Lazaar v. The Anthem Companies, Inc.

Background

Leslie Lazaar filed a proposed Fair Labor Standards Act (FLSA) collective action and a Federal Rule of Civil Procedure 23 class action against The Anthem Companies, Inc., and other defendants. She alleged that the defendants unlawfully classified her and similarly situated workers as exempt from federal and New York overtime requirements. According to Lazaar, she worked as a registered nurse and utilization-review nurse, performing medical-necessity reviews, sometimes for more than 40 hours per week and occasionally for more than 60 hours. She alleged that she and similar workers were paid salaries, treated as exempt, and not paid time-and-a-half for overtime.

Three other utilization-review nurses had opted into the case. Lazaar sought conditional certification under 29 U.S.C. § 216(b) for a group of workers in New York who held utilization-review or similar positions, were paid salaries, were treated as exempt from overtime laws, and were primarily responsible for medical-necessity reviews. The defendants had previously argued that Lazaar was exempt as a learned professional, that her FLSA claims were time-barred, and that she had not adequately alleged that two defendants employed her. The opinion states that the court had denied the defendants’ motion for judgment on the pleadings in an earlier ruling.

Legal standard

Under the FLSA, employees may pursue unpaid wages together when they are similarly situated and file written consent to join the case. The Second Circuit uses a two-step process. At Step One, the court decides whether potential opt-in plaintiffs who may be similarly situated should receive notice. The plaintiff must make only a modest factual showing that she and potential opt-in plaintiffs were victims of a common policy or plan that violated the law.

At this stage, the court does not resolve factual disputes, decide ultimate merits issues, or determine witness credibility. If the case proceeds, the court may later examine the full record at Step Two to determine whether the opt-in plaintiffs are actually similarly situated and whether the collective should remain certified.

Court’s analysis

The court found that Lazaar met the modest factual burden. Her allegations and declarations indicated that she and potential collective members performed utilization or medical-necessity reviews, were paid salaries, were classified as exempt from overtime, and were not paid overtime for hours worked over 40 per week. The court concluded that these assertions showed similarity in both job requirements and pay practices under a common policy or scheme.

The court rejected the defendants’ request to replace the Second Circuit’s two-step approach with a more demanding approach used by the Fifth Circuit. The court stated that it was required to follow the Second Circuit’s precedent and found no basis to depart from that procedure. It also rejected the defendants’ arguments that the declarations were irrelevant because some declarants worked outside the proposed period and that differences in job duties defeated similarity. The court explained that evidence outside the statutory period could help show the defendants’ wage practices and that differences in specific tasks did not overcome the broader similarities shown by the record.

Disposition and notice

The court granted Lazaar’s motion for conditional certification of an FLSA collective and authorized the case to proceed as an FLSA collective action. The defined collective includes all persons who, during the period beginning three years before notice is sent through the present, worked for the defendants in New York as utilization-review nurses, medical-management nurses, utilization-management nurses, utilization managers, or in similar positions; were paid a salary; were treated as exempt from overtime laws; and were primarily responsible for medical-necessity reviews.

The court ordered the defendants to provide Lazaar with the names and contact information of all members of the putative collective within 21 days of the opinion and order. The parties must confer about the form of the notice and report within 30 days whether they reached an agreement. If they did not agree, they were directed to submit competing proposals for the court’s consideration. The order did not decide whether Lazaar or any collective member ultimately was entitled to overtime pay.