Burlington Coat Factory. Photo: Jonathan Weiss/Shutterstock.com

A New Jersey federal judge has stricken the conclusion of an expert report favoring Burlington Coat Factory in its battle with assistant store managers over their eligibility for overtime pay.

Robert Crandall, a frequent expert in wage-and-hour litigation, relied too much on speculation when he concluded in the report that the retailer's assistant store managers spend the majority of their time on managerial duties, U.S. District Judge Joseph Rodriguez of the District of New Jersey said in ruling on the plaintiffs' motion to preclude the expert testimony.

The judge's decision precluding testimony about the conclusions of Crandall's study comes in a case where the plaintiffs claim they were misclassified as exempt from overtime. They allege that much of their time is spent on nonmanagerial duties such as stocking shelves, unloading trucks and cleaning bathrooms.

According to the decision, Crandall, of Resolution Economics in Beverly Hills, California, sent a team of observers into Burlington stores to collect data on how 60 assistant store managers spend their time. But his study came under criticism because observers recorded the assistant store managers engaged in managerial activity when they were talking to employees, walking from one place to another, or simply standing in a stationary position and looking around.

The observers were told to be unobtrusive, so they did not speak to the workers they were observing, and were not instructed to stand close enough to hear any conversations their subjects were having with other employees, according to the decision, which noted that a large portion of the assistant managers' time was recorded as "monitor/supervise while stationary" or "monitor/supervise while moving."

But Crandall acknowledged making assumptions about the thought processes of assistant managers who were recorded as spending time in that manner, Rodriguez said. The judge cited a deposition where Crandall was asked, concerning one worker whose activity was recorded as monitor/supervise, "is it not true, to cut through all this, that all you know from your data is that she was standing stationary with her eyes open?" Crandall responded, according to the decision, "I do not know her thought process when she's standing there. I would assume that she was trying to fulfill the expectations of the job of manager when she was there, and that carries certain connotations when you're in the store monitoring or traveling about."

In another example from Rodriguez, Crandall was questioned about why he recorded an assistant manager who was stocking merchandise alongside an hourly employee as performing a managerial task. Crandall responded that the assistant manager's intent could be to train or coach the hourly worker or to motivate that person to work at a faster pace, which would be managerial duties, or it could be that the assistant manager's intent was simply to stock the merchandise, the decision said. But surmising that the assistant manager was acting in a managerial capacity was a "statistical leap," Rodriguez wrote.

"Without talking to the ASM or obtaining declarations, there is no way, other than to guess, what the purpose of the ASM's activities are; they could be passively managing by setting the example for training purposes or they could just be accomplishing restocking the shelves," Rodriguez said in the Sept. 20 decision.

The information Crandall and his team relied on to draw conclusions leaves too much room for speculation or assumption, Rodriguez said.

"Recordation of physical activity, such as walking, talking to associates and other managers, and observing without information on the context of conversations is insufficient to conclude that the purpose or intent of the action is managerial. Unrecorded conversations between two people at work, regardless of their hierarchical relationship, could be anything from friendly small talk, to mentoring, to managing," Rodriguez said.

Rodriguez said Crandall could testify as to the "contours, methods and findings" of his study, the observations that were made and that certain activities were recorded as managerial. But he cannot opine on the conclusions in his report, because those conclusions rely on speculation and assumption, Rodriguez said.

The suit, filed in 2011, claims violation of the Fair Labor Standards Act, and is filed as a collective action.

Rodriguez is expected to rule next on motions by the plaintiffs for final certification of the FLSA action; and by Burlington to decertify the class.

Michael Galpern of Javerbaum, Wurgaft, Hicks, Kahn, Wikstrom & Sinins in Voorhees, representing the plaintiffs, said the decision gives Burlington "a very limited ability to argue that Mr. Crandall's conclusions have any legal relevance to the case." The Crandall report was "Burlington's main defense in the case," Galpern said.

On the other hand, the plaintiffs can offer the testimony of some of the 500 assistant store managers who opted in to the FLSA action, Galpern said. Those plaintiffs said they don't make decisions about hiring or firing employees, scheduling merchandise deliveries or setting the temperature in the store, among other things, according to Galpern.

Burlington is represented by Putney, Twombly, Hall & Hirson in New York. That firm's James McGrath III and Mary Ellen Donnelly did not return calls about the ruling.