Stepanov v. Five Borough Home Care: Class Certification in Wage Cases Requires Excluding Post-Commencement Hires Bound by Arbitration/Class Waivers; Live-In/Spread/Uniform Claims Often Too Individualized

1. Introduction

Case: Stepanov v Five Borough Home Care, Inc., 2026 NY Slip Op 01241 (App. Div., 2d Dep’t Mar. 4, 2026).
Parties: Plaintiff (a former home health aide who worked 24-hour “live-in” shifts) v. Defendant home care agency.
Posture: Defendant appealed from (i) an order granting (a) class certification and (b) leave to amend to add a plaintiff, and (ii) an order denying defendant leave to file a surreply.

Key issues: (1) Whether the proposed wage-and-hour claims satisfied the class certification prerequisites under CPLR 901 and 902; (2) whether the certified class should include workers who signed arbitration agreements/class-action waivers or were covered by collective bargaining agreements mandating arbitration; (3) whether the plaintiff could add an additional named plaintiff under CPLR 3025(b); and (4) whether the defendant should be allowed to file a surreply.

2. Summary of the Opinion

The Second Department modified the class certification order. It:

  • Affirmed class treatment for claims alleging failure to pay overtime for hours over 40 and an accurate overtime rate (second cause of action), failure to timely pay all wages when due (fourth cause of action), and violations of Public Health Law § 3614-c (sixth cause of action) and Administrative Code of the City of New York § 6-109 (seventh cause of action).
  • Held the class must exclude (i) individuals hired on or after December 19, 2017 who executed mandatory arbitration agreements and class-action waivers, and (ii) union members subject to mandatory arbitration provisions in certain collective bargaining agreements.
  • Reversed class certification as to claims alleging failure to pay for all hours of a 24-hour live-in shift (first cause of action), failure to pay spread-of-hours premiums (third cause of action), and failure to pay certain uniform laundering expenses (fifth cause of action), finding them unsuitable for class adjudication.
  • Affirmed leave to amend to add a plaintiff under CPLR 3025(b), and affirmed denial of leave to file a surreply.

3. Analysis

A. Precedents Cited

i. The CPLR 901/902 framework and appellate discretion

  • Medina v Fairway Golf Mgt., LLC and Cooper v Sleepy's, LLC: cited for the proposition that the movant bears the burden to establish compliance with CPLR 901 and 902. The court used these authorities as the entry point for reviewing whether each cause of action met numerosity, commonality/predominance, typicality, adequacy, and superiority.
  • Matter of Long Is. Power Auth. Hurricane Sandy Litig. and Dowd v Alliance Mtge. Co.: cited to emphasize that the CPLR article 9 requirements are liberally construed in favor of the class mechanism, but not to the point of certifying claims that turn on individualized proof.
  • Jenack v Goshen Operations, LLC (quoting Pludeman v Northern Leasing Sys., Inc.): used to underscore that class certification is entrusted to trial-court discretion, yet the Appellate Division “has the same discretion” and may exercise it even absent an abuse by the trial court. This framing supported the Second Department’s willingness to narrow the class and decertify certain claims.

ii. “Not a sham,” evidentiary basis, and the limits of merits review

  • Matter of Long Is. Power Auth. Hurricane Sandy Litig. (quoting Brandon v Chefetz): supplied the standard that merits review is limited to whether “on the surface” the claim is “not a sham.”
  • Pludeman v Northern Leasing Sys., Inc.: cited for the caution that conclusory assertions do not satisfy the statutory criteria.
  • Moreno v Future Health Care Servs., Inc. (quoting Yonkers Contr. Co. v Romano Enters. of N.Y.): used for the requirement that certification be founded on an “evidentiary basis,” a theme central to the court’s refusal to certify the first, third, and fifth causes of action.
  • Weinstein v Jenny Craig Operations, Inc. (138 AD3d 546): cited (via Medina v Fairway Golf Mgt., LLC) for the “minimal threshold” showing that claims are not a sham, supporting certification of the overtime/timely-wage and statutory claims.

iii. Typicality and “same course of conduct”

  • Medina v Fairway Golf Mgt., LLC (quoting Ackerman v Price Waterhouse): supported the finding that the certified claims arose from the same course of conduct and theories—critical to typicality and predominance for overtime rate/timeliness and the statutory claims.

iv. Arbitration/class waivers and class definition boundaries

  • Alfaro v Vardaris Tech, Inc. and In re Currency Conversion Fee Antitrust Litig.: cited for the proposition that arbitration agreements/class waivers are not enforceable against individuals already employed when the action commenced—preventing retroactive insulation of the employer from a pending case.
  • Lorentti-Herrera v Alliance for Health, Inc., Konstantynovska v Caring Professionals, Inc., and Weinstein v Jenny Craig Operations, Inc. (132 AD3d 446): cited to hold that arbitration agreements/class waivers (and, by analogy here, mandatory arbitration under later CBAs) are enforceable against individuals hired after commencement, requiring their exclusion from the class.

v. Individualized issues and unsuitable wage theories

  • Konstantynovska v Friendly Home Care, Inc.: directly supported the Second Department’s conclusion that live-in/shift-compensation theories and related wage items may be ill-suited to class treatment in this context.
  • Matter of Long Is. Power Auth. Hurricane Sandy Litig. and Moreno v Future Health Care Servs., Inc.: cited for the “hopelessly individual” problem—where individualized factual determinations defeat predominance and superiority.
  • Rallis v City of New York: cited as part of the evidentiary-basis line supporting denial of certification where proof was insufficiently classwide.

vi. Amendment and surreply practice

  • Bergman v Rosalind & Joseph Gurwin Jewish Geriatric Ctr. of Long Is., Inc., Guangzhou Sanhua Plastic Co., Ltd. v Fine Line Prods. Corp., and Garafola v Wing Inc. Specialty Trades: supported granting leave to amend under CPLR 3025(b) absent surprise/prejudice and where the amendment is not “palpably insufficient or patently devoid of merit.”
  • Attallah v New York Coll. of Osteopathic Medicine and Goldstein v Goldstein: supported denial of leave to file a surreply as a discretionary case-management determination.

B. Legal Reasoning

  1. Claim-by-claim certification rather than “all wage claims rise and fall together.”
    The court treated certification as granular. It affirmed certification for overtime/timely wage and the cited statutory causes of action because the plaintiff made a sufficient evidentiary showing of common policies or practices and classwide proof meeting CPLR 901(a). Conversely, it decertified the live-in hours, spread-of-hours, and uniform-laundering claims because they either required “hopelessly individual” inquiries or were not supported by the needed evidentiary basis.
  2. Class definition must account for enforceable arbitration and mandatory arbitration regimes.
    The court accepted that the employer implemented arbitration/class waivers (including language covering the action) and later entered CBAs with mandatory arbitration. It then drew a temporal line: such provisions cannot be used to bind existing employees retroactively in a pending lawsuit, but can bind post-commencement hires (and covered union members) prospectively—necessitating their exclusion from the class.
  3. Appellate “same discretion” as the trial court.
    Invoking its independent discretion, the Second Department modified the certification order directly, rather than merely remitting, thereby tightening the class to those properly included and eliminating unsuitable claims.

C. Impact

  • Sharper class definitions in wage-and-hour litigation. Plaintiffs and courts in the Second Department can expect more rigorous attention to whether some portion of putative class members are subject to enforceable arbitration/class waivers or mandatory arbitration under CBAs—and to exclude such groups at the certification stage rather than leaving the issue for later.
  • Temporal “commencement” rule has practical consequences. Employers may be limited in using post-filing arbitration rollouts to defeat class membership for existing workers, but can meaningfully reduce class size by ensuring enforceable agreements for later hires.
  • Live-in/ancillary wage items face heightened predominance scrutiny. Claims involving 24-hour live-in compensation, spread-of-hours, and uniform/laundry reimbursement may be particularly vulnerable where proof depends on individualized daily practices, varying schedules, or individualized expenses—unless plaintiffs can supply a robust, classwide evidentiary record.
  • Procedural signals. The affirmance on amendment and surreply underscores that (i) CPLR 3025(b) amendments will be freely granted absent prejudice and (ii) surreplies remain exceptional and discretionary.

4. Complex Concepts Simplified

CPLR 901(a) prerequisites
The five basic requirements for a class action: enough people (numerosity), shared key issues that outweigh individual issues (commonality/predominance), the class representative’s claims match the class’s (typicality), the representatives/attorneys will protect the class (adequacy), and a class action is the best method (superiority).
“Not a sham” merits review
At certification, the court does not decide who ultimately wins; it checks that the claims have facial legitimacy and are supported by some evidence, not just allegations.
“Hopelessly individual” issues
If deciding liability requires many mini-trials on each person’s circumstances, common issues do not predominate, making class treatment inefficient and unfair.
Arbitration agreement / class-action waiver
A contract term requiring disputes to be resolved in arbitration instead of court, often coupled with a waiver of the right to proceed as a class. Here, enforceability turned in significant part on whether the worker was already employed when the lawsuit began versus hired afterward.
CBA mandatory arbitration
A collective bargaining agreement can require disputes (often framed as “grievances”) to go to arbitration. The court treated such provisions as enforceable for covered groups (including later-hired union members), affecting who can be in the court-certified class.
CPLR 3025(b) leave to amend
A rule favoring amendment of pleadings unless it would unfairly surprise or prejudice the other side, or the amendment is clearly meritless.

5. Conclusion

Stepanov v Five Borough Home Care, Inc. establishes a practical certification rule for wage-and-hour class actions: courts should certify only those claims supported by classwide proof and should define the class to exclude individuals bound by enforceable arbitration/class waivers or mandatory arbitration under applicable collective bargaining agreements—particularly where those obligations attach to post-commencement hires. The decision also reinforces that some wage theories (notably 24-hour live-in compensation, spread-of-hours premiums, and uniform-laundering expenses) may fail predominance where proof is individualized or evidentiary support is thin, even while more policy-driven overtime/timeliness claims remain well-suited for class adjudication.