Mascol v. E & L Transp., Inc.

Decision Date09 May 2005
Docket NumberNo. CV-03-3343 (CPS).,CV-03-3343 (CPS).
PartiesFranklin MASCOL, et al., Plaintiffs, v. E & L TRANSPORTATION, INC., et al., Defendants.
CourtU.S. District Court — Eastern District of New York

Barry I. Levy, New York City, for Plaintiffs.

MEMORANDUM OPINION AND ORDER

SIFTON, Senior District Judge.

This is a civil action brought by six named plaintiffs in their individual capacities and on behalf of others similarly situated for claims under sections 7(a), 11(c), 15(a)(2)(5), 16 and 17 of the Fair Labor Standards Act, as amended (29 U.S.C. §§ 207(a), 211(c), 215(a)(2)(5), 216 and 217 (2004)) ("FLSA") and claims under Article 19 of the New York State Labor Law ("NYS Labor Law") and its implementing regulations, N.Y. Comp.Codes R. & Regs. tit. 12, § 142-2.2 (2004). The complaint, as amended, alleges that defendants failed to pay plaintiffs — current and former ambulette drivers — overtime pay at a rate of time and one half for hours worked over 40 hours per week in violation of FLSA and NYS Labor Law. Plaintiffs seek unpaid overtime wages from July 9, 2000 through the date of judgment, as well as liquidated damages, pursuant to the FLSA and unpaid overtime from July 9, 1997 through the date of judgment and liquidated damages equal to 25% of the unpaid wages pursuant to state law. In addition, plaintiffs seek an injunction and declaratory relief and attorneys' fees.

On January 27, 2004, the Court dismissed plaintiffs' claims for declaratory and injunctive relief under the FLSA and granted plaintiffs' motion to permit the action to proceed as a representative action under 29 U.S.C. § 216(b) with respect to the FLSA claims. The court ordered (1) defendants to turn over the names and addresses of potential plaintiffs by March 2, 2004, (2) plaintiffs to send notice to potential class members by April 2, 2004, and (3) potential plaintiffs to return notices by May 28, 2004.

Plaintiffs, on consent, amended the complaint on March 17, 2004 to add Elbrus Transportation, Inc. ("Elbrus"),1 Boris Shamiloff, Arkadi Ashurov, and Eduard Pardilov, as successors in interest to the original named defendants E & L Transportation, Inc., E & L Transportation, Inc. d/b/a Community Transport, Community Transportation, Inc., LCH Transportation Corp., Ely Matalon, and Leon Krisinovsky.2 On March 29, 2004, the Court (1) extended its January 27, 2004 order to apply to the new defendants, (2) gave the new defendants until April 1, 2004 to turn over the names and addresses of potential plaintiffs; (3) gave the plaintiffs until April 15, 2004 to send out notices; and (4) required the notices be received by June 15, 2004. On April 13, 2004, the March 29, 2004 order was again modified to (1) give defendants until April 30, 2004 to turn over the names and addresses, (2) give the plaintiffs until May 15, 2004 to send out notices; and (3) require that return notices be received by July 15, 2004.

Plaintiffs now move for partial summary judgment on the liability portion of the action. Defendants cross-move pursuant to Federal Rule of Civil Procedure 12(b) to dismiss the complaint on the grounds that defendants are exempt from the FLSA and that the Court should decline to exercise pendent jurisdiction over the state claims. Defendants' motion will also be treated as a motion for summary judgment since both defendants and plaintiffs ask the Court to consider material outside of the pleadings and have submitted Rule 56 statements. Morelli v. Cedel, 141 F.3d 39 (2d Cir.1998); see Fed.R.Civ.P. 12(b); James Wm. Moore et al., Moore's Federal Practice § 56.30[4] (3d ed.1997).

For the reasons set forth below, plaintiffs' motion for partial summary judgment is granted and defendants' motion is denied.

BACKGROUND

The following facts are drawn from the parties' pleadings, affirmations, affidavits, declarations, together with the submissions in connection with the present motion and, except as otherwise noted, are undisputed.

Plaintiffs and the class they seek to represent are former and present ambulette drivers3 that have been employed by the defendants in the six years preceding the filing of the complaint. Defendants are for-profit domestic corporations and individuals doing business in New York who employed plaintiffs in an industry affecting commerce within the meaning of the FLSA, 29 U.S.C. § 203.

Defendants provide passenger transportation services for mobility-limited passengers in the city of New York, and during the relevant period operated between 20 and 25 vans capable of transporting disabled individuals and their durable medical equipment. Typically more than one passenger is transported in the vehicles at a given time.4 The vehicles do not have meters and defendants are compensated on the basis of a flat rate per trip. The majority of the passengers transported on an annual basis do not pay defendants directly. Rather, a third-party, such as Medicaid or the New York State Department of Health, reimburses defendants for the cost of the trip.

Defendants' vans display licenses indicating that they are licensed by the Taxi and Limousine Commission. The Taxi and Limousine Commission has also issued paratransit base licenses to defendants' business.

In 1996, before the time period covered by this litigation, the Department of Labor ("DOL") investigated Community Transportation, Inc. for violations of the FLSA. In 1996, a letter (the "Sinclair Letter") was issued to Ely Matalon, stating that Community Transportation, Inc., was not in violation of the FLSA and stated "We believe your firm to be exempt from OT [overtime] under FLSA Reg Section 13(b)17 ... taxicab." The letter was issued from the Employment Standards Administration, Wage and Hour Division, DOL, and signed by Doreen L. Sinclair, an investigator.

Effective January 1, 1999, plaintiffs' terms of compensation were the subject of a collective bargaining agreement between Local 531, International Brotherhood of Teamsters, A.F.L.-C.I.O. and Community Medical Transport, Inc. And E & L Transport, Inc. ("CBA"). The parties do not dispute that the terms and conditions of plaintiffs' employment in the period from July 9, 1997 through January 1, 1999 were similar to those contained in the collective bargaining agreement.

The CBA, in effect from January 1, 1999 to December 31, 2001 provides as follows:

Article 5 Overtime

5.1

Overtime shall be paid in accordance with past practice. Such practice must conform to State and Federal Law. It is expressly understood that overtime pay at the appropriate rate has been calculated into the weekly salary paid to regular full-time employees.

Article 24 Wages

24.1

Regular full-time employees shall be paid a weekly salary according to the following progression. The date of any increases described in the progression shall be determined by the Employer on an individual basis within the range of dates set forth herein:

Starting rate: $450.00 per week Increase:

$25.00 per week Six (6) to Nine (9) months after the date of hire

$25.00 per week Six (6) to Nine (9) months later

$25.00 per week Nine (9) to Twelve (12) months later

$25.00 per week Nine (9) to Twelve (12) months later

24.2

Regular drivers who are scheduled to work less than sixty (60) hours per week shall be paid accordingly to the following progression. The date of any increases described in the progression shall be determined by the Employer on an individual basis within the range of dates set forth herein:

Starting rate: $7.50 per hour Increase:

$.25 per hour Six (6) to Nine (9) months after the date of hire

$.25 per hour Six (6) to Nine (9) months later

$.25 per hour Nine (9) to Twelve (12) months later

$.25 per hour Nine (9) to Twelve (12) months later

Plaintiffs claim based on pay stubs for five of the named plaintiffs and quarterly payroll records that plaintiffs were paid straight time for the first sixty hours worked. Defendants contend (1) that plaintiffs were paid straight time for only forty hours, time and a half for the next twenty hours, and a rate defendants refer to as "overtime plus" rate for work above the 60th hour; (2) that defendants' business is exempt from the FLSA or, alternatively, (3) that they believed in good faith they were exempt from the FLSA because of the Sinclair Letter.

DISCUSSION
Jurisdiction

The Court has jurisdiction over the federal claims under 29 U.S.C. § 216(b) and 28 U.S.C. § 1331 and over the state claims under 28 U.S.C. § 1367. See United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966); Ansoumana v. Gristede's Operating Corp., 201 F.R.D. 81 (S.D.N.Y.2001)(asserting claims under New York's Minimum Wage Act).

Summary Judgment Standard

Summary judgment is appropriate "[w]hen the record taken as a whole could not lead a rational trier of fact to find for the non-moving party." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Rule 56 of the Federal Rules of Civil Procedure provides for summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as matter of law." Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "An issue of fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Electrical Inspectors, Inc. v. Village of East Hills, 320 F.3d 110, 117 (2d Cir.2003). A fact is material when it "might affect the outcome of the suit under the governing law." Id.

The party seeking summary judgment has the burden of demonstrating that no genuine issue of material fact exists. Apex Oil Co. v. DiMauro, 822 F.2d 246, 252 (2d Cir.1987). If the moving party's initial burden is met, the burden shifts to the non-movant to "set...

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