A federal judge in Newark has denied certification to a class of Walmart overnight assistant store managers in New York and New Jersey who claimed they were wrongly declared exempt from overtime pay.

The judge, applying recent case law from the U.S. Court of Appeals for the Third Circuit, found the plaintiffs failed to satisfy the commonality requirement that is one of four prerequisites to class certification. U.S. District Judge Madeline Cox Arleo ruled that the plaintiffs satisfied the other three prerequisites—numerosity, typicality and adequacy of representation.

In a victory for Walmart's attorneys at Greenberg Traurig, Arleo denied certifying the managers, who generally are scheduled for four, 12-hour shifts per week supervising hourly workers. The suit claimed "rampant understaffing" and "aggressive restrictions on overtime labor costs" at the retailer's stores meant they perform mostly nonmanagerial duties such as stocking shelves. As such, they claimed they are misclassified and are entitled to overtime under state wage-and-hour laws, the suit claimed.

Marc Hepworth of Hepworth, Gershbaum & Roth in New York, who represented the plaintiffs, did not respond to requests for comment. Wendy Johnson Lario and Kristine Feher of Greenberg Traurig in Florham Park, representing Walmart, also did not respond to requests for comment.

A Walmart spokesman, Randy Hargrove, said in a statement, "We are pleased the Court determined that this case is not appropriate for class treatment. We take compliance with the law seriously and have processes in place to make sure our associates are correctly compensated."

In finding the plaintiffs failed to make a showing of commonality, which requires that plaintiffs share at least one question of fact or law with the grievances of the prospective class, Arleo noted that plaintiffs' court papers cited testimony of potential class members who said their primary duties involved loading trucks, operating forklifts, stocking shelves and sweeping.

But lawyers for Walmart submitted declarations from other overnight assistant managers who said their main duties involved supervising the store and managing associates. The record, Arleo said, also reveals major differences in the ability of overnight assistant managers to hire, fire and promote employees, the judge said. Some never interviewed prospective hires, while others interviewed candidates but could not hire them, and still others had more discretion in the hiring process.

"As overnight ASM duties can vary significantly, the court would need to conduct individualized, rather than class-wide, proceedings to determine each overnight ASM's exemption status," Arleo said.

In court papers arguing that common issues predominate, the plaintiffs relied on a 2018 District of New Jersey case, Ferreras v. American Airlines, granting certification in a wage-and-hour case involving hourly airline employees. But that decision was reversed by the Third Circuit in December 2019, after the plaintiffs filed their motion. The appeals court said the airline employees would have to offer individual proof to establish their claims, Arleo said.

"The Third Circuit concluded that the Ferreras plaintiffs had not demonstrated predominance because, like here, they would need to offer individualized proof to establish their claims," Arleo said.

The plaintiffs argued that the assistant managers' statements about their job duties cited by Walmart conflicted with testimony by those individuals in depositions, but Arleo rejected the plaintiffs' claims, saying "the record does not fully support plaintiffs' characterization of the evidence."

Walmart has approximately 100 stores in New York and 63 in New Jersey, each with somewhere between four and 15 assistant managers. They are paid a fixed, annual salary.