Charlot v. Ecolab, Inc.

• Decision Date: 30 September 2015
• Docket Number: No. 12 Civ. 4543(KAM)(VMS).,12 Civ. 4543(KAM)(VMS).
• Parties: Anthony CHARLOT, Alan Remache and Jose Tejada, individually and on behalf of all others similarly situated, Plaintiffs, v. ECOLAB, INC., Defendant.
• Court: U.S. District Court — Eastern District of New York

136 F.Supp.3d 433

Anthony CHARLOT, Alan Remache and Jose Tejada, individually and on behalf of all others similarly situated, Plaintiffs,

v.ECOLAB, INC., Defendant.

No. 12 Civ. 4543(KAM)(VMS).

United States District Court, E.D. New York.

Signed Sept. 30, 2015.

Artemio Guerra, Michael J.D. Sweeney, Getman & Sweeney, PLLC, New Platz, NY, Justin Mitchell Swartz, Molly A. Brooks, Sally J. Abrahamson, Outten & Golden LLP, New York, NY, for Plaintiffs.

Andrew J. Voss, Shirley Lerner, Susan K. Fitzke, John H. Lassetter, Littler Mendelson, P.C., Minneapolis, MN, Jeffrey W. Brecher, Jackson Lewis, P.C., Justin Robert Marino, Littler Mendelson, P.C., Noel P. Tripp, Jackson Lewis LLP, Melville, NY, Amy S. Ramsey, Angela I. Rochester, John A. Ybarra, Littler Mendelson, P.C., Chicago, IL, for Defendant.

MEMORANDUM AND ORDER

MATSUMOTO

, District Judge:

The named plaintiffs Anthony Charlot, Alan Remache, Jose Tejada, Gregory Germuska, Garwyn Richmond, Matt Riggs, and Christopher Hendley (collectively, the "Named Plaintiffs" or "plaintiffs")¹ bring this individual, collective, and class action against Ecolab, Inc. ("defendant") for alleged violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 et seq.

; the New York Labor Law, N.Y. Lab. Law §§ 650 et seq., and its supporting regulations, N.Y. Comp.Codes R. & Regs. tit. 12, Pt. 142 (collectively, the "New York Wage Laws"); the New Jersey Wage–and–Hour Laws. N.F.S.A. §§ 34:11–56a et seq., its supporting regulations, N.J. Admin. Code §§ 12:56–1.1 et seq., and the New Jersey Wage Payment Law, N.J.S.A. §§ 34:11–4.1 –33.6 (collectively, the "New Jersey Wage Laws"); the Pennsylvania Minimum Wage Act, 43 Pa. Stat. § 333.101 et seq., and the Pennsylvania Wage Payment and Collection Law, 43 Pa. Stat. § 260.1 et seq. (collectively, the "Pennsylvania Wage Laws"); the Illinois Minimum Wage Law, 820 Ill. Comp. Stat. § 105/1 et seq., the Illinois Wage Payments and Collections Act, 820 Ill. Comp. Stat. §§ 115/1 et seq., and their implementing regulations, 56 Ill. Admin. Code §§ 210.100 through 300.850 (collectively, the Illinois Wage Laws); the Washington Minimum Wage Act, Rev.Code Wash. §§ 49.46.005 et seq., the Washington Industrial Welfare Act, Rev.Code Wash. §§ 49.12.005 et seq., and the Washington Wage Rebate Act, Rev.Code Wash. §§ 49.52.050 et seq., and Washington Administrative Code §§ 296–126–092 and 296–126–050 (collectively, the Washington Wage Laws); and the North Carolina Wage and Hour Act, N.C. Gen.Stat. § 95–25.1 et seq., and implementing regulations, 13 N.C. Admin. Code 12.0300 et seq. (collectively, the North Carolina Wage Laws).

On December 22, 2014, defendant Ecolab moved for summary judgment and the plaintiffs cross-moved for partial summary judgment on the limited issues of defendant's affirmative defenses to overtime liability under the FLSA. (ECF Nos. 160–183.² ) Presently before the court are the parties' cross-motions for summary judgment on whether plaintiffs, as Route Managers, Route Sales Managers, or Service Sales Route Managers for defendant-employer Ecolab, were (1) exempt employees under the FLSA as either: "outside salesmen," pursuant to 29 U.S.C. § 213(a)(1)

; or (2) "commissioned salespersons," who have been properly compensated under the FLSA, pursuant to 29 U.S.C. § 207(i)

(the "7(i)" defense).

I. BACKGROUND

A. Procedural Background

On September 11, 2012, plaintiffs Charlot, Remache, and Tejada commenced this putative collective and class action, bringing individual and representative claims on behalf of themselves and all other similarly situated Ecolab employees, alleging that defendant Ecolab failed to pay its Route Managers, Route Sales Managers, and Service Sales Route Managers overtime for hours worked over forty hours per week in violation of the FLSA and pertinent state overtime and wage laws. On April 6, 2015, plaintiffs filed an amended complaint to add four additional named plaintiffs and their respective state class claims. (ECF No. 201, Amended Complaint ("Amend.Compl.").)

Plaintiffs bring their FLSA overtime wage claim on behalf of themselves and on behalf of a putative Section 216(b) FLSA collective class.³ Pursuant to the FLSA, plaintiffs must opt-in to a collective action by filing written consent with the court. 29 U.S.C. § 216(b)

(requiring employees affirmatively to consent to join a collective action).

Plaintiffs allege with respect to their federal claim that, as a part of its regular business practice, "Ecolab intentionally, willfully, and repeatedly engaged in a pattern, practice, and/or policy of violating the FLSA" by failing to record all the time that its employees worked, willfully failing to keep payroll records as required by the FLSA, willfully misclassifying the plaintiffs and the putative class members as exempt from the requirements of the FLSA, willfully failing to pay plaintiffs and the putative class members earned wages, violating an agreement to pay overtime to all employees that are not exempt from the requirements of the FLSA and willfully failing to pay its employees, including plaintiffs and the putative class members, overtime wages for hours that they worked in excess of 40 hours per week. (Amend.Compl. ¶ 114.)

On March 11, 2014, the parties appeared for a pre-motion conference to discuss their proposed respective cross-motions for summary judgment and set a briefing schedule, advising the court that resolution of their motions would affect only the three named plaintiffs.⁴ (Minute Entry dated March 11, 2014.) On March 18, 2014, at the request of the court, the parties submitted a joint letter clarifying that the parties had previously agreed to conduct limited discovery with respect to defendant's two affirmative defenses, pursuant to FLSA Sections 213(a)(1)

and 207(i), and that plaintiffs would not seek class certification under FLSA Section 216(b) until summary judgment on the defendant's affirmative defenses had been resolved. (ECF No. 89, Joint Letter dated 3/18/14.)

The parties' cross-motions for summary judgment were fully-briefed and filed on December 22, 2014. ( See ECF Nos. 160–182.) On July 10, 2015, the parties presented oral argument on their cross-motions for summary judgment. Following the oral argument, at the request of the court, each party submitted additional citations to evidence in the record in support of their arguments. (ECF Nos. 217, Plaintiffs' Letter dated July 15, 2015; 218, Defendant's Letter dated July 17, 2015.)

On September 10, 2015, plaintiffs notified the court of the Honorable Edmond E. Chang's decision in the Northern District of Illinois, denying defendant Ecolab's motion for summary judgment in Schneider v. Ecolab, No. 14–CV–1044 (N.D.Ill. Sept. 3, 2015) and finding that plaintiff Schneider was not exempt as either an "outside salesman" or "commissioned salesperson" under Illinois Minimum Wage Law. (See ECF No. 221, Plaintiffs' Letter re Decision in Schneider. ) Because the decision was filed under seal in the Northern District of Illinois, this court ordered defendant to obtain permission from Judge Chang and produce the decision and file it under seal in this action. (Order dated 9/11/15.) In addition, the court permitted the parties to submit limited submissions and replies regarding why Judge Chang's decision does or does not apply to the instant action. (See ECF Nos. 224, Defendant's Letter re Unsealing of Schneider; 226, Defendant's Submission re Schneider dated 9/17/15; 227, Plaintiffs' Submission re Schneider dated 9/17/15; 235, Plaintiffs' Reply Letter dated 9/24/15; 236, Defendant's Reply Letter dated 9/24/15.)

B. Factual Background

The following facts have not been specifically or directly disputed with admissible evidence unless otherwise noted. Defendant Ecolab, Inc. sells cleaning, sanitizing, and food safety products, such as mops, floor mats and dish racks to a variety of businesses, primarily comprised of full service and fast food restaurants, and hospitality businesses, such as hotels and public facilities. (Defendant's Rule 56.1 Statement of Undisputed Facts ("Def. 56.1") ¶¶ 5–6; Plaintiffs' Rule 56.1 Statement of Undisputed Facts ("Pls. 56.1") ¶ 1.) Ecolab's cleaning and sanitizing solutions include products for ware-washing, housekeeping, and general sanitation chemicals, e.g., detergents, rinse-aids, sanitizers, and glass cleaners. (Def. 56.1 ¶ 3; Pls. 56.1 ¶ 1.) Ecolab also provides leases of dish and ware-washing machinery that include installation and regular maintenance services, which, under Ecolab's business model, serve as gateways for the sale of its cleaning products. (Pls. 56.1 ¶¶ 1, 3–4, 6–10; Def. 56.1 ¶¶ 63–64; see Pls. 56.1 ¶ 231 (citing Declaration of Charles Melnyk in Support of Defendant's Motion for Summary Judgment ("Melnyk Decl.") ¶ 7); Defendant's Opposition to Plaintiffs' Rule 56.1 Statement of Undisputed Facts ("Def.Opp.Pls. 56.1") ¶¶ 1, 6.)

Plaintiffs were Route Managers ("RMs"), Route Sales Managers ("RSMs") or Sales Service Route Managers ("SSRMs") for Ecolab's Institutional and PureForce divisions during the periods alleged in the complaint.⁵ (Def. 56.1 ¶¶ 86–90; Pls. 56.1 ¶¶ 2.) Specifically, Charlot was an RSM between November 2009 and February 2011 in Ecolab's Institutional Division, Tejada was an RSM between January 2010 until March 2012 in Ecolab's Institutional Division, and Remache was an SSRM from February 2012 until February 2013 for Ecolab's PureForce division. (Def. 56.1 ¶¶ 87–90; see Pls. 56.1 ¶ 2.)

1. Ecolab's Business Model

Ecolab employs a value-added sales model combining service and sales. (Def. 56.1 ¶¶ 76–84 ("value-added selling").) Value-added selling is premised on developing a relationship between the vendor and the customer through consistent and regular contact, and identifying and meeting the customer's needs through consultation between the customer and a sales person. (Def. 56.1 ¶ 77.) Plaintiffs admit that Ecolab's value-added sales model includes consistent and regular maintenance and repairs. (Plai...