Argued March 31, 2015.
As Corrected September 4, 2015.
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 12-C-1274 -- Thomas M. Durkin, Judge.
For MARISELI GOMEZ BELL, individually, and on behalf of all others similarly situated, Plaintiff - Appellee: Thomas Arthur Doyle, Attorney, Thomas A. Doyle, Ltd., Chicago, IL; Amy Elisabeth Keller, Attorney, Wexler Wallace LLP, Chicago, IL.
For Pnc Bank, Defendant - Appellant: Allyson Newton Ho, Attorney, Morgan, Lewis & Bockius LLP, Dallas, TX.
Before KANNE and ROVNER, Circuit Judges, and SPRINGMANN, District Judge.[*]
Rovner, Circuit Judge.
Mariseli Gomez Bell alleged that her former employer, PNC Bank, failed to pay her overtime wages in violation of the Fair Labor Standards Act, 29 U.S.C. § § 201-262, the Illinois Minimum Wage Law, 820 ILCS 105/1-105/15 and the Illinois Wage Payment and Collection Act, 820 ILCS 115/1-115/15. Bell claims that the failure was not an isolated incident, but rather part of a policy or practice of PNC that affected many other employees. Consequently she successfully moved the district court to certify a class of plaintiffs. We affirm.
The district court set forth an extensive and thorough recitation of the facts in this case, from which we borrow liberally. Bell worked as a senior banker at the PNC branch at Broadway and Berwyn Streets in Chicago from June 1, 2009, through May 31, 2011. Bell submitted an affidavit from which the district court extracted facts about her knowledge of PNC's overtime policies and practices. R. 65, apx.1-7. In her affidavit, Bell states that she was evaluated, in part, on the basis of how many new accounts she brought into the bank, and in order to generate new accounts she needed to spend " significant" time outside of her regular work hours visiting prospective clients. Some of the assignments to visit prospective clients came from Greg Bolden, a PNC vice president who did not work at the Broadway and Berwyn branch. The overtime work was necessary, she asserted, because the branch was understaffed and could not spare her absence, including, at times, during her lunch breaks.
According to Bell, when she submitted time cards reflecting overtime work, her branch manager, Letticia Flores, rejected the time cards and told Bell that PNC " would not permit the overtime." R. 65, apx.3. Flores also submitted an affidavit describing her personal knowledge of PNC's overtime policies and practices. Flores is now deceased and cannot be cross-examined, but in her affidavit, Flores states that her supervisor, Christina Romis, a PNC regional manager, told her that " PNC would not permit [Flores] to report overtime for the branch," and " PNC expected its employees to handle their outside-the-branch work on their own time, without reporting any extra hours that they worked." Id., apx.10. Bell also averred that Romis told her that PNC " would not permit overtime to be reported by employees." Id., apx.3. PNC, however, has always had written policies prohibiting off-the-clock work and requiring payment for overtime hours.
In January 2011, Margaret Alvarez, an Employee Relations Investigator for PNC, contacted Bell to ask whether she had ever worked unpaid overtime hours, and Bell confirmed that she had. According to Bell, Alvarez told her that PNC " would not pay for hours that [Bell] could not support with documents." Id., apx.4. On July 31, 2011, after Bell had resigned from PNC, she received an electronic deposit in her checking account for $1,392.89. Later, Bell learned through communications related to this litigation, that through this payment PNC intended to compensate her for 68.15 unpaid overtime hours. Bell believes that this payment is insufficient to compensate her for the actual number of overtime hours she worked for PNC in 2009 and 2010.
In addition to Bell's and Flores' affidavits, the district court considered PNC's own investigation reports documenting complaints of unpaid overtime. The reports show that in addition to Bell, two other employees at the same branch complained that they were not paid for overtime hours that they worked. One employee, Ernest Ward, claimed that he was not paid for 45.61 hours of overtime and that he was discouraged from submitting overtime records. PNC's investigation into Ward's claims revealed that Flores did not want employees at her bank working overtime and, instead, offered Ward permission to leave work early on another day as compensation. R. 66, apx.276-77. After the investigation, PNC paid Ward for 50.18 hours of overtime.
According to the PNC investigator, on July 3, 2013, PNC began to investigate whether Ward " enable[d] branch employees to falsify bank referral reports." R. 73-1, pp.6-7. The next day, Ward filed a lawsuit against PNC for failure to pay overtime wages. See Ward v. PNC Bank, N.A., No. 13 C 95 (N.D. Ill., dismissed Sept. 25, 2014). PNC fired Ward on February 14, 2013.
PNC's investigation reports also show that another employee at Bell's branch, Tess Claveria, claimed that Flores refused to allow overtime claims and instead directed Claveria to leave work early on a later day in an attempt to compensate Claveria for the overtime hours. Claveria also claimed that she was deprived of her full lunch hour on certain occasions. Claveria sought compensation for overtime hours, and PNC determined that it only owed her payment for 8.02 overtime hours. Alvarez stated that PNC's analysis of teller electronic journals, alarm codes, log-in and log-out reports, and payroll reports for the dates Claveria reported unpaid overtime or missed meal periods showed that Claveria provided inconsistent statements about the time she worked. On December 26, 2012, PNC began to investigate claims that Claveria " entered false information that enabled her to receive credit for unearned referrals and/or unearned incentive pay." R. 73-1, p.6. Claveria opted into this lawsuit on January 23, 2013, and PNC fired her on February 14, 2013.
PNC eventually fired branch manager Flores as a result of its investigations into allegations of unpaid overtime. Bell testified that after Flores was fired, her new " manager [told Bell] that if [Bell] was working overtime to go ahead and report it." R. 65, apx.53 (145:17-23).
PNC produced all of its internal investigation reports detailing any direct or indirect complaints of unpaid overtime in Illinois for the relevant time period. The reports disclose that nearly ninety percent of PNC's Illinois branches have never had any complaints about unpaid overtime. They also show that some employees at other branches complained to PNC Employee Relations that they worked overtime hours for which they were not paid.
PNC produced a table compiling these complaints and listing any overtime compensation PNC paid as a result of its internal investigations. R. 65, apx.153-58. Bell's counsel compared PNC's table to the investigation reports themselves and created a list of complaints found in the investigation reports that were not included in PNC's table, and a list of employees who worked overtime but were not paid. R. 65, apx.159-161. The district court reviewed PNC's table, Bell's counsel's list, and the investigation reports themselves and created a summary compilation of what the evidence revealed regarding complaints of unpaid overtime made by employees at each branch included in the class Bell seeks to certify. The district court compiled the following facts:
o At the Algonquin branch, an employee alleged that he was not paid when he arrived early to work or when he traveled to customer locations to pass out flyers. R. 66, apx.302, apx.308-09. The employee also stated, however, that the branch manager had never told him not to record overtime.
Id. p. apx.308. Other employees at the branch stated that the employee purposefully arrived to work early so he could leave early.
Id. p. apx.309. PNC told the employee he would need to provide documentation for any time for which he had not been paid, and the employee agreed that he would provide this if he could.
Id., apx.302. The employee was fired for other misconduct unrelated to recording time,
id. at apx.301-03, and the employee never requested payment for unpaid hours.
o At a Bloomington branch on Market Street & JC Parkway, an employee alleged that the branch manager planned to shift overtime hours to the following week to avoid paying overtime rates. R. 66, apx.314. PNC contacted the manager, and he denied having said that he intended to shift hours in this manner and promised to clarify with the branch staff that overtime hours would not be shifted.
o At the Bolingbrook branch, a branch manager was informed that two employees had taken home information about new PNC products to study. When an employee noted that employees should receive overtime pay for such work, the branch manager said, " Bolingbrook does not have this issue." R. 66, apx.319-20. The manager was disciplined.
Id., apx.321. The two employees did not request overtime pay, but PNC paid each of them an hour of overtime. R. 65, apx.155. Another employee stated that on rare occasions she did not record that she left work ten minutes late. R. 66, apx.328. PNC's records do not reflect that this employee requested overtime compensation for this time or that PNC paid her any such compensation.
o At the Buffalo Grove branch, several employees reported that the branch manager told employees that " PNC does not allow overtime and overtime would only be paid to employees who were deserving of it." R. 66, apx.364. The manager also told employees to take extra paid vacation rather than paying overtime.
Id. PNC investigated the manager, R. 66, apx.362, and paid seven employees a total of 148.45 hours of overtime. R. 65, apx.154.
o At the Carpentersville branch, an employee initially alleged that she had been denied a lunch break. The investigation revealed that the employee had formerly been allowed to take her lunch break late in the afternoon so she could pick up her son, but had been told she could no longer do this because it violated PNC policy. The employee confirmed that she was fully compensated for her lunch break and was not owed additional pay. R. 66, apx.418.
o At a Chicago branch at 18th & Clark, an employee reported that her practice was to enter all of her time for the
week at the beginning of the week and then adjust for any differences that occurred as the week progressed. R. 66, apx.424. She reported that on some occasions she worked past the time she had initially recorded but failed to adjust the time.
Id. The employee stated that her branch manager never advised her not to record all the time she worked.
Id., apx.424-25. PNC investigated whether the employee was owed any additional pay and determined that she was not. R. 65, apx.154.
o At a Chicago branch at 35th & State, an employee alleged that she worked through lunch breaks, but she also stated that she always recorded the time she worked, and she did not allege that PNC had failed to pay her overtime she was owed. R. 66, apx.438. PNC's investigation revealed that the branch manager thought the employee was exempt from overtime pay, and the manager was issued a warning for this mistake.
o At a Chicago branch at 87th & Cottage Grove, an employee reported that the branch manager " made [the employee] feel as though she was not allowed to enter overtime on her time card," but " never specifically directed her not to enter overtime." R. 66, apx.475. PNC fired the manager due to " extensive discrepancies in the time [the employee] entered as compared to the time she was logged into her computer" over a three-month period, and the manager was " ultimately responsible" for errant time reporting.
Id. PNC paid the employee for 251.6 hours of overtime as a result of its investigation. R. 65, apx.154. PNC's investigator's notes also show that another employee alleged that her lunch breaks were frequently interrupted due to inadequate staffing. R. 66, apx.487. PNC's records do not reflect that this employee's allegations were addressed.
o At a Chicago branch at LaSalle & Kinzie, the assistant branch manager reported that some employees had not reported overtime because " they may have been told there was 'no overtime.'" R. 67, apx.545. One employee reported that he did not always record his overtime because " he did not want the branch to incur overtime."
Id. Both employees stated that the branch manager communicated the importance of recording their time accurately, and no one had ever told them to enter time inaccurately.
Id. Another employee consistently worked overtime and failed to record it, despite the manager telling the employee not to stay late and to accurately record his time if he did stay late.
Id., apx.540. Alvarez states that this employee was paid for all hours worked. R. 73-1, p.7 (ID#1036), but PNC's list of overtime paid does not show that the employee was paid. R. 65, apx.154.
o At a Chicago branch in Lincoln Park, an employee admitted that she sometimes interrupted her lunch break to assist customers. She did not allege that she was owed unpaid overtime or that her supervisor required her to interrupt her lunch break. R. 67, apx.557.
o At a Chicago branch at Madison & Leavitt, an employee admitted that he sometimes interrupted his lunch break to assist customers and would take additional lunch break time to compensate. He did not allege that he was owed unpaid overtime or that his supervisor required him to interrupt his lunch break. R. 67, apx.564.
o At a Chicago branch at North & Homan, several employees stated that the branch manager had interrupted their lunch breaks. R. 67, apx.570-71. The manager was disciplined with a verbal warning.
Id. at apx.571. None of the employees sought payment for unpaid off-the-clock hours, and PNC did not pay for any. R. 65, apx.157.
o At a Chicago branch at State & Huron, an employee alleged that he had not been paid for work he did at home. R. 67, apx.577. The employee was advised that he was not permitted to work at home without approval of his manager.
Id. The employee was paid for 0.30 hours of overtime. R. 65, apx.154.
o Bell cites hand written notes of PNC investigators and alleges that these notes show that in 2009 at the
Downers Grove branch on 75th Street, " employees reported that management refused to permit employees to record time for work performed before the bank opened," R. 64, p.5 (citing R. 67, apx.583-84, apx.588, apx.593), and that " [e]mployees were not paid for pre-shift work." R. 64, p.7 (citing R. 67, apx.583-85). The district court, however, could not decipher the hand-written notes. Alvarez stated that the investigation at the Downers Grove branch did not involve an allegation of unpaid overtime, but rather allegations that employees were arriving to work late but recording their time as if they had arrived on time. R. 73-9, pp.8-9 (ID#1096-97). The district court noted that Alvarez did not cite any documents in the record to support these statements, nor did she explain why she would have personal knowledge of the investigation at the Downers Grove branch.
o At the Elgin branch, an employee stated that " there used to be a rumor that the policy was if you had an outage and you did not find it you did not get paid for the time you took to look for the outage." R. 67, apx.599. The employee described this as an " unofficial rule."
Id. The employee, however, also stated that he had recently attended a meeting at which a person from the PNC legal department explained that all overtime was to be paid.
Id. The employee also stated that he has always been paid overtime, despite the rumor of an unofficial policy. Another employee initially alleged that she thought the branch manager told her not to record overtime, but that she missed a meeting at which the manager instructed the employees to record all overtime accurately.
Id., apx.599-600. The employee initially thought she was owed 200 hours of overtime pay but later clarified that she was owed less than $200 of overtime pay.
Id., apx.600. The employee agreed that she was in fact owed 3.45 hours of overtime,
id., and PNC paid this. R. 65, apx.154.
o At the Fox Lake branch, an anonymous employee reported that the branch manager required employees to report to work five minutes early and not record that time. R. 67, apx.612-13. PNC investigators spoke with two other employees at the branch and they said that the manager had never given such an instruction.
Id. No employees requested payment for unpaid overtime, and PNC did not pay for any. R. 65, apx.154.
o At the Loves Park branch, several employees reported that a former branch manager instructed them not to record overtime, but that their current manager instructed them to report any overtime they worked. R. 67, apx.623. Alvarez stated that the Employee Relations department repeatedly asked the employees to report any overtime they were owed, but the employees failed to do so. R. 73-1 ¶ 46.
o At the North Aurora branch, employees reported that the branch manager required them to arrive at work five minutes prior to the start of their shifts but not record these five minute periods. R. 67, apx.652-53. The manager was fired,
id. at apx.653, and seven employees were each paid between 1.75 and 2.75 hours of overtime. R. 65, apx.155.
o At the Orland Park West branch, an employee was suspected of under-reporting her time. R. 67, apx.670. The employee
admitted that she under-reported her time to hide her inability to work efficiently.
Id., apx.670-71. PNC paid the employee 1.25 hours of overtime. R. 65, apx.155.
o At the Park Ridge branch, an employee reported a single instance of her manager telling her to record a lunch break she did not take in order to avoid overtime and allow the employee to take an extra paid break the following week. R. 67, apx.676-77. PNC told the manager this violated PNC policy.
Id., apx.677. The employee did not request payment for unpaid overtime, and PNC did not pay for any. R. 65, apx.157.
o At a Rockford branch on Riverside Boulevard, an employee reported that the branch manager " requested" that employees take extra time off rather than report overtime. R. 67, apx.702. PNC investigators spoke with three employees at the branch and all three said they had never been instructed not to report overtime. One employee skipped lunches without the manager's knowledge, and PNC paid that employee 2.75 hours of overtime. R. 65, apx.154. Another employee alleged that the manager had asked him to complete reports at home without overtime pay, but the employee indicated that he refused to do so. R. 67, apx.693.
o At the Schaumburg branch, in the course of a separate investigation, PNC learned that an employee had interrupted her lunch on several occasions to assist customers. R. 67, apx.714. PNC paid the employee 1 hour of overtime. R. 65, apx.155. Another employee stated that he also sometimes interrupted his lunch break to assist customers, but the employee stated that he would always complete his lunch break at some point during the day. R. 67, apx.714. Both employees stated that the decision to interrupt their lunch breaks was their own.
o At the West Aurora branch, during a review of the branch's records, the PNC Employee Relations investigator noticed that an employee had worked every day from March 7, 2011, through March 18, 2011. R. 67, apx.726. The employee stated that " she thinks nothing of it if she comes into the branch to help out for a few minutes, and that she does not expect to get paid."
Id. at apx.725. The manager advised the employee that she must record all her time.
Id. PNC's investigation report notes that the employee would be paid overtime for the unreported time, R. 67, apx.725, but PNC's list of overtime payments contains no record that the employee was paid. R. 65, apx.156.
o At the Wheaton--Danada branch, two employees reported that the branch manager " reacted in a negative manner when they entered overtime on their time sheets." R. 67, apx.738. Both employees also reported that " they had inaccurately recorded their time on a number of occasions in order to make it appear as though they had only worked 40 hours per week."
Id. at apx.731. After an investigation into the amount of overtime pay PNC owed the two employees, PNC paid one employee for 39 hours of overtime and 27 additional hours of regular pay, and the other employee for 1.6 hours of overtime and 1.6 additional hours of regular pay. R. 65, apx.154.
In addition to the incidents recorded in PNC's investigation reports, Bell submitted an affidavit from James Cobb, a manager of PNC's DePaul branches, in which he states that he had borrowed " more than 37[PNC] employees ... from branches all over the Chicago region" to staff " table days," which are PNC promotional events. R. 65, apx.14. Cobb attached to his affidavit a list of 37 employees he says he " borrowed." R. 65, apx.15. Cobb learned that his spouse, Ernest Ward (who as the
Court has already noted, filed a related suit against PNC), had worked for him during a table day but had not recorded this time on his time card at the Broadway and Berwyn branch where Ward worked. Cobb expressed concern to a PNC Employee Relations representative that he did not know whether the thirty-seven employees had been paid for their overtime through their branch offices. Cobb claimed that he was told to ignore the issue and that PNC would not investigate. Alvarez, on the other hand, testified that she talked to PNC payroll personnel who told her that all thirty-seven of the employees in question had been properly paid. Alvarez did not provide business records to support this assertion. And, at least according to Cobb's affidavit, Ernest Ward was not paid for his overtime.
PNC contends that it has a written overtime policy that explicitly requires payment of time and a half for any time worked over forty hours in any work week. It contends that pursuant to this policy, it " has paid overtime at every branch in the putative class every year during the class period." R. 72, p.6. Specifically, according to Alvarez, " PNC has paid overtime to non-exempt branch employees at every branch in the putative class during each year from 2009 to October 2013 for a total of $432,290.85 for approximately 17,673 hours of overtime." R. 73-1, p.4, (ID#1031). Alvarez, however, did not submit or reference any business records to the district court to support this assertion nor did she explain how she had personal knowledge of those facts. The district court, therefore, did not consider those assertions. This may have been an incorrect conclusion, as evidence given by affidavit could suffice to resolve disputes before deciding whether to certify a class. See Szabo v. Bridgeport Machs., Inc., 249 F.3d 672, 676 (7th Cir. 2001) (For class certification purposes, a judge need not accept the plaintiff's assertion that she met the requirements of Rule 23 as conclusive; instead " the judge would receive evidence (if only by affidavit) and resolve the disputes before deciding whether to certify the class." ). On the other hand, an affidavit must be based on personal knowledge. Fed.R.Civ.P. 56(c)(4); Cocroft v. HSBC Bank USA, N.A., No. 14-1460, 796 F.3d 680, 2015 WL 4597537, at *4 (7th Cir. July 31, 2015). As we discuss in a moment, the burden is on the proposed plaintiff class to prove eligibility for class certification, and so the importance of the affidavit may not be significant. If the district court finds it necessary, it can explore the issue further upon remand.
The district court also noted that even if PNC had business records to support Alvarez's statements that PNC paid all of the overtime due, those records would not negate the evidence in the record that PNC's management had denied compensation for overtime work on a number of occasions. The district court found that the evidence showed that PNC often paid overtime only after initially failing to do so. It then noted that if PNC willfully failed to pay overtime, PNC would be liable not merely for actual overtime wages, but also ...