Wage and Hour Litigation:
Effective Use of Expert Witnesses
Selecting an Appropriate Expert and Leveraging Expert Testimony During Class Certification, Motion Hearings and Trial
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THURSDAY, MAY 24, 2012
Presenting a live 90-minute webinar with interactive Q&A
Neil A. Capobianco, Partner, SNR Denton, New York Michael A. Alaimo, Principal, Miller Canfield, Detroit
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Wage and Hour Litigation:
Effective Use of Expert Witness
Michael A. Alaimo
Principal
Miller Canfield
(313) 496-8447
To Use or Not to Use an Expert
• Initial Considerations
– Case Size (single plaintiff, multiple plaintiffs,
collective action)
– Case Complexity
– Potential Damages
– Cost
What Kind of Experts?
• Economic
• Statistical (often same as economic expert)
• Industrial Organization – misclassification, time
& motion
• Survey experts
• Government agency experts (state and federal)
• Consulting experts vs. testifying expert
Sources Experts Rely Upon
•
Timekeeping data
- Time in & out (shifts and breaks)
- Employee failure to clock in all the time
- Exempt employees
- Management edits
•
Payroll data
- Credited hours and pay (by pay type)
- Accuracy
- Often bi-weekly
•
Work history data
Sources Experts Rely Upon (con’t.)
• Other time-stamped data sources:
– Emails/text messages
– Security badges
– Point of Sale
– GPS
– Credit cards
– Personal observation-shadowing, video surveillance
– Any other data source that contains time stamps
• Policy documents, legal documents, interviews,
deposition testimony
Concerns when selecting an expert:
•
Issues to be addressed by expert
•
Proposed expert’s credentials? background?
•
How often has the proposed expert testified
about this issue?
•
How often testified for plaintiffs; for
defendants?
•
Impeached in prior cases?
•
Presence in front of a jury: pompous vs
Best Practices
• Managing Expert’s Work Product
– Close communication at all times (methodology, data, scope)
– Start data work early in the case
• Discovery (data collection and review)
• Preview analyses before turning data over to plaintiffs
• Opposing expert rebuttal
• Own analyses/testimony
– Know weaknesses of your witness’ analyses, challenge your
own witnesses
– Make sure your witness’ analyses reflect reality.
– Recognize the implicit assumptions behind your witness’
analyses.
– Don’t underestimate the amount of time it takes to gather data,
learn about the process, and conduct analyses.
Best Practices (cont.)
• Managing Costs
– Ask for cost estimates up-front
• Expert’s estimate should clearly state what is and is not covered
• Request regularly-scheduled updates (verbal or written) that justify
costs
• Understand how the case will be staffed
– Leveraging much of the work to lower-cost staff – Billing rate of each team member
• Ask to be notified before costs exceed estimate
• Fixed-price estimates
• Volume discounts
Litigation Strategy: What Lies Ahead
• Conditional Certification
• Final Certification/De-Certification
• Rule 23 Class Certification (e.g. State Wage & Claims)
• Mediation/Settlement Discussions
• Summary Judgment/Partial Summary Judgment
• Trial
Conditional Certification
• Often not the best opportunity to utilize expert
• Standard is generally lenient
– Named Plaintiffs must demonstrate that they are
similarly situated to the putative plaintiffs
– Similarly situated = must make a modest factual
showing sufficient to demonstrate that they and
potential plaintiffs together were victims of a common
policy or plan that violate the law
– Little, if any discovery, at this point
– Often times the court’s decision based on the
pleadings and affidavits
Conditional Certification (con’t)
• Exception to General Rule: more stringent standard sometimes applied where discovery has already occurred
– Court considers several factors including (1) the extent and consequences of disparate factual and employment settings; (2) various defenses available to defendant that appear to be individual to each plaintiff; and (3) other fairness and procedural questions
– Where plaintiff does not immediately seek conditional certification, this may be an opportunity to pursue discovery aggressively
– Utilize experts to demonstrate differences amongst the named plaintiffs, and therefore not suitable for collective action treatment
• Alternative: Where you and client have determined that named plaintiffs have weak claims:
– Take deposition of each named plaintiff – Move for summary judgment
Conditional Certification Granted
• Notice to potential Opt-Ins
• Aggressively pursue discovery
– How this is handled will depend on the number of opt–ins
– Consult with expert in preparing written discovery
• Depositions of named plaintiffs (if not already taken) and
representative number of other plaintiffs
– Consult with expert re: questions
Motion to Decertify/Final Certification
• Whether or not Plaintiffs file a motion for final certification, defendant
should file a motion to decertify
– Defendant has greater flexibility in framing the issues
– Defendant has the opportunity to argue its position twice
– Affidavit from expert demonstrating that individualized nature of
claims by named plaintiffs and representative plaintiffs
– Too much variation in the evidence precludes the court from
making a decision on the merits based on representative
evidence.
– Decertification as to entire collective action or some portion of it.
Use of Experts at Mediation/Settlement
• Rough Estimate vs Refined Damage Calculations
• Rough Estimate
– Number of class members x average OT rate X
average OT hours per week x number of weeks in
time period in question = back wages (before
penalties)
– Additional Variables
° Liquidated damages (good faith belief and reasonable
basis)
19
Use of Experts at Mediation/Settlement
(con’t)
• More Refined Damage Calculations
– IT experts regarding type of data available
– Liability Experts
– Damage Experts
• Expert Information regarding Damages
– Work History
• Accounts for employee turn over
• Account for leaves of absence, vacations and/or not in
relevant job
– Payroll Data
• Fluctuations in individual wages
• Overtime already paid
Motion for Summary Judgment
• Where Motion to Decertify denied in part or in its
entirety, Motion for Summary Judgment may be
possible.
– Although in deciding Motion to Decertify, the court must
consider whether defendant has individualized defenses to
the plaintiffs’ claim, it does not decide their validity
– All or some of what remains of the case once the motion to
decertify has been decided, may be addressed by a
summary judgment motion
– Expert may provide bases for all or some portion of
defendant’s summary judgment motion e.g.
de minimus
Use of Experts at Trial
• If you do use experts at this stage
– Using experts in selecting representative
class members and determining the reliability
of representational evidence
– Liability arguments
– Damages arguments
– Representative class members vs. the entire
class?
– Preparing the expert for testimony at trial
– Countering opposing side’s expert at trial
Wage and Hour Litigation
Effective Use of Expert Witnesses
Neil A. Capobianco Partner
T +1 212 398 5781
[email protected] snrdenton.com
Wage and Hour Litigation: Effective Use of Expert Witnesses
SNR Denton is a client-focused international legal practice delivering quality and value.
We serve clients in key business and financial centers from more than 60 locations worldwide, through offices, associate firms and special alliances across the US, the UK, Europe, the Middle East, Russia and the CIS, Asia Pacific and Africa, making us a top 25 legal services provider by lawyers and professionals.
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Wage and Hour Litigation: Effective Use of Expert Witnesses
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Wage and Hour Litigation: Effective Use of Expert Witnesses
Neil Anthony Capobianco
Neil Capobianco is a member of SNR Denton’s Litigation and Arbitration practice in New York, where he specializes in Employee Retirement Income Security Act (ERISA), employment and commercial litigation.
For more than 20 years, Neil has regularly counseled employers on day-to-day
employment issues and negotiated and litigated on behalf of employers, executives and professionals. He has successfully handled complex commercial litigation involving
advancement and indemnification of corporate officers and directors, class actions, ERISA breach of fiduciary duty, restrictive covenants, trade secrets, executive contracts,
professional liability, collective bargaining grievances and statutory claims. Neil’s extensive litigation experience encompasses the Age Discrimination in Employment Act; the
Americans with Disabilities Act; the Civil Rights Acts of 1866, 1964 and 1991; ERISA; the Equal Pay Act; the Fair and Accurate Credit Transactions Act; the Fair Labor Standards Act; the Family and Medical Leave Act; the Racketeer Influenced and Corrupt
Organizations Act; Sarbanes-Oxley Act whistleblower claims; Title VII of the Civil Rights Act of 1964; the Worker Adjustment and Retraining Notification Act; and state and common law claims for breach of contract, breach of fiduciary duty, defamation, discrimination, fraud, professional malpractice, retaliation, sexual harassment, unfair competition, and wage and hour violations.
Prior to joining SNR Denton, Neil was a partner, or of counsel, at other law firms. Neil speaks and writes frequently to provide practical, business-oriented advice to employers seeking to navigate the complex web of employment law. He conducts internal
investigations, spearheads anti-harassment training for employees and has represented employers before the Equal Employment Opportunity Commission, state and local human rights agencies, the unemployment division, and the federal and state departments of labor.
Wage and Hour Litigation: Effective Use of Expert Witnesses
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Wage and Hour Litigation: Effective Use of Expert Witnesses
Morales v. Greater Omaha Packing Co., Inc., No. 08 CV 88 (D. Neb. Feb. 15, 2011)
FLSA and state law action alleging donning, doffing, and cleaning are compensable.
Plaintiffs offer William J. Cutler, Jr. as expert, who conducted a “time study.”
Company moves to strike Cutler’s report, including his time study, which
measured the amount of time, pre- and post-shift and during the daily meal period where plaintiffs were not paid.
Company also objected to Cutler offering opinions about whether the Company complied with the FLSA and its regulations.
Company claimed that Cutler lacks qualifications to testify, his study methodology is not scientifically valid, his opinions are unreliable in terms of sample sizes,
selection methods, and data gathering.
Wage and Hour Litigation: Effective Use of Expert Witnesses
Morales v. Greater Omaha Packing Co., Inc., No. 08 CV 88 (D. Neb. Feb. 15, 2011)
Cutler = U.S. DOL Wage & Hour Compliance Specialist for 24 years.
Witness may qualify to render an expert opinion by knowledge, skill, experience, training, or education.
“Mr. Cutler is clearly qualified to testify.”
Company contends subjective bias in samples chosen not statistically random, made group assumptions instead of collecting individual data, and used small samples.
“Mr. Cutler testified that the use of this time study technique was the same as he used in the Department of Labor.”
Court notes Cutler would have had more objective material to work with if the records included the donning and doffing time.
Wage and Hour Litigation: Effective Use of Expert Witnesses
Morales v. Greater Omaha Packing Co., Inc., No. 08 CV 88 (D. Neb. Feb. 15, 2011)
Cutler, his assistant, and Plaintiffs’ attorneys were only given 2 days to make their observations and were not permitted to split up.
Cutler can be cross-examined at trial.
However, no legal conclusions.
“As a general matter an expert cannot offer conclusions of law. The expert must testify as to facts but should not focus on issues of law.”
Cutler may “testify as to the regulations he bases his opinions on so long as this testimony does not cross over into conclusions regarding whether defendant acted within the law or not.”
Wage and Hour Litigation: Effective Use of Expert Witnesses
Marting v. Crawford & Co., 9 WH Cases2d 554 (N.D. Ill. Jan. 8, 2004)
FLSA/Cal. class action claiming insurance adjusters are non-exempt.
Brian H. Kleiner, Ph.D, a tenured professor in the College of Business and Economics at California State University.
Published hundreds of articles in the field of human resource management.
Specialties include “job analysis.”
Articles include Determining Exempt Or Non-Exempt Status Under California Law
for Managers and California Minimum Wage and Overtime.
Kleiner reviewed Plaintiff’s tasks on daily time cards, reviewed Company’s training and operations systems and analyzed deposition transcript of Company’s
corporate designee.
Kleiner concluded that Plaintiff “did not customarily or regularly exercise discretion and independent judgment.”
Wage and Hour Litigation: Effective Use of Expert Witnesses
Marting v. Crawford & Co., 9 WH Cases2d 554 (N.D. Ill. Jan. 8, 2004)
Court concludes Kleiner’s report lacks reliability and should be excluded.
“not verified by the scientific method through scientific facts or experiments.”
Kleiner published no articles regarding his methodology of analyzing jobs to determine if they are exempt or non-exempt.
Kleiner admits he does not know if his methods are widely accepted.
Implausible that Kleiner is an expert in FLSA job classifications “where he admits that he has not even read the law itself.”
Kleiner admitted that he did not know the rates of error in his analysis.
Kleiner’s analysis was not based on extensive empirical studies and statistics.
Kleiner’s analysis goes to the ultimate legal issue of the case.
While an expert’s report won’t be rejected merely because it encompasses an ultimate issue for the factfinder, report must offer more than “bottom line.”
Wage and Hour Litigation: Effective Use of Expert Witnesses
In re Wal-Mart Stores Inc., 505 F. Supp. 2d 609 (N.D. Cal. 2008)
Rule 23 class action alleging final pay was short or late under California law.
Damages expert Martin Shapiro analyzed 3 electronic databases:
– “Associate” database tracks employee time, attendance, and payment records. – “Payroll” database contains details of employee’s payroll, including hours and
dollars.
– “PeopleSoft” database includes termination dates and termination reasons.
Shapiro claimed he could determine from these databases:
– Amount of PTO accrued but unpaid at time of termination (subclass 1). – Amount of other wages due but unpaid at termination (subclass 2).
– Whether and when final pay was received late by any particular employee (subclass 3).
Wage and Hour Litigation: Effective Use of Expert Witnesses
In re Wal-Mart Stores Inc., 505 F. Supp. 2d 609 (N.D. Cal. 2008)
Wal-Mart attacked Plaintiffs’ class certification on 2 main grounds:
– Dr. Shapiro’s methodology and calculations are so rife with errors as to make any reliance on them insufficient as a matter of law.
– Databases analyzed don’t contain requisite information necessary to determine whether and when Wal-Mart’s statutory duties to tender final pay were
triggered, specifically, information related to the exact date an employee was terminated and whether and when the employee made himself available to pick up his final pay in-store.
“The precision with which [Wal-Mart’s expert] was able to identify and correct
errors in Dr. Shapiro’s calculations only illustrates the degree to which the needed information can be extracted from the databases with the requisite precision.”
Wage and Hour Litigation: Effective Use of Expert Witnesses
In re Wal-Mart Stores Inc., 505 F. Supp. 2d 609 (N.D. Cal. 2008)
After receiving the declaration from Wal-Mart’s expert, Dr. Shapiro re-performed his calculations – taking into consideration the Cash Office Database, which
captures cash paid to employees – and concluded that his initial calculations were only affected by 0.02 percent.
“Thus, while Wal-Mart makes heavy weather of the errors in Dr. Shapiro’s
calculations, the errors themselves are either negligible or easily identifiable and correctable.”
At the class certification stage, “robust gatekeeping of expert evidence is not required; rather, the court must query only whether expert evidence is ‘useful in evaluating whether class certification requirements have been met.’”
“Whether or not his calculations are ultimately correct is a matter more
appropriately raised at the merits stage, and need not be reached at the class certification stage.”
Wage and Hour Litigation: Effective Use of Expert Witnesses
Wage and Hour Litigation: Effective Use of Expert Witnesses
Rule 26(a)(2)(B)(ii) requires expert witness disclosure of:
“the facts or data considered by the witness in forming [the expert’s opinions].”
Prior rule required disclosure of “data or other information.”
“Many courts read the disclosure provision to authorize discovery of all
communications between counsel and expert witnesses and all draft reports” – Advisory Committee Notes
This 2010 amendment effectively ends the 17-year experiment in requiring disclosure of all expert-attorney communications.
Wage and Hour Litigation: Effective Use of Expert Witnesses
Rule 26(b)(4) is amended to provide work-product protection against discovery regarding draft expert disclosures or reports and – with 3 specific exceptions – communications between expert witnesses and counsel.
Specifically, attorney-expert communications are subject to work product protections, except to the extent the communications:
Relate to compensation for the expert’s study or testimony.
Identify facts or data that the party’s attorney provided and that the expert considered in forming the opinions to be expressed.
Identify assumptions that the party’s attorney provided and that the expert relied on in forming the opinions to be expressed.
Wage and Hour Litigation: Effective Use of Expert Witnesses
Rules 26(b)(3)(A) and (B) protect drafts of any report or disclosure required under Rule 26(a)(2), regardless of the form in which the draft is recorded.
Rule 26(b)(3)(A) protects “Documents and Tangible Things” prepared in anticipation of
litigation or for trial by or for another party or its representative, unless (i) they are otherwise discoverable under Rule 26(b)(1); and (ii) the party shows that it has substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means.
Rule 26(b)(3)(B) provides that even if the Court orders the disclosure of these
materials, it must protect against disclosure of the mental impressions, conclusions,
opinions, or legal theories of a party’s attorney or other representative concerning the litigation.
Wage and Hour Litigation: Effective Use of Expert Witnesses
Intended Results:
Make discovery less expensive and time-consuming.
– Reduce wasteful discovery efforts focused on attorney-expert communications.
– Remove duplication in expert duties.
Improve the quality of expert testimony.
– Encourage robust communications between attorney and expert. – Focus challenges on substance of opinions.
Committee Note: “The refocus of disclosure on ‘facts or data’ is meant to limit disclosure to material of a factual nature by excluding theories or mental
