April 26, 2007
Kelley Drye achieved a major victory for Goodwill Industries, when the federal court for Eastern District of New York dismissed a class action lawsuit which had been brought against Goodwill, alleging violations of the Fair Labor Standards Act ("FLSA") and New York State Labor Law.
The Plaintiff, a store manager at one of Goodwill's retail locations, had been fired after failing to pass probation. He brought suit on behalf of himself and "all former and current Goodwill Store Managers," claiming that they had been "misclassified," were not in fact "exempt"
executives under the law, and were thus entitled to overtime compensation.
Kelley Drye first convinced the court that plaintiff's counsel should not be permitted to send out class notices to any other Goodwill managers, until after the issue of the Plaintiff's exempt status was decided. Once that discovery was completed, and it was clear that Plaintiff
was in fact 'exempt', had very minimal damages, and that no one else was likely to come forward to join the suit, Goodwill made an Offer of Judgment to Plaintiff. After the Plaintiff rejected the offer, Goodwill moved to dismiss, arguing that the action should be dismissed because
plaintiff was exempt, and that the rejection of the Offer of Judgment mooted the FLSA claims. Since no other putative class members had come forward, Judge Wexler of the Eastern District agreed with Goodwill, and dismissed the action in its entirety, finding the Plaintiff had no
individual claim. The use of an Offer of Judgment to 'moot' a potential FLSA class action is a relatively new tactic, that has now been successful in this and several other cases.