Autozone Can Dismiss Managers in Class Action

Tuesday, December 8, 2020

An Alabama federal choose granted AutoZone’s request to dismiss practically 500 present and former retailer managers from a nationwide collective motion that the nationwide auto-parts chain had misclassified them as exempt below the Truthful Labor Requirements Act (“FLSA”) and denied them additional time, holding these plaintiffs had missed the three-year statute of limitations and that plaintiffs had failed to determine equitable tolling ought to apply to avoid wasting their claims.

Previous to the moment lawsuit, Carr et al v. Autozoners LLC et al., a bunch of retailer managers filed an FLSA collective motion in 2010 within the district of Arizona, Taylor v. AutoZone, Inc., alleging that AutoZone improperly categorized them as exempt and didn’t pay them additional time. Roughly 1,500 opt-in plaintiffs joined that motion. The named plaintiffs in Taylor settled their claims in opposition to AutoZone and stipulated to the decertification of the collective motion and the dismissal of the opt-in plaintiffs’ claims with out prejudice. In response to considerations from the Arizona court docket that statute of limitations points might preclude opt-in plaintiffs from pursuing their claims in subsequent actions, the events entered a tolling settlement whereby AutoZone agreed that the statute of limitation was tolled for the opt-in plaintiffs’ claims in the course of the pendency of the Taylor motion and that the statute would begin operating once more upon dismissal of their claims with out prejudice.

Roughly one month later, a bunch of opt-in plaintiffs from Taylor filed the Carr case. The court docket conditionally licensed a category of present and former AutoZone retailer managers, excluding managers from California and Puerto Rico (the place they have been categorized as non-exempt), employed from February 27, 2012 (three years previous to the submitting date of Carr) to the current, in addition to people who had filed opt-in consents in Taylor. Over 1,600 class members opted into Carr, together with greater than 300 that had beforehand opted into the Taylor motion.

AutoZone moved for abstract judgment looking for dismissal of lots of of retailer managers from the case on statute of limitations grounds, each for failure to fulfill the two-year limitation for normal FLSA claims and the three-year limitations interval for willful FLSA violations. The Courtroom discovered {that a} query of truth existed on the difficulty of willfulness based mostly on the document, and refused to grant abstract judgment dismissing plaintiffs whose claimed have been purportedly barred by the two-year statute of limitations, because the three-year limitations interval might apply.

With respect as to if opt-in plaintiffs whose claims can be barred even when the three-year statute of limitations utilized, plaintiffs countered that the court docket ought to apply the doctrine of equitable tolling to seek out the statute of limitations tolled for opt-in plaintiffs upon the submitting of the criticism in Carr. Usually, in an FLSA collective motion, the submitting of a lawsuit doesn’t toll the statute of limitations for all putative class members and the statute runs till a category member recordsdata his or her private opt-in consent kind. To ensure that a court docket to use equitable tolling, plaintiffs should show that that some extraordinary circumstance prevented well timed submitting regardless of diligently pursuing their rights.

Plaintiffs in Carr argued that equitable tolling was applicable as a result of the size of time that elapsed between the submitting of Carr solely month after Taylor was dismissed in Arizona in 2015 and potential class members didn’t obtain discover of the pending collective motion till 2017.

The Courtroom identified that the usual is whether or not the potential opt-in plaintiff acted diligently in pursuing their claims, not the named plaintiffs who have been already occasion to the case. Accordingly, the Courtroom disregarded the immediate initiation of the Carr motion following Taylor as an element supporting equitable tolling. The Courtroom additional held that the purported delay till 2017 in reaching a court-approved discover of the motion didn’t justify the “excessive treatment” of equitable tolling provided that dozens of opt-in notices have been filed in 2015 and 2016 earlier than the category was conditionally licensed, which confirmed opt-in plaintiffs have been conscious of and will have pursued their claims earlier than a court-approved discover was issued. The court docket additionally identified that plaintiffs didn’t cite to any authority that litigation delays related to FLSA collective actions are an “extraordinary circumstance” that would warrant utility of the doctrine of equitable tolling. Accordingly, the Courtroom refused to use equitable tolling to increase the three-year FLSA statute of limitations to incorporate the claims of practically 500 potential plaintiffs within the lawsuit.

The Carr resolution is a vital reminder for employers that, within the absence of a tolling settlement, the usual for plaintiffs to determine equitable tolling is a excessive bar that’s usually reserved for circumstances involving circumstances the place plaintiffs are affirmatively misled into permitting the statutory interval to lapse, or the place the plaintiffs had no cheap method of discovering the alleged incorrect earlier than the tip of the interval. Absent extremely uncommon circumstances, till an opt-in plaintiff recordsdata his or her consent to affix, that particular person’s particular person statute of limitations continues to run.