Gillett v. Zara USA, Inc.

Background

Latrell Gillett, Alex Swinton, and Royale Adams sued Zara USA, Inc. and Inditex USA LLC under the Fair Labor Standards Act and New York Labor Law. They alleged that the defendants failed to include commission payments in the regular pay rate used to calculate overtime, and also alleged other wage-law violations, including failure to pay spread-of-hours compensation and failure to provide required wage notices and statements.

The plaintiffs moved for conditional certification under Section 216(b) of the Fair Labor Standards Act. Conditional certification is an early-stage determination allowing potentially similar employees to receive notice and choose whether to join an overtime lawsuit. It does not finally decide whether the defendants violated the law or whether all participating workers are actually similarly situated.

Conditional Certification

The court applied the first step of the two-step process used for Fair Labor Standards Act collective actions. At this stage, the plaintiffs needed to make a modest factual showing that they and other workers were subject to a common policy that may have violated the law.

The court found that the plaintiffs met that standard. Their declarations described a commission policy affecting hourly workers, alleged that the defendants failed to include commission compensation when calculating overtime, and identified observations and conversations involving workers at multiple Zara stores. The court also relied on the defendants’ acknowledgment that the commission policy applied to several categories of hourly employees at Zara stores across the United States.

The court rejected the plaintiffs’ proposed period extending to the present because the commission policy had been discontinued at all U.S. Zara stores by July 1, 2019. The court therefore conditionally certified a collective consisting of sales associates, stock associates, cashiers, and other hourly employees who worked for the defendants at Zara retail stores in the United States at any time from May 14, 2017, through July 1, 2019, and were not paid adequate overtime.

Notice to Potential Participants

The court ordered that notice be sent to potential participants for the same May 14, 2017, through July 1, 2019, period. It declined to apply a blanket pause to the statute of limitations for all potential participants, stating that individual workers could later seek such relief if needed.

The court ordered the parties to meet and confer about the notice language and the selection of an independent administrator. The notice could be distributed by first-class mail, email, and text message, and could be posted in employee areas at Zara stores that were not accessible to the general public. The court also allowed a deadline-reminder letter. The opt-in period was set at 60 days.

Pre-Certification Discovery

The plaintiffs requested a computer-readable list containing the names, last known addresses, telephone numbers, email addresses, work locations, and employment dates of potential collective members. They also requested social security numbers for people whose notices were returned as undeliverable.

The court granted the pre-certification discovery request in part. It ordered the defendants to provide the requested information other than social security numbers within 14 days. The court did not authorize collecting social security numbers at that time, but allowed the plaintiffs to renew that request if the other information proved insufficient to contact particular potential participants.

Disposition

The court granted the plaintiffs’ motion solely as to the narrowed collective covering hourly workers employed from May 14, 2017, through July 1, 2019. It ordered notice procedures, required the parties to meet and confer about notice and administration, and ordered the defendants to produce the specified employee information. The opinion addressed preliminary certification and related procedures rather than deciding the ultimate wage claims.