Brown v. Barnes and Noble, Inc.

Background

The plaintiffs alleged that Barnes and Noble, Inc. misclassified Café Managers in its stores as exempt, salaried employees rather than hourly employees eligible for overtime under the Fair Labor Standards Act. Barnes and Noble eventually reclassified the employees as non-exempt in 2016. As a defense to liability for the earlier classification, Barnes and Noble asserted that it had relied on a good-faith and informed decision by its Vice President of Human Resources.

The plaintiffs sought communications between Barnes and Noble executives and the company’s attorneys concerning the classification decision. Magistrate Judge Katherine H. Parker ordered Barnes and Noble to produce certain documents it had withheld as protected by attorney-client privilege and awarded the plaintiffs attorney’s fees and costs related to the motion to compel. Magistrate Judge Parker later denied Barnes and Noble’s motion for reconsideration.

Court’s Analysis

Barnes and Noble objected to both orders under Federal Rule of Civil Procedure 72. The district court reviewed the discovery orders under the standard requiring reversal only if they were clearly erroneous or contrary to law. The court stated that a party seeking to overturn a discovery order bears a heavy burden.

The court held that Barnes and Noble’s good-faith defense placed the decision maker’s state of mind at issue. Because legal advice could show whether the company ignored advice or acted contrary to it when classifying Café Managers, the court agreed that the plaintiffs were entitled to discover communications bearing on that issue. The court rejected Barnes and Noble’s argument that privilege could be waived only if the company specifically asserted a defense based on good-faith reliance on counsel.

The court also upheld the award of fees and costs. It explained that such an award generally follows when a motion to compel is granted, unless the discovery refusal was substantially justified, the parties did not meet and confer in good faith, or the award would be unjust. The court concluded that Barnes and Noble had not shown a basis to reverse the fee award.

Disposition

Judge Mary Kay Vyskocil denied Barnes and Noble’s objections in full. The court affirmed Magistrate Judge Parker’s December 23, 2019 and March 5, 2020 orders and ordered Barnes and Noble to produce all wrongly withheld documents by September 4, 2020.