CHERYL L. POLLAK, United States Magistrate Judge.
On December 30, 2009, plaintiffs Slobodan Karic, Claribel Garcia, Steven Jones, Goran Stanic, Ljubomir Zivanovic, Daniel Colon, and William Chatman (collectively, "plaintiffs") commenced this action against The Major Automotive Companies, Inc.
During the Class Period, which runs from December 30, 2006 to the date of filing of this action, December 30, 2009 (the "Class Period"), plaintiffs were employed as sales representatives at various Major World car dealerships. (Id. ¶ 22; Pls.' Mem.
In addition to the named plaintiffs, plaintiffs allege that there were at least 150 other sales representatives working for Major World during the Class Period. (Am. Compl. ¶ 5). Nine of these other sales representatives
Plaintiffs claim that if they did not sell any cars during a pay period, they were only paid the $20 per day shift amount. (Am. Compl. ¶ 8; Pls.' Mem. at 4). Thus, for each pay period that plaintiffs did not sell any cars, they received substantially less than the applicable minimum wage. (Pls.' Mem. at 4). Plaintiffs further allege that even when they sold one or two cars, the commissions received were not enough to constitute minimum wage when added to the shift pay. (Id. at 4-5). Furthermore, plaintiffs allege that they were never "informed by [d]efendants of their entitlement to minimum wage for all hours worked under the FLSA." (Id. at 3).
Plaintiffs assert that "Major World designed and implemented an ongoing scheme whereby it manipulated the gross profits of cars sold, underreported income, self-dealt, and falsified documents and sales records, thereby reducing its sales representatives' commissions and increasing its own profits." (Am. Compl. ¶ 10). Defendants would also allegedly charge the sales representatives for any "lateness, failure to properly fill out forms, and other arbitrary and purported infractions." (Id. ¶ 18). As a result, plaintiffs claim that they sustained "direct and proximate financial harm to their income," and seek a declaratory judgment, "[u]npaid minimum wages, overtime pay, spread-of-hours pay, agreed upon wages, unpaid commissions and unlawful deductions of wages, along with liquidated damages and interest," as well as "pre-judgment interest and post-judgment interest," "an injunction requiring [d]efendants to pay all statutorily required wages pursuant to the NYLL," and all other remedies "this Court shall deem just and proper." (Id. ¶¶ C, E-G, I).
Under the FLSA, employers are required to compensate covered employees for all work performed, including overtime, in order to prevent "labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers." 29 U.S.C. §§ 202(a), 207(a)(1); see also Reich v. N.Y.C. Transit Auth., 45 F.3d 646, 648-49 (2d Cir.1995) (citations omitted). Pursuant to Section 216(b) of the FLSA, an employee may bring an action "`to recover unpaid overtime compensation and liquidated damages from employers who violate the Act's overtime provisions.'" Gjurovich v. Emmanuel's Marketplace, Inc., 282 F.Supp.2d 101, 103 (S.D.N.Y.2003) (quoting Hoffmann v. Sbarro, Inc., 982 F.Supp. 249, 260 (S.D.N.Y.1997)).
Under the statute, an employee may bring a collective action "for and in behalf of himself . . . and other employees similarly situated." 29 U.S.C. § 216(b). However, unlike a class action brought pursuant to Rule 23 of the Federal Rules of Civil Procedure, a collective action brought under the FLSA may be brought only on behalf of those employees who affirmatively "opt in" by giving consent in writing to become a party to the action. Id.; Gjurovich v. Emmanuel's Marketplace, Inc., 282 F.Supp.2d at 103-04; see also Iglesias-Mendoza v. La Belle Farm, Inc., 239 F.R.D. 363, 367 (S.D.N.Y.2007); Patton v. Thomson Corp., 364 F.Supp.2d 263, 266 (E.D.N.Y.2005).
Courts use a two-step analysis to determine whether certification of a collective action under the FLSA is appropriate. See Castro v. Spice Place, Inc., No. 07 CV 4657, 2009 WL 229952, at *2 (S.D.N.Y. Jan. 30, 2009). The first step involves "looking to the pleadings and affidavits to determine whether plaintiffs have satisfied `the minimal burden of showing that the similarly situated requirement is met.'" Id. (quoting Lee v. ABC Carpet & Home, 236 F.R.D. 193, 197 (S.D.N.Y.2006)). To meet this burden, "plaintiffs 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) (quoting Hoffmann v. Sbarro, Inc., 982 F.Supp. at 261). The standard for approval under Section 216(b) is "considerably less stringent" than the requirements for class certification under Federal Rule of Civil Procedure 23. Avila v. Northport Car Wash, Inc., 774 F.Supp.2d 450, 454-55 (E.D.N.Y. 2011) (quoting Rodolico v. Unisys Corp., 199 F.R.D. 468, 481 (E.D.N.Y.2001)). "Although the Second Circuit has yet to prescribe a particular method for determining whether members of a putative class are similarly situated, district courts in this circuit look to the `(1) disparate factual and employment settings of the individual plaintiffs; (2) defenses available to defendants which appear to be individual to each plaintiff; and (3) fairness and procedural considerations counseling for or against notification to the class.'" Laroque v. Domino's Pizza, LLC, 557 F.Supp.2d 346, 351 (E.D.N.Y.2008) (quoting Guzman v. VLM, Inc., No. 07 CV 1126, 2007 WL 2994278 at *3 (E.D.N.Y. Oct. 11, 2007)).
"The second step, which typically occurs after the completion of discovery, requires the court to make factual findings whether the class members are `actually similarly situated.'" Avila v. Northport Car Wash, Inc., 774 F.Supp.2d at 454 (quoting Bifulco v. Mortgage Zone, Inc., 262 F.R.D. 209, 212 (E.D.N.Y.2009)). "At that juncture,
If plaintiffs meet the "fairly lenient standard" required by the first step in the analysis, the court will typically grant "conditional certification" and authorize notice to potential plaintiffs. See Iglesias-Mendoza v. La Belle Farm, Inc., 239 F.R.D. at 367. Although the statute has no specific provision for issuing such notice, the Supreme Court in Hoffmann-LaRoche Inc. v. Sperling held that it was appropriate for courts to authorize such notice under the FLSA in order to serve the "broad remedial goal" of the Act. 493 U.S. 165, 171-173, 110 S.Ct. 482, 107 L.Ed.2d 480 (1989); see also Braunstein v. E. Photographic Labs., Inc., 600 F.2d 335, 335-36 (2d Cir.1978) (holding that a district court "has the power to order that notice be given to other potential members of the plaintiff class under the `opt-in' provision of the [FLSA]"); Hoffmann v. Sbarro, Inc., 982 F.Supp. at 261 & n. 15. The burden is significantly less than that required to sustain a class certification motion under Rule 23 because the FLSA's opt-in provision merely provides an opportunity for potential plaintiffs to join the action and is only a preliminary determination as to which potential plaintiffs may in fact be similarly situated. See Patton v. Thomson Corp., 364 F.Supp.2d at 267; Gjurovich v. Emmanuel's Marketplace, Inc., 282 F.Supp.2d at 104. After discovery, the court then looks at the record again to "`make[] a factual finding regarding the similarly situated requirement; if the claimants are similarly situated, the collective action proceeds to trial, and if they are not, the class is decertified.'" Castro v. Spice Place, Inc., 2009 WL 229952, at *2 (quoting Lee v. ABC Carpet & Home, 236 F.R.D. at 197).
Plaintiffs move for conditional certification, arguing that they have met their minimal burden of demonstrating that they were "similarly situated." (Pls.' Mem. at 1-2). In support of their motion, plaintiffs have submitted the declarations of eight of the named plaintiffs and opt-ins, Karic, Garcia, Jones, Stanic, Zivanovic, Colon, Dowers, and Morgan, each declaring that they worked for Major World during the Class Period, that they were paid a flat rate of $20.00 per shift plus commissions, and that all sales representatives were similarly paid for similar hours.
In their initial response to plaintiffs' motion for conditional certification, filed in November of 2010, defendants acknowledge that the controlling case law provides "a presumption in favor of conditional certification" and thus, defendants did not vigorously oppose the conditional certification based on an argument that there was no violation of the FLSA. (Defs.' Mem.
On April 21, 2011, defendants submitted a Supplemental Memorandum in Opposition to Plaintiffs' Motion for Conditional Certification, in which they argued that since the time of their initial response, plaintiffs have examined approximately 20 boxes of documents produced by the defendants and that the case "is therefore substantially advanced." (Defs.' Supp. Mem.
While defendants cite several cases in support of their argument that the two-step approach should be collapsed in this case and that the "`lenient' standard" should be rejected in favor of a "more flexible one" (id. at 3), the majority of the cases cited are from other circuits and are distinguishable on their facts. See, e.g., Bouaphakeo v. Tyson Foods, Inc., 564 F.Supp.2d 870 (N.D.Iowa 2008) (where the parties had "completed class discovery," the court applied an intermediate approach under which the court considered not only plaintiffs' complaint and submissions, but all of the facts placed before the court); Bunyan v. Spectrum Brands, Inc., No. 07 CV 0089, 2008 WL 2959932, at *2, *4 (S.D.Ill. July 31, 2008) (explaining that the first step of the certification process occurs "where the parties have engaged only in minimal discovery;" the court decided to apply an intermediate approach where the parties had conducted "a substantial amount of discovery" over eleven months and defendants had submitted information specifically challenging whether the plaintiffs were similarly situated in terms of job responsibilities); Villanueva-Bazaldua v. TruGreen Ltd. Partners, 479 F.Supp.2d 411, 415 (D.Del.2007) (adopting an intermediate approach where some discovery had occurred and finding that the sole plaintiffs one page declaration was insufficient to provide a factual showing to support conditional class certification); Torres v. Gristede's Operating Corp., No 04 CV 3316, 2006 WL 2819730, at *7 n. 7 (S.D.N.Y. Sept. 29, 2006) (noting that the traditional two-stage process did not apply because plaintiffs moved for certification only after discovery had been completed).
Here, while the parties have been engaged in discovery for several months, plaintiffs note, correctly, that discovery is far from complete; there have been numerous conferences, one as recently as June 29, 2011, held to address discovery deficiencies and defendants' failure to provide certain requested records relating to the files of the named plaintiffs. (Pls.' 5/2/11 Letter at 1). Plaintiffs continue to complain that they have not been provided with the basic discovery needed to establish their claims and the Court has repeatedly Ordered defendants to undertake certain steps to obtain the information requested. Moreover, in contrast to the cases cited above, the plaintiffs have submitted affidavits from eight plaintiffs and opt-ins, each of which describes a common
Next, defendants argue that because none of the current individual plaintiffs were employed by three of the entities— Major Automotive Companies, Inc., Major Motors of the Five Towns, Inc., or Major Automotive Realty Corp.—it would be improper to include employees of these defendants in the putative class. (Defs.' Supp. Mem. at 4). Specifically, defendants claim that "none of these entities can be liable for wages or overtime to any plaintiff and none of the [p]laintiffs can be the representative of a putative class of employees of those defendant companies." (Id.) Thus, employees of these defendants are allegedly not similarly situated. (Id. at 4-5). In response, plaintiffs rely on the decision in Capsolas v. Pasta Resources, Inc., to argue that they have sustained their "modest factual showing" that the employees of all of the Major World entities were subjected to the same common compensation policy, even though there are currently no employees of these three entities named as plaintiffs or opt-ins. (Pls.' Notice of Supp. Auth.
In Capsolas v. Pasta Resources, Inc., the plaintiffs, who were employed by various restaurants commonly owned by the two individually named defendants, held various positions, "such as backwaiter, server, and bartender." 2011 WL 1770827, at *1. The plaintiffs alleged that at the end of each evening, tips would be divided according to a formula, along with a deduction of a percentage for the night's wine sales, which allegedly went to the house. Id. In support of their motion for conditional certification, the plaintiffs in Capsolas submitted statements from various employees who indicated that at each of the restaurants where they worked, there was a 4-4.5% deduction from tips for wine sales. Id. at *1-2. Defendants in Capsolas argued that plaintiffs had failed to adequately show a common policy with respect to the remaining three restaurants, for which no plaintiff had submitted a statement. Id. at *3. However, based on the plaintiffs' statements, the court found that plaintiffs had established sufficient facts to reasonably infer that there was a uniform policy across all of the restaurants that were commonly owned and supervised by the same individuals. Id.; see also Garcia v. Pancho Villa's of Huntington Village, Inc., 678 F.Supp.2d 89 (E.D.N.Y.2010) (certifying a class of workers at three restaurants even though the plaintiffs all worked for the same restaurant); Fasanelli v. Heartland Brewery, Inc., 516 F.Supp.2d 317 (S.D.N.Y.2007) (certifying a class of restaurant workers based on a statement that a uniform policy existed even though plaintiffs only worked at some of the restaurants); but cf., Rudd v. T.L. Cannon Corp., No. 10 CV 591, 2011 WL 831446 (N.D.N.Y. Jan. 4, 2011) (denying certification of workers across a chain where the allegations were of isolated, particularized incidents, with no claim of an overall policy).
Finally, defendants cite to the decisions in Cuzco v. Orion Builders, Inc., 477 F.Supp.2d 628, 633 (S.D.N.Y.2007), Laroque v. Domino's Pizza, LLC, 557 F.Supp.2d 346, and Morales v. Plantworks, Inc., 05 CV 2349, 2006 WL 278154 (S.D.N.Y. Feb. 2, 2006), to argue that because the affidavits here are "cookie cutter" affidavits, with simple boilerplate and identical statements, the affidavits should be rejected as insufficient. (Defs.' Supp. Mem. at 5-6). Although the court in Morales denied class certification because the affidavits made no reference to any employees other than the plaintiffs and made no allegation of a common plan or policy, the court in Laroque certified the class based on the affidavits of the four named plaintiffs. Morales v. Plantworks, Inc., 2006 WL 278154 at *2; Laroque v. Domino's Pizza, LLC, 557 F.Supp.2d at 353, 356. Similarly, in Cuzco, the court concluded that there was sufficient basis to certify the class when plaintiffs singular declaration and complaint were viewed in conjunction with declarations submitted by the defendant. Cuzco v. Orion Builders, Inc., 477 F.Supp.2d at 633-34. None of these cases present circumstances similar to the case at bar, where plaintiffs have not only submitted a Complaint, but have supported the allegations therein with numerous declarations describing a common practice, alleging common ownership, and alleging the existence of other potential class members.
Having reviewed the declarations provided by plaintiffs, the Court concludes that plaintiffs have satisfied their burden of setting forth specific facts demonstrating that they are sufficiently similarly situated to other sales representatives of the various Major World entities to warrant conditional certification of the Class and for Notice to be sent to all putative class members, at each of the Major World dealerships.
In connection with their motion for certification, plaintiffs have submitted a Proposed Class Notice for approval by the Court. Plaintiffs also supplied an updated Proposed Notice with their Reply in Support of their motion.
In their Supplemental Memorandum in Opposition to Plaintiffs' Motion for Conditional Certification, defendants raise an objection
In addition, defendants object to the language in the Proposed Class Notice that states that if recipients of the Notice "do not opt in, they will not be included as part of this lawsuit." (Defs.' Mem. at 2 (citing Fitapelli Decl., Ex. L
The Court also notes a few other changes that must be made:
1) In paragraph 1, Sales Representatives should be singular, not plural.
2) Paragraph 6 should be modified to include the following sentence at the end of the paragraph: "If any of the defendants or their agents try to discuss the lawsuit with you, you have the right to not discuss it with them."
3) Paragraph 7 should begin with the following: "It is entirely your own decision whether or not to join this lawsuit. This Notice does not mean that you have a valid claim or that you are entitled to any monetary recovery. Any such determination must still be made by the Court." There should then be a line skipped before the
4) Paragraph 8 should be modified to inform the potential class members that they have the option of hiring their own counsel; they are not required to agree to the representation of Fitapelli & Schaffer, LLP. Section 8 should be replaced with the following:
This information must also be present on the Consent Form; plaintiffs must add to the Form a way for opt-in plaintiffs to indicate whether they wish to opt in, and if so, whether they wish to be represented by Fitappeli & Schaffer, LLP, or whether they wish to retain their own attorney. The Consent Form itself should also include the date by which the forms must be returned. The same language that is on page four of the Notice may be used for that purpose.
Accordingly, plaintiffs are directed to modify the Proposed Class Notice as directed herein and to submit the updated Notice for Court approval on or before
To the extent that information regarding the names and contact information of all new and used sales representatives have not been provided by defendants, such information shall be provided to plaintiffs on or before
Having considered the parties' submissions, the Court hereby grants plaintiffs' request for class certification. The Court Orders that plaintiffs provide the Court with an updated Notice, pursuant to the aforementioned instructions, on or before
The Clerk is directed to send copies of this Order to the parties either electronically through the Electronic Case Filing ("ECF") system or by mail.