Rocha ex rel. Situated v. Gateway Funding Diversified Mortg. Servs., L.P.
| Decision Date | 01 June 2016 |
| Docket Number | CIVIL ACTION NO. 15-482 |
| Parties | CESAR ROCHA and RALPH JETER, Individually, and on Behalf of All Others Similarly Situated v. GATEWAY FUNDING DIVERSIFIED MORTGAGE SERVICES, L.P. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Plaintiffs Cesar Rocha and Ralph Jeter have brought this matter as a collective action under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., and as a class action pursuant to New Jersey law. They contend that their former employer, Defendant Gateway Funding Diversified Mortgage Services, L.P. ("Gateway"), misclassified them as exempt from the minimum wage and overtime requirements of the FLSA and New Jersey law and failed to pay them required minimum and overtime wages. Before the Court is Plaintiffs' "Motion for Order Authorizing Notice to Similarly Situated Persons Pursuant to 29 U.S.C. § 216(b)," in which Plaintiffs seek conditional certification of this case as a collective action under the FLSA and ask that notice of this action be sent to similarly situated persons. For the following reasons, we grant the Motion.
Gateway is a mortgage lender with more than 50 branch offices, which markets home loans to residential customers across the country through nearly 500 loan officers. (Reich Decl. ¶ 3.) Rocha was employed by Gateway as loan officer in American Forks, Utah from February 2012 to September 2012. (Rocha Decl. ¶¶ 2-3.). He maintains that he was an inside-sales loan officer and that his primary job responsibility was to sell home loans to borrowers by telephone from inside Gateway's office.1 (Id. ¶¶ 2, 5.) He reports that he routinely worked more than 40 hours per week, sometimes as many as 50-60 hours per week, and, after his first three months of employment, was not paid minimum or overtime wages by Gateway. (Id. ¶¶ 6-8.) Gateway's employment records for Rocha state that he was paid $3000.00 per month for his first 90 days of employment and was paid solely by commission thereafter. (Sandstrom Decl. Ex. 2 at FOA 00162.)
Jeter was employed by Gateway as a loan officer in Brigantine, New Jersey from April 2012 to May 2014. (Jeter Decl. ¶¶ 2-3.) He asserts that he was employed as an inside-sales loan officer and that his primary job responsibility was to sell home loans to customers on the phone from inside Gateway's office. (Id. ¶¶ 2, 5.) He contends that he regularly worked more than 40 hours per week and often worked 50-60 hours per week, and he was not paid minimum or overtime wages by Gateway. (Id. ¶¶ 6-8.) Gateway's records show that it classified Jeter as exempt from federal wage and hour requirements, meaning that he was considered to be ineligible for overtime pay for hours worked in excess of 40 in one week. (Sandstrom Decl. Ex. 10 at FOA 00061.) He was paid on a commission only basis. (Jeter Decl. ¶ 6.)
The Complaint alleges the following. All of Gateway's inside sales loan officers employed during the relevant period had the primary duty of selling residential mortgage loans from inside Gateway's offices. (Compl. ¶ 8.) During the relevant time period, Gateway unilaterally dictated and controlled the terms of employment of Plaintiffs and the potential members of the collective, including the nature of their work, their wages, their classification asexempt employees, their productivity requirements, and how their hours were tracked. (Id. ¶¶ 10-11.) Pursuant to its policies, Gateway knowingly permitted Plaintiffs and prospective members of the collective to arrive early for work, work late, and work on weekends so that they regularly worked more than 40 hours per week. (Id. ¶ 12.) Gateway did not require Plaintiffs and prospective members of the collective to maintain accurate, contemporaneous records of their work hours. (Id. ¶ 13.) Pursuant to Gateway's policies, Plaintiffs and the prospective members of the collective did not receive a weekly guaranteed salary of at least $455 (the federal minimum wage for a 40 hour workweek), but were paid on a commission basis, so that they worked hours for which they did not receive the minimum wage. (Id. ¶¶ 14-15.) Plaintiffs and the prospective members of the collective also did not receive overtime pay for hours worked in excess of 40 hours of work per week. (Id.)
Plaintiffs seek to prosecute this matter as a collective action pursuant to 29 U.S.C. § 216(b)2 on behalf of the following FLSA Collective:
All People who worked as inside sales Loan Officers for Defendant, its subsidiaries, or affiliated companies at any time during the maximum limitations period who worked more than 40 hours in any week without receiving all overtime compensation required by federal law or wages over the required minimum level for every hour worked.
(Id. ¶ 17.) Plaintiffs maintain that they are members of the FLSA Collective defined above. (Id. ¶ 18.)
The Complaint asserts two claims pursuant to the FLSA and two claims pursuant to New Jersey law. Count I asserts a claim on behalf of the FLSA Collective for failure to pay required minimum wages in violation of 29 U.S.C. § 206(a)(1)(C). (Id. ¶¶ 35-42.) Count II asserts a claim on behalf of the FLSA Collective for failure to pay required overtime wages in violation of 29 U.S.C. § 207(a)(1). (Id. ¶¶ 44-50.) Count III asserts a claim on behalf of Plaintiff Jeter and a sub-class of individuals who were employed as inside sales Loan Officers for Gateway in the state of New Jersey at any time during the maximum limitations period (the "New Jersey Sub-Class") for failure to pay minimum and overtime wages in violation of N.J. Stat. Ann. 34:11-56(a)(4) and N.J. Admin. Code § 12:56-6.1. (Id. ¶¶52-66.) Count IV asserts a claim on behalf of Plaintiff Jeter and the New Jersey Sub-Class for failure to pay for all hours worked in violation of N.J. Admin. Code § 12:56-5.1. (Id. ¶¶ 52-81.) Plaintiffs have not yet moved for certification of the New Jersey Sub-Class.
Plaintiffs have moved for conditional certification of this case as a collective action pursuant to 29 U.S.C. § 216(b) and ask that we authorize the service of their proposed Notice "to a seventeen-state putative collective defined to include all persons Gateway . . . employed as a commission-only Loan Officer during any workweek in the last three years." (Pl. Mem. at 1.)
"Collective actions brought under the FLSA are governed by § 216(b), which provides for an opt-in procedure for plaintiffs desiring to be included in the litigation." Harrison v. DelGuerico's Wrecking & Salvage, Inc., 305 F.R.D. 85, 87 (E.D. Pa. 2015) (citing 29 U.S.C. § 216(b)). "There are two requirements for potential plaintiffs to be included in the collective action: plaintiffs must (1) be 'similarly situated' and (2) give written consent." Id. (quoting 29 U.S.C. § 216(b)). "However, the 'similarly situated' standard for employees to proceedcollectively under the FLSA is not defined by the statute." Id. at 88 (citing Symczyk v. Genesis Healthcare Corp., 656 F.3d 189, 192 (3d Cir. 2011), reversed on other grounds Genesis Health Care Corp. v. Symczyk, 133 S. Ct. 1523 (2013)). "The FLSA also does not provide specific procedures by which potential plaintiffs may opt in, but the Supreme Court has held that 'district courts have discretion, in appropriate cases, to implement [§ 216(b)] . . . by facilitating notice to potential plaintiffs.'" Id. (alterations in original) (quoting Hoffmann-La Roche, Inc. v. Sperling, 493 U.S. 165, 169 (1989)).
The United States Court of Appeals for the Third Circuit has adopted a two-step approach for certification of collective actions pursuant to 29 U.S.C. § 216(b). Zavala v. Wal Mart Stores Inc., 691 F.3d 527, 535-36 (3d Cir. 2012). "During the initial phase, which is conducted early in the litigation process when the court has minimal evidence, 'the court makes a preliminary determination whether the employees enumerated in the complaint can be provisionally categorized as similarly situated to the named plaintiff.'" Harrison, 305 F.R.D. at 88 (quoting Symczyk, 656 F.3d at 192). "'[I]f the plaintiff carries [his] burden at this threshold stage, the court will conditionally certify the collective action for the purposes of notice and pretrial discovery.'" Id. (alterations in original) (quoting Symczyk, 656 F.3d at 192). However, Zavala, 691 F.3d at 536 () (quoting Symczyk, 656 F.3d at 194). "After discovery, and with the benefit of a much thicker record than it had at the notice stage, a court following this approach then makes a conclusive determination as to whether each plaintiff who has opted in to the collective action is in fact similarly situated to thenamed plaintiff." Symczyk, 656 F.3d at 193 (internal quotation omitted). "If the plaintiff carries his heavier burden during the second phase 'the case may proceed to trial as a collective action.'" Harrison, 305 F.R.D. at 88 (quoting Symczyk, 656 F.3d at 193).
The Third Circuit has instructed district courts to apply "a 'fairly lenient 'standard' . . . for conditional certification" at the first step. Zavala, 691 F.3d at 535 (quoting Zavala v. Wal-Mart Stores, Inc., Civ. A. No. 03-5309, 2010 WL 2652510, at *2 (D.N.J. June 25, 2010)).3 Thus, at the first step, the "[p]laintiff must make 'a modest factual showing that the similarly situated requirement is satisfied.'" Titchenell v. Apria Healthcare Inc., Civ. A. No. 11-563, 2012 WL 3731341, at *3 (E.D. Pa. Aug. 29, 2012) (quoting Bosley v. Chubb Corp., Civ. A. No. 04-4598, 2005 WL 1334565, at *3 (E.D. Pa. June 3, 2005)). "Without evaluating the merits of plaintiff's case, the Court must determine 'whether plaint...
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