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E.D.La.: FLSA Defendants Not Entitled To Discover Plaintiffs’ Social Security Numbers Because Irrelevant; Need To Comply With Tax Laws Insufficient Reason
Baca v. Brother’s Fried Chicken
Before the Court were: (1) the motion of the defendants, Omar Hamdan, Fatmah Hamdan, Alberta, Inc., FHH Properties, LLC, and Alberta Management, LLC, pursuant to Fed.R.Civ.P. 12(e), for a more definite statement; and (2) the motion of the plaintiffs, Angela Mericia Baca and Abigail Analqueto, for a protective order limiting inquiries with in terrorem effect. The motions were related. The defendants’ sought an order requiring the plaintiffs to provide Social Security numbers and addresses. The plaintiffs sought a protective order barring the defendants from inquiring into this information. The Court granted Plaintiffs’ Motion and denied Defendants’.
The Court noted, “[i]n Topo v. Dhir, 210 F.R.D. 76 (S.D.N.Y.2002), the court stated:Courts have generally recognized the in terrorem effect of inquiring into a party’s immigration status when irrelevant to any material claim. In particular, courts have noted that allowing parties to inquire about the immigration status of other parties, when not relevant, would present a danger of intimidating that would inhibit plaintiffs in pursuing their rights.”
The Court, in granting Plaintiffs’ Motion for a Protective Order and denying Defendants’ Motion discussed the 5th Circuit case In re Reyes, 814 F.2d 168,170 (5th Cir.1987) paraphrasing, “[t]here is much stronger justification in this case [for a writ of mandamus] where there is no possible relevance and the discovery could place in jeopardy unrelated personal status matters.” Id. at 170-71. “Inasmuch as the protections provided by the FLSA apply to undocumented aliens, the plaintiffs’ immigration status, Social Security numbers and addresses are not relevant. In Agusiegbe v. Petroleum Associates of Lafayette, 486 So.2d, 314 (La.App. 3rd 1986), the defendant contended that the plaintiff falsely represented himself to be employable as a U.S. citizen. The court held that the LWPA applied to all employees, regardless of their nationality. Id. at 316. The information sought by defendants is not relevant to plaintiffs’ LWPA claims.
The defendants urge that the information is required to permit them to comply with the provisions of the Internal Revenue Code for the completion of Forms 1099 and W-2. The burden of reporting payroll information rests with the employer. The defendants have not demonstrated why they could not have obtained this information when the plaintiffs first began working for them. The plaintiffs are not required to provide it to defendants in connection with the pending FLSA and LWPA claims.”
N.D.Ga.: Apartment Broker, Whose Customers Were The Apartment Homes And Not Renters, Not A “Retail Establishment” Subject To 7(i) Exemption Of The FLSA
Russell v. Promove, LLC
This case was before the Court on all parties’ motions for summary judgment. Plaintiffs had cross-moved for summary judgment, seeking a finding from the Court that Defendant, an apartment broker, was not a “retail” establishment, subject to the 7(i) exemption of the FLSA as a matter of law. Granting this branch of Plaintiffs’ Motion, the Court stated, in part:
“A retail or service establishment is defined as “an establishment 75 per centum of whose annual dollar volume of sales of goods or services (or of both) is not for resale and is recognized as retail sales or services in the particular industry.”29 U.S.C. § 213(a)(2) (1988); 29 C.F.R § 779.312. First, Plaintiffs argue that the Defendants’ business is not regarded as retail and that such a concept cannot be artificially created in an industry that lacks a traditional concept of retail and servicing.; Schussler v. Employment Consultants, 333 F.Supp. 1387, 1390 (N.D.Ill.1971). Plaintiffs argued that the “mom and pop” type shops which conduct similar business to the Defendants do not comprise an apartment locator industry. In response, Defendants assert that when Defendant Todd White founded the predecessor of ProMove in 1990, he relied on industry standards to determine employee payment and commission structure.
The record before the Court sufficiently establishes the nature of ProMove’s business to allow the Court to reach a conclusion regarding the claimed exemption. Though the parties disagree as to the conclusions to be drawn from the evidence, the underlying facts are largely undisputed. Prospective renters come into ProMove’s business locations and receive referrals to apartment homes. These renters pay nothing for the referral. ProMove’s compensation, if any, comes from the apartment homes if the prospective renter chooses the apartment, identifies ProMove as the referral source, and pays the first month’s rent. Based on the undisputed facts, the Court concludes that the apartment homes are ProMove’s customers. The payment for ProMove’s service comes entirely from the apartment homes. The fact that the payment is not made until the first month’s rent is paid does not alter the fact that the payment is from the apartment home. ProMove’s business serves the apartment homes as its customers, not the general public.
Also, the Court finds that ProMove’s business is closely akin to a broker. Even though ProMove does not have the authority to negotiate terms of the lease agreements, it serves the function of bringing the landlords and tenants together much as a real estate agent would do in a real estate transaction. Such businesses have been identified by the DOL as lacking the retail concept. 29 C.F.R. § 779.317. Also, its brokering function occurs prior to the “very end of the stream of distribution,” and thus, does not meet the examples of retail and service establishments provided by the DOL. 29 C.F.R. § 779.318.
Based on the foregoing, the Court concludes that Defendants failed to prove the applicability of the Section 7(i) retail or service establishment exemption. Accordingly, Plaintiffs’ motion for summary judgment as to Defendants’ retail or service exemption defense is GRANTED.”
D.Kan.: Mortgage Broker Not “Retail Establishment”; Financial Specialists Not “Retail” Exempt
Underwood v. NMC Mortg. Corp.
This case was before the Court on Defendant’s Motion for Summary Judgment. Defendant, a mortgage broker, moved for summary judgment asserting that it was a “retail establishment” and that, therefore, Plaintiffs, who were “financial specialists” facilitating their loans, were exempt for the overtime provisions of the FLSA, under the so-called retail exemption. The Court found that Defendant is not a retail establishment, and therefore Plaintiffs are not retail exempt.
“Plaintiffs assert that the facts are analogous to the facts in Saunders v. Ace Mortgage Funding, Inc, in which that court distinguished Gatto and found that the retail or service establishment exemption did not apply. In Saunders, plaintiffs brought a collective action under the FLSA seeking overtime and minimum wage compensation from their employer. The employer, Ace Mortgage (”Ace”), matched mortgage borrowers with lenders for a fee. Ace primarily brokered loans, but it also engaged in a small amount of direct lending called “table funding” where the bank provided the funding for the loan but the loan closed in Ace’s name. Ace also closed a small number of loans in its own name using its warehouse line of credit.
In Saunders, the District of Minnesota examined whether Ace was part of the “financial industry” because the businesses listed in 29 C.F.R. § 779.317 that lacked a retail concept included “credit companies,” “small loan and personal loan companies,” and “finance companies.”
29 C.F.R. § 779.317 specifically cites to Mitchell for the proposition that these type of financial businesses lack a retail concept. The Saunders court found that the facts in Gatto were factually distinguishable because Ace engaged in a small amount of direct lending and declined to use the reasoning in Gatto. It concluded that Ace was part of the financial industry and therefore could not qualify as a retail or service establishment as a matter of law and that the Gatto court ultimately “strained to bring a financial business within the definition of a retail or service establishment on the basis that its activities were limited to brokering, not lending.”
The facts in this case are similar to the facts in both Gatto and Saunders. NMC matched customers with lenders in finding residential loans but did not represent the consumer or the lender. Unlike the defendant in Gatto but similar to the defendant in Saunders, NMC engaged in table funding in which the loan closed in NMC’s name. Although NMC did not use its own line of credit for closing loans like the defendant in Saunders, the Court finds the facts more analogous to the facts in Saunders.
Everything about NMC’s business is related to the financial industry. NMC matched consumers with loans. NMC processed the loan applications. NMC engaged in table-funding so the loan closed in the name of NMC. In contrast to Illinois law where mortgage brokers are defined as “nonfinancial intermediaries,” in Kansas, NMC’s name appeared on the closing loan documents as a “lender” because NMC engaged in table-funding. In its annual report to Kansas, NMC had to report that it was a “lender” from 2004 through 2006 on 422 loans totaling $57,653,391. Finally, NMC underwrote these table-funded loans which indicates more than peripheral involvement in the financial aspects of providing the loan to the consumer. Accordingly, this Court concludes that NMC is within the financial industry and therefore should not be considered a “retail or service establishment.”
Even if this Court were to conclude that NMC was not within the financial field, NMC still lacks the characteristics that would qualify it as a “retail or service establishment.” As the Department of Labor’s regulations make clear, the three characteristics of a retail or service establishment include (1) selling to the general public; (2) serving the everyday needs of the public; and (3) being at the very end of the stream of distribution. Examples of such establishments include grocery stores, furniture stores, and restaurants. NMC is not similar to these retail establishments as it does not appear to the Court that matching individuals with residential mortgage lenders would qualify as selling to the “general public” or serving the “everyday needs” of the public. In any event, NMC is not at the very end of the stream of distribution. In Partida v. American Student Loan Corporation, the District of Arizona addressed this third element when determining whether a company in the business of matching individuals with third-party lenders to consolidate student loans was a retail or service establishment. The court stated that the defendant’s business was “an integral and upstream part of the loan origination business and therefore is on the non-retail end of the establishment spectrum.” As the Partida court noted, “[a] loan referral provides the basis for a subsequent transaction in which an individual obtains what he or she ultimately seeks-a [residential] loan.” The court in Partida concluded that because the business was not at the end of the stream of distribution, the business could not be considered a “retail or service establishment.”
NMC’s business was similar to the business in Partida in that it matched individuals with residential loans. NMC was not providing the end product but was directing the individual to the residential loan. The Tenth Circuit has noted that “[b]usinesses that serve only other commercial establishments are generally not within the ‘retail concept’ of the exemption.” This Court cannot conclude that NMC was at the very end of the stream of distribution. As such, it lacks the characteristics of a retail or service establishment.
Finally, this Court finds 29 C.F.R. § 779.317 instructive. This regulation provides a list of establishments that lack a retail concept and includes freight brokers, insurance brokers, and stock or commodity brokers. Although “mortgage brokers” were not included, the regulation specifically states that it is a “partial list” of businesses. A “mortgage broker” is similar to an “insurance broker” or “stock or commodity broker” because the broker assists the customer in obtaining the mortgage, insurance, or stock. The majority, if not all, of Defendant’s business was done as a “broker.” Because a mortgage broker is similar to the brokers listed in section 779.317, the Court finds that NMC lacks the “retail concept” to be qualified as a “retail or service establishment.” Exemptions are to be narrowly construed under the FLSA, and NMC is not a retail or service establishment under 29 U.S.C. § 207(i) and therefore is not entitled to this exemption.”
Casey’s General Stores To Pay Close To $12 Million To Settle Wage and Hour Suits
The Wall Street Journal is reporting that Casey’s General Stores Inc. has agreed to pay $11.7 million to settle two class-action wage lawsuits and said it will record a $9.1 million charge in its fiscal fourth-quarter as a result of the settlement.
The convenience-store chain was sued by plaintiffs representing about 7,800 current and former assistant managers and about 76,000 current and former non-management-level employees over allegations they weren’t paid overtime.
Initially, Casey’s General Stores managers had filed a suit against the company, with cooks and cashiers suing for overtime pay in early 2008. Those employees also claimed they were denied mandatory meal and rest breaks and said they were asked to perform tasks before and after their shifts.
Under the settlement agreement, the company will also pay up to $400,000 in related settlement expenses. The company’s directors and officers insurance company will pay $3 million of the settlement on behalf of the defendants.
For the full article go to: http://online.wsj.com/article/BT-CO-20090508-716883.html
D.Kan.: Defendant Not Entitled To Sanctions Due To Plaintiff’s Refusal To Dismiss Certain Claims
Armstrong v. Wackenhut Corp.
Finding that the lead plaintiff in a wage-and-hour suit against G4S Wackenhut Corp. did not unreasonably refuse to dismiss state law claims, a federal judge has refused to grant Wackenhut attorneys’ fees for expenses it incurred filing a motion to dismiss those claims. In an order handed down last week, the District Court Judge in the U.S. District Court for the District of Kansas rejected Wackenhut’s bid for attorneys’ fees under Section 1927 and under Rule 11.
EDS Overtime Class Action For “Technical Support” Employees Transferred From Georgia To New York
Azar v. Electronic Data Systems Corp.
Southern District of New York, Case No. 1:09-cv-4005, assigned to Hon. Richard J. Sullivan
Agreeing that the case should be re-assigned to New York, where 2 other related cases are currently pending, the Court in the Northern District of Georgia transferred this case to the Southern District of New York, to be handled alongside the other 2 currently pending cases.
Morgan & Morgan filed this class action to recover unpaid overtime for all current and former EDS salaried technical support employees who were misclassified by EDS as exempt during any period after October 2005, who worked in the State of Georgia and throughout the United States. “Technical Support” employees are those whose primary duties were or are to install, maintain, and/or support computer software and/or hardware for EDS or its clients. The Fair Labor Standards Act (FLSA) requires covered employers to pay employees performing this type of work a premium of 1.5 times their regular rate of pay for hours worked in excess of 40 in a workweek. We contend that EDS improperly classified technical support workers as “exempt” from this requirement and in doing so denied employees their overtime pay in violation of the FLSA.
If you believe you are a “Technical Support” employee who was wrongfully denied overtime pay by EDS within the last 3-4 years, you may qualify to join this class action. For a free consultation regarding your rights, contact Overtime Attorney Andrew Frisch at 1-888-OVERTIME or http://www.overtimeadvocate.com/2.html today.
You can also join the case and submit a claim, by completing a “CONSENT TO JOIN” form, then faxing to (954) 333-3515. You are entitled to consult with an attorney of your choice.
D.Mass.: SAFETEA-LU Does Not Apply Retroactively To Bar Claims Of Employees Who Drive Vehicles Of Less Than 10,001 Lbs.
Benoit v. Tri-Wire Engineering Solutions, Inc.
The parties filed cross-motions for partial summary judgment on the issue of the applicability of the Motor Carrier Act (“MCA”) exemption as a defense to Plaintiffs’ complaint which seeks to recover unpaid overtime from August 10, 2005, to the present. The issue was the retroactive applicability of the SAFETEA-LU Technical Corrections Act of 2008 (“SAFETEA-LU”). Addressing numerous arguments from both Plaintiffs and Defendants, the Court concluded that SAFETEA-LU does not apply retroactively.
Plaintiff filed the instant complaint on December 11, 2007, and since then at least 125 additional technicians have filed consent-to-sue forms. On or about June 5, 2008, the court granted Plaintiffs’ motion for preliminary recognition of this case as a FLSA collective action and established a discovery schedule. Coincidentally, on the very next day, June 6, 2008, the FLSA was amended in a manner potentially applicable here, i.e., it called into question whether a long-standing overtime exemption for employers of light-weight vehicle drivers-the MCA exemption-should retroactively apply to August 10, 2005. Accordingly, on October 15, 2008, the court entered a new scheduling order which allowed the parties to file cross-motions for partial summary judgment addressing that issue. The motions were filed and the court heard oral argument on March 26, 2009. In deciding in Plaintiffs favor the Court discussed the nature of the SAFETEA-LU amendments and their affect on the FLSA and the MCA:
“On August 10, 2005, however, Congress passed the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (hereinafter “the SAFETEA-LU”).Pub.L. No. 109-59, 119 Stat. 1747 (2005). Among other things, the SAFETEA-LU narrowed the definition of a “motor carrier” to include only “person[s] providing commercial motor vehicle (as defined in section 31132) transportation for compensation.”49 U.S.C. § 13102(14) (emphasis added). In turn, the “commercial motor vehicle” definition required that the vehicle have “a gross vehicle weight rating or gross vehicle weight of at least 10,001 pounds, whichever is greater.”49 U.S.C. 31132(1) (emphasis added). The practical effect of this amendment-i.e., the narrowing of the MCA exemption to include only operators of motor vehicles weighing more than 10,000 pounds-was that qualified employees who operated light-weight vehicles were entitled, apparently for the first time, to overtime pay under the FLSA.
On June 6, 2008, however, the SAFETEA-LU was enacted. Pub.L. No. 110-244, 122 Stat. 1572 (2008). Among other things, the SAFETEA-LU, in section 305, re-amended the definition of “motor carrier” by striking the word “commercial” and, hence, restoring the definition to its pre-SAFETEA-LU state. Id. § 305(c), 122 Stat. at 1620. The effective date of this part of the SAFETEA-LU, however, is a bit unclear. Accordingly, the court focuses its analysis on the question of whether section 305 applies retroactively to August 10, 2005.
Defendant argued that section 305 of the SAFETEA-LU is an amendment “to the SAFETEA-LU” and that, according to subsection (b) of section 121, it should apply retroactively beginning August 10, 2005. As Plaintiffs argued, however, a close look at the text of section 305 reveals that it is not an amendment to the SAFETEA-LU. Rather, it is an amendment to a portion the United States Code that was created by the ICC Termination Act of 1995. See generally Vidinliev, 581 F.Supp.2d at 1288-90.
Perhaps more importantly for purposes of statutory construction, the court agrees with the following point made in Vidinliev: “If the definition of motor carrier in section 305 applies retroactively, then the one-year defense in section 306 is nothing more than surplusage.” Id. Or, put another way, “applying section 305 retroactively would violate the rule that a statute should be ‘interpreted so that no words shall be discarded as meaningless, redundant, or mere surplusage.’ ” Id. (quoting United States v. Canals-Jimenez, 943 F.2d 1284, 1286 (11th Cir.1991)). See also Wood v. Spencer, 487 F.3d 1, 7 (1st Cir.2007) (”It is common ground that all words and provisions of statutes are intended to have meaning and are to be given effect.”) (citation, alteration and internal quotation marks omitted). Other courts have come to this very conclusion, i.e., “to suggest that the court interpret § 121 in a way that renders the safe harbor in § 306 a nullity is at odds with basic rules of statutory construction.” Tews, 592 F.Supp.2d at 1349 n. 8 (citing Mountain States Tel. & Tel. Co. v. Pueblo of Santa Ana, 472 U.S. 237, 249 (1985)).See, e.g., Villegas, 2008 WL 5137321, at *21 n. 9 (”As this Court must presume that [all the] words of statutes are intended to have meaning, the Court will conclude that § 305 does not apply retroactively, and § 306 provides a one-year defense to liability.”); Veliz, 2008 WL 4911238, at * 6 (”For the one-year defense in Section [306(c) ] to have any relevance, Section 305(b) cannot apply retroactively.”).See also Hernandez v. Brink’s, Inc., 2009 WL 113406, at *7 (adopting reasoning of Vidinliev ); Loyd, 2008 WL 5211022, at *8 (following reasoning of both Vidinliev and Veliz );Horn v. Digital Cable & Communications, Inc., No. 1:06 CV 325, slip op. at 8-10 (N .D.Ohio Nov. 18, 2008) (following Vidinliev to hold that “Section 306 of the [TCA] undermines retroactivity finding”). And the Supreme Court recently reiterated, “one of the most basic interpretive canons [is] that ‘a statute should be construed so that effect is given to all of its provisions, so that no part will be inoperative or superfluous, void or insignificant.’ ” Corley v. United States, — U.S. —-, 2009 WL 901513, at *8 (Apr. 6, 2009) (quoting Hibbs v. Winn, 542 U.S. 88, 101 (2004)). In this court’s view as well, Plaintiffs’ section 306 surplusage argument cinches the result in their favor.”
N.D.Ill.: Tailors Scope Of Representative Discovery In Stage 1 Class Of 522 FLSA Plaintiffs; Plaintiffs Entitled To Protective Order Re: RFAs Served On Entire Class
Russell v. Illinois Bell Telephone Co.
The case was before the Court on Illinois Bell’s motion to compel the depositions of thirty-eight individual plaintiffs and to dismiss three individual plaintiffs. Additionally, plaintiffs moved for a protective order, pertaining to RFAs and RFPs served on every individual Plaintiff, in this 522 person class. For the reasons set forth below, the Court grants the motions in part and denies them in part.At the time of the Motions, Defendant had deposed twenty-four plaintiffs. Each side selected twelve of the deponents.
Significantly, Plaintiffs requested a protective order excusing them from responding to requests for admission (RTA) and requests for the production of documents (RFP) propounded by Illinois Bell.
The RTAs were sent to opt-in plaintiffs that had not been deposed. Each set of RTAs is identical containing ten requests. The ten requests essentially ask the plaintiff to admit that Illinois Bell did not violate her FLSA rights (e.g., “Admit that you did not perform any work on behalf of Defendant without compensation after the end of your scheduled shift.”). Pls.’ Mot for a Protective Order at 4-5. Each of the ten requests is a variation pertaining to a different alleged violation of the FLSA. In granting Plaintiffs a protective order pertaining to the RFAs and requiring them to answer the RFPs, the Court reasoned:
“District courts have broad discretion over matters relating to discovery. E.g., Patterson v. Avery Dennison Corp., 281 F.3d 676, 681 (7th Cir.2002); Fed.R.Civ.P. 26(b)(2). The Court agrees with plaintiffs that the responding to the RTAs would be unduly burdensome based on the circumstances of this case. As noted above, Illinois Bell is entitled to depose a reasonable and sufficient number of opt-in plaintiffs. Requiring the plaintiffs to respond to hundreds of RTAs, however, is unreasonable and will not advance the ball in this litigation. It is fair to assume that each plaintiff will deny the RTAs that pertain to her FLSA claim, leaving Illinois Bell without any additional information regarding similarities or dissimilarities among the class members. Conversely, requiring plaintiffs to respond to the RTAs would impose a significant burden on them and an enormous burden on their counsel, and it would defeat the purpose of utilizing representative discovery in FLSA class actions. E.g., Adkins, 143 F.R.D. at 174.
The RFPs were sent to opt-in plaintiffs who had not been previously been served with written discovery. They consist of four narrowly drawn requests for documents that would support or refute the particular plaintiff’s FLSA claims. The RFPs are more likely to yield relevant evidence than the RTAs. For example, disclosure regarding whether a plaintiff kept notes of when she allegedly worked overtime without appropriate compensation might be probative of whether such conduct actually occurred or the extent of it. Additionally, disclosure regarding whether a plaintiff possesses documents she contends required her to work overtime without compensation might be probative whether such a policy actually existed regarding or the whether plaintiff misinterpreted some policy of directive of Illinois Bell.
Moreover, certain actions by plaintiffs’ counsel have elevated the importance of the RFPs. During the deposition of one opt-in plaintiff, that deponent made reference to a document she contended Illinois Bell provided that informed her she would not be paid if she logged off of her phone. Plaintiffs’ counsel had not produced this document before the deposition, contending it was not responsive to a document request. Plaintiffs respond that the disclosures they made pursuant to Rule 26(a)(1) obviate the need for individual RFPs. The actions of plaintiffs’ counsel, however, undermine that contention.”
The Court concluded, “Illinois Bell’s RFPs are narrowly tailored, seek relevant information, and will not impose an undue burden on plaintiffs. Accordingly, the Court denies plaintiffs’ motion for a protective order regarding the RFPs.”
9th Cir. Seeks Clarification From California Supreme Court Re: Proper Classification Of Pharmaceutical Sales Reps
On May 5, the 9th Circuit Court of Appeals certified the question of exempt status (under California state law) of pharmaceutical sales representatives to the California Supreme Court.
The 9th Circuit asked for guidance from the California Supreme Court to determine two issues, pertaining to the oft-litigated issues of whether Pharmaceutical Sales Reps are outside sales exempt and/or administrative exempt under those so-called exemptions in the California Wage and Hour law, which is similar to the FLSA. The first question focuses on whether or not pharmaceutical representatives fall within the “outside sales exemption.” The other question focuses on the administrative exemption and whether or not application is applicable to the pharmaceutical sales reps at issue as well.
Pharmaceutical sales reps across the country will be watching this and other key cases in the months to come. If you worked as a pharmaceutical sales rep within the last 3 years, you may may entitled to overtime pay which was incorrectly denied to you, if you worked more than 40 hours per week.
Call 1-888-OVERTIME or visit http://www.overtimeadvocate.com to learn more about your overtime rights today.
Class Conditionally Certified In Centex Unpaid Overtime Case
Odem v. Centex Homes
A federal judge has granted conditional certification to a nationwide class of “Field Managers” in an overtime wage suit against Centex Homes Inc. that could include as many as 3,500 opt-in plaintiffs. Centex “Field Managers” can find out more about the case by contacting class attorneys Morgan & Morgan at 1-866-344-9243.
A copy of the Order certifying the class can be found at Odem v. Centex Homes
Overtime Law Blog 