial of Protracted Litigation, 25 F.R.D. 351, 429 (1960)).

         These considerations "are non-exclusive, but it remains essential to consider whether the population and terms were properly defined, whether the design, questionnaires, and interviews met objective standards, whether data was accurately collected and reported, whether data was properly analyzed, whether the questions asked were unrelated to the material issues of the case, whether questions were unfairly leading, and whether questions were confusing." J & J Snack Foods. Corp. v. Earthgrains Co., 220 F.Supp.2d 358, 369 (D.N.J. 2002) (citing 4 Weinstein's Federal Evidence § 702.06). Under well-established statistical principles, the differences between the studied population and the target population must be not be too great so as to render the conclusions unreliable, and therefore inadmissible. See Citizens Fin. Grp., 383 F.3d at 121 (3d Cir. 2004) ("A survey of the wrong 'universe' will be of little probative value in litigation.").

         Crandall's study satisfies a majority of the considerations identified in Pittsburgh Press Club, 579 F.2d at 758. Crandall utilized trained observers to objectively survey a representative population of workers who labor under the same corporate policies, procedures and training schemes as the opt in ASMs. The variations identified by Crandall in the day-to-day achievement of the duties does not render his findings unreliable as to the opt-in Plaintiffs, who complain that their labor is less managerial in nature. Courts in this Circuit have permitted behavioral evidence of populations that are not part of the proposed class as reliable evidence against an opt-in subset of that population. See, e.g., Resch v. Krapfs Coaches, Inc., Civil Action No. 11-6893, 2013 WL 4603011, at *6 (E.D .Pa. Aug. 29, 2013) ("[D]efendant does not need to prove that each plaintiff drove interstate regularly, or even that they have driven interstate at all; instead, defendant must simply prove that 'because of company policy and activity, the driver could reasonably be expected to do interstate driving.' "); Mendez v. Avis Budget Group. Inc., No. 11-6537 (JLL), 2017 WL 2672074 (D.N.J. June 21, 2017) (rejecting the argument that the expert was required to address each way an e-Toll surcharge might have been disclosed, and concluding that those arguments go to the weight, as opposed to the admissibility, of the opinion).

         Crandall's findings as being based upon a class of individuals not named in the present matter are subject to scrutiny, but in this instance, such challenges go to the weight and value, not the inherent reliability. Crandall himself admits that his findings as to the sample population may not necessarily inform the experience of the opt-ins.

Q. Are [the opt-ins] the exception to the rule and how many might fall in one category versus the other as you use the terms "rule" and "exception."
A. I can't give you an estimate of how many would fall into any category at this point because I do not have a listing of all their claimed experiences and how they estimated their time. I've not evaluated whether or not they have provided reliable estimates. And if I had such information, I would then statistically compare their claims to the distribution of outcomes and from there I can make a determination.

         Crandall Dep. 526:6-531:7.

         Crandall also agrees that he lacks data on opt-ins to make a comparison to the sample population of ASMs:

Q. With respect to Exhibit 2 [relating to one of the two constituent groups of ASMs] -
A. Yes.
Q. - which you did open to, have you conducted any tests to determine whether if you sampled the opt-in ASMs, you would get 53.8 percent managerial in your determination?
Q. But would you expect to see the number - the number of 53.8 managerial?
A. 1 wouldn't be surprised to see that number.
Q. Have you tested to see whether that would be the case?
A. Are you asking have I connected [sic] a study of opt-ins? I haven't conducted a study of opt-ins.
Q. So you did not conduct any tests that would determine whether you would get a similar chart to Exhibit 2 or whether the numbers might look wildly different?
A. I would be surprised if the numbers are wildly different. This is on the course of looking at, for example, Exhibit 2, 1000 - looks like 271 hours without my glasses on. It's pretty close to that. You know, that's a lot of time and that's a lot of people that went into this. And so I think this is certainly representative of the diversities of experience you would expect to see and I would expect these numbers to be that way, yes.
Q. That is your expectation. My question was have you run any tests.
A. Have I compared two data ...

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