Auditors’ Overtime FLSA Class Action Can Proceed, Rules New York Court U.S. Supreme Court Decision Did Not Change Standard for Certification of FLSA Collective Action

A New York federal court ruled that a lawsuit seeking unpaid overtime for employees who perform audits can proceed as a certified collective action.  In Pippins v. KPMG LLP, No. 11 Civ. 0377, 18 WH Cases2d 1179 (SDNY 2012), the plaintiffs were Audit Associates employed by KPMG, a major accounting firm.  Plaintiffs alleged that KPMG unlawfully misclassified them as administrative or professional employees who were exempt from the overtime provisions of the Fair Labor Standards Act (“FLSA”). 

Plaintiffs moved to conditionally certify the action as a collective action under the FLSA.  A court’s “certification” authorizes notice of the suit to similarly situated employees and to allow putative class members the opportunity to opt-in to the class.  “Certification” is conditional because the court can later decertify the action based on a more stringent factual analysis made post- discovery. The standard for certification of an FLSA action is less onerous than that under Rule 23 of the Federal Rules of Civil Procedure which governs other types of class actions.  Conditional certification in an FLSA action only requires plaintiffs to make a “modest factual showing” that they and other putative class members were victims of a common policy or plan that violated the FLSA. 

The court rejected the argument  advanced by defendant that the United States Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), raised the bar for conditional certification of an FLSA action.  In Dukes, a Title VII discrimination case, the Supreme Court held that the “commonality” finding necessary for class certification under Rule 23 will frequently require the court to assess of the merits of the case.  The court in Pippins held that since the Rule 23 standards do not apply under the FLSA, the holding of Dukes was inapplicable. 

The Pippins court found that the FLSA standard for conditional certification had been met due to the plaintiffs’ showing that the Audit Associates performed the same or very similar duties, under similar supervision, after the same training, and subject to the same rules; and because of KPMG’s across-the-board policy classifying all Audit Associates as exempt.  Accordingly, the court authorized plaintiffs to send notice to similarly situated employees.

Posted on September 24, 2012 .