Agonath et al v. Interstate Home Loans Center, Inc. et al
Filing
41
ORDER granting in part and denying in part DE 26 Motion to Certify FLSA Collective Action. For the reasons set forth in the attached Memorandum and Order, the Court grants in part and denies in part Plaintiffs' motion to proceed as a collective action and to facilitate notice under 29 U.S.C. § 216(b), as detailed therein. Ordered by Magistrate Judge Steven I. Locke on 3/6/2019. (Kantor, Jesse)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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JEFFREY AGONATH, JAMES ALLEN,
BRIAN DALEY, KEVIN ROGERS, and
MICHAEL GALARZA, Individually, and
on Behalf of All Others Similarly Situated,
-against-
Plaintiffs,
MEMORANDUM
AND ORDER
17-cv-5267 (JS)(SIL)
INTERSTATE HOME LOANS CENTER,
INC., TERENCE CULLEN, ALEX NIVEN,
KENNETH TUMSUDEN, JEANNE
WICKES, and ELLEN ZUCKERMAN,
Defendants.
--------------------------------------------------------------x
STEVEN I. LOCKE, United States Magistrate Judge:
Plaintiffs Jeffery Agonath (“Agonath”), James Allen (“Allen”), Brian Daley
(“Daley”), and Kevin Rogers (“Rogers,” and collectively the “Illinois Plaintiffs”), along
with Michael Galarza (“Galarza,” and together with the Illinois Plaintiffs,
“Plaintiffs”) commenced this action on behalf of themselves and others similarly
situated seeking, inter alia, unpaid overtime compensation from Defendants
Interstate Home Loans Center, Inc. (“Interstate”), Terence Cullen, Alex Niven,
Kenneth Tumsuden, Jeanne Wickes, and Ellen Zuckerman (together, the “Individual
Defendants,” and collectively with Interstate, “Defendants”), pursuant to the Fair
Labor Standards Act of 1938 (“FLSA”), 29 U.S.C. § 201 et seq. and various state laws.
See Complaint (“Compl.”), Docket Entry (“DE”) [1].
Presently before the Court, on referral from the Honorable Joanna Seybert for
decision, is Plaintiffs’ motion to proceed as a collective action and to facilitate notice
under 29 U.S.C. § 216(b). See DE [26] (“Plaintiffs’ Motion”); DE [26-7], Proposed
Notice of Collective Action Lawsuit with Opportunity to Join (the “Proposed Notice”);
DE [26-13], Proposed Revised Notice of Collective Action Lawsuit with Opportunity
to Join (the “Revised Notice”); see also October 11, 2018 Electronic Order [Referring
Motion]. Defendants oppose Plaintiffs’ Motion. See Defendants’ Memorandum of
Law in Opposition to Plaintiffs’ Motion to Proceed as a Collective Action and to
Facilitate Notice Under 29 U.S.C. Section 216(b) (“Defs.’ Opp.”), DE [26-8]. For the
reasons set forth herein, Plaintiffs’ Motion is granted in part and denied in part as
detailed below.
I.
Background
The following facts are taken from the Complaint and declarations submitted
in support of the instant motion, and are accepted as true for the purposes of the
motion. 1
Interstate is a New York corporation in the business of mortgage lending with
locations throughout the United States, including corporate headquarters in Melville,
NY. See Compl. ¶ 10; see also Defs.’ Opp. at 2. The Individual Defendants are the
owners and officers of Interstate. See Compl. ¶¶ 11-15. Plaintiffs, residents of New
York and Illinois, were formerly employed by Interstate as loan officers tasked with
originating mortgages. See id. ¶¶ 5-9, 18, 29, 39, 47, 55. Throughout the course of
their employment, Plaintiffs regularly worked more than 40 hours per week over the
Plaintiffs each submitted a declaration in support of the instant motion. See Declaration of Jeffery
Agonath (“Agonath Decl.”), DE [26-1]; Declaration of James Allen (“Allen Decl.”), DE [26-2];
Declaration of Brian Daley (“Daley Decl.”), DE [26-3]; Declaration of Kevin Rogers (“Rogers Decl.”),
DE [26-4]; Declaration of Michael Galarza (“Galarza Decl.”), DE [26-5] (collectively, “Plfs.’ Decls.”).
1
2
course of five to seven days. See id. ¶¶ 22, 25, 33, 57, 41, 43, 49, 51, 59; see also Plfs.’
Decls. Galarza worked primarily in Interstate’s Melville office in addition to working
from a home office, whereas the Illinois Plaintiffs performed their primary duties
from a single home office in Illinois. See Compl. ¶¶ 20, 21, 31. According to Plaintiffs,
Defendants improperly classified them and other loan officers as exempt from, inter
alia, FLSA overtime requirements. See id. ¶ 62. Thus, Defendants failed to maintain
time records and did not pay Plaintiffs overtime compensation despite being aware
that their employees were regularly working in excess of 40 hours per week. See id.
¶¶ 63-66. Other loan officers employed by Interstate were and continue to face
similar alleged improper overtime deprivations. See id. ¶ 67; see also Galarza Decl.
¶ 14 (naming additional loan officers subject to Defendants’ overtime policy).
Based on the above, Plaintiffs initiated this lawsuit on September 7, 2017,
seeking to recover, inter alia, damages pursuant to the FLSA, New York and Illinois
law. See generally Compl. Defendants Answered the Complaint on January 8, 2018.
See DE [20]. Discovery is ongoing. See DE [29]. Plaintiffs filed the instant motion
for conditional FLSA collective action certification on April 6, 2018, see DE [26], and
Judge Seybert referred the motion to this Court for decision. See October 11, 2018
Electronic Order. Plaintiffs’ Motion requests an Order: (i) conditionally certifying
this case as an FLSA collective action encompassing all current and former loan
officers employed by Defendants from three years prior to the initiation of this suit
through the present; (ii) directing Defendants to produce a computer-readable data
file containing contact and employment information for the putative class; and (iii)
3
authorizing dissemination of a notice of pendency to potential opt-in plaintiffs via
first-class mail and email, and by posting the notice conspicuously throughout
Interstate’s nationwide locations. See Plaintiffs’ Memorandum of Law in Support of
Their Motion to Proceed as a Collective Action and to Facilitate Notice Under 29
U.S.C. Section 216(b) (“Plfs.’ Mem.”), DE [26], at 23. Defendants oppose conditional
certification and object to portions of the Proposed Notice along with Plaintiffs’
proposal for distribution of the notice. See generally Defs.’ Opp.
II.
Discussion
Pursuant to the FLSA, employees must be compensated “at a rate not less than
one and one-half times the regular rate at which [they are] employed” for every hour
worked in excess of 40 in a given work week. 29 U.S.C. § 207(a)(1). Section 216(b) of
the FLSA provides that:
An action … may be maintained against any employer ... by any one or
more employees for and on 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). “[D]istrict courts ‘have discretion, in appropriate cases, to …
facilitat[e] notice to potential plaintiffs of the pendency of the action and of their
opportunity to opt-in as represented plaintiffs.” Myers v. Hertz Corp., 624 F.3d 537,
554 (2d Cir. 2010) (quoting Hoffman-La Roche, Inc. v. Sperling, 493 U.S. 165, 169,
110 S. Ct. 482 (1989)).
Consistent with this discretion, and as detailed below, the Court:
(i) conditionally certifies this case as an FLSA collective action; (ii) authorizes the
4
dissemination of notice of the litigation, subject to the conditions set forth herein; and
(iii) orders Defendants to produce contact information and dates of employment for
potential opt-in plaintiffs.
A.
Conditional Certification
Courts in the Second Circuit apply a two-step analysis to determine whether a
collective action under Section 216(b) of the FLSA should be certified. See Myers, 624
F.3d at 554. First, the Court evaluates whether the proposed class members are
“similarly situated” to the named plaintiffs. See Rodolico v. Unisys Corp., 199 F.R.D.
468, 480 (E.D.N.Y. 2001). If the Court finds that the putative class is sufficiently
similarly situated, the action will be conditionally certified and each class member
may then consent in writing to “opt-in” to the litigation. Id. (citing 29 U.S.C. § 216(b)).
“[T]he key question for the similarly situated inquiry is not whether plaintiff’s job
duties are identical to other potential opt-in plaintiffs, but rather, whether the
proposed plaintiffs are similarly situated … with respect to their allegations that the
law has been violated.” Knox v. John Varvatos Enterprises Inc., 282 F. Supp. 3d 644,
656 (S.D.N.Y. 2017) (internal quotations and citations omitted). The second step
generally occurs following completion of discovery and requires examination of the
evidentiary record to ascertain whether the opt-in plaintiffs are, in fact, similarly
situated. Bifulco v. Mortg. Zone, Inc., 262 F.R.D. 209, 212 (E.D.N.Y. 2009). The
present motion concerns only the first step of the certification process – whether the
proposed class members are similarly situated such that conditional certification is
appropriate.
5
At the conditional certification stage, “the evidentiary standard is lenient.”
Moore v. Eagle Sanitation, Inc., 276 F.R.D. 54, 58 (E.D.N.Y. 2011); see also Lynch v.
United Servs. Auto. Ass'n, 491 F. Supp. 2d 357, 368 (S.D.N.Y. 2007) (“The burden for
demonstrating that potential plaintiffs are similarly situated is very low at the notice
stage”) (internal quotation and citation omitted).
Plaintiffs seeking conditional
certification “need only make a modest factual showing sufficient to demonstrate that
they and potential plaintiffs together were victims of a common policy or plan that
violated the law.” Doucoure v. Matlyn Food, Inc., 554 F. Supp. 2d 369, 372 (E.D.N.Y.
2008) (internal quotation and citation omitted). “This low burden is consistent with
the broad remedial purpose of the FLSA.” Hamadou v. Hess Corp., 915 F. Supp. 2d
651, 661 (S.D.N.Y. 2013) (internal quotation and citation omitted). At this stage, “the
Court does not resolve factual disputes, decide substantive issues going to the
ultimate merits or make credibility determinations.” Summa v. Hofstra Univ., 715
F. Supp. 2d 378, 385 (E.D.N.Y. 2010) (quoting Francis v. A & E Stores, Inc., No. 06cv-1638, 2008 WL 2588851, at *2 (S.D.N.Y. June 26, 2008), report and
recommendation adopted as modified, 2008 WL 4619858 (S.D.N.Y. Oct. 16, 2008));
see also Laroque v. Domino's Pizza, LLC, 557 F. Supp. 2d 346, 354 (E.D.N.Y. 2008)
(“The standard in this circuit is clear; the merits of plaintiffs’ claim are not at issue
in a motion for conditional certification”). Thus, when “plaintiffs attest that they
regularly worked in excess of [] 40 hours per week and worked evenings, early
mornings, and weekends without being properly paid…. [s]uch attestations … are
6
sufficient for the purposes of [conditional certification].” Bifulco, 262 F.R.D. at 214
(internal citation omitted).
To be entitled to conditional certification, a movant is not required to prove an
actual FLSA violation, “but rather that a ‘factual nexus’ exists between the plaintiff's
situation and the situation of other potential plaintiffs.” Sobczak v. AWL Indus., Inc.,
540 F. Supp. 2d 354, 362 (E.D.N.Y. 2007) (quoting Wraga v. Marble Lite, Inc., No. 05cv-5038, 2006 WL 2443554, at *1 (E.D.N.Y. Aug. 22, 2006)); see also Sexton v.
Franklin First Fin., Ltd., No. 08-cv-4950, 2009 WL 1706535, at *3 (E.D.N.Y. June 16,
2009) (“‘nothing more than substantial allegations that the putative class members
were together the victims of a single decision, policy or plan’ is required”) (quoting
Scholtisek v. Eldre Corp., 229 F.R.D. 381, 387 (W.D.N.Y. 2005)). “Courts will certify
broad classes where there is some showing that all members of the putative class
performed the same duties ... or that the employer had uniform company-wide
employment practices.” Vasquez v. Vitamin Shoppe Indus., Inc., No. 10-cv-8820, 2011
WL 2693712, at *3 (S.D.N.Y. July 11, 2011) (internal citation omitted).
The
determination that potential opt-in plaintiffs are similarly situated is typically based
on the pleadings and declarations submitted in support of the motion. See Sharma
v. Burberry Ltd., 52 F. Supp. 3d 443, 452 (E.D.N.Y. 2014) (“courts in the Second
Circuit routinely grant conditional certification for overtime claims based on the
statements of the named plaintiff(s) and other supporting affidavits”).
Here, Plaintiffs have satisfied their burden of demonstrating that they and the
potential collective action members – other loan officers subject to wage violations –
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were together victims of a common compensation policy that violated the FLSA. The
Complaint alleges that Defendants systematically failed to pay Plaintiffs and other
Interstate loan officers overtime wages provided for under federal law. See Compl.
¶¶ 62-65. Those allegations are supported by Plaintiffs’ Declarations, which describe
similar unlawful employment practices. See, e.g., Agonath Decl. ¶ 9 (“[loan officers]
were encouraged to work long hours”); id. ¶ 11 (“Interstate used no timekeeping
system to track and record the hours worked by … loan officers”); id. ¶ 14 (“Interstate
never paid … loan officers for the overtime hours … worked”); id. ¶ 15 (“All loan
officers employed by Interstate … were subject to the same policies and practices, and
had the same duties”); 2 see also Galarza Decl. ¶ 8 (“During my employment,
Defendants did not track or otherwise record the number of hours that I worked each
day and each week of my employment”); id. ¶ 13 (“I worked with at least eight to ten
loan officers who also originated mortgage loans for Interstate. To my knowledge,
these loan offices were subjected to the same payroll and timekeeping practices and
policies of Defendants as me. All other loan officers had the same job duties and
responsibilities…”). Thus, Galarza and the Illinois Plaintiffs attest that they, and
the putative class, were all subject to the same payroll policies and practices.
The Court is unpersuaded by Defendants’ argument that conditional
certification is inappropriate because, inter alia, some of Interstate’s employees “are
exempt from overtime wages under the FLSA, thus requiring this Court to engage in
highly individualized and fact intensive inquiries [into each Plaintiff]” and since
The Declarations of the other Illinois Plaintiffs attest to virtually identical policies and practices.
See generally Plfs.’ Declarations.
2
8
Defendants’ loan officers are “disparately situated depending on their classifications
and job duties” despite sharing the same job title. See Defs.’ Opp. at 1-15; see also
Affidavit of Alexander Niven (“Niven Aff.”), DE [26-9], ¶ 5. Specifically, Defendants
contend that Plaintiffs are not similarly situated because the additional loan officers
named in the Galarza Declaration worked in Interstate’s Melville office, whereas
Plaintiffs are outside salespeople exempt from overtime wages under the FLSA. See
Defs.’ Opp. at 3-4; Niven Aff. ¶¶ 6-7. Further, Defendants claim that the Illinois
Plaintiffs’ out-of-state work at an unsanctioned office rendered them outside the scope
of Interstate’s control. See Defs.’ Opp. at 5; Niven Aff. ¶ 10.
As discussed above, Plaintiffs have sufficiently alleged and attested to a
common compensation policy whereby Interstate’s loan officers are uniformly
deprived of overtime wages.
Moreover, Plaintiffs argue that Defendants’
classification of loan officers as exempt was impermissible. See Compl. ¶ 62
(“Defendants improperly classified Named Plaintiffs and other loan officers working
for them as exempt from the overtime requirements of the FLSA …”).
Defendants’
arguments concerning exemption status and disparate employment conditions
present factual disputes that would require the premature resolution of substantive
issues. See Summa, 715 F. Supp. 2d 378, 390 (“the court rejects Defendant’s objection
that conditional certification was inappropriate because the class … required
individualized factual inquiries to determine whether or not they were exempt from
the FLSA”); Sexton, 2009 WL 1706535, at *7 (a “motion for conditional certification
is not the proper forum to litigate the merits of plaintiff’s claims”); see also Lynch, 491
9
F. Supp. 2d at 368 (“At this procedural stage, the court does not resolve factual
disputes, decide substantive issues going to the ultimate merits, or make credibility
determinations…. Indeed, a court should not weigh the merits of the underlying
claims in determining whether potential opt-in plaintiffs may be similarly situated”)
(internal citations omitted). Accordingly, Defendants’ arguments are better suited
for summary judgment or decertification following discovery and are therefore
rejected. See Benavides v. Serenity Spa NY Inc., 166 F. Supp. 3d 474, 479 (S.D.N.Y.
2016) (“In the second stage, which occurs after discovery …. a defendant can move to
decertify if the record reveals that the claimants are not similarly situated”) (citing
Myers, 624 F.3d at 55); Salomon v. Adderley Indus., Inc., 847 F. Supp. 2d 561, 565
(S.D.N.Y. 2012) (“The Defendant will have an opportunity to argue that individual
inquiries predominate over common issues, based upon the discovery, at the second
phase”); see also Bijoux v. Amerigroup New York, LLC, No. 14-cv-3891, 2015 WL
4505835, at *10 (E.D.N.Y. July 23, 2015), report and recommendation adopted, 2015
WL 5444944 (E.D.N.Y. Sept. 15, 2015) (“the type of person-by-person fact-intensive
inquiry sought by Defendants is premature at the conditional certification stage and
has been specifically rejected by courts within this circuit”) (internal brackets
quotations and citations omitted). 3
Notably, much of the authority cited by Defendants throughout their opposition is from outside the
Second Circuit. For example, the two principal cases Defendants rely in in opposing conditional
certification are from the Southern District of Indiana and the Eastern District of Michigan. See, e.g.,
Defs.’ Opp. at 12; Clausman v. Nortel Networks, Inc., No. IP02-0400, 2003 WL 21314065 (S.D. Ind.
May 1, 2003); Olivo v. GMAC Mortg. Corp., 374 F. Supp. 2d 545 (E.D. Mich. 2004). The Court declines
to follow those cases in light of the well-established principles in this circuit.
3
10
Moreover, Defendants’ contention that Plaintiffs’ “boilerplate affidavits fail[]
to satisfy their [evidentiary] burden” is without merit. See Defs.’ Opp. at 14-16. As
discussed above, the low evidentiary burden for conditional certification merely
requires Plaintiffs to set forth a factual nexus between their allegations and an
alleged policy affecting the putative class. Here, the Declarations of the Illinois
Plaintiffs and Galarza assert that Interstate had a uniform policy of withholding
overtime compensation from its employees and support those allegations with
individualized testimony as to their personal compensation experiences.
See
generally Plfs.’ Decls. Accordingly, Plaintiffs have satisfied the lenient standard
applicable at this stage, and the Court conditionally certifies this matter as an FLSA
collective action encompassing all current and former loan officers employed by
Defendants during the time window set forth below.
B.
Notice Period
The Court must next determine the appropriate timeframe applicable to the
class. Plaintiffs seek permission to include as potential collective action plaintiffs all
loan officers who worked for Defendants dating back three years from the filing of the
Complaint (i.e. from September 7, 2014 through the present). See Plfs.’ Mem. at 22.
Defendants contend that the notice period should be based upon when notice is served
upon potential plaintiffs as opposed to when the Complaint was filed, and that only
a two-year window is appropriate. See Defs.’ Opp. at 17. As discussed below, the
Court concludes the neither party’s position is appropriate and instead directs that
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notice be given to potential opt-in plaintiffs dating back three years from the filing of
Plaintiffs’ Motion (i.e., from April 6, 2015 through the present).
The FLSA has a two-year statute of limitations except in the case of willful
violations, for which the statute of limitations is three years. See 29 U.S.C. § 255(a).
“At the conditional certification stage, allegations of willful conduct are sufficient to
apply the three-year statute of limitations for purposes of certifying the class.” Jie
Zhang v. Wen Mei, Inc., 14-cv-1647, 2015 WL 6442545, at *5 (E.D.N.Y. Oct. 23, 2015)
(citing Summa, 715 F. Supp. 2d at 388); Patton v. Thomson Corp., 364 F. Supp. 2d
263, 268 n.2 (E.D.N.Y. 2005) (finding allegation of willful violation justified notice
based on a three-year statute of limitations period).
Further, “the statute of
limitations applicable to a plaintiff’s claim continues to run until he or she has filed
a written consent with the court to join the lawsuit.” Garriga v. Blonder Builders
Inc., No. 17-cv-0497, 2018 WL 4861394, at *10 (E.D.N.Y. Sept. 28, 2018) (citing 29
U.S.C. § 256(b)). The Court, however, “may toll the limitations period to avoid
inequitable circumstances” under the doctrine of equitable tolling. See id. (internal
quotation and citations omitted). One such circumstance where equitable tolling is
appropriate is during the period in which the motion for conditional certification is
pending. See Yahraes v. Rest. Assocs. Events Corp., No. 10-cv-935, 2011 WL 844963,
at *2 (E.D.N.Y. Mar. 8, 2011) (“The delay caused by the time for a court to rule on a
motion, such as one for certification of a collective action in a FLSA case, may be
deemed an extraordinary circumstance justifying application of the equitable tolling
doctrine”) (internal quotation bracket and citations omitted); McGlone v. Contract
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Callers, Inc., 867 F. Supp. 2d 438, 445 (S.D.N.Y. 2012) (“While plaintiffs wishing to
pursue their rights cannot sit on them indefinitely, those whose putative class
representatives and their counsel are diligently and timely pursuing the claims
should also not be penalized due to the courts' heavy dockets and understandable
delays in rulings”); see also Jackson v. Bloomberg, L.P., 298 F.R.D. 152, 170 (S.D.N.Y.
2014) (applying equitable tolling as of the date of the filing of a conditional
certification motion that took seven months to decide).
Here, the Complaint alleges that Defendants willfully violated the FLSA. See
Compl. ¶¶ 69, 84. Moreover, Plaintiffs’ assertions of willfulness are supported by
Galarza’s testimony. See Galarza Decl. ¶ 17 (“Despite Defendants’ knowledge of the
number of overtime hours that I and the other loan officers worked … Defendants
never paid [us] overtime compensation”). Defendants argue that a two-year notice
period is appropriate because Interstate disputes that any wrongdoing was willful,
which gives rise to a factual dispute. See Defs.’ Opp. at 16-17; see also Niven Aff. At
this conditional certification stage, however, Defendants’ denial is insufficient to
overcome Plaintiffs’ allegations of willfulness. See Alvarez v. IBM Restaurants Inc.,
839 F. Supp. 2d 580, 587 (E.D.N.Y. 2012) (“The Plaintiffs have alleged willfulness in
their Complaint ... and the Defendants deny these allegations. Courts in this circuit
have generally held that where willfulness is in dispute, a three-year statute of
limitations applies at the conditional certification stage”). Accordingly, Plaintiffs
have sufficiently alleged willful conduct such that a three-year statute of limitations
is appropriate with respect to the conditional class.
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The Court further concludes sua sponte that the three-year statute of
limitations should be tolled for the period between the filing of the Plaintiffs’ Motion
and the date of this Memorandum and Order. The record is clear that Plaintiffs
diligently pursued conditional certification. Specifically, Plaintiffs’ moving brief is
dated January 31, 2018, less than one month after Defendants filed their Answer and
more than one year prior to the instant decision. See DEs [20], [26]. Absent tolling
of the limitations period, a substantial number of class members may now be timebarred through no fault of counsel or the class representatives. Accordingly, the
Court concludes it is equitable to toll the statute of limitations while Plaintiffs’ Motion
was pending, and directs notice to be provided to all present and former loan officers
employed by Interstate from April 6, 2015 through the present. 4
C.
Proposed Notice
i.
Content of the Notice
Next, Plaintiffs seek leave to disseminate the Proposed Notice to all loan
officers employed by Interstate between September 7, 2014 and the present. See Plfs.’
Mem. at 19-20; Proposed Notice. Defendants object to the Proposed Notice on the
grounds that it: (i) too broadly defines the class as “all loan officers” given that some
loan officers are exempt from FLSA overtime requirements and subject to different a
compensation structure; (ii) fails to describe their defenses in details; (iii) omits
reference that the overtime claim only applies to hours worked in excess of 40 in a
given week; and (iv) does not adequately inform the putative class of their obligations,
The Court notes that any particularized challenge to a given Plaintiff’s statute of limitations will be
entertained at the appropriate juncture.
4
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including the requirement to engage in discovery and the possibility of bearing
Defendants’ costs if there is no recovery. See Defs.’ Opp. at 18-20. On reply, Plaintiffs
submitted the Revised Notice, which:
(i) indicates Defendants’ denial of any
wrongdoing; (ii) mentions repeatedly that the overtime claims concern hours worked
in excess of 40 in a given week; (iii) informs opt-in plaintiffs that they may be liable
for costs if there is no recovery; (iv) indicates that class members may have to give
written or oral testimony; and (v) instructs opt-in plaintiffs to preserve employment
records. See Revised Notice.
Neither the FLSA nor any court has expressly outlined what form courtauthorized notice should take or what provisions the notice should contain. See
Moore, 276 F.R.D. at 58 (citing Fasanelli v. Heartland Brewery, Inc., 516 F. Supp. 2d
317, 323 (S.D.N.Y. 2007)). It is well-settled, however, that “[t]he form of a courtauthorized notice and provisions contained in it are left to the broad discretion of the
trial court.” Sobczak, 540 F. Supp. at 364; Hernandez v. Immortal Rise, Inc., No. 11cv-4360, 2012 WL 4369746, at *6 (E.D.N.Y. Sept. 24, 2012) (“courts have broad
discretion to craft appropriate notices that effectuate the overarching policies of the
collective suit provisions [of the FLSA] and provide employees with accurate and
timely notice concerning the pendency of the collective action, so that they can make
informed decisions about whether to participate”) (internal quotation and citation
omitted).
Consistent with this discretion, the Court concludes that the Revised Notice
should be modified to: (i) reflect the notice period described by the Court above (i.e.,
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September 7, 2014 should be replaced with April 6, 2015 throughout); (ii) remove the
reference to opt-in plaintiffs potentially bearing Defendants’ costs; and (iii) describe
Defendants’ position in greater detail. With respect to Defendants’ principal objection
– that the identified class is too broad – the Court rejects this argument for the same
reason it conditionally certifies the class. Specifically, Defendants’ claim that the
putative class encompasses loan officers that are exempt from FLSA overtime
requirements is premature at the conditional certification stage in light of Plaintiffs’
allegations and attestations that “all loan officers … were subject to the same policies
and practices.” See, e.g., Agonath Decl. ¶ 15; see also Compl. ¶ 68 (“Other loan officers
… are subject to the same practices and policies that deprive them of overtime
wages”).
Further, the Court disagrees that the notice should mention that opt-in
plaintiffs might be liable for Defendants’ costs if there is no recovery. Although some
courts have approved language to this effect, see, e.g., Gjurovich v. Emmanuel's
Marketplace, Inc., 282 F. Supp. 2d 101, 110 (S.D.N.Y. 2003), many courts in this
District have reached the opposite conclusion. See Guzman v. VLM, Inc., No. 07-cv1126, 2007 WL 2994278, at *8 (E.D.N.Y. Oct. 11, 2007) (“Given the remote possibility
that such costs for absent class members would be other than de minimis ... such
language is inappropriate”); see also Dilonez v. Fox Linen Serv. Inc., 35 F. Supp. 3d
247, 256 (E.D.N.Y. 2014); Garcia v. Pancho Villa's of Huntington Vill., Inc., 678 F.
Supp. 2d 89, 95 (E.D.N.Y. 2010). Accordingly, in light of the FLSA’s overarching
16
remedial purpose, the Court will not authorize language stating that opt-in plaintiffs
may be required to pay costs in the event they do not prevail.
With respect to detailing Defendants’ position, an issue that Plaintiffs do not
dispute but purport to resolve with the Revised Notice, the Court agrees that it is
appropriate to further revise the language to indicate Defendants’ contention that
Plaintiffs are exempt from FLSA overtime requirements. Although the Court will
not resolve this substantive dispute at the conditional certification stage, this
information will give individuals considering joining the suit an opportunity to
consider whether it is worthwhile to participate. Accordingly, the Court directs that
the last paragraph of Section II of the Revised Notice include language indicating
that Defendants’ denial of wrongdoing includes contending that Interstate’s loan
officers are exempt due to their classification as outside salespeople.
The Court is satisfied that the Revised Notice adequately alleviates
Defendants’ remaining concerns. Additionally, the Revised Notice: (i) describes the
nature of the lawsuit; (ii) informs the putative class that the Court does not endorse
the merits of the action; (iii) apprises opt-in plaintiffs that they will be bound by the
outcome of the action if they join, and that they will not be affected if they choose not
to participate; (iv) advises the putative class that Defendants cannot retaliate against
them for joining the suit; and (iv) notifies recipients that they have the option to
retain independent counsel. Accordingly, the Court approves dissemination of the
Revised Notice once it reflects the changes indicated above.
To that end, once
Plaintiffs have edited the Revised Notice in accordance with the Court’s directives,
17
they should serve a draft on Defendants on or before March 20, 2019. Defendants
must serve any objections, or give their consent, on or before March 29, 2019. After
the revised notice is complete, the parties should file a joint motion for approval of
the notice with the Court on or before April 10, 2019. That motion should contain a
proposed opt-in form.
ii.
Distribution of the Notice
Finally, the Court authorizes Plaintiffs to circulate the notice, once approved,
via first-class mail and email. Further, the Court directs Defendants to conspicuously
post the notice and opt-in forms at their company office locations, and to produce
contact information and dates of employment for each of the potential class members.
Plaintiffs seek to distribute notice via first class mail, email correspondence, and by
posting the notice at Interstate’s office locations.
See Plfs.’ Mem. at 20-21.
Defendants object to email distribution and in-office posting, contending that regular
mail alone is sufficient. See Defs.’ Opp. at 18-19.
The Court first concludes that email circulation is reasonable. See Martin v.
Sprint/united Mgmt. Co., No. 15-cv-5237, 2016 WL 30334, at *19 (S.D.N.Y. Jan. 4,
2016) (“Courts in this Circuit routinely approve email distribution of notice and
consent forms in FLSA cases”) (collecting cases); Pippins v. KPMG LLP, No. 11-cv0377, 2012 WL 19379, at *14 (S.D.N.Y. Jan. 3, 2012) (“given the reality of
communications today … email notice in addition to notice by first class mail is
entirely appropriate”) (internal citation omitted); see also Cabrera v. Stephens, No.
16-cv-3234, 2017 WL 4326511, at *11 (E.D.N.Y. Sept. 28, 2017) (permitting email
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dissemination of the notice of pendency). Moreover, the Court concludes that the
final notice of pendency along with consent forms should be posted at each of
Interstate’s office locations. See Cabrera, 2017 WL 4326511, at *8 (“Courts routinely
approve requests to post notice on employee bulletin boards and in other common
areas, even where potential members will also be notified by mail”) (internal
quotations and citations omitted). Defendants do not proffer an explanation as to
how such a posting would be unduly burdensome, and instead merely contend it is
unnecessary. The Court, however, will not require Defendants to post notices in any
home offices out of which their employees operate. Accordingly, the Court authorizes
the notice of pendency to be distributed by first-class mail and email, and directs
Defendants to conspicuously post the notice and opt-in forms in their company offices.
To that end, Defendants are directed to provide Plaintiffs with a computerreadable data file containing the names, last known mailing addresses, last known
telephone numbers, last known email addresses, and dates of employment of
potential opt-in plaintiffs, consistent with the class described herein, on or before
April 12, 2019. Fa Ting Wang v. Empire State Auto Corp., No. 14-cv-1491, 2015 WL
4603117, at *14 (E.D.N.Y. July 29, 2015) (“Disclosure of the names, addresses,
telephone numbers, and email addresses of putative class members is commonplace
in this district because such information is essential to identifying and notifying
potential opt-in plaintiffs”); Ack v. Manhattan Beer Distributors, Inc., No. 11-cv-5582,
2012 WL 1710985, at *6 (E.D.N.Y. May 15, 2012) (“Courts routinely order discovery
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of names, addresses, and telephone numbers in FLSA actions”). All notices must be
circulated within two weeks of the Court’s approval of the final version.
III.
Conclusion
For the foregoing reasons, the Court grants in part and denies in part
Plaintiffs’ Motion as follows:
1) this action is conditionally certified as a collective action, with the
potential class including any and all of Defendants’ current and former
loan officers who were employed from April 6, 2015 through the present;
2) Defendants are directed to produce a computer-readable data file
containing the names, last known mailing addresses, last known
telephone numbers, last known email addresses, and dates of
employment of all potential class members on or before April 12, 2019;
3) Plaintiffs are authorized to disseminate the final approved notice and
opt-in forms via first class mail and email within two weeks of the
Court’s approval of the final version, and Defendants are directed to
conspicuously post the approved notice and opt-in forms at Interstate’s
office locations; and
4) the statute of limitations is tolled from the time Plaintiffs’ Motion was
filed through the date of issuance of this Memorandum and Order.
Dated:
Central Islip, New York
March 6, 2019
/s/ Steven I. Locke
STEVEN I. LOCKE
United States Magistrate Judge
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