Olivo v. Gmac Mortg. Corp.

• Decision Date: 01 April 2004
• Docket Number: No. 03-72585.,03-72585.
• Citation: 374 F.Supp.2d 545
• Court: U.S. District Court — Eastern District of Michigan
• Parties: Nathaniel J. OLIVO & Lola J. Hopcraft, individually and on behalf of all similarly situated persons, Plaintiffs, v. GMAC MORTGAGE CORPORATION, Defendant.

374 F.Supp.2d 545

Nathaniel J. OLIVO & Lola J. Hopcraft, individually and on behalf of all similarly situated persons, Plaintiffs, v. GMAC MORTGAGE CORPORATION, Defendant.

No. 03-72585.

United States District Court, E.D. Michigan, Southern Division.

April 1, 2004.

Dale E. Bock, Flint, MI, Valdemar L. Washington, Detroit, MI, for Plaintiffs.

Dennis M. Barnes, Eugene Driker, Matthew R. Millikin, Barris, Sott, Detroit, MI, Joseph N. Frabizzio, Michael L. Banks, Sarah E. Bouchard, Morgan, Lewis, Phildelphia, PA, for Defendant.

OPINION AND ORDER

ZATKOFF, Chief Judge.

I. INTRODUCTION

This matter is before the Court on Plaintiffs' Motion for Court Facilitation of Notice to Potential Plaintiffs. Defendant GMAC Mortgage Corporation has responded. The Court finds that the facts and legal arguments are adequately presented in the parties' papers and the decision process would not be significantly aided by oral argument. Therefore, pursuant to E.D. MICH. LR 7.1(e)(2), it is hereby ORDERED that the motion be resolved on the briefs submitted. For the reasons set forth below, Plaintiffs' Motion is DENIED.

II. BACKGROUND

This is an action for overtime compensation brought pursuant to the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. §§ 201-219, (hereinafter "FLSA"). Plaintiffs are Nathaniel J. Olivo and Lola J. Hoperaft, former retail loan officers with Defendant GMAC Mortgage Corporation, (hereinafter "GMAC"). Although GMAC employs loan officers in all fifty states, both Plaintiffs worked out of GMAC's office in Flint, Michigan, where Plaintiff Olivo worked from approximately July 10, 2000, until July 17, 2002, and Plaintiff Hopcraft worked from approximately February 25, 2002, until May 13, 2003.

Plaintiffs' responsibilities as loan officers were to originate residential real estate, mortgage, and home equity loans for GMAC. The terms and conditions of Plaintiffs' employment were set forth in Residential Loan Originator Employment and Compensation Agreements executed by Plaintiffs, (hereinafter "Employment and Compensation Agreement"). See Plaintiffs' Motion Ex. 9 & 10. GMAC loan officers are paid on a pure commission basis pursuant to schedules set forth in the loan officer's Employment and Compensation Agreements. Under this commission-based pay structure, a loan officer's compensation is based on his or her actual production, measured by the value of that loan officer's mortgage loan closings. In order to provide compensation to beginning loan officers while they are still developing contacts and while GMAC is processing submitted loan applications, (i.e., while the loan officer's first loans are "in the pipeline"), however, GMAC pays loan officers on a salaried basis during the first three months of the loan officer's employment.

On July 3, 2003, Plaintiffs filed the instant Complaint. With their Complaint, Plaintiffs allege that while employed by Defendant, they routinely worked in excess of forty hours a week, but that Defendant failed to pay Plaintiffs, (and all other similarly situated GMAC loan officers), time and one-half their regular rates of pay for those hours worked in excess of forty hours a week. Plaintiffs allege that this practice violates 29 U.S.C. §§ 207(a) & 215(a). In essence, Plaintiffs allege that Defendant's failure to pay overtime pay to those loan officers that work in excess of forty hours a week violates the Fair Labor Standards Act. In addition, Plaintiffs seek to proceed as a collective action, and to have all similarly situated GMAC loan officers added as plaintiffs pursuant to the "opt in" provision of the FLSA. See 29 U.S.C. § 216(b).

On October 29, 2003, this Court held a Scheduling Conference. At that time, the Court indicated that it would provide an initial period of time whereby the parties would conduct discovery as to whether this action should proceed as a "collective action" pursuant to 29 U.S.C. § 216(b). Following this initial period of discovery, Plaintiffs would submit a motion based upon whether they sought to proceed as a "collective action," and based upon whether they sought Court facilitation of notice of the action to "similarly situated" putative plaintiffs. On January 5, 2004, Plaintiffs filed their Motion for Court Facilitation of Notice to Potential Plaintiffs, and on February 4, 2004, Defendant filed a response opposing Plaintiffs' Motion.

With their Motion, Plaintiffs ask that the Court (1) grant their request to proceed as a collective action pursuant to 29 U.S.C. § 216(b); (2) grant their request for Court facilitation of notice to the putative class of plaintiffs; (3) order the Defendant to produce an alphabetized list of present and former loan officers employed by Defendant since February 1, 2001; and (4) approve Plaintiffs' proposed Notice to Potential Plaintiffs and Consent to Join. Defendant opposes Plaintiffs' Motion in its entirety.

III. DISCUSSION

With their Complaint, Plaintiffs allege that Defendant has a policy of not paying its residential mortgage loan officers for work performed in excess of forty hours a week in violation of 29 U.S.C. §§ 207(a) and 215(a). With their Motion, Plaintiffs seek the Court's approval to proceed as a collective action pursuant to 29 U.S.C. § 216(b), and request that the Court facilitate the notification of the pendency of this action to the putative "class" plaintiffs. Section 216(b) of the FLSA authorizes collective actions in certain circumstances and provides as follows:

§ 216. Penalties

. . . . .

(b) Damages; right of action; attorney's fees and costs; termination of right of action, ... An action to recover [for violations of 29 U.S.C. §§ 206, 207 or 215(a)(3)] may be maintained against any employer (including a public agency) in any Federal or State court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated. No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought.

See 29 U.S.C. § 216(b).

Pursuant to § 216(b), Plaintiffs may maintain a collective action on behalf of themselves "and other employees similarly situated[,]" but for any "similarly situated" employee to be bound by a judgment, they must have filed a written consent with this Court. See § 216(b); Sims v. Parke Davis & Co., 334 F.Supp. 774, 780-81 (E.D.Mich.1971), aff'd, 453 F.2d 1259 (6th Cir.1971). In other words, a collective action under § 216(b) is a representative action, but in order for the named Plaintiffs to represent the interests of "similarly situated" employees, the "similarly situated" employees must "opt in" to the proceedings. See Clougherty v. James Vernor Co., 187 F.2d 288, 290 (6th Cir.1951) ("[U]under the Fair Labor Standards Act the plaintiff has no right without specific authorization to represent an employee not joined as a plaintiff."). If the Court authorizes a "collective action" under § 216(b), then in its discretion, this Court may authorize the notification of putative "class" members of the pendency of the collective action. See Hoffmann-La Roche v. Sperling, 493 U.S. 165, 110 S.Ct. 482, 107 L.Ed.2d 480 (1989); Woods v. New York Life Ins. Co., 686 F.2d 578, 580 (7th Cir.1982) ("[Section 216(b)] authorizes a representative action; and this authorization surely must carry with it a right in the representative plaintiff to notify the people he would like to represent that he has brought a suit, and a power in the district court to place appropriate conditions on the exercise of that right."). The issues before the Court are whether it should authorize a § 216(b) action in this case, and if so, whether it should exercise its discretion and facilitate notice to putative "class" plaintiffs.

In order to proceed as a "collective action" pursuant to § 216(b), Plaintiffs must demonstrate that they are "similarly situated" to the employees they seek to notify of this suit. In order to determine whether the Plaintiff has made this showing, the Court adopts the "two-stage class certification method." See Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J.1987). See also Hipp v. Liberty Nat'l Life Ins. Co., 252 F.3d 1208 (11th Cir.2001) ("The two-tiered approach to certification of § 216(b) opt-in classes... appears to be an effective tool ... and we suggest that district courts in this circuit adopt it in future cases."). See generally Mooney v. Aramco Services Co., 54 F.3d 1207 (5th Cir.1995) (discussing two different approaches to § 216(b) "certification.").

Under the first step of the two-stage method, the Court determines whether Plaintiffs have demonstrated other "similarly situated" putative plaintiffs for "notice" purposes. With this step, "[a] named plaintiff can show that the potential claimants are similarly situated `by making a modest factual showing sufficient to demonstrate that they and potential plaintiffs together were victims of a common policy or plan that violated the law.'" Flores v. Lifeway Foods, Inc., 289 F.Supp.2d 1042, 1045 (N.D.Ill.2003). See Gjurovich v. Emmanuel's Marketplace, Inc., 282 F.Supp.2d 101, 104 (S.D.N.Y.2003); Roebuck v. Hudson Valley Farms, 239 F.Supp.2d 234, 238 (N.D.N.Y.2002) (citing Realite v. Ark Restaurants Corp., 7 F.Supp.2d 303, 306 (S.D.N.Y.1998)); Kane v. Gage Merch. Servs., 138 F.Supp.2d 212, 215 (D.Mass.2001) (quoting Hoffmann v. Sbarro, Inc. 982 F.Supp. 249, 261 (S.D.N.Y.1997)); Harper v. Lovett's Buffet, Inc., 185 F.R.D. 358, 364 (M.D.Ala.1999).<sup>1</sup> This initial standard is fairly lenient, and in order to meet this standard, Plaintiffs must simply "submit evidence establishing at least a colorable basis for their claim that a class of `similarly situated' plaintiffs exists." Severtson v. Phillips Beverage Co., 137 F.R.D. 264, 266 (D.Minn.1991). Courts requiring a factual showing under the first step of a Lusardi-type determination have considered...