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Vaughan v. Mortgage Source LLC

April 14, 2010


The opinion of the court was delivered by: A. Kathleen Tomlinson, Magistrate Judge



Plaintiff Desiree Vaughan ("Vaughan" or "Plaintiff") brings this action on behalf of herself and others similarly situated, seeking unpaid minimum wage and overtime compensation from Defendants Mortgage Source LLC ("Mortgage Source") and company President, Michael J. Lederman ("Lederman") (together, "Defendants"), pursuant to the Fair Labor Standards Act of 1938, as amended ("FLSA"), 29 U.S.C. §§ 201 et seq., the New York Wage and Hour Law, New York Labor Law Articles 6 and 19 and the New York Codes Rules and Regulations §§ 138-2.1 et seq. ("New York Labor Articles"). Plaintiff now moves for (1) conditional certification as an FLSA collective action pursuant to 29 U.S.C. § 216(b) ("Section 216(b)"); (2) Court authorization of a proposed notice to all individuals who are similarly situated in this potential collective action; and (3) Defendants' production of a computer-readable data file containing the names, addresses, and telephone numbers of certain of Defendants' former and current employees (i.e., potential opt-in members). For the reasons set forth below, Plaintiff's motion for

(1) conditional certification under Section 216(b) of the FLSA, (2) Court-authorized notice, and (3) Defendants' production of the requested data file is GRANTED. The proposed notice submitted under cover letter dated May 19, 2009 [DE 36] is approved to the extent set forth below.


A. Alleged Facts

Plaintiff Desiree Vaughan was formerly employed as a loan officer by Defendants from May 2006 to September 2006 and worked at Defendants' main office located in Garden City, New York, and its previous location in Great Neck, New York. Complaint ("Compl.") [DE 1], ¶ 5; Pl.'s Mem. at 2; Pl.'s Ex. C, ¶¶ 2, 3. Defendant Mortgage Source provides mortgage banking services to consumers in New York State. Compl., ¶ 8. Defendant Lederman is the President of Mortgage Source and has held that position at all times relevant to the allegations set forth in the Complaint. Id., ¶ 10. Lederman exercised operational control as well as control over significant business functions of Mortgage Source, determined employee compensation, made hiring decisions, and acted on behalf of and in the interest of the company in devising, directing, implementing, and supervising the challenged wage and hour practices and policies relating to loan officers. Id.

Plaintiff alleges that Defendants managed the loan officers' employment, including the amount of overtime worked, and that Defendants dictated, controlled and ratified the wage and hour and all related employee compensation policies of Mortgage Source. Id., ¶ 18. Specifically, Plaintiff maintains that "Defendants uniformly administered and enforced their sales policies to all loan officers through a training program, weekly meetings, supervision, and its production goals and quotas." Pl.'s Mem. at 3; Pl.'s Exs. C-N, ¶¶ 4, 9. Furthermore, according to Plaintiff, Defendants followed uniform policies in connection with the loan officers, including mandating that loan officers satisfy daily, weekly and monthly production goals and quotas and requiring them to work evenings, early mornings and weekends, for the purpose of selling more loans for Defendants. Pl.'s Mem. at 3; Pl.'s Exs. C-N, ¶¶ 4-7, 9.

With respect to the alleged pay plan and common scheme, Plaintiff contends that pursuant to Mortgage Source's uniform policies, Plaintiff and all similarly situated loan officers were paid commissions only -- i.e., they did not receive a guaranteed salary (which, according to Plaintiff, would have been $455 per week for a 40-hour work week) or an hourly rate for the hours they worked. Plaintiff further asserts that, "[a]s a result of Defendants' pay plan, time requirements and production goals, loan officers regularly worked in excess of forty (40) hours per week without any overtime pay." Pl.'s Mem. at 4; Compl., ¶¶ 19-22. Moreover, according to Plaintiff, "Defendants furthered their common scheme by failing to keep any records of the time worked by their loan officers even though they were required to do so under the FLSA." Pl.'s Mem. at 4 (citing 29 C.F.R. § 516.2); Pl.'s Exs. C-N, ¶ 10; see also Compl., ¶ 27 ("Neither Plaintiff nor the similarly situated loan officers have been required to record their time worked, and Defendants failed to maintain accurate time records as required by the FLSA and the New York Labor Articles.").

Regarding the jobs performed by loan officers at Mortgage Source, Plaintiff maintains that all loan officers had the same job titles, compensation plans, job descriptions and job requirements. Compl., ¶¶ 12-32; Pl.'s Mem. at 2. The loan officers' primary duty was "to sell residential mortgage loans." Compl., ¶ 15. In particular, loan officers sold "home loans by calling prospective customers from Defendants' office over the telephone, inputting their information into the Mortgage Source computer database and closing a deal." Pl.'s Exs. C-N, ¶ 5.

B. Procedural History

Plaintiff commenced this action by filing a Complaint on November 21, 2008 [DE 1]. The parties filed their briefs in support of and in opposition to the instant motion for conditional certification as an FLSA collective action [DE 32-35] on May 13, 2009. On May 19, 2009, the parties filed a joint letter and proposed Notice form, stating that they agree on the attached notice if the Court grants Plaintiffs' Motion for Conditional Certification for both overtime and minimum wage violations. If the Court does not grant the Plaintiffs' motion as to their overtime claims only, the Defendants request that references to overtime in the proposed notice be stricken and that notice be issued only as to Plaintiffs' minimum wage claim. The parties do not dispute that a collective action should proceed on Plaintiffs' minimum wage claims.

See DE 36. In other words, the parties have agreed that the instant motion for conditional certification should be granted as to Plaintiff's minimum wage claim and have agreed to a proposed notice for such claim. The only issue here, therefore, is whether conditional certification should be granted with respect to Plaintiff's claim for overtime wages. In the event the Court grants Plaintiff's motion for overtime wages, then Defendants agree to the proposed Notice for that claim as well.

On June 23, and November 16, 2009, respectively, Plaintiff sought leave to supplement her motion for the sole purpose of referring the Court to two decisions which, according to Plaintiff, provided "directly on-point authority." See DE 37, 38. Defendants did not object to Plaintiff's request for leave to supplement and, in any event, the Court had reviewed the appended decisions on its own. In both decisions submitted by Plaintiff -- Bifulco v. Mortgage Zone, Inc., 262 F.R.D. 209 (E.D.N.Y. 2009) and Sexton v. Franklin First Financial, Ltd., No. 08-CV-4950, 2009 WL 1706535 (E.D.N.Y. Jun. 16, 2009) -- Judge Bianco granted a motion for conditional certification as an FLSA collective action pursuant to Section 216(b), based upon factual circumstances similar to the instant case.*fn1 Judge Bianco's decisions in Bifulco ...

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