Copper et al v. Cavalry Staffing, LLC et al
MEMORANDUM & ORDER: Enterprises motion 66 to dismiss is DENIED. Defendants motion 69 to dismiss with respect to the Second Amended Complaints Second, Fourth, and Fifth claims is GRANTED IN PART, and otherwise DENIED IN PART. Plaintiffs motion 72 to conditionally certify a collective action is GRANTED. Ordered by Judge Frederic Block on 9/25/2015. (Innelli, Michael)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
DEREK COPPER and LESLIE MINTO,
on behalf of themselves and all others
MEMORANDUM AND ORDER
14-CV-3676 (FB) (CLP)
-againstCAVALRY STAFFING, LLC,
ENTERPRISE HOLDINGS, INC., and
TRACY LEE HESTER, in his individual
and professional capacities,
For the Plaintiffs:
ALEXANDER T. COLEMAN
MICHAEL J. BORRELLI
Borelli & Associates, PLLC
1010 Northern Boulevard
Great Neck, NY 11021
For Defendants Cavalry and Hester:
KATHLEEN M. CAMINITI
Fisher & Phillips, LLP
430 Mountain Avenue
Murray Hill, NJ 07974
For Defendant Enterprise:
BARRY I. LEVY
JOHN K. DIVINEY
KENNETH A. NOVIKOFF
Rivkin Radler, LLP
929 RXR Plaza
Uniondale, NY 11556
BLOCK, Senior District Judge:
Derek Copper (“Copper”) and Leslie Minto (“Minto”) (collectively, “plaintiffs”)
filed this action under the Fair Labor Standards Act and New York Labor Law against
Cavalry Staffing, LLC (“Cavalry”), Tracy Hester (“Hester”), and Enterprise Holdings, Inc.
(“Enterprise”) (sometimes collectively, “defendants”). Enterprise moves to dismiss the
complaint because it was not plaintiffs’ employer. Alternatively, Enterprise joins Cavalry
and Hester in moving to dismiss the complaint in its entirety because it fails to state a
claim pursuant to FRCP 12(b)(6). Finally, plaintiffs move for conditional certification of
a collective action. For the reasons that follow, Enterprise’s motion to dismiss is
DENIED, defendants’ motion to dismiss is GRANTED IN PART and DENIED IN PART,
and plaintiffs’ motion to conditionally certify the collective action is GRANTED.
The following facts are derived from plaintiffs’ Second Amended Complaint.
Enterprise owns and operates several Enterprise Rent-A-Car locations across the
United States. It contracted with Cavalry to provide staffing for its New York State
locations. As the Key Account Manager for Cavalry, Hester was responsible for hiring,
firing, and setting the work schedules for Cavalry employees. Cavalry employed plaintiffs
to staff Enterprise’s locations at the JFK, LaGuardia, and Central Islip airports.
Copper and Minto were Cavalry employees staffed at Enterprise locations. Their
primary duties were to clean, wash, and prepare Enterprise’s vehicles for customers. They
also interacted with Enterprise customers in the showrooms, and would pick up and drop
off customers at various locations.
As a Supervisor, Minto had the additional
responsibilities of record-keeping, reporting to managers, and demonstrating to service
agents the proper way to clean the vehicles.
Plaintiffs assert that they, and others similarly situated, were regularly required to
work in excess of forty hours per week, yet received zero compensation for those
additional hours. Accordingly, they bring claims arising under the Fair Labor Standards
Act (“FLSA”) and New York Labor Law (“NYLL”) for unpaid overtime, minimum-wage
violations, and failure to furnish proper wage statements.
A. Whether Enterprise was Plaintiffs’ Employer
Under the FLSA,1 the term “employer” is defined as including “any person acting
directly or indirectly in the interest of an employer in relation to an employee.” 29 U.S.C.
§ 203(d). The statute “offers little guidance on whether a given individual is or is not an
employer.” Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132, 139 (2d Cir. 1999). Courts
have accordingly looked to the “economic reality” presented by each case. Id. (citing
“The standards by which a court determines whether an entity is an
‘employer’ under the FLSA also govern that determination under the New York
labor law.” Wolman v. Catholic Health Sys. of Long Island, 853 F. Supp. 2d 290,
296 n.4 (E.D.N.Y. 2012).
Goldberg v. Whitaker House Coop., 366 U.S. 28, 33 (1961)). Under the economic-reality
test, courts consider “whether the alleged employer (1) had the power to hire and fire the
employees, (2) supervised and controlled employee work schedules or conditions of
employment, (3) determined the rate and method of payment, and (4) maintained
employment records.” Id. (quoting Carter v. Dutchess Cmty. Coll., 735 F.2d 8, 12 (2d.
Alternatively, joint-employer status is found when the alleged employer had
“functional control” over the workers. Zheng v. Liberty Apparel Co., 355 F.3d 61, 72 (2d
Cir. 2003). To assess whether Enterprise had functional control over plaintiffs, the Court
may consider: (1) whether Enterprise’s premises and equipment were used for plaintiffs’
work; (2) whether Cavalry had a business that could or did shift as a unit from one
putative joint employer to another; (3) the extent to which plaintiffs performed a discrete
line job that was integral to Enterprise’s process of production; (4) whether responsibility
under the staffing contract could pass from Cavalry to another agency without material
changes; (5) the degree to which Enterprise supervised plaintiffs’ work; and (6) whether
plaintiffs worked exclusively or predominantly for Enterprise. See id. This is a highly
factual inquiry that is generally not decided as a matter of law. See Barfield v. New York
City Health and Hosps. Corp., 537 F.3d 132, 143-44 (2d Cir. 2008) (“Because of the factintensive character of a determination of joint employment, we rarely have occasion to
review determinations made as a matter of law on an award of summary judgment.”);
Zheng, 355 F.3d at 76 n.13 (“The fact-intensive character of the joint employment inquiry
is highlighted by the fact that two of the three leading cases in this circuit were appeals
from judgments following bench trials. In the third case, we decided that genuine issues
of material fact precluded summary judgment on the ultimate issue of FLSA coverage.”
Plaintiffs have adequately pled that Enterprise exercised functional control over
them as a joint employer. They alleged that all of the work they performed, including the
washing of Enterprise’s vehicles, was done exclusively on Enterprise’s premises.
Plaintiffs also aver that Enterprise hired branch managers to supervise its New York
locations. According to the complaint, the branch mangers were “responsible for
managing and directing the day-to-day activities of all Cavalry employees” and
“supervising all aspects of the employees’ day-do-day job duties.” Second Amended
Complaint ¶ 33.
Additionally, Cavalry staffed plaintiffs to work exclusively for
Accepting as true all of the allegations in the Second Amended Complaint and
drawing all inferences in plaintiffs’ favor, Weixel v. Board of Educ., 287 F.3d 138, 145
(2d Cir. 2002), the complaint sufficiently alleges Enterprise was plaintiffs’ joint employer.
Enterprise’s motion to dismiss is DENIED.
B. Defendants’ Joint Motion to Dismiss
The various claims in the Second Amended Complaint are addressed in turn.
1. Overtime Claims
The FLSA and NYLL require employers to compensate employees “at a rate not
less than one and one-half the regular rate” for those hours worked in excess of forty
hours. 29 U.S.C. § 207(a).2 To survive a 12(b)(6) motion on an overtime claim, “a
plaintiff must sufficiently allege 40 hours of work in a given workweek as well as some
uncompensated time in excess of the 40 hours.” Lundy v. Catholic Health Sys. of Long
Island Inc., 711 F.3d 106, 114 (2d Cir. 2013). “Determining whether a plausible claim
has been pled is ‘a context-specific task that requires the reviewing court to draw on its
judicial experience and common sense.’” Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679
The First and Third claims in the Second Amended Complaint allege that
defendants failed to pay plaintiffs for the time they worked in excess of forty hours in any
given week. See Second Amended Complaint ¶¶ 42, 47, 55, 58. Defendants argue that
plaintiffs’ allegations are too broad to create a plausible inference to maintain an overtime
claim. Plaintiffs, however, provide two workweeks as representative examples in which
Copper was unpaid for hours he worked in excess of forty. Defendants attempt to defeat
Overtime claims under the FLSA and NYLL are subject to the same
standards. DeJesus v. HF Mgmt. Servs., LLC, 726 F.3d 85, 89 & n.5 (2d Cir.
these allegations by appending to their motion pay stubs and wage statements that indicate
plaintiffs worked fewer hours than alleged and that plaintiffs were compensated for each
hour worked. Consideration of this extrinsic evidence provides little probative value for
this claim because plaintiffs plausibly allege that defendants did not account for hours
they worked “off-the-clock;” therefore, these unaccounted-for hours would not appear
in the wage statements furnished by defendants.
Accordingly, defendants’ motion to dismiss is DENIED as to plaintiffs’ First and
2. Minimum-Wage Claims
The Second, Fourth, and Fifth claims in the Second Amended Complaint allege that
defendants failed to pay plaintiffs the minimum wage as required by the FLSA and NYLL.
Specifically, plaintiffs allege that because they received zero compensation for hours
worked in excess of forty hours in any given workweek, they were not compensated the
minimum wage (or any wage) for those hours. Defendants move to dismiss these claims
because they argue that the proper method of calculating plaintiffs’ rate of pay for
minimum-wage purposes is to divide their total remuneration by the number of hours
worked in a given week. Plaintiffs effectively concede that if the rate of pay is calculated
as such, they were compensated at least the minimum wage.
The Court agrees with defendants’ method of calculating an employee’s rate of pay.
Under the FLSA, “[t]he regular hourly rate of pay of an employee is determined by
dividing his total remuneration for employment . . . in any workweek by the total number
of hours actually worked by him in that workweek for which such compensation was
paid.” 29 C.F.R. § 778.109; see also Johnson v. Equinox Holdings, Inc., No. 13-CV6313, 2014 WL 3058438 at *3 (S.D.N.Y. July 2, 2014) (rejecting plaintiffs’ argument that
failure to compensate for off-the-clock hours resulted in a minimum-wage violation when
average hourly wage did not fall below the minimum wage).
Plaintiffs cite several cases for the proposition that there is a rebuttable presumption
that the payment of a weekly salary is compensation for only the first forty hours of an
employee’s workweek. See Berrios v. Nicholas Zito Racing Stable, Inc., 849 F. Supp. 2d
372, 385 (E.D.N.Y. 2012); Guallpa v. N.Y. Pro Signs, Inc., No. 11-CV-3133, 2014 WL
2200393 at *3 (S.D.N.Y. May 27, 2014); Amaya v. Superior Tile & Granite Corp., No.
10-CV-4525, 2012 WL 130425 at *9 (S.D.N.Y. Jan. 17, 2012). However, these cases are
inapposite because they applied the presumption as a matter of contract interpretation to
determine whether the employer and employee had agreed that hours worked in excess
of forty would be paid at a premium or included in the weekly rate of pay. In none did the
court find a minimum-wage violation by calculating the rate of pay with respect to only
those hours worked in excess of forty.
Plaintiffs also assert that the language of NYLL’s minimum-wage provision is
broader than the FLSA. Specifically, that provision states: “Every employer shall pay to
each of its employees for each hour worked a wage of not less than . . . .” NYLL § 652
(emphasis added). But the plain language of this statute does not compel plaintiffs’
interpretation—that courts must look to each individual hour worked to determine whether
the employee was compensated the minimum wage for that specific hour. The phrase
“each hour worked” is best interpreted as mandating an average rate of pay on a per hour
basis: this is calculated by dividing the employee’s total remuneration by the total number
of hours worked. See Johnson, 2014 WL 3058438 at *3. Moreover, § 652 crossreferences the FLSA’s minimum-wage provision to ensure that New York’s minimum
wage is at least on par with the federal rate. Id. § 652(1). It is unlikely the New York
statute was intended to calculate minimum wage in a manner different from the FLSA.
Cf. Casci v. Nat’l Fin. Network, LLC, No. 13-CV-1669, 2015 WL 94229 at *4 (E.D.N.Y.
Jan. 7, 2015) (applying the same standard to FLSA and NYLL minimum-wage claims).
Accordingly, defendants’ motion to dismiss is GRANTED with respect to
plaintiffs’ Second, Fourth, and Fifth claims based on minimum-wage violations.
3. Failure to Furnish Wage Statements
In 2010, the New York State Legislature passed the Wage Theft Prevention Act (the
“WTPA”) in an effort “to expand the rights of employees to seek civil and criminal
avenues of remedy” against their employers who fail to comply with the labor law. N.Y.
Sponsors. Memo., 2010 S.B. 8380, 233rd Leg., 2010 Reg. Sess. (Oct. 28, 2010). The
WTPA amended, among other provisions, NYLL § 195(3) to require employers to
“furnish each employee with a statement with every payment of wages” that lists various
categories of information, including, “the number of overtime hours worked.”
NYLL § 195(3).3 An employer’s failure to comply with § 195(3) results in a civil penalty
of $250 for each violation up to $5,000 per employee. See NYLL § 198(1-d).
The plaintiffs’ Sixth claim alleges defendants failed to comply with § 195(3)
because defendants “failed to furnish . . . accurate wage statements.” Second Amended
Complaint ¶ 99. The wage statements appended to defendants’ motion to dismiss
demonstrate that they furnished documentation containing the categories required by the
statute.4 The wage statements separately list the number of regular and overtime hours
Section 195(3) provides in full:
Every employer shall . . . furnish each employee with a statement with
every payment of wages, listing the following: the dates of work
covered by that payment of wages; name of employee; name of
employer; address and phone number of employer; rate or rates of pay
and basis thereof, whether paid by the hour, shift, day, week, salary,
piece, commission, or other; gross wages; deductions; allowances, if
any, claimed as part of the minimum wage; and net wages. For all
employees who are not exempt from overtime compensation as
established in the commissioner’s minimum wage orders or otherwise
provided by New York state law or regulation, the statement shall
include the regular hourly rate or rates of pay; the overtime rate or
rates of pay; the number of regular hours worked, and the number of
overtime hours worked. For all employees paid a piece rate, the
statement shall include the applicable piece rate or rates of pay and
number of pieces completed at each piece rate. Upon the request of an
employee, an employer shall furnish an explanation in writing of how
such wages were computed[.]
By referring to the completeness and inaccuracy of the wage statements in
their complaint, plaintiffs relied on these documents in fashioning their Sixth
claim. See Second Amended Complaint ¶ 99 (“Defendants willfully failed to
furnish Plaintiffs . . . with accurate wage statements containing the criteria required
worked and the rate of compensation for each. But plaintiffs argue that these wage
statements do not satisfy the statute’s requirements because defendants did not account
for overtime hours plaintiffs allegedly worked off-the-clock. Therefore, according to the
complaint, the furnished wage statements do not accurately state “the number of overtime
hours worked.” NYLL § 195(3).
At oral argument, defendants argued for the first time that § 195(3) is merely a
notice and record-keeping provision. According to defendants, the wage statements’
compensated—regardless of whether off-the-clock hours are accounted for—satisfied
§ 195(3) because plaintiffs were notified of what compensation defendants believed they
were entitled to and provided the basis for the calculation of their wages. Under
defendants’ interpretation, the statutory scheme contemplates that even though an
inaccurate wage statement can satisfy § 195(3), underpaid employees are still protected
by the substantive minimum and overtime wage provisions of the NYLL.
Whether § 195(3) requires an accurate statement of the number of overtime hours
an employee actually worked—rather than just a statement of the overtime hours for
under the NYLL.”). The Court may accordingly consider the wage statements
attached to defendants’ motion to dismiss without converting it to a motion for
summary judgment. See Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d
Cir. 2002) (“[A] plaintiff’s reliance on the terms and effect of a document in
drafting the complaint is a necessary prerequisite to the court’s consideration of the
document on a dismissal motion.”).
which the employee is being paid—appears to be a matter of first impression.5 The New
York Court of Appeals has instructed that in matters of statutory interpretation, courts
should consider “the text of a provision [a]s the clearest indicator of legislative intent.”
See Albany Law Sch. v. N.Y. State Office of Mental Retardation & Developmental
Disabilities, 19 N.Y.3d 106, 120 (2012) (internal quotation marks omitted). Courts should
also “inquire into the spirit and purpose of the legislation, which requires examination of
the statutory context of the provision as well as its legislative history.” Id. (internal
quotation marks omitted). Both the statutory text and remedial purpose of the WTPA
persuade the Court that plaintiffs have sufficiently pled a claim under § 195(3).
The plain language of § 195(3) requires wage statements furnished to employees
to include a statement of “the number of overtime hours worked.” NYLL § 195(3)
(emphasis added). Accordingly, the “number of overtime hours” that appears on the wage
statement should include every hour actually “worked” by the employee. If, as
defendants argue, the wage statements serve only to provide notice to employees of the
basis of their compensation—and thus even an inaccurate statement of hours worked
Although some courts have stated that § 195(3) requires furnishing of
“accurate wage statements,” they have done so without analysis and in cases in
which the proper interpretation of the statute was not at issue. See, e.g., Dominguez
v. B S Supermarket, Inc., No. 13-CV-7247, 2015 WL 1439880, at *2 (E.D.N.Y.
Mar. 27, 2015) (order adopting magistrate judge’s report and recommendation that
stated: “[P]laintiffs brings a claim pursuant to Section 195(3) . . . , which requires
employers to furnish employees with accurate wage statements.”); Jiaren Wei v.
Lingtou Zhengs Corp., No. 13-CV-5164, 2015 WL 739943, at *2 (E.D.N.Y. Feb.
20, 2015) (same).
could satisfy § 195(3)—the statute would likely read “the number of overtime hours being
compensated,” not “the number of overtime hours worked.” Plaintiffs have therefore
adequately pled a § 195(3) violation by alleging that defendants “maintained inaccurate
time records” and paid them “according to these inaccurate time records, and not the
hours . . . actually worked.”6 Second Amended Complaint ¶ 48 (emphasis added).
The legislative history of the WTPA bolsters this interpretation. The WTPA’s
sponsors justified the legislation on the basis that “a large number of employees are
earning less than minimum wage and others are being paid less than their correct wage.”
N.Y. Sponsors. Memo., 2010 S.B. 8380, 233rd Leg., 2010 Reg. Sess. (Oct. 28, 2010). The
legislators were concerned that “[m]any employees are also not all receiving the
appropriate amount of overtime compensation and many employers are failing to
adequately inform their employees of their wages and how they are calculated in a
language they can comprehend.” Id. In an effort to combat these abuses, the WTPA was
drafted to “dramatically” increase the penalties against employers “in order to far better
protect workers’ rights and interests.” Id. The dramatic expansion of civil penalties and
the WTPA’s remedial purpose convince the Court that the New York legislature did not
intend for inaccurate statements of overtime hours to satisfy the WTPA’s wage-notice
To counter this assertion, defendants submitted exhibits relating to the
sophistication of the clock-in/clock-out system they utilized. But because the
Second Amended Complaint does not rely on these documents, the Court has not
considered them with respect to the present 12(b)(6) motion. See Chambers, 282
F.3d at 153.
As an additional note, the Court need not decide today whether § 195(3) contains
an implicit good-faith exception that would exempt an employer from civil penalties when
there are inaccuracies in wage statements despite the employer’s good-faith efforts to
properly account for an employee’s overtime hours. To the extent such an exception
exists, defendants have not raised it in their motion to dismiss; moreover, plaintiffs have
sufficiently pled conduct to overcome it.
As noted above, the complaint alleges
defendants “required” plaintiffs to work in excess of forty hours per week yet consistently
failed to compensate them for overtime.
For the foregoing reasons, defendants’ motion to dismiss is DENIED with respect
to plaintiffs’ Sixth claim.
C. Plaintiff’s Motion to Conditionally Certify a Collective Action
The FLSA allows a plaintiff to sue on behalf of “other employees similarly
situated,” provided that the other employees give their consent in writing. 29 U.S.C.
§ 216(b). In this context, “similarly situated” means that the named plaintiff and the
potential opt-in plaintiffs “together were victims of a common policy or plan that violated
the law.” Hoffman v. Sbarro, Inc., 982 F. Supp. 249, 261 (S.D.N.Y. 1997) (Sotomayor,
J.) (collecting cases).
Certification of a collective action is a two-step process. “The first step involves
the court making an initial determination to send notice to potential opt-in plaintiffs who
may be ‘similarly situated’ to the named plaintiffs with respect to whether a FLSA
violation has occurred.” Myers v. Hertz Corp., 624 F.3d 537, 555 (2d Cir. 2010). If the
Court makes such a determination, the potential plaintiffs must be given notice of the
action and an opportunity to opt in. Because the determination is only preliminary and
must necessarily be made early in the proceedings, the first step imposes on the named
plaintiff the minimal burden of making a “modest factual showing” based on the pleadings
and affidavits. Id.
Once the opt-in period is over and discovery is completed, the court—usually at the
defendant’s instance—applies “a more heightened scrutiny” to the question. Jacobs v.
N.Y. Foundling Hosp., 483 F. Supp. 2d 251, 265 (E.D.N.Y. 2007). If the facts developed
during discovery refute the step-one determination, the court will decertify the collective
action and only the named plaintiffs’ claims will proceed. See id.
Plaintiffs move to conditionally certify a collective action at the first, preliminary
step. In addition to the allegations made in the complaint, they submit affidavits from five
Cavalry employees who worked at Enterprise locations. Each affiant claims he regularly
worked in excess of forty hours per week yet were never paid for hours worked in excess
of forty. The affidavits also state that the employees were not furnished with pay stubs
that accurately reflected their hours worked. Defendants argue that these affidavits are not
sufficient to warrant conditional certification because they are “boilerplate” and
unsupported. Indeed, the Court will not conditionally certify a collective action based
solely on “unsupported assertions,” Myers, 624 F.3d at 555; however, plaintiffs may carry
their modest burden “by relying on their own pleadings, affidavits, declarations, or the
affidavits and declarations of other potential class members.” Hallissey v. Am. Online,
Inc., No. 99-CV-3785, 2008 WL 465112, at *1 (S.D.N.Y. Feb. 19, 2008); see also Sharma
v. Burberry Ltd., 52 F. Supp. 3d 443, 452 (E.D.N.Y. 2014) (“This determination is
typically ‘based on the pleadings, affidavits and declarations’ submitted by the
Plaintiffs’ affidavits satisfy the Court that there are other similarly situated
employees with potential FLSA claims against defendants. That is all that is required to
warrant conditional certification. Plaintiffs’ motion to conditionally certify the collective
action is GRANTED.
Defendants advanced several objections to the proposed notice to potential
plaintiffs. The parties are directed to confer to agree upon appropriate notice procedures
and shall submit a joint proposed order for the Court’s approval by October 9, 2015.
Should the parties be unable to agree, they shall submit separate proposed orders that
highlight for the Court the areas of disagreement.
In sum, Enterprise’s motion to dismiss is DENIED. Defendants’ motion to dismiss
with respect to the Second Amended Complaint’s Second, Fourth, and Fifth claims is
GRANTED IN PART, and otherwise DENIED IN PART.
Plaintiffs’ motion to
conditionally certify a collective action is GRANTED.
/S/ Frederic Block__________
Senior United States District Judge
Brooklyn, New York
September 25, 2015
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