“Rule 23(b)’s predominance requirement incorporates Rule 23(a)’s commonality requirement ....”
How later courts described this case
- “Rule 23(b)’s predominance requirement incorporates Rule 23(a)’s commonality requirement ....”
Written by the judges who cited it.
The opinion
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
ANTHONY CHARLOT, ALAN
REMACHE, JOSE TEJADA,
GREGORY GERMUSKA, GARWYN
RICHMOND, MATT RIGGS,
CHRISTOPHER HENDLEY, AND
KRISTOFFER WRIGHT,
| Civ. No. 18-10528 (KM) (MAH)
Plaintiffs,
OPINION
v.
ECOLAB, INC.,
Defendant.
KEVIN MCNULTY, U.S.D.J.:
This motion for class certification arises from the decision of Defendant
Ecolab, Inc. to classify certain of its employees as exempt from the overtime-
wage requirements of New Jersey state law. The employees believe that they are
primarily service technicians, entitled to overtime pay; Ecolab maintains that
they are primarily salespeople. Plaintiffs move for class certification and seek to
represent a putative class whose members allegedly suffered uniform harm
because they were all misclassified by Ecolab. Ecolab alleges that this case is
not appropriate for class certification. For the reasons that follow, the motion
for class certification is GRANTED.
I. BACKGROUND!
A. The Parties
1. Ecolab
Ecolab, Inc., a Delaware corporation headquartered in Minnesota, sells
commercial sanitation products. (DE 1 □□ 18-19; DE 388-22 4] 2-5). Ecolab
1 “DE __” refers to the docket entry number in this case.
contracts with its customers to install its equipment and keep it in good
working order by providing routine and emergency maintenance. (DE 388-4 at
3; DE 388-20 Jf 11 & 20; DE 388-7 at 113:13-17). In return, Ecolab’s clients
commit to exclusively purchase Ecolab’s chemical cleaning products. (DE 388-
4 at 1-2).
2. Proposed Class Representatives.
Plaintiffs Alan Remache and Kristoffer Wright worked in New Jersey for
two Ecolab divisions that sell specialized cleaners and sanitizers to the
hospitality industry. (DE 388-7 at 39:14-25; DE 388-20 { 2; DE 388-3 at
20:25-22:1). They were employed by Ecolab as dishwasher repair technicians,
positions that Ecolab refers to as “route sales managers” and “service and sales
route managers” (collectively, “route managers” or “RMs’). RMs install,
maintain, and repair commercial dishwashers as provided in the lease
agreements Ecolab signs with its customers. (DE 388-10 at 61:3-6; 70:7-8; DE
388-3 at 122:4-12; 148:13-18; 159:14-21; 167:8-13).
The two named New Jersey plaintiffs are former Ecolab RMs. Remache
worked for Ecolab as an RM in New Jersey from approximately February 2012
to February 2013. (DE 388-6 at 75:14—24). Wright worked for Ecolab as an RM
in New Jersey from approximately 2003 through October 2012. (DE 388-7 at
17:25-18:4 & 206:7-9).
DE 388-__ = Exhibits accompanying Plaintiffs’ motion to certify the class.
DE 393-___ = Exhibits accompanying Ecolab’s opposition to the motion.
DE 394-___ = Exhibits accompanying Plaintiffs’ reply.
Where the parties filed more than one exhibit under the same docket number,
both the docket number and the exhibit number are cited. E.g., DE 393-# Ex. #.
Plaintiffs filed exhibits 10, 16, 17, 21-23, 25-30, 32-34, 36 & 39-42 under seal.
(DE 388). In the interest of uniformity, any citation within this opinion to those
exhibits refers to the sealed record, which is located at DE 388. (The declaration of
Molly Brooks (DE 388-2) serves as an index.) The unsealed exhibits are located at DE
389,
The proposed class consists of anyone who was employed by Ecolab in
New Jersey as a route manager, route sales manager, or service and sales route
manager between September 11, 2010 and the present. (DE 388-46).
Approximately 106 people meet those criteria. (DE 388-8).
B. Factual Background
1. Classification of RMs and the New Jersey Wage and Hour
Law
New Jersey’s Wage and Hour Law (“NJWHL?”) incorporates certain
exemptions of the federal Fair Labor Standard Act (“FLSA”), which allow
employers to avoid paying overtime wages to exempted employees. See N.J.
Admin. Code § 12:56-7.2(a).2 In particular, it incorporates the outside-sales
exemption, which applies to employees whose primary duty is sales and who
are “customarily and regularly engaged away from the employer’s place or
places of business in performing such primary duty.” 29 C.F.R. § 541.500.3
Ecolab classifies all New Jersey RMs based on a uniform job description
and compensation plan—without an individualized inquiry into the RMs
duties—as exempt from the NJWHL’s overtime provisions. (DE 388-9 ] 2). Asa
result, it does not pay overtime wages—across the board—to any RM for hours
worked overtime. (DE 388-5 at 18:6-19:8; DE 388-9 f 2).
2. Ecolab’s Non-RM Salesforce
Aside from its RM workforce, Ecolab employs a salesforce dedicated to
selling Ecolab’s products and leases for those products. This salesforce
includes territory managers, street sales development managers, sales
2 Before September 2011, the New Jersey outside-sales exemption did not apply
to employees who spent more than twenty percent of their time in non-sales work, N.J.
Admin. Code § 12:56-7.4 (2011). Because the prior version of the regulation provided a
narrower exemption, class members who are non-exempt under the current exemption
would also be exempt under the prior exemption.
In 2011, New Jersey amended N.J. Admin. Code § 12:56-7.2 to include a so-
called “administrative exemption.” This provision exempts employees if (a) their
primary duty was sales activity; (b) at least 50% of their compensation came from
commissions; and (c) total compensation exceeded $400 per week. Id. § 12:56-7.2(b).
development managers, distributor sales and development managers, area
route managers, account executives, corporate account managers, and vice
presidents. (DE 388-3 at 108:21-109:19 & 111:22-112:16; DE 388-10 at 44:3-
46:22: DE 388-11 at 35:2-10 & 48:12-49:2 & 87:4-88:10 94:4-95:9 & 99:20-
100:7; DE 388-28; DE 388-29; DE 388-30). These employees’ responsibilities
include selling leases and products to existing clients and cold-calling
prospective clients. (DE 388-11 at 48:12-49:2 & 87:4-88:10 & 87:11-19; DE
388-27).
These non-RM employees are further divided into salespeople, who sell
leases to individual customers, and corporate account representatives, who
negotiate agreements for corporate accounts:
Ecolab has two types of accounts: (1) independent operators, or
‘street’ accounts and (2) corporate accounts. Street accounts,
though not an official name, refer to independent operators with
one location or unit, whereas corporate accounts are multi-location
customers that are owned or operated by a centralized
management team.
(DE 237 at 10). Ecolab’s corporate account representatives interact with people
at the customer’s headquarters and are responsible for corporate accounts.
(DE 388-10 at 43:9--14). A corporate agreement usually governs services for
multiple locations and may contain uniform rebates or discounts for all covered
locations. (DE 388-10 at 116:3-22). As part of these corporate agreements,
Ecolab offers installation, maintenance, replacement parts, and repairs twenty-
four hours a day, seven days a week. (DE 388-4 at 3).
Ecolab’s fulltime salesforce “pushes” new sales opportunities; an RM’s
position, by contrast, is designed to “pull” sales from regular on-site visits to
Ecolab’s customers. (DE 393-3 Ex. 4 at 130:19-131:7; DE 393-7 Ex. 15 13
& 16; DE 393-8 Ex. 16 JJ 6 & 7; DE 393-8 Ex. 18 4 6). Under this model,
existing customers can order supplies either through RMs, through Ecolab’s
service center, or through an outside distributor. (DE 393-8 Ex. 19 11).
3. Ecolab’s Products and Distributors
If a customer elects to place an order through an RM, the RM is
responsible to ensure that the order is delivered to the customer by Ecolab or
by a distributor. (DE 393-8 Ex. 19 7 11).
In fact, many Ecolab customers obtain Ecolab products from distributors
and not from RMs. (DE 388-6 at 139:5-140:23; DE 388-7 at 129:22-130:19;
DE 388-10 at 25:3-15 & 27:23-28:18; DE 388-14 at 48:16-23; DE 388-15 at
51:15-22; DE 388-45). These so-called “indirect” product sales are fulfilled by
third parties and not by Ecolab employees. (DE 388-11 at 218:16-219:7).
Distributors account for over half of Ecolab’s sales; in New Jersey in particular,
more than half of the RMs’ accounts obtain Ecolab products from distributors.
(DE 388-6 at 139:5-140:23; DE 388-7 at 129:22-130:19; DE 388-14 at 48:16-
23; DE 388-15 at 51:15-22; DE 388-45). Regardless of the sale’s source,
however, in recognition of the RM’s existing and ongoing relationships with the
customer, Ecolab awards a commission to the RM assigned to the account.
Thus even sales through distributors generate commissions for the RM
assigned to the account. (DE 388-12; DE 388-3 at 90:12-19; DE 388-45; DE
393-2 Ex. 1 at 25:1-27:1 & 29:9-19; DE 393-6 Ex. 13 at JJ 14 & 31).).
4. Leases
Ecolab’s leases commit it to install, train, maintain, and repair the
commercial equipment leased to its customers. (DE 388-4 at 3). RMs provide
these services. When an Ecolab customer signs a lease, the customer is
assigned to a route, and the RM working the route takes responsibility for
installing the equipment, training the staff, making monthly maintenance calls
to ensure the equipment’s proper operation, and responding to emergency
repair call twenty-four hours a day, seven days a week. (DE 388-3 at 122:4-12
& 148:13-18 & 159:14-21 & 167:8-13; DE 388-10 at 61:3-6 & 70:7-8; DE
388-7 at 113:13-17; DE 388-20 47 11 & 20).
Ecolab leases also include a commitment by the customer to purchase a
set amount of Ecolab products each month. (DE 388-41). Before an account is
assigned to an RM, Ecolab’s non-RM salespeople negotiate the product-
purchase commitment with the customer. (DE 388-21] 4).
5. RMs’ Job Duties
The members of the proposed class of New Jersey RMs had identical job
titles, descriptions, codes, and classifications. For instance, every RM was
responsible for routine preventive maintenance (“RPM”) (DE 388-4 4 7 &14&
15), emergency service requests (“ESR”) (DE 388-3 at 167:8-13), and
equipment installation (DE 388-4 { 9). All class members had the same duties
and responsibilities, which they were required to perform pursuant to uniform
rules and instructions. (DE 388-4 at 4-5).
Ecolab’s RMs primarily service accounts by installing, maintaining, and
repairing commercial equipment along their routes. (DE 388-3 at 143:11-
149:5; DE 388-6 at 133:15-135:1; DE 388-11 at 156:12-157:25 & 171:2-22).
RMs spend the vast majority of their time carrying out these tasks. (DE 388-7
at 112:22-114:6; DE 388-11 at 207:14-209:5; DE 388-43; DE 388-13; DE
388-14 at 306:10-18; DE 388-20 qf 5 & 9-14; DE 388-15 at 70:10-74:2 &
132:20-22; DE 388-21 {4 5-15). Each RM is assigned approximately one
hundred to one-hundred-twenty accounts. (DE 388-4 at 4; DE 388-6 at
134:10-16; DE 388-7 at 131:18-21; DE 388-11 at 181:12-18 & 182:3-9; DE
388-14 at 61:23-62:2; DE 388-15 at 50:9-51:14; DE 388-16 at 46:7-20).
Each Ecolab lease provides for regular visits by the RM—visits that
Ecolab refers to as routine preventative maintenance (“RPM”).* (DE 388-3 at
148:13-149:7 & 158:6-21; DE 388-4 at 3-5; DE 388-22 qq] 13-14). Also
pursuant to the leases, RMs are required to respond to emergency service
requests (“ESR”), to install and reclaim equipment, and to train customers’
employees to use Ecolab equipment. (DE 388-4 at 2-3; DE 388-13 ] 8; DE
388-21 7] 6-15; DE 388-23.}.
4 In April 2016. Ecolab changed the term for RPM to “Regular Service Calls.” (DE
388-13).
RPM requires the RM to travel to a client’s business location, check and
record chemical ratios, check for proper product usage, inspect the
dishwasher, disassemble and reassemble machines per the service protocol,
enter meter readings, titrate chemicals and dispensers, and record results. (DE
388-3 at 158:14-160:11; DE 388-13; DE 388-21 7 10; DE 388-24). RMs
regularly work more than forty hours a week on such maintenance work. (DE
388-6 at 79:16-80:3; DE 388-7 at 424:19-425:20; DE 388-14 at 174:6-9; DE
388-15 at 132:20-25).
In addition to RPM, Ecolab requires RMs to remain on-call to respond to
ESRs within sixty minutes of a customer call, and they must be available to do
so twenty-four hours a day, seven days a week. (DE 388-3 at 171:21-174:3 &
183:2-185:22; DE 388-6 at 255:3-256:5; DE 388-11 at 184:3-185:17 &
207:14-209:5; DE 388-15 at 95:8-11; DE 388-20 q 13; DE 388-42).
An ESR often requires the RM to perform mechanical work, such as
replacing dishwasher motors or other parts and disassembling and
reassembling machines. (DE 388-6 at 361:16-22; DE 388-14 at 40:25-41:10;
DE 388-15 at 116:10-21; DE 388-16 at 75:17-77:19 & 105:22-108:3; DE 388-
21 4 15; DE 388-25). ESRs often involve plumbing and electrical work. (DE
388-6 at 265:15-266:8; DE 388-13; DE 388-14 at 166:8-12; DE 388-16 at
56:9-25 & 106:8-108:3; DE 388-3 at 147:22-148:4). Ecolab quality-controls its
RMs’ ESR response rates by calling customers to ensure that the RMs timely
responded. (DE 388-3 at 171:21-174:3).
To ensure that it hires a workforce that is capable of carrying out the
necessary tasks, Ecolab’s job description for RMs demands “hands-on
mechanical ability, which includes electrical, plumbing, and mechanical
experience and problem-solving skills to troubleshoot and repair equipment
and dispensing systems.” (DE 388-44). The posted job requirements also
include the ability to lift and carry seventy-five-pound loads, but the advertised
requirements do not require sales experience. (DE 388-44).
When a member of the Ecolab sales team sells a new lease, Ecolab
requires an RM to install the equipment at the customer’s location(s}. (DE 388-
3 at 122:4-12; DE 388-7 at 53:17-24; DE 388-13; DE 388-15 at 98:21-99:8;
DE 388-16 at 56:3-8; DE 388-20 7 5; DE 388-21 { 5). Installations sometimes
take more than an entire eight-hour workday and may also require assistance
from RMs assigned to other routes. (DE 388-21 7 8; DE 388-15 at 99:1-12 &
115:15-116:5; DE 388-3 at 148:5-12). Ecolab also requires RMs to reclaim
machines when leases expire, a task that involves similar plumbing and
electrical work. (DE 388-21 § 9; DE 388-11 at 210:4-10; DE 388-3 at 143:11-
22).
The company also requires RMs to train Ecolab customers’ employees
how to use its commercial equipment and chemical products. (DE 388-4 at 2-3;
DE 388-11 at 216:3-21; DE 388-3 at 181:5-13). RMs occasionally also perform
service and repair work on routes that border their own. (DE 388-3 at 183:2-
185:22; DE 388-11 at 184:3-185:17; DE 388-20 qq 10 & 13). During weekend
rotations, RMs remain on-call to provide around-the-clock emergency service to
customers on other RMs’ routes while simultaneously servicing their own. (DE
388-4 at 2-3; DE388-11 at 207:14-208:11; DE 38-3 at 177:7-16; DE 388-20
{ 14; DE 388-26; DE 388-6 at 154:15-156:6). As a result of all the service and
repair work Ecolab assigns them, RMs regularly work more than forty hours in
a week. (DE 388-6 at 79:11-18 & 153:10-154:2 & 155:8-156:6; DE 388-7 at
424:19-426:5; DE 388-14 at 174:6-9; DE 388-15 at 132:20-25; DE 388-20
4 23; DE 161 § 217).
6. RMs’ Training
Ecolab requires all RMs to complete the same three-month training
program. (DE 388-10 at 63:19-66:4). The Ecolab RM training consists of
electrical and plumbing classes that cover the installation and repair of
Ecolab’s dishwashers. (DE 388-3 at 147:22-148:4; DE 388-38). Ecolab also
requires all RMs to take specific online training, and Ecolab monitors each
RM’s progress. (DE 388-3 at 181:17-25; DE 388-10 at 66:18-67:9; DE 388-11
at 225:18-226:11; DE 388-39).
Some RMs do not pursue sales training. (DE 393-4 Ex. 7 at 61:21-62:7
& 64:16-65:1 & 72:10-73:8; DE 393-2 Ex. 2 at 40:23-25; DE 393-12 Ex. 35;
DE 393-10 Ex. 29; DE 393-12 Ex. 36; DE 393-10 Ex. 28). Some view sales as
Ecolab’s goal, not one that they were hired to pursue. (DE 393-4 Ex.6 at 277:5-
15). Others actively pursue sales, seeing the RM role as one that requires both
service and sales. (DE 393-2 Ex. 2 at 12:22-13:18; DE 393-4 Ex. 5 at 41:18-
42:9). Some RMs come into the position with only sales experience and no
technical experience. (DE 393-2 Ex. 2 at 43:2-12).
7. Supervision and Evaluation of RMs
Ecolab’s district managers (“DM”) supervise RMs. In 2017, there were
thirteen DMs in New Jersey, responsible for forty individual territories; as of
April 2019, there were eighteen DMs covering forty-eight territories. (DE 393-8
Ex. 19 at J] 5-6; DE 393-14 Ex. 44 4-5). DMs assign their RMs different
objectives and goals. (DE 393-4 at 237:24-239:3; DE 393-4 Ex. 6 at 305:23-
306:6; DE 393-8 Ex. 18 J] 1&7; DE 393-8 Ex. 24 q 5). Not all managers
monitor RMs the same way, but RMs’ service delivery reports (“SDRs”) are
centrally tracked to ensure that RMs complete RPMs regularly. (DE 388-10 at
18:15-24).
Ecolab uses the same metrics and evaluation tools to track and evaluate
all of the RMs’ work. (DE 388-4 at 5-6). After every maintenance visit, an RM is
required to file an SDR that describes the maintenance and repair work he or
she performed. (DE 388-3 at 154:3-10 & 157:5-165:1; DE 388-10 at 19:6-15,
DE 388-11 at 178:21-179:13; DE 388-23; DE 388-32 at 997). SDRs detail the
RM’s findings, and they also record any sales the RM made by ordering
depleted or additional products and documenting recommendations of
additional products. (DE 393-2 Ex. 1 at 19:6-15; DE 393-2 Ex. 2 at 63; DE
393-5 Ex. 8 at 154:10-14; DE 393-5 Ex. 9 at 60:8-16 & 61:21-62:19 & 67:9-
68:19; DE 393-7 Ex. 15 at J 19; DE 393-8 Ex. 16 at q 10).
Each RM’s tablet feeds data about his or her visits to Ecolab every day.
(DE 388-3 at 160:13-161:19; DE 388-6 at 253:23-254:10; DE 388-10 at
18:25-19:15; DE 388-11 at 208:19-209:10). DMs use that data to review the
RM’s work and to determine whether the RM made a sufficient number of
RPMs each week. (DE 388-3 at 175:15-176:7 & 216:11-217:18; DE 388-10 at
21:15-25; DE 388-11 at 113:21-114:12 DE 388-20 ff 18 & 19; DE 388-33
qq 13-14).
Ecolab uses data from SDRs to generate performance track reports,
which measure the percentage of RPM calls and ESRs to which each RM
responded. (DE 388-34; DE 388-21 4 27; DE 388-11 at 268:9-270:8; DE 388-3
at 170:25-173:9). Ecolab also monitors both the time and quality of individual
RMs’ responses to ESRs. (DE 388-3 at 171:21-175:10; DE 388-11 at 208:21—
209:10). In contrast, Ecolab does not track individual! sales of RMs, how a sale
was originated, or who originated the sale. (DE 388-3 at 153:11-156:22; DE
388-6 at 33:4-34:1; DE 388-10 at 26:5-17 & 51:10-18; DE 388-11 at 243:6-
19; DE 388-40 at 3).
SDRs represent the confluence of RMs’ sales and service responsibilities.
(DE 393-14 Ex. A). However, despite Ecolab’s formally requiring RMs to
complete SDRs, RMs neither always nor uniformly complete them. (DE 393-8
Ex, 22 at J 7-8). Some RMs use SDRs to merchandise and take orders, but
others use them as a service tool. (DE 393-1 Ex. 2 at 72:11-21; DE 393-4 Ex. □
at 100:1-8; DE 393-8 Ex. 21 | 23; DE 393-8 Ex. 22 18). Nonetheless, each
required element of an SDR corresponds to service work—not the sales work—
performed by the RM. (DE 388-32).
DMs also closely monitor RMs’ hours and schedule. They review RMs’
hour reports and review the monthly schedule of RPMs. (DE 388-3 at 2 16:11-
217:18; DE 388-6 at 135:22-136:18; DE 388-11 at 266:12-267:5; DE 388-33
at 13 & 14). Ecolab supervisors reprimand RMs if they fall short of their
hours requirements or do not complete enough RPMs. (DE 388-20 { 18; DE
388-33 47 13 & 14; DE 388-35; DE 388-36).
However, RMs have a lot of discretion in carrying out their duties, While
Ecolab expects RMs to track hours via the company’s ESM program, tracking is
managed at the local level, and not all RMs abide by it. (DE 393-2 Ex. 2 at
10
136:23-137:12; DE 393-3 Ex. 3 at 27:2-12 & 28:14-23; DE 393-4 Ex. 6 at
206:3~207:25; DE 393-4 Ex. 7 at 307:12-308:16; DE 393-5 Ex. 8 at 88:14-17
& 91:14-92:15; DE 393-8 Ex. 20 { 13).
Some RMs view the position as one that requires little more than
maintenance of existing accounts, while others focus on growing sales in
assigned territories. (DE 393-2 Ex. 2 at 56-57; DE 393-4 Ex. 6 at 40:4-15 &
43:2-44:24 & 105:1-9 & 159:20-160:23; DE 393-8 Ex. 24 at Jf 8-9). For
instance, Plaintiff Remache served as a DM and supervised RMs. (DE 393-5 Ex.
8 at 25:20-23). Remache testified that the RMs who reported to him performed
their tasks differently, regardless of how he trained them: some reached sales
goals, some did not; each had varying levels of ability, skill, and experience;
and Remache’s supervision varied according to the individual’s performance,
relationship with customers, and skill in selling or servicing equipment. (DE
393-5 Ex. 8 at 372:16-373:5 & 401:5-22 & 812:3-814:3; DE 393-8 Ex. 18 { 9).
Ecolab does not track RMs’ sales, but DMs do monitor “call coverage”’—
ie., whether RMs are regularly performing RPMs. (DE 388-3 at 154:6-156:22;
DE 388-6 at 33:19-35:3; DE 388-10 at 26:5-17; DE 393-8 Ex. 18 { 10; DE
393-8 Ex. 23 7 18; DE 393-8 Ex. 24 § 16). Ecolab requires all RMs to respond
to ESRs, and Ecolab imposes a sixty-minute response time limit. (DE 388-6 at
255:10-256:5; DE 388-11 at 208:12-210:2; DE 388-14 at 165:8-166:14; DE
393-2 Ex. 2 at 64:9-66:3). Ecolab does not dispute that each RM spends the
vast majority of his or her time making RPM calls and responding to ESRs, is
required to perform preventive maintenance and repairs on the calls, and is
required to record this work on SDRs that Ecolab monitors.
8. Ecolab’s Compensation Plan for RMs
Ecolab applies the same timekeeping policies to all New Jersey RMs. (DE
388-5 at 28:14~-23). Pursuant to the terms of Ecolab’s uniform compensation
plan, the compensation for RMs has three components: a base salary; a fixed
percentage of the invoiced amount on the service accounts assigned to each
11
RM; and a nominal bonus for “customer retention” and “sales productivity.”
(DE 388-17 at 4-5; DE 388-18; DE 388-19).
RMs exercise no control over the first two components of their
compensation. Ecolab refers to the second component (the fixed percentage of
monthly contracted service invoices) as “commissions,” but RMs cannot control
which accounts they are assigned (DE 388-15 at 106:23-107:9 & 119:22-
120:11; DE 388-16 at 104:14-105:13; DE 388-20 qq 8 & 26; DE 388-10 at
82:16-83:12), and are neither expected nor authorized to negotiate leases (DE
388-15 at 113:9-12 & 133:13-25; DE 388-6 at 300:10-25; DE 388-16 at
53:11-19). To balance commissions evenly among RMs, Ecolab annually
reassigns routes, along with the commissions that correspond to them. (DE
388-11 at 277:24-283:25). Redistribution is based on geography, traffic,
weather, number of accounts, sales volume, market fluctuations, and growth
expectations. (DE 388-3 at 235:3-10). Unlike many traditional commission-
based businesses, route assignment is not based on merit; an RM’s
performance is only considered insofar as turnover may affect the capabilities
of that or another RM. (DE 388-3 at 235:14-18). Geography is the primary
criterion when Ecolab transfers a route between RMs. (DE 388-11 at 271:11-
272:5). Ecolab also does not record whether an RM has a relationship with a
particular client. (DE 388-10 at 76:18-22).
Ecolab’s leases typically have a one-year term, and they renew
automatically. RMs do not negotiate leases, because leases are negotiated and
sold by Ecolab’s sales force. (DE 388-10 at 44:24-45:7). An RM’s income from
these leases remains steady, because the leases include purchasing minimums
for the accounts, and if the customer does not purchase the minimum amount,
Ecolab charges the customer the difference between the contract amount and
the actual amount spent. (DE 388-4 at 2; DE 388-16 at 120:2-5). RMs’
“commissions” are based on the overall volume of products that their
customers order, regardless of whether any RM facilitated the purchase. (DE
388-3 at 58:19-59:5, 208:22-209:7; DE 388-6 at 33:4-34:1; DE 388-10 at
26:15-17 & 88:12-95:2 & 112:3-114:3; DE 388-15 at 164:8-165:2; DE 388-16
12
at 34:8-25; DE 388-20 7 25). RMs may receive commissions on leases and
products purchased before the account was assigned to them and on accounts
they have never visited. (DE 388-3 at 58:12-59:5; DE 388-10 at 112:3-114:3;
DE 388-16 at 35:1-14; DE 388-21 at q 4).
Ecolab records products delivered by Ecolab as “direct” sales and records
sales to customers delivered via distributors as “indirect” sales. (DE 393-6 Ex.
12 at 27:14-16). The company attributes both types of sales to RMs, because
the RM controls the client relationship and the ongoing commitment to buy
Ecolab products. (DE 393-2 Ex. 1 at 29:9-19; DE 393-6 Ex. 12 J 9; DE 393-7
Ex. 14 49 9-13; DE 393-8 Ex. 17 q 9-12).
Ecolab also employs so-called full-service specialists, who exclusively
repair and install dishwashers, but who have no sales responsibility. (DE 393-8
Ex. 24 J 15; DE 393-7 Ex. 15 7 21; DE 393-3 Ex. 4 at 29:12-17 & 50:24-25 &
51:3-13 & 53:19-22 & 58:10). Some territories might even engage independent
contractors to install dishwashers. (DE 393-3 Ex. 4 at 29:12-17 & 51:3-13 &
52:16-24 & 58:10-14; DE 393-6 Ex. 11 at 144:15-145:7 & 147:3-12; DE 393-7
Ex. 15 J 21; DE 393-8 Ex. 16 7§ 12). Nonetheless, every RM is required to
install Ecolab machines and to respond to service calls. (DE 393-8 Ex. 21 4 28;
DE 388-20 4f 12 & 22; DE 388-15 4 9; DE 393-7 Ex. 15 4] 20-21; DE 393-8
Ex. 21 | 26; DE 393-8 Ex. 22 | 16; DE 388-20 5; DE 388-33 J 4).
C. Procedural History
On September 11, 2012, several RMs sued in the U.S. District Court for
the Eastern District of New York under docket number 2:12-cv-04543, (DE 1).
Those RMs asserted claims under the federal Fair Labor Standards Act (“FLSA”)
on behalf of Ecolab employees nationwide and also brought claims under the
labor laws of Illinois, New Jersey, New York, North Carolina, Pennsylvania, and
Washington. (DE 1 & DE 341 at 2-3).
With respect to the named plaintiffs only, the parties agreed to cross-
move for summary judgment on the “retail or service establishment” exemption
13
of the FLSA, 29 U.S.C. § 207(i). 5 The parties filed their cross-motions for
summary judgment on December 22, 2014. (DE 106 & 171). On September 30,
2015, Judge Kiyo Matsumoto granted Ecolab’s motion and denied that of
Plaintiffs. (DE 237). Judge Matsumoto’s ruling rested solely on the FLSA; it did
not address the New Jersey plaintiffs’ NJWHL issues.
In April 2016, Ecolab again moved for summary judgment and moved to
strike from the amended complaint the class and collective claims. On March
29, 2017, Judge Matsumoto granted the motion for summary judgment on all
FLSA claims and on all non-New Jersey state-law claims. (DE 310).
Consequently, only Plaintiffs’ New Jersey state law claims remained.
On February 17, 2017, Plaintiffs moved to certify the class in the Eastern
District of New York. (DE 302). Judge Matsumoto ordered the parties to
mediate. Mediation failed, and on June 13, 2018 the action was transferred—
still uncertified—to the District of New Jersey. (DE 344). The parties have since
updated the evidentiary record. (DE 369 at 5-6).
II. LEGAL STANDARD
The class action is “an exception to the usual rule that litigation is
usually conducted by and on behalf of the individual named parties only.”
Comcast Corp. v. Behrend, 569 U.S. 27, 33 (2013) (citing Califano v. Yamaski,
442 U.S. 682, 700-01 (1979)). Accordingly, a plaintiff bears the burden of
5 Section § 207(i) further carves out the overtime requirements:
No employer shall be deemed to have violated subsection (a) by
employing any employee at a retail or service establishment for a
workweek in excess of the applicable workweek specified therein, if (1)
the regular rate of pay of such employee is in excess of one and one-half
times the minimum hourly rate applicable to him under [29 U.S.C, § 206]
and (2) more than half his compensation for a representative period (not
less than one month) represents commissions on goods or services. In
determining the proportion of compensation representing commissions,
all earnings resulting from the application of a bona fide commission rate
shall be deemed commissions on goods or services without regard to
whether the computed commissions exceed the draw or guarantee.
29 U.S.C. § 207(i).
14
affirmatively demonstrating by a preponderance of evidence that her putative
class satisfies the class-certification requirements in Federal Rule of Civil
Procedure 23. Byrd v, Aaron’s Inc., 784 F.3d 154, 163 (3d Cir, 2015).
Importantly, Rule 23 “does not set forth a mere pleading standard.” Wal-Mart
Stores, Inc. v. Dukes, 564 U.S. 338, 351 (2011). Rather, the plaintiff must prove
that the Rule 23(a) requirements are met. Comcast, 569 U.S. at 33.
First, to qualify for class certification, a party must demonstrate that the
putative class meets the four requirements set forth in Rule 23(a), known as
numerosity, commonality, typicality, and adequacy of representation:
(1) the class is so numerous that joinder of all members is
impracticable [numerosity];
(2) there are questions of law or fact common to the class
[commonality];
(3) the claims or defenses of the representative parties are
typical of the claims or defenses of the class [typicality]; and
(4) the representative parties will fairly and adequately protect
the interests of the class [adequacy of representation].
Fed. R. Civ. P. 23(a); see also Dukes, 564 U.S, at 345.
The Supreme Court has emphasized that it “may be necessary for the
court to probe behind the pleadings before coming to rest on the certification
question” and that certification is proper only if “the trial court is satisfied,
after a rigorous analysis” that Rule 23{a)’s prerequisites have been met.
Comcast, 569 U.S. at 33 (quoting Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147,
160-61 (1982)). Such an analysis will “entail some overlap with the merits of
the plaintiffs underlying claim.” Dukes, 564 U.S. at 351.
Second, plaintiffs must satisfy at least one of the three bases for class
treatment listed in Rule 23(b). Jd. at 345-46. Here, the RMs seek to certify the
class under Rule 23(b)(3), which permits certification when (1) “the questions of
law or fact common to class members predominate over any questions affecting
only individual members,” and (2) “a class action is superior to other available
methods for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P.
15
23(b)(3). The Rule 23(b)(3) analysis of predominance and superiority is more
demanding than the Rule 23(a) analysis. See Comcast, 569 U.S. at 34 (citing
Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 623-24 (1997)). In particular,
courts have a duty to take a close look at whether common questions
predominate over individual ones. Dukes, 564 U.S. at 362.
In the Third Circuit, Rule 23(b){3) certification also involves an
independent “ascertainability” inquiry. A plaintiff is required to show that (1)
the class is “defined with reference to objective criteria” and (2) there is “a
reliable and administratively feasible mechanism for determining whether
putative class members fall within the class definition.” Byrd, 784 F.3d at 163
(citing Hayes v. Wal-Mart Stores, Inc., 725 F.3d 349, 355 (3d Cir. 2013)). The
parties do not seem to dispute this issue, however; Ecolab relegates to a
footnote its argument against the class’s ascertainability. (DE 393 at 30 n.113).
III. DISCUSSION
Because this matter involves a controversy between citizens of different
states and the amount in controversy is alleged to exceed the sum of $75,000,
this Court has jurisdiction pursuant to 28 U.S.C. § 1332(a).° New Jersey
substantive law will apply. See Erie R.R. v. Tompkins, 304 U.S. 64, 78 (1938).
A. The New Jersey Wage and Hour Law
New Jersey law imposes minimum-wage and overtime-payment
requirements on employers, except as to certain specified categories of
employees. See N.J. Stat. Ann. § 34:11-56a. Among those categories of
exempted employees are “persons employed as outside salesmen as such terms
shall be defined and delimited in regulations adopted by the commissioner
_.. “NJ. Stat. Ann. § 34:11-56a4(a). An employer bears the burden of proving
that the outside-sales exemption applies. See In re Raymour & Flanigan
Furniture, 405 N.J. Super. 367, 377 (App. Div. 2009)..
6 The parties do not rely on the diversity rules of the Class Action Fairness Act,
28 U.S.C. 1332(d).
16
The Division of Wage and Hour Compliance of the New Jersey
Department of Labor has adopted the FLSA’s definition of outside-sales
employees. See N.J. Admin. Code § 12:56-7.2. Because the NJWHL overtime-
compensation and minimum-wage requirements are modeled after and nearly
identical to their analogous FLSA regulations, judicial opinions construing the
FLSA apply. See Thompson v. Real Estate Mortg. Network, Inc., 106 F. Supp. 3d
486, 491 (D.N.J. 2015). (“The FLSA includes a right of action to recover
withheld overtime payments; the principle of parallel construction suggests
that the NJWHL be interpreted the same way.”).
Overtime exemptions to the FLSA must be given a “fair reading” in
determining whether they apply to an employee. Encino Motorcars v. Navarro,
138 S. Ct. 1134, 1142 (2018). To determine whether an individual’s “primary
duty” is exempt sales work, the relevant inquiry is whether making sales or
obtaining orders was the employee’s “principal, main, major or most important
duty.” 29 C.F.R. § 541.700(a). “Employees have a primary duty of making sales
if they ‘obtain a commitment to buy’ from the customer and are credited with
the sale.” 69 Fed. Reg. 22163 (April 23, 2004). The amount of time spent on
sales is not dispositive; rather, the “major emphasis [is] on the character of the
employee’s job as a whole.” 29 C.F.R. § 541.700(a).104
“Unsurprisingly, determining whether an employee is exempt involves a
fact intensive inquiry.” In re Morgan Stanley Smith Barney LLC Wage & Hour
Litig., No. 11-3121, 2016 WL 1407743 at *5 (D.N.J. Apr. 11, 2016). A “job title
is not determinative of whether an employee is exempt; an employee’s exempt
status depends on the actual duties he or she performs. See also 29 C.F.R.
§ 541.2 (“job titles insufficient”), adopted by N.J.S.A. § 12:56-7.2(a). Courts
also consider “external indicia” of sales, to determine whether sales, as opposed
to another duty, is the primary duty. Christopher v. SmithKline Beecham Corp.,
132 S. Ct. 2156, 2172 (2012).
LF
B. Rule 23(a) Requirements
A plaintiff seeking to certify a class first must satisfy Rule 23(a)’s four
requirements: numerosity, commonality, typicality, and adequacy of
representation. See Section II, supra. All must be proven by a preponderance of
the evidence. In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 307 (3d
Cir. 2008).
1, Numerosity
Rule 23(a){1) requires a finding that “the class is so numerous that
joinder of all members is impracticable.” That requirement promotes judicial
economy by avoiding onerous (anti-)joinder rules and eliminating the need to
adjudicate numerous similar actions separately. See Marcus v. BMW of N. Am.,
LLC, 687 F.3d 583, 594-95 (3d Cir. 2012). Furthermore, it enhances access to
judicial relief, particularly when individual claims would be uneconomical to
litigate individually, and, where joinder can be easily accomplished, prevents
putative class representatives and counsel from denying members of a small
class from adjudicating their claims individually. Jd.
As a general rule, a potential class with as few as forty members may
meet the numerosity requirement. Id. at 595 (citing Stewart v. Abraham, 275
F.3d 220, 226-27 (3d Cir. 2001)}). Nonetheless, Rule 23(a)(1) “requires
examination of the specific facts of each case.” Gen. Tel. Co. of Nw. v. EEOC,
446 U.S. 318, 330 (1980). Additionally, numerosity is not presumed for state-
specific subclasses simply because there is a nationwide or larger class; there
needs to be state-specific evidence of numerosity for each subclass. Marcus,
687 F.3d at 585.
Here, Plaintiffs and Ecolab have identified approximately 106 RMs who
worked for Ecolab during the proposed class period. Those current and former
RMs constitute the entire New Jersey class. That class size is large enough that
joinder is impracticable, but not so large as to make notice impracticable.
There are no other state-specific classes or subclasses, because Judge
18
Matsumoto dismissed all non-New Jersey state-law claims. Finally, Ecolab does
not contest that the Rule 23(a)(1) numerosity requirement is met.
2. Commonality
Rule 23(a}(2) requires a showing of “questions of law or fact common to
the class.” “Commonality requires the plaintiff to demonstrate that the class
members ‘have suffered the same injury.” Dukes, 564 U.S. at 349-50 (citing
Falcon, 457 U.S. at 157). The claims must rest upon a “common contention”
that is capable of classwide resolution. Id. at 350.
Importantly, the commonality requirement does not require that class
members share identical claims. In re Prudential Ins. Co. Am. Sales Practice
Litig. Agent Actions, 148 F.3d 283, 310 (3d Cir. 1998). “[Flactual differences
among the claims of the putative class members do not defeat certification.” Id.
(citing Baby Neal v. Casey, 43 F.3d 48, 56 (3d Cir. 1994)). Commonality is
addressed at a fairly high level of generality and is less stringent than the Rule
23(b)(3) predominance requirement. See Amchem, 521 U.S. at 609.
What is required is that the named plaintiffs share at least one question
of fact or law with the prospective class. See Rodriguez v. Nat’l City Bank, 726
F.3d 372, 382 (3d Cir. 2013). In fact, “the focus of the commonality inquiry is
not on the strength of each plaintiffs claim, but instead is ‘on whether the
defendant’s conduct was common as to all of the class members.” Jd. (citing In
re Prudential, 148 F.3d at 311).
The Supreme Court has held that it is appropriate for district courts to
look at the merits of a claim at the certification stage:
Rule 23 does not set forth a mere pleading standard. A party
seeking class certification must affirmatively demonstrate his
compliance with the Rule-that is, he must be prepared to prove
that there are in fact sufficiently numerous parties, common
questions of law or fact, etc... . “[S]ometimes it may be necessary
for the court to probe behind the pleadings before coming to rest
on the certification question,” [Falcon,] 457 U.S., at 160, and...
certification is proper only if “the trial court is satisfied, after a
rigorous analysis, that the prerequisites of Rule 23({a) have been
satisfied,” id., at 161; see id., at 160, (“[A]ctual, not presumed,
19
conformance with Rule 23(a) remains .. . indispensable”).
Frequently that “rigorous analysis” will entail some overlap with
the merits of the plaintiff's underlying claim. That cannot be
helped. “(T]he class determination generally involves
considerations that are enmeshed in the factual and legal issues
comprising the plaintiff's cause of action.” /d., at 160 (quoting
Coopers & Lybrand v. Livesay, 437 U.S. 463, 469 (1978); some
internal quotation marks omitted). Nor is there anything unusual
about that consequence: The necessity of touching aspects of the
merits in order to resolve preliminary matters, e.g., jurisdiction
and venue, is a familiar feature of litigation. See Szabo v.
Bridgeport Machines, Inc., 249 F.3d 672, 676-677 (CA7 2001)
(Easterbrook, J.).
Dukes, 564 U.S. at 350-52.
In Dukes, for example, a class of one-and-a-half-million female Wal-Mart
employees sought to sue the company for employment discrimination. /d. at
342. Wal-Mart’s policy of vesting in local supervisors the authority to determine
pay and promotion matters allegedly violated Title VII by discriminating against
women. Jd. The district court certified the class, but the Supreme Court
disagreed with its application of the commonality requirement. Jd. at 349. The
Court warned that the commonality determination required a more probing
inquiry than the district court had undertaken:
Th[e] language fof Rule 23(a)(2)] is easy to misread, since “[a]ny
competently crafted class complaint literally raises common
‘questions.” [Richard] Nagareda, Class Certification in the Age of
Aggregate Proof, 84 N.Y.U. L. Rev. 97, 131-132 (2009). For
example: Do all of us plaintiffs indeed work for Wal-Mart? Do our
managers have discretion over pay? Is that an unlawful
employment practice? What remedies should we get? Reciting
these questions is not sufficient to obtain class certification.
Commonality requires the plaintiff to demonstrate that the class
members “have suffered the same injury,” Falcon, [457 U.S.,] at
157. This does not mean merely that they have all suffered a
violation of the same provision of law. Title VII, for example, can be
violated in many ways—by intentional discrimination, or by hiring
and promotion criteria that result in disparate impact, and by the
use of these practices on the part of many different superiors in a
single company. Quite obviously, the mere claim by employees of
20
the same company that they have suffered a Title VII injury, or
even a disparate-impact Title Vil injury, gives no cause to believe
that all their claims can productively be litigated at once. Their
claims must depend upon a common contention—for example, the
assertion of discriminatory bias on the part of the same supervisor.
That common contention, moreover, must be of such a nature that
it is capable of classwide resolution--which means that
determination of its truth or falsity will resolve an issue that is
central to the validity of each one of the claims in one stroke.
Id. at 349-50. The Court emphasized that a central feature of commonality is
the existence of an answer that is common to the classwide issue:
What matters to class certification . . . is not the raising of common
‘questions’—even in droves—but, rather, the capacity ofa
classwide proceeding to generate common answers apt to drive the
resolution of the litigation. Dissimilarities within the proposed
class are what have the potential to impede the generation of
common answers.” Nagareda, 84 N.Y.U. L. Rev. 97] at 132.
Id. at 350. Ultimately the Dukes Court’s decision rested on the absence of a
corporate policy:
The only corporate policy that the plaintiffs' evidence convincingly
establishes is Wal-Mart's “policy” of allowing discretion by local
supervisors over employment matters. On its face, of course, that
is just the opposite of a uniform employment practice that would
provide the commonality needed for a class action; it is a policy
against having uniform employment practices.”
Dukes, 564 U.S. at 355.
Such an absence of a corporate policy—and therefore the lack of a
common issue of law or fact—is not a feature of the Ecolab Plaintiffs’ claims.
The most important question of fact or law —-indeed the only relevant
question—is whether Ecolab misclassified the RMs as exempt from overtime
eligibility. It is Ecolab’s stated, overall corporate policy to classify RMs as
outside salespeople to whom the overtime provisions of the NJWHL do not
apply. It is not, like the “policy” in Dukes, a mere abdication in favor of local
discretion. Here, DMs do not have discretion regarding the classification of RMs
or the authority to make wage-and-hour determinations. Rather, those
21
determinations are made at Ecolab’s corporate headquarters. While employed
by Ecolab, every RM is responsible for installing, maintaining, and repairing
the company’s dishwashers, but RMs are also allowed to sell the Ecolab’s □
products. The issue on the merits, then, is whether an RM’s primary duty is to
sell products. If the answer is “yes,” the members of the class are exempt from
the NJWHL’s overtime requirements; if the answer is “no,” they are not. That
yes-or-no question does not need to be answered yet; for now it suffices that
Ecolab’s uniform classification policy is common to all members of the
proposed class and that its resolution will generate common answers. Rule
23(a)(2) and Dukes do not require more.
In fact, looking beyond the pleadings and into the merits only weakens
Ecolab’s argument with respect to commonality. Ecolab stresses the different
approaches taken by various RMs to the sales aspect of their position. There is
indeed evidence of such differences, but overall the evidence shows that RMs
are primarily service technicians and that their duties are common across the
class. Ecolab structures, closely monitors, and regularly evaluates the RMs’ job
performance as it relates to the installation, maintenance, and repair aspect of
their jobs. Ecolab exercises no such oversight vis-a-vis sales. Insofar as sales
are a part of an RM’s job, that role is incidental to the service duties that are
central to the position.
Moreover, RMs are all subject to identical compensation policies, creating
class-wide incentives (or a lack thereof) to sell products and leases. Sales, even
if they are not accomplished by RMs, result in commissions to RMs, and their
routes are annually redistributed to achieve parity of labor and compensation
among RMs. Even the most actively sales-focused RMs testified in a way that
suggested that service work constituted the primary source of their duties and
compensation. Thus, the evidence in the certification record reveals that even
though the RM position surely involved sales, or at least the option to conduct
sales, the question of whether Ecolab misclassified the RMs is common to all
members of the proposed class.
22
Finally, it is highly suggestive that Ecolab employs a dedicated, full-time
salesforce that does not include RMs. Ecolab makes the complementary
observation that it relies upon independent contractors and employees who
perform the service-related aspects of an RM’s job but have no sales
involvement. That evidence, however, is not as persuasive as Ecolab suggests.
For one thing, the supplemental use of independent contractors does not affect
the fact that every RM must service dishwashers on both a routine and
emergency basis. In other words, there is no evidence in the record that
Ecolab’s alleged reliance on independent contractors shifted the responsibilities
of some RMs from service to sales.’ Moreover, not a single RM testified that any
such outside help was available to him or her; that assertion came solely from
Ecolab. To the extent that outside help is available, the testimony suggests that
it is discretionary or even intermittent. In sum, a searching evaluation of the
evidence at this, the certification stage, only strengthens Plaintiffs’ argument
that they are asserting a common issue as to whether Ecolab incorrectly
classified them under the NJWHL.
Thus there exists a common, classwide question of law or fact: whether
Ecolab misclassified the RMs as exempt from overtime eligibility under the
NJWHL.
3. Typicality
The Rule 23(a}(3) test for typicality requires that the claims or defenses of
the named plaintiffs be “typical of the claims or defenses of the class.” Fed. R.
Civ. P. 23(a)(3). “The typicality requirement is designed to align the interests of
the class and the class representatives so that the latter will work to benefit the
entire class through the pursuit of their own goals.” In re Prudential, 148 F.3d
at 311; see also Rodriguez, 726 F.3d at 376 n.4 (citing Eisenberg v. Gagnon,
766 F.2d 770, 786 (3d Cir. 1985)). Typicality does not require that the putative
Because the inquiry of Rule 23(a}(2) concerns commonality, presumably
evidence that Ecolab’s use of independent contractors shifted the responsibilities of all
RMs from service to sales, the merits inquiry would remain common across the class.
23
class members all share identical claims. In re Warfarin Sodium Antitrust Litig.,
391 F.3d 516, 531-32 (3d Cir. 2004). Rather, the typicality requirement, which
tends to overlap with the commonality and adequacy determinations, seeks to
assure that absent class members will be adequately represented. Rodriguez,
726 F.3d at 376 n.4; Eisenberg, 766 F.2d at 786.
Ecolab does not seriously dispute that the claims of Remache and Wright
are typical of the remainder of the class. Ecolab merely insists in rather
conclusory fashion that its commonality arguments (which I have now rejected)
imply a lack of typicality as well: “For the same reasons Plaintiffs have not
shown themselves to be representative of a class of [RMs] in New Jersey, their
claims lack typicality because they have not shown them to arise from the
same course of events and/or conduct as their putative class.” (DE 393 at 29
n.112}.
Here, Plaintiffs have satisfied the typicality requirement because the
claims asserted by Remache and Wright arise from Ecolab’s uniform alleged
misclassification of the RMs. Remache and Wright purport to represent a class
of 106 RMs, all of whom worked for Ecolab during the class period. Ecolab of
course disputes these claims, but does not establish that the claims of
Remache and Wright diverge significantly from those of the other class
members. Accordingly, the across-the-board allegation that this corporate
policy was erroneous is sufficient to satisfy Rule 23(a)(3). See Newton v. Merrill
Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 183-84 (3d Cir, 2001)
(“(T]ypicality is established regardless of factual differences . . . [if] the claims of
the named plaintiffs and putative class members involve the same conduct by
the defendant... .”).
4, Adequacy of Representation
Rule 23(a)(4) requires that the “representative parties wil! fairly and
adequately protect the interests of the class.” The adequacy inquiry has two
components designed to ensure that absent class members’ interests are fully
pursued: (1) whether counsel is qualified to represent the class and (2) whether
24
there are conflicts of interest between named parties and the putative class
they seek to represent. In re Warfarin, 391 F.3d 532-33 (citing In re Prudential,
148 F.3d at 313).
Ecolab does not address whether Remache and Wright are adequate
class representatives. It grumbles about, but accepts arguendo, Wright's status
as a named plaintiff:
On March 2, 2016, Plaintiffs sought to amend the complaint to add
Wright as a plaintiff, representative of New Jersey [RMs]. [(DE
265)]. Ecolab moved to strike the collective and class allegations of
the operative complaint, which was granted in March 2017. [(DE
269)]. Judge Matsumoto dismissed the claims of all individuals
except Remache, an [RM], whose New Jersey state law claim
survived. {(DE 310 & 311)]. Wright is not a named plaintiff in the
operative complaint. See [(DE 337) Feb. 21, 2018 Order at 10)]. For
the purposes of this Motion, however, Ecolab treats him as a
proposed class representative.
(DE 393 at 19 n.102).
Plaintiffs point out that Remache and Wright assisted with the litigation,
sat for depositions, answered interrogatories, and produced documents. (DE
388-1 at 25). The record does not suggest that there are conflicts of interest
between Remache and Wright on the one hand and the members of the
proposed class on the other. See In re Warfarin, 391 F.3d at 532.
There seems to be no significant issue as to the adequacy and suitability
of counsel. Plaintiffs note that their counsel, Outten & Golden LLP and
Getman, Sweeney & Dunn, PLLC, have been selected as wage-and-hour class
counsel before and that Green Savits, LLC has served as wage-and-hour
plaintiffs’ counsel. (DE 388-1 at 25-26 & nn.86-88).
The record thus reveals that Remache and Wright are adequate
representatives of their proposed class and have selected competent counsel.
Plaintiffs have thus satisfied the requirements of Rule 23(a){4).
C. Rule 23(b)(3) Requirements
In addition to satisfying the four Rule 23(a) requirements, a plaintiff
seeking class certification must satisfy at least one of the three requirements
25
- listed in Rule 23(b). Here, plaintiffs rely on Rule 23(b)(3), which requires (A)
“that the questions of law or fact common to class members predominate over
any questions affecting only individual members,” and (B) that “a class action
is superior to other available methods for fairly and efficiently adjudicating the
controversy.” Fed. R. Civ. P. 23(b)(3).8 Although the requirements are distinct,
many considerations are relevant to both, so some overlap in the discussion is
unavoidable.
Rule 23(b)(3) sets out a list of four non-exhaustive favors to consider
during the predominance and superiority inquiries:
{A) the class members’ interests in individually controlling the
prosecution or defense of separate actions;
(B) the extent and nature of any litigation concerning the
controversy already begun by or against class members;
(C) the desirability or undesirability of concentrating the litigation
of the claims in the particular forum; and
(D) the likely difficulties in managing a class action.
Fed. R. Civ. P. 23{b)(3).
1. Predominance
To be certified as a Rule 23(b)(3) class action, a putative class must
demonstrate that “the questions of law or fact common to class members
predominate over any questions affecting only individual members.” Fed. R.
Civ. P, 23(b)(3). The putative class bears the burden of demonstrating
predominance. See Comcast, 569 U.S. at 33-34. “If anything, Rule 23(b)(3)’s
predominance criterion is even more demanding than Rule 23(a).” Comcast,
569 U.S. at 34 (citing Amchem, 521 U.S. at 623-24 (1997)). Since Rule 23(b)(3)
is an “adventuresome innovation,” designed for situations in which “class-
action treatment is not clearly called for,” courts have a duty to take a “close
8 This Circuit has given prominence to a third element: (C) an independent
“ascertainability” inquiry to determine if the class can be defined and determined for
the purposes of class litigation. Byrd, 784 F.3d at 163. As noted above, this
ascertainability factor does not seem to be substantially contested.
26
look” at whether common questions predominate over individual ones. Id.
{citing Dukes, 564 U.S. at 362).
The predominance analysis may overlap with or resemble a merits
inquiry. See Comcast, 569 U.S. at 33-34; Dukes, 564 U.S. at 351. “The
predominance inquiry is especially dependent upon the merits of a plaintiff’s
claim, since the nature of the evidence that will suffice to resolve a question
determines whether the question is common or individual.” In re Constar Int'l
Inc. Sec. Litig., 585 F.3d 774, 780 (3d Cir. 2009) (quotation marks omitted); see
also Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1045 (2016). The Third
Circuit recently explained that courts, in undertaking a predominance inquiry,
must look beyond the pleadings:
In determining whether issues that are “susceptible to generalized,
class-wide proof” are “more prevalent or important,” a district court
is called to “formulate some prediction as to how specific issues
will play out... in a given case[.]” The court cannot rely on a mere
“threshold showing” that a proposed class-wide method of proof is
“plausible in theory.” Rather, the court’s Rule 23(b)(3) finding
necessarily entails some analysis of whether the proposed class-
wide evidence will actually be sufficient for the class to prevail on
the predominant issues in the case. If class-wide evidence is
lacking, the court cannot be adequately assured that
individualized evidence will not later overwhelm the case and
render it unsuitable for class-wide adjudication. This analysis will
often resemble a merits determination, in that it relates to
plaintiffs’ ability to prove the elements of their claims.
Harnish v. Widener Univ. Sch. of Law, 833 F.3d 298, 304-05 (3d Cir. 2016)
(internal citations omitted).
The predominance analysis may be seen as an extension of the
commonality analysis, see Section B.2, supra, in that it incorporates an
assessment of the issue’s susceptibility to classwide proof on the merits. See
Reinig v. RBS Citizens, N.A., 912 F.3d 115, 127 (3d Cir. 2018) (“Rule 23(b)’s
predominance requirement incorporates Rule 23(a)’s commonality requirement
....”), Here too, Ecolab’s arguments do not withstand the arguments of the
motion for class certification, because the questions raised by Plaintiffs’ claims,
27
considered in light of the likely evidence, can be resolved by common, classwide
answers.
First, and most simply, the class members share a common legal theory:
that Ecolab’s classification policy violates the NJWHL. The merits of the case do
not concern any other provision of law, and alli plaintiffs join the named
plaintiffs’ NJWHL claim. That of course is not sufficient, but it is a start.
Second, Ecolab’s argument that individual issues predominate over
common questions is, to a degree, undercut by its own corporate policy of
classifying all RMs as exempt. In opposing Plaintiffs’ certification motion,
Ecolab seeks to disprove the predominance of Plaintiffs’ claims by illustrating
granular differences between various RMs’ sales volumes. But at the same
time, the company has apparently never viewed any RMs as unique, because it
uniformly classifies them all as exempt from the NJWHL’s overtime
requirements—without ever inquiring into whether the sales aspect of the job is
the “principal, main, major or most important duty.” See 29 C.F.R.
§ 541.700(a).
Third, the classwide factual issues predominate over individual factual
issues, because all of the RMs have similar job descriptions and
responsibilities. Every RM is responsible for installing, maintaining, repairing,
and reclaiming commercial dishwashers. Each RM is required to respond to
emergency service requests within sixty minutes, and Ecolab makes RMs
available to its customers twenty-four hours a day, seven days a week. Ecolab
also requires all RMs to structure, monitor, record, and track their workflows
through a centralized database. Ecolab trains and supervises all of its RMs on
a uniform basis—and it trains them separately from employees who are
primarily responsible for sales. A commission system, while it may be
indicative of a sales position, is not so here. Sales are attributed via
commission to RMs without regard to who or what type of employee generated
them. Those “sales” are then redistributed annually to create parity in pay, as
well as parity in incentive to sell in the first place.
28
Fourth, as discussed more thoroughly with respect to commonality in
Section B.2, supra, a preliminary evaluation of the merits of Plaintiffs’ claim
further weakens Ecolab’s position. Ecolab repeatedly notes that each RM takes
a different approach to the sales aspect of his or her job. However, the evidence
is nevertheless that the sales aspect is subordinate, and that the RM position is
primarily service- and repair-oriented. Ecolab rigorously trains its RMs for the
service and repair aspects of their positions, and it closely monitors those same
details. However, the company does not provide the same structure or impose
the same requirements in connection with the sales side of the RM position.
Ecolab requires every RM to service dishwashers, both as a matter of routine
course and in emergencies. Even the most sales-driven RMs primarily perform
these technical services. Indeed, they are required to do so, but there is no
evidence that Ecolab requires any RM to make sales. That Ecolab employs a
separate, full-time salesforce further suggests that the sales aspect of the RM
position is merely incidental, and not the primary duty. Accordingly, to the
extent that the merits present individualized inquiries into various RMs’ sales
practices, those inquiries are overshadowed by the classwide issue of Ecolab’s
misclassification, and the evidence shows that those classwide issues
predominate.
2. Superiority
Certification under Rule 23(b)(3) also requires that a putative class action
be “superior to other available methods for fairly and efficiently adjudicating
the controversy.” Fed. R. Civ. P. 23(b)(3). The superiority inquiry “asks the
court to balance, in terms of fairness and efficiency, the merits of a class action
against those of alternative methods of adjudication.” In re Prudential, 148 F.3d
at 316 (internal quotations omitted). This requirement is met when “a class
action would achieve economies of time, effort, and expense, and promote
uniformity of decision as to persons similarly situated, without sacrificing
procedural fairness or bringing about other undesirable results.” Fed. R. Civ. P.
23(b)(3) advisory committee’s notes (1996 amendment, subdivision (b)(3)).
29
Plaintiffs have shown that a class action is the superior form of
adjudication. From a cost perspective, this case presents a paradigmatic
example of the advantages of class litigation. Wage-and-hour disputes are often
not cost-effective to pursue individually, as each employee’s claim is likely to be
modest. Many plaintiffs lack the resources to federally litigate such a case. The
case at hand concerns a single defendant, alleged by approximately one
hundred plaintiffs to have violated a single statutory provision. Requiring
individual lawsuits would not serve the RMs’ individual interests, because their
identical claims are susceptible to class-wide resolution, with the economies of
scale that such resolution implies.
Moreover, it does not appear that any member of the proposed class has
litigated this issue in any other forum. The District of New Jersey is an ideal
forum, because the dispute concerns an interpretation of New Jersey state law
brought by a class of New Jersey residents against an out-of-state defendant.
In fact, Judge Matsumoto reached the same conclusion when she transferred
the case here from the Eastern District of New York. (DE 341 at 19-20) (*[T]he
factors slightly favor transfer to the District of New Jersey. Of the nine factors,
three are neutral and six weigh in favor of transfer. Although some of the six in
favor of transfer only minimally point in that direction, among those six are the
more important factors, such as the locus of operative facts and the
convenience of witnesses.”). Finally, the class is not likely to prove
unmanageable, because there is a discrete and identifiable number of plaintiffs
(approximately 106), and that number is not so large as to present
administrative difficulties. The identities of the class members should be
obtainable from Ecolab’s employment records. A class action is thus the
superior method of disposing of this case.
3. Ascertainability
In the Third Circuit, Rule 23(b)(3) certification requires an independent
determination that (1) the class is “defined with reference to objective criteria’;
and (2) there is “a reliable and administratively feasible mechanism for
30
determining whether putative class members fall within the class definition.”
Byrd, 784 F.3d at 163 (citing Hayes, 725 F.3d at 355).
Ecolab contests the ascertainability of the class only in a footnote,
arguing that “the proposed class definition is not ascertainable. It includes
individuals in unidentified positions and requires determination of whether an
individual ‘regularly performed’ certain tasks.” (DE 393 at 30 n.113). Ecolab
advances no other argument on this point. Despite these protestations, the
class is ascertainable for the reasons already state. It has been identified and is
defined with reference to objective criteria: Ecolab has produced to Plaintiffs
the list of RMs who are among the proposed class members, (DE 388-8), and
Plaintiffs have produced a proposed Rule 23 notice (DE 388-46), It appears that
the class is not merely ascertainable, but ascertained.
IV. CONCLUSION
After a thorough analysis of the Rule 23(a) and 23(b)(3) requirements, |
GRANT Plaintiffs’ motion for class certification.
A separate order will issue.
Dated: December 17, 2019
1. Mok, yy
Hon. Kevin McNulty
United States District Judge
al