Labor and Employment Team Defeats Collective Certification for Urban Outfitters

A team led by Tom Barton, Cheryl Orr, Bill Horwitz and Jaime Walter has achieved a significant victory for Urban Outfitters in the U.S. District Court for the Eastern District of New York. On September 6, the court granted the team’s Motion to Decertify the Collective Action and denied plaintiffs’ Motion for Final Certification of the Collective Action. As a result of this ruling, the former nationwide collective action with more than 160 opt-ins is now a three-plaintiff lawsuit.

Plaintiffs are former Department Managers in Urban Outfitters stores who allege that the company misclassified them as exempt employees and improperly paid them on a salary basis in violation of the Fair Labor Standards Act. They contend that they should have been paid on an hourly basis and received overtime pay at a rate of time-and-a-half for all hours they worked over 40 hours in a week. They sought to bring their claims as a collective action on behalf of current and former Department Managers nationwide. They sought to recover, among other things, unpaid overtime, liquidated damages and attorneys’ fees.

On April 22, 2016, the team filed a Motion to Decertify the Collective Action and plaintiffs filed a Motion for Final Certification of the Collective Action. On March 7, 2017, Magistrate Judge James Orenstein issued a Report and Recommendation recommending that the District Court Judge grant the company’s Motion to Decertify the Collective Action and deny plaintiffs’ Motion for Final Certification of the Collective Action. On September 6, 2017, District Court Judge Roslynn Mauskopf adopted that Report and Recommendation.

Judge Mauskopf agreed with Judge Orenstein that: (1) the record reflects material differences among the named plaintiffs and opt-ins with regard to both the amount of exempt work they performed and the level of managerial authority they exercised; (2) those differences make it unduly difficult for Urban Outfitters to defend claims against it using representative evidence; and (3) if the litigation proceeded as a collective action, the differences in the duties and levels of authority of the plaintiffs and opt-ins would require inefficient mini-trials for more than 100 plaintiffs and opt-ins, which would not serve the interests of procedural economy or fairness.