ANALISA TORRES
Motions granted in part and denied in part.
Penn Ueoka Dodson, Anderson Dodson, P.C., New York, NY, for Plaintiffs. Ira Leonard Blank, Lawrence Wittels, The Enterprise Law Group LLC, St. Louis, MO, Lauren Katz Kluger, Reitler Kailas & Rosenblatt, L.L.C., New York, NY, for Defendants.
MEMORANDUM AND ORDER
ANALISA TORRES, District Judge:
In this action, Plaintiffs, Michael McGlone, on behalf of himself individually and others similarly situated, allege that Defendants, Contract Callers, Inc. (“CCI”), Michael Maguire, and William “Tim” Wertz, violated the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201 et seq. and the New York Labor Law (“NYLL”), §§ 650 et seq. Defendants move to decertify the conditionally certified collective action under 29 U.S.C. § 216(b). Plaintiffs move for partial summary judgment under Rule 56 of the Federal Rules of Civil Procedure and request final collective certification. Maguire also moves for summary judgment. For the reasons stated below, Defendants' motion to decertify the conditionally certified collective action is DENIED. Plaintiffs' request for final certification is GRANTED. Plaintiffs' motion for partial summary judgment is GRANTED. Maguire's motion for summary judgment is DENIED.
Thus, the first step is for the Court to “determine whether [D]efendants have failed to keep accurate or adequate records.” Bueno v. Mattner, 633 F.Supp. 1446, 1452–53 (W.D.Mich.1986), aff'd, 829 F.2d 1380 (6th Cir.1987). “In wages and hours cases in which payroll and time records are kept, the accuracy and adequacy of the records can be determined in a variety of ways,” including documentary evidence and testimony of witnesses. Agudelo v. E & D LLC, No. 12 Civ. 960, 2012 WL 6183677, at *2 n. 1 (S.D.N.Y. Dec. 11, 2012); see also Jenkins v. Sara Lee Corp., No. 05 Civ. 74, 2008 WL 731265, at *5 (E.D.Tenn. Mar. 17, 2008) (“[D]eposition testimony of [p]laintiffs ... [shows that] Mr. McFall instructed the employees to only record their scheduled hours instead of the hours they actually worked. Thus, the records kept by Defendant Sara Lee, i.e. the time sheets, according to the plaintiff, are not accurate and, thus, the burden should shift to Sara Lee.”); Centeno v. I & C Earthmovers Corp., 970 F.Supp.2d 1280, 1287 (S.D.Fla.2013) (“The plaintiffs also attest that the defendants ‘had instructed [them] to report a lesser schedule of 7 am to 3:30 pm and not the full schedule [they] actually worked.’ ”).
Here, Plaintiffs have demonstrated that Defendants kept inaccurate records. For the first couple of weeks on the project, Defendants' time log records show the plumbers signing in and signing out at disparate times. PL Partial Sum. Judg. 56.1 ¶ 7. Afterward, Defendants' records consistently show Plaintiffs as having worked from exactly 7:30 a.m. to 4:00 p.m. Id. ¶ 8. And, beginning approximately in May 2009, Defendants' records consistently show Plaintiffs as having worked from exactly 8:00 a.m. to 4:30 p.m. Id. ¶ 9. Angelo Solomine, the general manager in charge of the New York division, admitted that the CCI facility opened at 7:00 a.m. and that he saw plumbers arrive before 8:00 a.m., before 7:30 a.m., and even sometimes before 7:00 a.m. Id. ¶ 14. Solomine also stated that an incentive program was created where, if a plumber finished a certain number of jobs, he would be allowed to leave work early but log his time as if he had worked until 4:30 p.m. Id. ¶ 18.
Solomine's testimony establishes that Defendants did not accurately record Plaintiffs' hours worked on both the front and back ends of their shifts. The incentive program distorted their actual hours worked on the back end of their shifts, as the time logs show that Plaintiffs stopped working at 4:30 p.m. even if they had left work earlier. And, Solomine's testimony admitting that plumbers often arrived at the facility before 8:00 a.m., 7:30 a.m., and even 7:00 a.m., combined with the exact round numbers recorded as Plaintiffs' start times in the time logs, demonstrate that Plaintiffs' hours were not accurately recorded on the front end of their shifts either. Accordingly, this Court holds as a matter of law that Defendants' time records are inaccurate and that the Anderson v. Mt. Clemens Pottery just and reasonable inference standard will apply at trial.
Although the Court notes that these inaccuracies advantaged Plaintiffs, the Court has found no cases that distinguish between beneficial and detrimental inaccuracies in time records when determining whether the Anderson v. Mt. Clemens Pottery burden shifting framework applies. Indeed, in two cases where the employers had incentive programs similar to Defendants', the courts utilized the framework when determining damages. See Garcia v. Tyson Foods, Inc., 890 F.Supp.2d 1273, 1284 (D.Kan.2012); Alvarez v. IBP, Inc., No. 98 Civ. 5005, 2001 WL 34897841, at *7 (E.D.Wash. Sept. 14, 2001), reversed on other grounds by, 339 F.3d 894 (9th Cir.2003).
D. Defendants' Incentive Program
As discussed above, CCI created an incentive program where, if a plumber finished a certain number of jobs, he would be allowed to leave work early but log his time as if he had worked until 4:30 p.m. Pl. Partial Sum. Judg. 56.1 ¶ 18. Plaintiffs also seek summary judgment that “[t]he pay associated with Defendants' ‘incentive program’ amounted to a ‘bonus' and cannot retrospectively be used to offset any pay otherwise owed to Plaintiffs pursuant to state and federal law.” Pl. Partial Sum. Judg. Mem. 1.
“Section 207(h) is the only provision in the FLSA that addresses offsets.” Garcia v. Tyson Foods, Inc., 890 F.Supp.2d 1273, 1291 (D.Kan.2012). Plaintiffs argue that there are only three categories of payment which may be credited against overtime compensation mandated by the FLSA, citing 29 U.S.C. § 207(h)(2). However, the three exceptions listed in § 207(h)(2) are only carved out of the universe of compensation “excluded from the regular rate [of payment] pursuant to subsection (e).” 29 U.S.C. § 207(h)(1). “[E]xtra compensation which is paid as an incentive for the rapid performance of work,” such as Defendants' incentive program, “requires ... inclusion in the regular rate.” 29 C.F.R. 778.207. Therefore, “the statute does not specifically bar an offset” for payments made pursuant to an incentive program like Defendants'. Garcia, 890 F.Supp.2d at 1292.
In Garcia, the employer paid for what the court called “sunshine time”—“a form of compensation ... representing the difference between the amount of time scheduled for a shift and the amount of time it took to complete the work for the day.” Id. at 1290. “For example, if the shift was scheduled to last 7 hours and 56 minutes yet the employees finished the work in 7 hours and 40 minutes, the employees were paid for the entire scheduled shift.” Id. at 1290–91. The court confronted the precise legal issue before the Court now, “whether the sunshine pay ... is eligible for an offset; a situation not addressed by § 207(h).” Id. at 1292. After considering another district court case, Alvarez v. IBP, Inc., No. 98 Civ. 5005, 2001 WL 34897841, at *24 (E.D.Wash. Sept. 14, 2001), reversed on other grounds by, 339 F.3d 894 (9th Cir.2003), which held that sunshine payments could not be used to offset overtime pay obligations, and Department of Labor regulations, the court found that the defendants' “sunshine payments [could] not be offset against [the] plaintiffs' damages.” Garcia, 890 F.Supp.2d at 1294. The court was persuaded by 29 C.F.R. § 778.201(c), which provides: “Section [207(h) ] of the Act specifically states that the extra compensation provided by these three types of payments may be credited towards overtime compensation due under section [207(a) ] for work in excess of the applicable maximum hours standard. No other types of remuneration for employment may be so credited.” (emphasis added). For the same reasons articulated in Garcia, this Court finds that payments made pursuant to Defendants' incentive program may not be used to offset any pay otherwise owed to Plaintiffs pursuant to state and federal law.
New York law requires employers to “pay an employee for overtime at a wage rate of one and one-half times the employee's regular rate in the manner and methods provided in and subject to the exemptions of sections 7 and 13[,] of 29 U.S.C. 201 et seq.” N.Y. Comp.Codes R. & Regs. tit. 12, § 142–2.2 (emphasis added). Accordingly, the same FLSA analysis regarding whether the incentive program pay may offset overtime compensation applies to Plaintiffs' NYLL claims. See Lewis v. Alert Ambulette Serv. Corp., No. 11 Civ. 442, 2012 WL 170049, at *5 (E.D.N.Y. Jan. 19, 2012) (citation omitted) (“New York State labor regulations substantially incorporate and adopt the FLSA's overtime regulations. As such, the same elements are required to prove plaintiffs' claim under New York labor law as under federal law.”); Khan v. IBI Armored Servs., Inc., 474 F.Supp.2d 448, 451 n. 1 (E.D.N.Y.2007) (citation omitted) (“New York's overtime law incorporates most of the FLSA's substantive provisions and exemptions, and a court's analysis under federal and state law will, in this and most cases, be the same.”)
Accordingly, Plaintiffs' motion for partial summary judgment is GRANTED. III. Maguire's Motion for Summary Judgment
Defendants also seek summary judgment on Plaintiffs' FLSA claims against Maguire, arguing that Maguire was not Plaintiffs' “employer.” Individual liability under the FLSA is premised upon “personal responsibility for making decisions about the conduct of the business that contributed to the violations of the Act.” Baystate Alt. Staffing, Inc. v. Herman, 163 F.3d 668, 678 (1st Cir.1998). The FLSA defines “employer” as “any person acting directly or indirectly in the interest of an employer in relation to an employee.” 29 U.S.C. § 203(d). The Second Circuit has adopted an “economic reality” test for determining whether an individual qualifies as an “employer” under the FLSA. Irizarry v. Catsimatidis, 722 F.3d 99, 111 (2d Cir.2013). Under the “economic reality” test, courts look to the totality of the circumstances and consider whether the alleged employer “(1) had the power to hire and fire the employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records.” Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132, 139 (2d Cir.1999) (citation and internal quotation marks omitted). These factors do not “comprise a rigid rule for the identification of an FLSA employer,” but rather “provide a nonexclusive and overlapping set of factors to ensure that the economic realities test mandated by the Supreme Court is sufficiently comprehensive and flexible to give proper effect to the broad language of the FLSA.” Irizarry, 722 F.3d at 105 (citations and internal quotation marks omitted).
Maguire was employed by CCI as vice president of sales/business development. Def. 56.1 ¶ 8; Pl. 56.1 ¶ 8. Maguire was not an owner of CCI. Def. 56.1110; Pl. 56.1 ¶ 10. Maguire described his primary duties as generating sales, new business development, identifying opportunities, and closing deals. Def. 56.1 ¶ 9; Pl. 56.1 ¶ 9. Solomine was the general manager in charge of the New York division; Plaintiffs reported to supervisors Charles Loguidici and James Olsen, as well as Solomine. Def. 56.1 ¶¶ 5, 6; Pl. 56.1 ¶¶ 5, 6. Solomine, Loguidici, and Olsen gave Plaintiffs their work assignments. Def. 56.1 ¶ 7; Pl. 56.1 ¶ 7. Maguire did not hire or fire any of the plumbers who worked in the New York division. Def. 56.1 ¶ 14; Pl. 56.1 ¶ 14.
Plaintiffs argue that Maguire was their employer under the FLSA because (1) Maguire interviewed, hired, and supervised Solomine (who was one of their supervisors), Pl. 56.1 ¶¶ 11–14; (2) two Plaintiffs lodged complaints regarding benefits, wage rates, and staffing to Maguire, see Frangiosa Dep. 69:14–73:2, Mar. 18,2013; Soto Dep. 61:9–62:17, Mar. 15, 2013; and (3) Maguire negotiated the contract between CCI and the DEP, Maguire Dep. 24:17–27:15, May 28, 2013, which “made Plaintiffs' pay a matter of reserve engineered math.” Pl. Maguire Sum. Judg. Mem. 2.
There is factual dispute regarding whether Maguire supervised Solomine. See Maguire Dep. 16:12–13, May 28, 2013 (“Q: Did Angelo Solimine [sic] ever report to you? A: No.”); Solomine Dep. 27:4–11, May 29, 2013 (Q: “Who among that team, who is the pool of people who you would consider to be your superiors in the chain of command ... A: David Stetz, Clarence Pritchett, Rob Stillwell, Mike Maguire.”).
Specifically, Plaintiffs argue that “Maguire agreed that CCI would install a certain number of units over a certain time period for the DEP.... Because it was a prevailing wage job, the hourly pay rate was not set by anybody at CCI—it was set by the NYC Comptroller. But, to the extent that the agreed contract set forth how many units needed to be installed in what amount of time, Maguire had more input than anyone else into the formula or equation by which Plaintiffs' pay rates would ultimately be determined.” Pl. Maguire Sum. Judg. Mem. 2.
Plaintiffs' first argument supports their position that Maguire was their “employer” under the FLSA. See Herman, 172 F.3d at 140. In Herman, security guards claimed the chairman of the defendant was their “employer” under the FLSA in part because he hired their supervisors. Even though the chairman had not hired the guards themselves, the Second Circuit agreed, stating that “the fact that he hired individuals who were in charge of the guards is a strong indication of control.” Id. The same reasoning applies here. Even though Maguire did not hire Plaintiffs, he hired Solomine, one of their supervisors, which is a strong indication that Maguire controlled them. See id.
Plaintiffs' second argument is substantially weaker than their first. Two Plaintiffs, Joseph Frangiosa and Rafael Soto, separately complained to Maguire directly regarding benefits, wage rates, and staffing. Because they were not receiving satisfactory answers at the lower level, the two escalated their complaints to “ ‘corporate’ and felt Mr. Maguire was a suitable person to whom to direct [their] complaint[s].” Pl. Maguire Sum. Judg. Mem. 2 (emphasis added). Plaintiffs essentially argue that the two plumbers' subjective beliefs about Maguire's ability to address their complaints is evidence that Maguire was their employer under the FLSA. This argument is unavailing. See Brock v. Mr. W Fireworks, Inc., 814 F.2d 1042, 1049 (5th Cir.1987) (“Subjective beliefs cannot transmogrify objective economic realities.”); Copantitla v. Fiskardo Estiatorio, Inc., 788 F.Supp.2d 253, 314 (S.D.N.Y.2011) (“Diaz de la Vega's perception that George Makris is an ‘owner’ does not make him an employer.”); Chao v. Vidtape, Inc., 196 F.Supp.2d 281, 291 (E.D.N.Y.2002), aff'd as modified, 66 Fed.Appx. 261 (2d Cir.2003) (citation omitted) (“[M]ost [employees] thought he was a ‘boss' when asked, but this testimony is insufficient to support a definition of employer under the economic realities test.”). Frangiosa's and Soto's belief that Maguire was the appropriate person to air their grievances to does not, without more, provide evidence that Maguire had the power to redress their complaints or change their schedules or conditions of employment. Indeed, Frangiosa's testimony provides little evidence that Maguire was able to meaningfully respond to his complaint. Frangiosa testified that he received “some answers from ... Mr. Milton, and ... Tim Wertz” and that he “started the correspondence with Mr. Mcguire [sic], and then it was taken over by Milton, their controller, a woman, I can't remember the name, and then there was another person. I think a Tim Wertz.” Frangiosa Dep. 71:7–17, Mar. 18, 2013. And, Maguire testified that he merely “forwarded [Frangiosa's written complaint] to the corporate office to be addressed.” Maguire Dep. 39:8–11, May 28, 2013.
However, Soto's testimony provides evidence that Maguire had some ability to address the complaints lodged with him. Soto testified that when he complained to Maguire: “[H]e heard me out and he told me that he would speak to Angelo [Solomine].” Soto Dep. 62:8–12, Mar. 15, 2013. Because Maguire stated that he would speak to Solomine about Soto's complaint, Soto's testimony indicates that Maguire had the ability to redress Soto's complaint and thus affect the schedules and conditions of Plaintiffs' employment.
Soto's testimony is also evidence that Maguire supervised Solomine.
Plaintiffs' third argument is somewhat nonsensical. Plaintiffs contend that Plaintiffs' pay rates were ultimately determined by Maguire because he negotiated the contract that set how much work needed to be accomplished over what period of time. However, Plaintiffs acknowledge that because the DEP contract was a prevailing wage job, the hourly pay rate was not set by anybody at CCI—it was established by the NYC Comptroller. See Peniche Decl. ¶ 15. What the Court can glean from the record is that Maguire negotiated a contract with the DEP that set forth how many units needed to be installed in what amount of time, and it was CCI's job to meet those expectations. Maguire Dep. 24:17–27:6, May 28, 2013. Maguire noted that the number of units that needed to be installed within a given time informed how many plumbers CCI needed to hire. Id. at 27:3–7. Therefore, the person who chose how many plumbers needed to be hired to timely fulfill the contract controlled the plumbers' schedules and/or conditions of employment, as the number of hours worked and/or expected pace of work would necessarily fluctuate as a function of the total number of plumbers hired. However, CCI's director of field services, Yancy Emery, not Maguire, chose how many plumbers were needed to timely fulfill the contract. Id. at 27:8–15. Thus, Maguire neither set the rate of pay nor controlled the schedules and/or conditions of employment of the plumbers by negotiating the prevailing wage DEP contract.
Plaintiffs also argue that in non-prevailing wage contracts, Maguire was involved in determining the hourly rate of pay for the laborers. See Wertz Dep. 47:2–48:21, May 29, 2013. Thus, “were the DEP contract at issue not a prevailing wage job, Maguire would have had the authority to set the Plaintiffs' hourly rates.” Pl. Maguire Sum. Judg. Mem. 2–3 (emphasis added). This argument is meritless. Just as Plaintiffs' subjective beliefs are not relevant to determining whether Maguire was Plaintiffs' employer, neither are hypothetical situations. Instead, “economic realities are determinative.” Usery v. Pilgrim Equipment Co., Inc., 527 F.2d 1308, 1315 (5th Cir.1976) (emphasis added).
Although this is a close case, Plaintiffs have marshalled enough evidence that, if credited at trial, demonstrates that Maguire possessed sufficient control over them, through his relationship with their supervisor Solomine, to be considered their “employer,” as that term is broadly defined by the FLSA. See Herman, 172 F.3d at 140. Accordingly, Maguire's motion for summary judgment is DENIED.
CONCLUSION
For the reasons stated above, Defendants' motion to decertify the conditionally certified collective action is DENIED. Plaintiffs' request for final certification is GRANTED. Plaintiffs' motion for partial summary judgment is GRANTED. Maguire's motion for summary judgment is DENIED.
The joint pre-trial order is due October 24, 2014. The joint pre-trial order and related submissions are to be sent as follows:
In accordance with Paragraph V.B of the Court's Individual Rules and Practices for Civil Cases, the parties shall submit a proposed joint pre-trial order to the Court by PDF attachment to an e-mail by October 24, 2014, at
12:00 p.m.
In accordance with Paragraphs V.C and V.D of the Court's Individual Practices, each party shall file and serve along with the joint pre-trial order all required pre-trial filings, including motions addressing any evidentiary issues or other matters that should be resolved in limine, joint requests to charge, joint proposed verdict forms, and joint proposed voir dire questions.
In accordance with Paragraph V.C(v) of the Court's Individual Practices, the parties shall deliver to the Court by October 24, 2014, one copy of each documentary exhibit sought to be admitted, pre-marked (i.e., labeled with exhibit stickers) and assembled sequentially in a looseleaf binder or in separate manila folders labeled with the exhibit numbers and placed in a suitable container for ready reference.
In accordance with Paragraph V.F of the Court's Individual Practices, by October 31, 2014, at
12:00 p.m.,
the parties shall file, if necessary, any opposition to any motion in limine, and any opposition to any legal argument in a pre-trial memorandum.
Counsel for all parties shall appear for a final pre-trial conference on December 4, 2014, at
4:00 p.m.,
in Courtroom 15D of the United States Courthouse, 500 Pearl Street, New York, N.Y. 10007.
Trial shall commence at 9:00 a.m. on
December 8, 2014.
In accordance with Paragraph V.H of the Court's Individual Practices in Civil Cases, trial will be conducted from 9:00 a.m. to 2:15 p.m. with a break from 11:15 to 11:45 a.m.
Prior to the final pre-trial conference, counsel for both parties, along with the parties themselves, shall meet in person for at least one hour to discuss settlement of this matter. Additionally, counsel shall submit a joint letter by September 26, 2014, informing the Court whether they would like to be referred to a magistrate judge for settlement discussions.
The Clerk of Court is directed to terminate the motions at ECF Nos. 91, 93, and 98.
SO ORDERED. -------- Notes: