Citibank “Personal Bankers” Win Conditional Class Certification in Nationwide FLSA Action

In a recently unsealed ruling, Winfield v. Citibank, U.S. District Judge John G. Koeltl granted conditional class certification, pursuant to Section 216(b) of the Fair Labor Standards Act (the “FLSA”), to a nationwide class of “personal bankers” who alleged that their employer Citibank failed to pay them the FLSA overtime rate.

The plaintiffs alleged that Citibank had a “dual-edged policy” concerning payment of overtime, essentially forcing the personal bankers to work overtime but not paying them for it. Essentially, Citibank required its personal bankers to choose between the lesser of two evils: the bankers alleged that Citibank strictly limited the number of overtime hours they could work, but then encouraged “Personal Bankers to work overtime by requiring them to meet strict sales quotas that could not reasonably be accomplished in a forty-hour work week.” As a result, personal bankers who worked over forty hours per week were not paid proper overtime rates under the FLSA. The personal bankers submitted evidence showing that Citibank had a disciplinary policy governing failures to meet quotas, and that the disciplinary policy was instituted on a nationwide basis.

Section 216(b) of the FLSA allows a group of employees who are “similarly situated” with respect to the FLSA violations they allege to band together and bring a collective action against their employer. The standard for determining whether employees are similarly situated requires only a minimal showing, and motions for collective action certification are usually made at a very early stage of the litigation.

In this action, Citibank opposed conditional certification on several grounds. Citibank argued that the personal bankers were not “similarly situated” because they had not alleged a common policy that violated the law: Citibank’s limitation on overtime hours was lawful. However, Judge Koeltl pointed out that a lawful policy may nonetheless be actionable if it is implemented in an unlawful way.

Here, the personal bankers had alleged that the limitation on overtime–lawful in and of itself–was actionable due to its combination with encouragement by Citibank branch managers to work overtime to meet sales quotas and the subsequent refusal to pay overtime. One plaintiff testified that “[My Branch Manager] said that I needed to do whatever it took to meet my goals. That Regional was not approving overtime, and that even if I work overtime, I was not allowed to put it on the sheet.” Other plaintiffs testified similarly. The court cited to multiple emails by Citibank managers showing that the “dual-edged policy” of setting high quotas and not paying overtime necessitated by those high quotas was not simply a rogue policy implemented by a few. In these emails, the managers acknowledged that pressure was coming from higher up in the organization. Some of the managers had told the personal bankers that the dual-edged policy was dictated to them by regional management.

Among other arguments, Citi moved to strike some of the personal bankers’ declarations and testimony as hearsay. In particular, Citibank argued that the statements concerning regional management’s dictation of policies was inadmissible at trial and therefore could not be used to support conditional certification. However, Judge Koeltl noted that courts frequently allow hearsay to support a motion for conditional certification due to the preliminary nature of such a motion. Judge Koeltl denied Citibank’s motion to strike without prejudice.

Judge Koeltl also joined a growing number of courts that have rejected application of Wal-Mart v. Dukes to motions for conditional certification under the FLSA. Judge Koeltl noted that Dukes was decided under the more stringent standards of Rule 23, rather than the minimal standards of FLSA Section 216(b) which require only that all employees be “similarly situated.” In Wal-Mart, the Supreme Court took issue with the allegations of a single employee who sought to represent a nationwide class of employees against whom Wal-Mart had allegedly discriminated. In Wal-Mart, the Supreme Court held that a plaintiff must show that his or her claims can be proven by reference to a common policy.
Judge Koeltl held that the plaintiffs’ testimony concerning statements from regional management, as well as the overtime and quota policies Citibank had in place, had sufficiently shown, for purposes of 216(b), that the plaintiffs were subject to a “common policy or plan that violated the law.”

Abbey Spanier, LLP, located in New York City, is a well-recognized national class action and complex litigation law firm.