HOLESAPPLE et al v. E-MORTGAGE MANAGEMENT, LLC et al
Filing
28
OPINION. Signed by Judge Noel L. Hillman on 12/29/2011. (TH, )
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
HENRY HOLESAPPLE, ANTHONY
NASTASI, and MARK EMORY
WASHINGTON,
Plaintiffs,
CIVIL NO. 11-0769(NLH)(KMW)
v.
OPINION
E-MORTGAGE MANAGEMENT, LLC,
GREG ENGLESBE, and BRIAN
KRASNER,
Defendants.
Appearances:
SAMUEL A. DION
DION & GOLDBERGER, ESQS.
1616 WALNUT STREET, SUITE 2316
PHILADELPHIA, PA 19103
Attorneys for plaintiffs
DAVID J. KHAWAM
SENTRY OFFICE PLAZA, SUITE 604
216 HADDON AVE.
WESTMONT, NJ 08108
Attorney for defendants
HILLMAN, District Judge
Before the Court is plaintiffs’ motion for conditional
class certification pursuant to the Fair Labor Standards Act
(“FLSA”).
Also before the Court is defendants’ motion for
reconsideration of the Court’s Order granting an extension of
time to file a reply brief.
For reasons explained below,
plaintiffs’ motion for conditional class certification will be
denied without prejudice, and defendants’ motion for
reconsideration will be denied.
I.
BACKGROUND
Plaintiffs were former employees of defendant E-
Mortgage Management, LLC (“E-Mortgage”).
E-Mortgage is a
mortgage lending and brokerage company that operates
approximately eight offices in at least four states, including
New Jersey, Pennsylvania, Maine and Delaware.
There is no
dispute that E-Mortgage is an employer within the meaning of 29
U.S.C. § 203(d).1
Plaintiffs worked as “loan officers” or
“customer service representatives.”2
Their primary job duties
were to solicit mortgage loans and oversee the loan applications
until they were sent to processing and closing.
paid on a commission only basis.
Plaintiffs were
Plaintiffs allege that they
were not paid the minimum wage, and that they routinely worked in
excess of 40 hours per week, but did not receive overtime
compensation.
Plaintiffs allege that defendants violated FLSA Section
206(a) which requires employers to pay employees the current
1
“‘Employer’ includes any person acting directly or
indirectly in the interest of an employer in relation to an
employee and includes a public agency, but does not include any
labor organization (other than when acting as an employer) or
anyone acting in the capacity of officer or agent of such labor
organization.” 29 U.S.C. § 203(d).
2
It appears that at some point the title changed from “loan
officer” to “customer service representative” although plaintiffs
state that the duties were the same.
2
minimum wage3, and FLSA Section 207(a)(1) which requires
employers to pay overtime to employees who work in excess of 40
hours in a workweek at a rate not less than one and one-half
times the regular rate at which he is employed.
Plaintiffs seek
for themselves and similarly situated employees declaratory and
compensatory relief, unpaid wages, unpaid overtime, and
reasonable costs and attorneys’ fees.
Plaintiffs filed a motion
for conditional class certification under the FLSA.
Defendants
oppose plaintiffs’ motion and argue that plaintiffs’ declarations
submitted in support of their motion were inadequate and
factually incorrect.
Plaintiffs sought and were granted an
extension to file a reply brief attaching revised affidavits.
Defendants filed a motion for reconsideration of the Court’s
Order granting the extension.
II.
JURISDICTION
Plaintiffs bring this action on behalf of themselves
and others “similarly situated” to remedy alleged violations of
the Fair Labor Standards Act, 29 U.S.C. § 201, et seq., and
therefore this Court exercises subject matter jurisdiction
pursuant to 28 U.S.C. § 1331 (federal question jurisdiction).
3
hour.
As of July 24, 2009, the federal minimum wage is $7.25 an
See 29 U.S.C. § 201(a)(1)(c).
3
III. DISCUSSION
A.
Motion for Reconsideration
Plaintiffs filed their motion for conditional class
certification on May 18, 2011.
According to Local Rule 78.1, the
motion day for the hearing was set for June 20, 2011, which date
was entered by the Clerk of Court on the Court’s official docket.
See L.Civ.R. 78.1.
The deadline for opposition briefs is
fourteen days before the motion day, or June 6, 2011, and the
deadline for reply briefs is seven days before the motion day, or
June 13, 2011.
See id.
When plaintiffs filed their motion for
conditional class certification, they erroneously stated on their
docket entry that the opposition brief was due on June 13, 2011,
rather than June 6, 2011.
Defendants filed their opposition
brief on June 13, 2011, presumably according to the date entered
by plaintiffs which was seven days after the deadline.
Realizing the error with regard to the opposition
deadline, on June 20, 2011, plaintiffs filed a motion for
extension of time to file a reply.
The extension was necessary
because the defendants did not file their opposition until June
13, 2011, which was the original deadline for the reply under the
Local Rules.
The Court granted plaintiffs’ motion for extension
on June 29, 2011.
Defendants filed a motion for reconsideration
because the Order granting the extension was entered prior to the
date their opposition brief to the motion for extension was due,
4
on July 5, 2011.
This Court has discretion to extend a deadline after
the time has expired upon a showing of good cause if the party
failed to act because of excusable neglect.
See Fed.R.Civ.P.
6(b)(1)(B); Drippe v. Tobelinski, 604 F.3d 778, 782 (3d Cir.
2010).
Although defendants accurately recite the procedural
history surrounding the filing of the motion for extension, they
do not argue that they have been prejudiced in any way by the
filing of plaintiffs’ reply seven days after the deadline, which
was necessitated by the fact that defendants filed their response
late, without requesting an extension.
Here, the interests of
justice would favor allowing defendants to file a late response,
without having requested an extension due to the erroneous
deadline stated by plaintiffs, and allow plaintiffs, upon motion
for extension, a seven day extension to file their reply.
Accordingly, defendants’ motion for reconsideration
will be denied.
B.
Standard for Class Certification Under the FLSA
Plaintiffs allege that defendants violated the FLSA
Sections 206(a)4 and 2075 and seek to sue on behalf of themselves
4
Section 206(a) requires that employers pay employees at
least the minimum wage. See 29 U.S.C. § 206(a).
5
Section 207 sets the maximum hours under the FLSA. See 29
U.S.C. § 207. An employer shall not employ any employee for a
5
and other “employees similarly situated” pursuant to Section
216(b)6
See 29 U.S.C. § 216(b), ruled unconstitutional on other
grounds in Alden v. Maine 527 U.S. 706, 712 (1999) (“finding
unconstitutional provision of FLSA authorizing private actions
against states in state courts without their consent).
Rather
than opting-out as is done in a traditional class action lawsuit,
in an FLSA class action, potential class members must opt-in by
providing written consent filed with the Court.
Manning v. Gold
Belt Falcon, LLC, --- F.Supp.2d ----, 2011 WL 4583776, at *1
(D.N.J. Oct. 5, 2011) (stating that under the FLSA there are “two
pertinent requirements to maintain a collective action: 1) each
Plaintiff must manifest his written consent, and 2) Plaintiff's
attorney must file that consent with the Court.”).
The term “similarly situated” is not defined in the
FLSA.
See Ruehl v. Viacom, Inc., 500 F.3d 375, 389 n.17 (3d Cir.
2007).
Courts that have addressed whether a putative class is
similarly situated have adopted or recognized a two-step
approach.
See Morisky v. Public Service Elec. and Gas Co., 111
F.Supp.2d 493, 497 (D.N.J. 2000) (citation omitted); Kronick v.
“workweek longer than forty hours unless such employee receives
compensation for his employment ... specified at a rate not less
than one and one-half times the regular rate at which he is
employed.” Id.
6
Section 216 permits, inter alia, a plaintiff and other
employees similarly situated to file suit against his or her
employer. See 29 U.S.C. § 216(b).
6
Bebe Stores, Inc., No. 07-4514, 2008 WL 4546368 at *1 (D.N.J.
2008) (In “the absence of guidance from the Supreme Court and
Third Circuit, district courts have developed a test consisting
of two stages of analysis.”) (citing Morisky, 111 F.Supp.2d at
496).
At the first stage, or notice stage, the court determines
whether notice of the action should be given to potential class
members.
See Morisky, 111 F.Supp.2d at 497; Kronick, 2008 WL
4546368 at *1 (“During the initial notice phase, courts make a
preliminary inquiry into whether the plaintiff’s proposed class
is one of similarly situated members.”) (citations omitted).
Although the standard applied at this stage is fairly
lenient, courts in the Third Circuit are divided on the amount of
evidence needed to establish whether plaintiff is similarly
situated to the putative class.
See White v. Rick Bus Co., 743
F.Supp.2d 380, 387 (D.N.J. 2010).
“Some courts, particularly
those in the Western Districts of Pennsylvania, employ the more
lenient of the two relaxed standards.”
Id.
“Under that case
law, ‘preliminary certification is granted upon a mere allegation
that the putative class members were injured by a single policy
of the defendant employer.’” Id. (citations omitted, emphasis
removed).
“In contrast, other courts, including those in the
District of New Jersey, ‘requir[e] the plaintiffs to show a
modest factual nexus between their situation and that of the
proposed class members.’”
Id. (citing Garcia v. Freedom Mortg.
7
Corp., No. 09–2668, 2009 WL 3754070, *2 (D.N.J. Nov. 2, 2009),
quoting Aquilino v. Home Depot, Inc., No. 04–4100, 2006 WL
2583563 at *2 (D.N.J. 2006) (emphasis removed);
Villanueva–Bazaldua v. TruGreen Lim. Part., 479 F.Supp.2d 411
(D.Del. 2007)).
The “factual nexus” standard will be applied in this
case for the initial stage.
See Kronick, 2008 WL 4546368 at *1
(adopting the evidentiary standard articulated in Aquilino as
requiring a plaintiff to show “a factual nexus between their
situation and the situation of other current and former
[employees] sufficient to determine that they are ‘similarly
situated.’”) (citing Aquilino, 2006 WL 2583563, at *2).
“In
spite of the modest [factual nexus] evidentiary standard, courts
have not hesitated to deny conditional certification when
evidence is lacking.”
Dreyer v. Altchem Environmental Services,
Inc., No. 6-2393, 2007 WL 7186177, at *3 (D.N.J. Sept. 25, 2007).
In the second stage, or “reconsideration stage,” the
court “makes a second determination after discovery is largely
complete and the case is ready for trial.”
Morisky, 111
F.Supp.2d at 497 (citation omitted); Kronick, 2008 WL 4546368 at
*1 (“In the second stage, after more evidence is available, the
court makes a final determination as to whether the plaintiff is
similarly situated to the rest of the class.”).
“In its analysis
of the ‘similarly situated’ question at this stage, the court has
8
much more information on which to base its decision and, as a
result, now employs a stricter standard.”
at 497.
Morisky, 111 F.Supp.2d
If the court finds the plaintiffs are similarly situated
during the second stage, the case may proceed to trial as a
collective action.
Id.
The plaintiff bears the burden of
proving that class members are similarly situated.
See Troncone
v. Velahos, No. 10–2961, 2011 WL 3236219, at *4 (D.N.J. July 28,
2011).
B.
Plaintiffs’ Motion for Conditional Class Certification
Initially, plaintiffs alleged that they worked in
excess of 51 hours per workweek based on their bi-weekly paystubs
which stated “Paid Time - Available 112.000 hours.”
During the
initial scheduling conference with the Court, which occurred
after plaintiffs had filed the instant motion, it was suggested
that the 112 hours did not refer to biweekly hours worked but
instead was a notation that referred to the amount of time the
employee accrued for “paid time off” such as vacation or sick
time.
This explanation was confirmed in the certification
submitted by John Miriello, Director of Human Resources for EMortgage and later admitted by plaintiff Henry Holesapple in his
declaration.
Nevertheless, plaintiffs still maintain that they
worked in excess of 40 hours per workweek.7
7
The timing and shifting basis of plaintiffs’ motion is
very troubling to this Court. It seems clear that the original
9
Plaintiffs Henry Holesapple and Anthony Nastasi
submitted declarations in support of their motion for conditional
class certification.
In their response, defendants attacked the
declarations as inadequate.
In reply, plaintiffs submitted
revised declarations from Holesapple and Nastasi, and an
additional declaration from plaintiff Mark Emory Washington who
later joined in this lawsuit.
All three plaintiffs state that they worked at EMortgage’s Hainesport, New Jersey office.
Plaintiff Holesapple
states that he was formerly employed by E-Mortgage as a loan
officer from April 9, 2009 until December 30, 2010.
Holesapple
states that although the employee handbook states that the normal
work schedule is Monday through Friday from 8:30 a.m. to 5:30
a.m., that he was directed by his supervisor, Jeff Krasner, to
motion and certifications as filed by plaintiffs were based on a
completely inaccurate factual assumption and, moreover, that the
inaccuracy of those certifications was made known to plaintiffs’
counsel as early as June 9, 2012. Instead of withdrawing their
motion, which would have been the responsible thing to do,
plaintiffs waited until after defendants had filed their
opposition to amend their legal and factual basis for the pending
motion. Not only did plaintiffs’ lack of diligence and accuracy
improperly shift and expand the factual and legal basis for their
motion, it effectively denied defendants a fair opportunity to
reply. This kind of gamesmanship is litigation practice at its
worst and could provide a basis, standing alone, to deny
plaintiffs’ motion. While the Court will exercise its discretion
to resolve the motion on the merits and deny it without
prejudice, plaintiffs’ counsel is advised that their pleadings,
attestations, and motion practices are subject to Appendix R of
the Court’s Local Rules, the Rules of Professional Conduct and
Rule 11 of the Civil Rules of Federal Procedure.
10
work from 8:00 a.m. to 8:00 p.m. Mondays through Fridays.
Holesapple states that he regularly worked between 48 and 60
hours on weekdays and another 5 to 10 hours on weekends.
He
states that his supervisor required him to take files home to
work on in the evenings and weekends.
Holesapple states that he observed other employees in
the Hainesport office work similar hours, in excess of a 40 hour
workweek, including plaintiffs Anthony Nastasi and Mark
Washington, as well as Musa Branham, and not receive overtime
pay.
Holesapple also states that all loan officers were paid on
a 100% commission basis so that if he did not earn any
commissions during a pay period, he would receive no pay at all.
Plaintiff Anthony Nastasi states in his declaration
that he was formerly employed by E-Mortgage as a loan officer
from April 9, 2009 until December 30, 2010.
He states that E-
Mortgage had a policy requiring plaintiffs and all customer
service representatives to work at least 53 hours or more per
week, and that they were paid on a 100% commission basis.
Natasi
states that he was told that office hours were 10:00 a.m. to 8:00
p.m. Mondays through Thursday, and 10:00 a.m. until work was
completed on Fridays but no earlier than 3:00 p.m.
that his work hours exceeded 50 hours weekly.
He states
He states that he
usually came in by 10:30 a.m. and stayed until 8:00 p.m., and
worked 2-3 hours daily at home, including weekends.
11
Nastasi
states that he and the other customer service representatives
were not paid for the hours that they actually worked, and were
not paid for overtime hours.
Nastasi states that the commissions
he received did not amount to minimum wages ($7.25 per hour).
Plaintiff Mark Emory Washington states in his
declaration that he was formerly employed by E-Mortgage as a loan
officer from July 2, 2008 until August 2009.
was given the title of office manager.8
In August 2009, he
He performed the same
duties as a loan officer, with additional duties to oversee other
loan officers.
Washington states that he normally worked 52
hours per week.
He states he worked 8:30 a.m. to 8:00 p.m.
Mondays through Thursday, and on Fridays, he worked six hours.
As officer manager, Washington observed the work hours
of all loan officers and states that all of them, including
himself, on average worked in excess of 50 hours weekly.9
Washington also states that any worker that did not come into the
8
Washington does not state when his employment with EMortgage was terminated.
9
The Court has already noted, supra note 7, the unusual
and troubling way that plaintiffs submitted their motion. The
Declaration of Mark Washington, dated June 17, 2011, and filed
pursuant to 28 U.S.C. § 1746, was not part of plaintiffs’
original motion nor has any reason been proffered as to why it
was presented to the Court only in reply. What is most troubling
is that it directly contradicts the June 9, 2011 Declaration of
Brian Krasner, who declares under penalty of perjury that “All
CSRs work and have worked less than 40 hours per week....” It
appears to this Court that Washington’s and Krasner’s
Declarations can not both be truthful.
12
office before 10:00 a.m. would be criticized for their lack of
work ethic by supervisors Brian Krasner and Jeff Krasner and
those loan officers would be taken off inbound calls.10
He
states that when he became office manager, he would have to deny
inbound leads to anyone who did not arrive by 10:00 a.m.
Washington also states that all loan officers were paid on a 100%
commission basis, and that he observed that some loan officers
did not receive any compensation if they failed to close out any
loans.
He states that all loan officers had the same duties as
himself, including Henry Holesapple, Musa Branham, and Anthony
Nastasi.
Defendants submitted 14 declarations to rebut the
original declarations of the plaintiffs.
Supervisors at the
Hainesport office, Brian Krasner (also a defendant) and Jeff
Krasner, state in their declarations that there has never been a
policy requiring employees to work over 40 hours a week,
regardless of how an employee is paid.
The other 12 declarations
are from current E-Mortgage employees who state that they have
never been subjected to a company policy requiring them to work
over 40 hours in a workweek.
Four of the declarations are from
employees from the Hainesport, New Jersey office, the same office
10
Nastasi clarifies in his declaration that although he
came in after 10:00 a.m., he was still allowed to receive leads
because his supervisors were aware of all the work he was doing
outside the office.
13
where plaintiffs worked, four are from employees located in the
Haddon Township, New Jersey office, three are from employees in
the Lancaster, Pennsylvania office, and three are from the
Lebanon, Pennsylvania office.
With regard to the employees located in offices from
Haddon Township, Lancaster, and Lebanon, plaintiffs have not
provided any evidence that they have any personal knowledge of
the hours worked by employees in those offices and whether those
employees work in excess of 40 hours per week without receiving
overtime compensation.
With regard to the employees in the
Hainesport office, the declarations of current employees Musa
Branham and George McCartney both state that they have not worked
over 40 hours a week or on weekends, and by their experience,
there has never been a policy in place requiring them to work
over 40 hours per week or on weekends.
Mr. Branham’s declaration
directly contradicts Holesapple’s declaration in which he states
that he observed Mr. Branham working in excess of 40 hours
weekly, and that he told Holesapple he worked more than 40 hours
per week.
The declarations submitted by defendants indicate that
even if plaintiffs worked in excess of 40 hours per week without
receiving overtime pay, their situation is not similar to other
employees, or potential class members.
See Aquilino, 2006 WL
2583563, at *2 (requiring a plaintiff to show “a factual nexus
14
between their situation and the situation of other current and
former [employees] sufficient to determine that they are
‘similarly situated.’”).
The declarations of the current
employees who work in the same office location where the
plaintiffs worked contradict plaintiffs’ declarations that all
loan officers or customer service representatives were required
to work in excess of 40 hours per week.
Plaintiffs also declare that they were paid on a 100%
commission basis and if they did not earn commissions, they would
receive no pay at all in violation of the FLSA requiring
employers to pay at least the minimum wage.
Washington states
that he observed that other loan officers did not receive any
compensation because they failed to close out any loans.
Washington’s declaration, which was not part of plaintiffs’
original motion, does not state who the other loan officers were
that received no pay or, generally, when it occurred.
Nastasi
states his commissions did not amount to minimum wages, but does
not state that he has knowledge of, or observed, other loan
officers who did not receive minimum wages.
Accordingly, as with
the excess hours claim, plaintiffs have not provided the factual
nexus needed between their claim of E-Mortgage’s failure to pay
them minimum wage and the potential claims of the other class
members.
At best, plaintiffs have only established that all loan
officers received 100% commission pay, a statement defendants do
15
not dispute.11
The Declaration of Mark Washington, submitted without
the opportunity for fair reply, does provide some support for a
factual nexus regarding a minium wage claim since he states that
he observed other loan officers who did not receive any
compensation at all because they failed to close out loans.
Washington’s Declaration is more notable, however, for what it
fails to say.
He does not state, for example, whether he saw the
other loan officer’s paychecks while office manager of the
Hainesport office, nor does he provide the names of officers who
did not receive any pay, when those pay periods were, or estimate
the number of loan officers affected.
These vague, non-specific,
and conclusory allegations from a person presumably in a position
to know fail to establish the required factual nexus even
applying a lenient standard.
As such, plaintiffs’ motion will be
denied without prejudice.
11
Although defendants responded only to the original
affidavits because the revised affidavits had not yet been filed,
plaintiffs do raise the minimum wage claim in their complaint and
also state in their original declarations that their pay was
based on 100% commissions.
16
IV.
CONCLUSION
For the foregoing reasons, plaintiffs’ motion for
conditional class certification will be denied without prejudice.
s/Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.
Date:
December 29, 2011
At Camden, New Jersey
17
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