Szalczyk et al v. CBC National Bank
MEMORANDUM OPINION. Signed by Judge Richard D. Bennett on 1/10/2017. (bmhs, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
STEVEN SZALCZYK, JR., et al.,
Civil Action No. RDB-15-2011
CBC NATIONAL BANK,
Named plaintiff Steven Szalczyk and opt-in plaintiffs Tekesha Austin, Minka Wright,
Hilda Cornutt, and Audrey Veitch (collectively, “Plaintiffs”), on behalf of themselves and
those similarly situated, have filed an Amended Complaint (ECF No. 28) against defendant
CBC National Bank alleging violations of the Fair Labor Standards Act, 29 U.S.C. § 201, et
Currently pending before this Court is Plaintiffs’ Motion for Conditional Certification
of a Collective Action under 29 U.S.C. § 216(b) of the FLSA (“Plaintiffs’ Motion”) (ECF
No. 45). The parties’ submissions have been reviewed, and no hearing is necessary. See
Local Rule 105.6 (D. Md. 2016). For the reasons described herein, Plaintiffs’ Motion for
Conditional Certification (ECF No. 45) is GRANTED IN PART and DENIED IN PART.
Specifically, Plaintiffs’ Motion is GRANTED as to the “Inside Loan Officers” and
DENIED as to the “Outside Loan Officers,” as set forth in detail below.
CBC National Bank (“CBC”) is a nationally chartered bank with headquarters located
in Fernandina Beach, Florida. (ECF No. 28 at ¶ 3.) CBC operates a mortgage division that
sells residential mortgage loan products in several states, including Maryland. (Id.) The
mortgage division employs two types of loan officers to market and sell its mortgage
products: “Inside Loan Officers” (“ILOs”) and “Outside Loan Officers” (“OLOs”). (ECF
No. 45 at 4.) ILOs work at CBC office locations and are provided sales leads by CBC. (Id.)
CBC’s Compensation Overview states that ILOs are treated as “non-exempt” employees for
purposes of the FLSA, and these employees are paid on an hourly basis through the
submission of weekly timesheets.1 (ECF No. 45-1 at 36-39.) OLOs, by contrast, work
largely outside of CBC offices and are expected to generate their own sales leads. (ECF No.
45 at 4.) CBC treats its OLOs as “exempt” employees for purposes of the FLSA, and CBC
“admits it does nothing to monitor how much time, if any, [OLOs] perform sales activity
outside of offices.” (ECF No. 45 at 4; ECF No. 45-1 at 38-39.) OLOs are not required to
submit timesheets to CBC and are compensated on a commission-only or commission-plussalary basis, depending on their sub-classification.2 (ECF No. 45-1 at 38-39.)
Named plaintiff Steven Szalczyk worked for CBC as an ILO in its Parkville, Maryland
office for just over three months, from November 5, 2012 through February 15, 2013.
(ECF No. 45 at 7.) At the start of his employment, Mr. Szalczyk was told that he would earn
1 Section 13(a)(1) of the FLSA, codified at 29 U.S.C. § 213(a)(1) provides an exemption from the FLSA’s
minimum wage and overtime requirements for certain types of employees, including certain employees
working in the capacity of an outside sales employee.
CBC’s Compensation Overview describes six types of ILO compensation structures and three types of
OLO compensation structures. (ECF No. 45-1 at 36-38.)
$15 per hour, plus commissions. (Id. at 8.) During his deposition, Mr. Szalczyk testified that
“he, along with all other loan officers in his office, were told in a meeting by CBC
management to only report forty hours per week on the timekeeping system, but were then
told to work as much as they could to get sales.” (Id.) Plaintiff also testified that he typically
worked fifty-five (55) hours per week, but was not paid overtime wages. (Id.)
The Amended Complaint alleges that CBC failed to pay its employees the legal
minimum wage and failed to pay its employees overtime wages to which they were entitled.
(ECF No. 28 at ¶¶ 40-47.)
STANDARD OF REVIEW
Under the FLSA, a plaintiff may bring an action on behalf of himself and other
employees so long as the other employees are “similarly situated” to the plaintiff. 29 U.S.C.
§ 216(b); see also Quinteros v. Sparkle Cleaning, Inc., 532 F. Supp. 2d 762, 771 (D. Md. 2008). As
this Court has previously noted, Section 216 “establishes an ‘opt-in’ scheme, whereby
potential plaintiffs must affirmatively notify the court of their intentions to be a party to the
suit.” Quinteros, 532 F. Supp. 2d at 771 (citing Camper v. Home Quality Mgmt., Inc., 200 F.R.D.
516, 519 (D. Md. 2000)). Section 216(b) provides, in relevant part, that:
An action . . . may be maintained against any employer . . . in any Federal or
State court of competent jurisdiction by any one or more employees for and in
behalf of himself or themselves and other employees similarly situated. No
employee shall be a party plaintiff to any such action unless he gives his
consent in writing to become such a party and such consent is filed in the
court in which such action is brought.
29 U.S.C. § 216(b).
Furthermore, this Court has employed a two-step inquiry when deciding whether to
certify a collective action under the FLSA. Syrja v. Westat, Inc., 756 F. Supp. 2d 682, 686 (D.
Md. 2010); Banks v. Wet Dog Inc., No. CIV.A. RDB-13-2294, 2015 WL 433631, at *1 (D. Md.
Feb. 2, 2015). First, upon a minimal evidentiary showing that a plaintiff can meet the
substantive requirements of 29 U.S.C. § 216(b), the plaintiff may proceed with a collective
action on a provisional basis. Second, following discovery, the court engages in a more
stringent inquiry to determine whether the plaintiff class is “similarly situated” in accordance
with the requirements of § 216. Rawls v. Augustine Home Health Care, Inc., 244 F.R.D. 298, 300
(D. Md. 2007) (internal citations omitted). The Court then renders a final decision regarding
the propriety of proceeding as a collective action. Id. The second, more “stringent” phase
of collective action certification under the FLSA is often prompted by a defendant’s filing of
a motion to decertify, and thus is referred to as the “decertification stage.” Syrja, 756 F.
Supp. 2d at 686.
Whether to grant conditional certification is a matter of the court’s discretion. Syrja,
756 F. Supp. 2d at 686 (stating that “[d]eterminations of the appropriateness of conditional
collective action certification . . . are left to the court’s discretion”); see also Hoffmann–La
Roche, Inc. v. Sperling, 493 U.S. 165, 169 (1989). As the Court has explained, the “paramount
issue in determining the appropriateness of a conditional class certification is whether
plaintiffs have demonstrated that potential class members are ‘similarly situated.’” Williams v.
Long, 585 F. Supp. 2d 679, 684 (D. Md. 2008).
Plaintiffs bear the burden of showing that their claims are “similarly situated,” but
courts have ruled that “similarly situated” need not mean “identical.” See, e.g., Hipp v. Liberty
Nat. Life Ins. Co., 252 F.3d 1208, 1217 (11th Cir. 2001). This Court has held that a group of
FLSA plaintiffs is similarly situated if they can show they were victims of a common policy,
scheme, or plan that violated the law. Mancía v. Mayflower Textile Servs. Co., CIV.A. No. CCB–
08–273, 2008 WL 4735344, at *3 (D. Md. Oct. 14, 2008).
Plaintiffs’ allegations thus “must consist of more than ‘vague allegations’ with ‘meager
factual support,’ but [they] need not enable the court to reach a conclusive determination
whether a class of similarly situated plaintiffs exists.” Id. at *2 (quoting D’Anna v. M/A–
COM, Inc., 903 F. Supp. 889, 893 (D. Md. 1995). Moreover, “[w]hen sufficient evidence in
the record at the initial ‘notice’ stage makes it clear that notice is not appropriate, . . . a court
can . . . deny certification outright.” Syrja, 756 F. Supp. 2d at 686 (quoting Purdham v. Fairfax
Cnty. Pub. Sch., 629 F. Supp. 2d 544, 547 (E.D.Va. 2009)). Plaintiffs may rely on “affidavits
or other means” to make the required showing. Williams, 585 F. Supp. 2d at 683; see also
Bouthner v. Cleveland Const., Inc., CIV.A. No. RDB-11-0244, 2012 WL 738578, at *4 (D. Md.
Mar. 5, 2012); Ruiz v. Monterey of Lusby, Inc., CIV.A. No. DKC 13-3792, 2014 WL 1793786, at
*1–2 (D. Md. May 5, 2014).
Plaintiffs ask that this Court conditionally certify a collective action with a class
consisting of “all current and former loan officers employed by CBC” in the three-year
period prior to conditional certification. (ECF No. 45-14.) Defendant opposes Plaintiffs’
Motion, arguing that CBC’s OLOs do not belong in this case and, moreover, that
conditional certification of ILOs is unwarranted. As set forth in greater detail below,
Plaintiffs’ Motion will be DENIED as to the OLOs and GRANTED as to the ILOs.
Outside Loan Officers (OLOs)
While recognizing CBC’s separate categorizations of ILOs and OLOs, plaintiffs
nonetheless assert that “the only difference between [ILOs and OLOs], is that [OLOs] are
supposed to generate their own sales leads, rather than receiving leads on sales from CBC.”
(ECF No. 45 at 2.) Plaintiffs argue that at core, both groups “are subject to a common
policy in violation of the FLSA: denial of overtime pay;” thus, conditional certification is
CBC argues that ILOs and OLOs are not similarly situated because “the legal and
factual issues involved in adjudicating claims by exempt [OLOs] would be entirely different
from the legal and factual issues involved in adjudicating claims by non-exempt [ILOs].”
(ECF No. 49 at 26.) Specifically, defendant argues:
“For most [ILOs] who might opt into this case if the Court were to grant
Plaintiff’s Motion, the primary question will be whether or not the time they
recorded into CBC’s electronic timekeeping system in fact reflects their actual
hours worked. … For [OLOs], the primary issue will be whether each
individual [OLO] was properly classified as exempt, and that would require
highly individualized inquiries about the different locations where each
employee engaged in various forms of work, how frequently they worked
outside the office, and how much time they spent engaging in outside sales
(Id. at 26-27.)
This Court addressed a similar motion seeking conditional certification of a class
consisting of both exempt and non-exempt employees in Myles v. Prosperity Mortg. Co., No.
CIV. CCB-11-1234, 2012 WL 1963390, at *7 (D. Md. May 31, 2012). In Myles, plaintiff
sought to include in the proposed class (1) loan officers who worked in Long & Foster real
estate offices and (2) “independent” loan officers who worked outside of the real estate
offices, whether from their homes or other locations. Id. Finding that the two types of loan
officers were not “similarly situated,” this Court limited its certification to only those loan
officers who worked in the Long & Foster offices. Id. at *8.
In another case involving the proposed conditional certification of a class consisting
of differently-categorized employees, the United States District Court for the District of
Columbia noted that plaintiffs were unable to “identify a single case where a court has
included in the same class in a collective action both employees classified by an employer as
non-exempt and employees classified by the employer as exempt. In fact, the cases that
have had occasion to address the issue have reached or indicated a contrary result.” Hunter v.
Sprint Corp., 346 F. Supp. 2d 113, 120 (D.D.C. 2004).
So, too, in this case does the Court conclude that the ILOs and OLOs are not
similarly situated so as to warrant conditional certification of both groups as a single class.
First, while CBC’s categorization of the ILOs as non-exempt and the OLOs as exempt is not
binding on this Court, the distinction does indicate the potential application of the FLSA’s
outside sales exemption to the OLOs.3 As this exemption would apply to the OLOs only, it
cannot then be said that these employees are similarly situated to the ILOs. A second factor
distinguishing the ILOs and OLOs is the way in which they are compensated and,
importantly, the fact that only ILOs are required to record their time worked and to submit
3 The outside sales exemption excludes those employed “in the capacity of outside salesman” from the
FLSA’s maximum hour and overtime pay rules. 29 U.S.C. § 213(a)(1). FLSA regulations define the term
“employed in the capacity of outside salesman” to mean:
any employee (1)(1) Whose primary duty is: (i) making sales within the meaning of section 3(k) of the
Act, or (ii) obtaining orders or contracts for services or for the use of facilities for which a
consideration will be paid by the client or customer; and (2) Who is customarily and regularly
engaged away from the employer’s place or places of business in performing such primary duty.
29 C.F.R. § 541.500(a).
weekly timesheets. (ECF No. 45-1 at 36-39.) Third, while both ILOs and OLOs perform
similar job functions insofar as they both seek to sell mortgage products, there are significant
distinctions between their respective job duties and work locations. That is, while ILOs
work primarily within CBC offices and are provided with sales leads by CBC, OLOs work
primarily outside of the office and must make efforts to generate their own sales leads.
(ECF No. 45 at 4.) Thus, as defendant asserts, the primary legal issue in determining FLSA
liability with respect to the OLOs would be “whether each individual [OLO] was properly
classified as exempt.” (ECF No. 49 at 26-27.) This is a largely distinct inquiry from that
governing liability with respect to the ILOs—that is, “whether or not the time they recorded
into CBC’s electronic timekeeping system in fact reflects their actual hours worked.” (Id.)
In light of these differences, the Court does not find that the ILOs and OLOs are similarly
situated so as to warrant conditional certification of a collective action.
Thus, Plaintiffs’ Motion is DENIED as to the Outside Loan Officers (OLOs).
Inside Loan Officers (ILOs)
While the Court declines to conditionally certify a collective action including both the
ILOs and OLOs, the Court does find that plaintiffs have made the required modest factual
showing so as to warrant conditional certification of the ILOs. See Banks v. Wet Dog Inc.,
RDB-13-2294, 2015 WL 433631, at *2 (D. Md. Feb. 2, 2015).
assertion that “they, and other employees, were consistently required to work overtime
without being paid the required time-and-one-half their regular hourly rate for work in
excess of forty hours per week” is supported by ample evidence to merit conditional
certification. (ECF No. 45 at 17.)
CBC raises several arguments in opposition to Plaintiffs’ Motion. First, defendant
argues that plaintiffs are unable to demonstrate that CBC has a common policy, plan, or
practice that violates the FLSA. (ECF No. 49 at 31-33.) Defendant seeks refuge in its
written compensation policy, which states that ILOs are to be paid overtime wages. (ECF
No. 45-1 at 36-39.) Nevertheless, plaintiffs have alleged and have provided evidentiary
support for their position that CBC ILOs were directed to underreport their time and/or
were not fully compensated for overtime hours worked. See, e.g., Camacho Decl., ECF No.
45-8 at ¶ 5 (“I was told to enter the 40 hours regardless of actual hours worked, and often
management would enter the hours for us.”); Lee Decl., ECF No. 45-9 at 6 (“I was
instructed by either Robert Eagar, my Branch Manager, or Brad Sels, my Team Leader, to
report just 40 hours per week to be paid as my ‘draw,’ regardless of the actual hours I
worked.”) While defendant disputes the truth of these statements, they are consistent with
defendant’s recognition that “[f]or most [ILOs] who might opt into this case if the Court
were to grant Plaintiff’s Motion, the primary question will be whether or not the time they
recorded into CBC’s electronic timekeeping system in fact reflects their actual hours
worked.” (ECF No. 49 at 26-27.)4
CBC further asserts that plaintiff’s branch office was subject to the instructions of a
“rogue supervisor” who disregarded official corporate policy. (ECF No. 49 at 33.) Thus,
plaintiff’s own experience does not reflect the bank’s overall operations and is not a proper
basis for an FLSA collective action claim. In support, defendant has submitted several
4 The Court notes that plaintiffs have also raised the argument that CBC failed to pay plaintiffs at the proper
overtime rate as set forth in 29 C.F.R. § 778.117, which requires employers to include commission payments
in the calculation of an employee’s “regular rate.” (ECF No. 50 at 6.) While defendants have not yet had an
opportunity to respond to this claim, it may be addressed as this case proceeds.
declarations of employees who do not report being underpaid in violation of the FLSA. See
ECF Nos. 49-5 through 49-23.) While CBC may undoubtedly use such statements in
defense of its practices as this case proceeds, this Court has previously recognized that
“credibility determinations are usually inappropriate for the question of conditional
certification.” Butler v. DirectSAT USA, LLC, 876 F. Supp. 2d 560, 571 (D. Md. 2012).
Viewed against plaintiffs’ conflicting declarations, it is clear that the existence, nature, and
extent of defendant’s FLSA liability remain an open questions to be addressed at a later stage
in this case.
Defendant also argues that unmanageable, individualized inquiries would be required
to determine the extent of CBC’s FLSA liability if such liability were to be proven. (ECF
No. 49 at 35-38.) Relatedly, defendant asserts that differences in the putative plaintiffs’
compensation categories would also make conditional certification inappropriate. (Id. at 3839.) As plaintiffs note, however, “[b]ringing a collective action under Defendant’s standard
would require all putative class members to be paid the same hourly rate and to work the
same number of overtime hours each week to obtain conditional certification.” (ECF No.
50 at 7.) Indeed, this Court has previously recognized that differences in employees’ rates of
pay, duration of tenure, and the location at which the Plaintiffs worked,” are “minor
inconsistencies [which] do not amount to a conclusion that Plaintiffs are necessarily
dissimilar.” Banks v. Wet Dog Inc., No. CIV.A. RDB-13-2294, 2015 WL 433631, at *3 (D.
Md. Feb. 2, 2015). See also Robinson v. Empire Equity Grp., Inc., No. CIV. WDQ-09-1603, 2009
WL 4018560, at *3 (D. Md. Nov. 18, 2009) (“Plaintiffs do not have to show that the
potential class members have identical positions for conditional certification; plaintiffs can
be similarly situated even though there are distinctions in their job titles, functions, or pay.”).
In sum, plaintiffs have made a sufficient “minimal evidentiary showing” that the ILOs were
similarly situated and subjected to a common practice or policy that violated the FLSA so as
to warrant conditional certification of a collective action.
Accordingly, Plaintiffs’ Motion will be GRANTED as to the Inside Loan Officers
Plaintiffs’ Proposed Notice and Consent Form
Plaintiffs have filed a proposed Notice of Collective Action and Opt-In Consent
Form. (ECF Nos. 45-14, 45-15.) Defendant argues that the proposed notice form and the
proposed manner of notice are deficient and requests that the Court direct the parties to
confer in the development of a new notice form. (ECF No. 49 at 39.)
Revision of the Notice is required in light of the decisions reached herein—namely,
the limitation of the collective class to Inside Loan Officers (ILOs).5 Accordingly, the
parties shall confer and submit a joint, proposed notice within fourteen (14) days of this
Memorandum Opinion and the accompanying Order.
The opt-in period shall begin from the date three years prior to the date of this
Memorandum Opinion and the accompanying Order—that is, January 10, 2014 to present.
Also within fourteen (14) days of this Memorandum Opinion and the accompanying
Order, defendant shall produce to plaintiffs a computer-readable database of the names of
all Inside Loan Officers (ILOs) who worked for CBC National Bank from January 10, 2014
to present, including (1) their last known mailing addresses and (2) their last known personal
5 The Court also notes that the proposed notice does not advise potential plaintiffs that they have the right to
obtain their own counsel.
email addresses. See Arnold v. Acappella, LLC, BPG-15-3001, 2016 WL 5454541, at *4 (D.
Md. Sept. 29, 2016) (“This court has recognized that e-mail communication is ‘now the
norm’ and in numerous cases has directed FLSA defendants to produce such information.”).
For the foregoing reasons, Plaintiffs’ Motion for Conditional Certification of a
Collective Action under 29 U.S.C. § 216(b) of the Fair Labor Standards Act (ECF No. 45) is
GRANTED IN PART and DENIED IN PART.
Specifically, Plaintiffs’ Motion is
GRANTED as to the “Inside Loan Officers” and DENIED as to the “Outside Loan
A separate Order follows.
Dated: January 10, 2017
Richard D. Bennett
United States District Judge
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