Bethel v. Bluemercury, Inc.

Background

Leslie Bethel brought claims under the Fair Labor Standards Act (FLSA) and the New York Labor Law, alleging that BlueMercury failed to pay overtime wages and provide wage statements to Store Managers. Several other Store Managers filed written consents to join the case. Plaintiffs alleged that BlueMercury required Store Managers to respond to work-related calls, texts, and other messages before or after shifts and on days off, without compensation.

Plaintiffs sought conditional certification of a nationwide FLSA collective covering non-exempt, hourly Store Managers employed by BlueMercury anywhere in the United States during the three years before the complaint. At this initial certification stage, plaintiffs needed to make a modest factual showing that they and other workers were subject to a common policy that may have violated the FLSA. BlueMercury argued that plaintiffs had not shown a common unlawful policy, that the claims were too individualized for collective treatment, and that the court lacked personal jurisdiction over claims by Store Managers who did not work in New York.

Conditional certification and jurisdiction

The court found that plaintiffs met the initial factual standard. Four declarations described similar off-the-clock communications and estimated unpaid work, and the court concluded that this evidence was sufficient at this stage. The court did not resolve factual disputes, assess credibility, or decide whether the alleged policy actually violated the wage laws. BlueMercury may later seek to end collective treatment for workers who are shown not to be similarly situated after discovery.

The court declined to certify a nationwide collective. It held that the FLSA does not provide nationwide service of process and that due process principles therefore limited the court’s personal jurisdiction. Applying the reasoning of Bristol-Myers Squibb, the court concluded that Store Managers who worked outside New York did not suffer the alleged harm in New York and that their claims lacked a sufficient connection to the state. The court therefore limited the conditional collective to Store Managers who worked for BlueMercury at New York retail locations during the relevant period.

The court also concluded that BlueMercury had not waived or forfeited its personal-jurisdiction defense by omitting it from its answer. When BlueMercury answered, only Bethel was a plaintiff, and the later opt-in plaintiffs had not yet joined. The court directed the parties to meet and confer about the next steps for the opt-in plaintiffs’ claims in light of its jurisdictional ruling and to submit a joint letter by September 6, 2022.

Discovery and notice

The court granted plaintiffs’ request for pre-certification discovery. BlueMercury was ordered to provide, in a computer-readable format and within 14 days, the names, titles, compensation rates, employment dates, last known mailing addresses, last known email addresses, and known telephone numbers of employees within the New York-based putative collective. The court declined to order disclosure of Social Security numbers at that time because plaintiffs had not shown a current need for them.

The court generally approved plaintiffs’ proposed notice, consent-to-join form, and reminder notice, subject to modifications. Notice was authorized for Store Managers who worked for BlueMercury during the three years before the complaint was filed on March 31, 2021. The opt-in period was set at 60 days. The notice had to include BlueMercury’s description of its defenses, state that potential opt-in plaintiffs did not have to accept plaintiffs’ counsel, provide defense counsel’s contact information, and explain that joining workers might be asked to provide testimony and information about their work. The court allowed a reminder notice halfway through the 60-day period and authorized distribution by mail and email, along with posting at BlueMercury’s storefronts in areas used for required legal notices.

Equitable tolling and ruling

Plaintiffs separately asked the court to pause the limitations period for potential opt-in plaintiffs from November 15, 2021, until the date of the order. The court denied that request without prejudice. It stated that the issue could be considered later if an individual opt-in plaintiff made a showing that tolling was appropriate, because it was not yet clear that any potential plaintiff would be barred by the delay in notice.

Judge Katherine Polk Failla granted the motion for conditional collective certification only for the New York-based Store Managers, ordered the specified discovery, approved the notice and consent procedures with modifications, and denied the equitable-tolling motion without prejudice. The opinion did not determine the ultimate merits of plaintiffs’ overtime or wage-statement claims.