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Thompson v. World Alliance Financial Corp.

August 20, 2010

ANTHONY THOMPSON ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
WORLD ALLIANCE FINANCIAL CORP D/B/A SENIOR LENDING NETWORK, A NEW YORK CORPORATION, VERTICAL LEND INC., MORTGAGE WAREHOUSE, DAVID PESKIN, AND NICHOLAS HAHN, DEFENDANTS.



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

MEMORANDUM AND ORDER

I. PRELIMINARY STATEMENT

Plaintiff Anthony Thompson ("Thompson" or Plaintiff") brings this action on behalf of himself and others similarly situated, seeking unpaid minimum wage and overtime compensation from Defendants World Alliance Financial Corp., Vertical Lend Inc., Mortgage Warehouse, David Peskin and Nicolas Hahn (collectively, "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, and the New York Labor Articles 6 and 19 and the New York Codes Rules and Regulations §§ 138-2.1 et seq. ("New York Labor Articles"). The parties have consented to my jurisdiction for all purposes in this case, including entry of judgment.

Currently before the Court is Plaintiff Thompson's motion 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). See DE 37, 38. Also before the Court is Defendants' motion requesting that the Court appoint lead counsel for Plaintiffs [DE 55]. Also before the Court are Plaintiff Lauretti's motions for (1) an order to show cause [DE 58], and (2) to strike an attorney designation on certain opt-in forms.

For the reasons set forth below, Plaintiff Thompson's motion for (1) conditional certification under Section 216(b), (2) Court-authorized notice, and (3) Defendants' production of the requested data file is GRANTED. The proposed notice is approved with the modifications set forth below. Defendants' motion to appoint lead counsel is GRANTED. Plaintiff Lauretti's motion for an order to show cause and motion to strike are deemed MOOT.

II. BACKGROUND

A. Alleged Facts*fn1

Plaintiff Thompson was formerly employed as a loan officer by Defendants and worked at Defendants' office in Melville, New York. Complaint ("Compl.") [DE 1], ¶ 5; Pl.'s Mem. [DE 37] at 2; Pl.'s Ex. C, ¶¶ 2, 3. Defendants World Alliance, Vertical Lend and Mortgage Warehouse (collectively, "World Alliance")*fn2 provide mortgage banking services to consumers in New York State and in other states. Compl., ¶ 7. At all times relevant to the allegations set forth in the Complaint, Defendant Peskin was an owner, President and director of World Alliance. Id., ¶ 15; Pl.'s Mem. at 2. Similarly, Defendant Hahn was an owner and director of World Alliance at all times relevant to the allegations in the Complaint. Compl., ¶ 17; Pl.'s Mem. at 3. Both Peskin and Hahn exercised operational control as well as control over significant business functions of World Alliance; 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. Compl., ¶¶ 15, 17; Pl.'s Mem. at 2.

Plaintiff alleges that Peskin and Hahn 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 at World Alliance. Compl., ¶¶ 15, 17, 26; Pl.'s Mem. at 2. Specifically, Plaintiff maintains that "Defendants uniformly administered and enforced their sales policies to all loan officers through a training program, weekly meetings, supervision, and production goals and quotas." Pl.'s Mem. at 3; Pl.'s Ex. C, ¶ 4; Ex. D, ¶¶ 4, 11; Ex. E, ¶¶ 4, 10. Furthermore, according to Plaintiff, Defendants followed "uniform policies" with regard to the loan officers, including requiring loan officers to 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-E, ¶ 7.

In connection with World Alliance's alleged pay plan and common scheme, Plaintiff contends that pursuant to the company's uniform policies, all loan officers were paid commissions only -- i.e., they did not receive a guaranteed salary (which, according to Plaintiff, would have been at least $455 per week for a 40-hour work week), for at least a portion of the class period. Moreover, loan officers did not receive overtime pay for working in excess of 40 hours per week. Pl.'s Mem. at 3-5; Pl.'s Exs. C-E, ¶¶ 6, 8, 9; Compl., ¶¶ 22-35. Plaintiffs also assert that "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, E, ¶ 10; Ex. D., ¶ 12; see also Compl., ¶ 36 ("During significant portions of the statutory period, neither the named 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 World Alliance, Plaintiff maintains that all loan officers had the same job titles, compensation plans, job descriptions and job requirements. Compl., ¶¶ 22-25; Pl.'s Mem. at 3. The loan officers' primary duty was "to sell residential mortgage loans." Compl., ¶ 23. In particular, loan officers sold "home loans by calling prospective customers from Defendants' office over the telephone, inputting their information into the Mortgage Warehouse computer database and closing a deal." Pl.'s Exs. C-E, ¶ 5.

B. Procedural History

Plaintiff Thompson commenced this action by filing a Complaint on December 9, 2008 [DE 1] (the "Thompson Action").*fn3 I met with the parties in the Thompson Action for an Initial Conference on March 26, 2009 [DE 26], and issued a Case Management and Scheduling Order [DE 25, 27] to govern the pretrial phase of the case.*fn4 On the same date, the parties in the Thompson Action filed their Consent to the Exercise of Jurisdiction by a United States Magistrate Judge, which Judge Spatt signed on April 8, 2009, thereby bringing the Thompson Action before me for all purposes. See DE 32. On June 10, 2009, Plaintiff Michael Lauretti ("Lauretti") commenced a similar action (the "Lauretti Action") on behalf of himself and others similarly situated, against Defendant World Alliance Financial Corp., alleging substantively identical factual allegations as in the Thompson Action. World Alliance is represented by the same counsel in both actions. Plaintiff Thompson filed the instant motion for certification as a collective action on August 7, 2009 [DE 37].

On September 18, 2009, I held a Status Conference with counsel for all parties in the Thompson and Lauretti Actions, during which counsel for Plaintiff Lauretti agreed to consolidation of the two cases. See DE 52. Counsel for Plaintiff Lauretti further stated he understood that by agreeing to consolidation, the parties were also agreeing to my jurisdiction for all purposes in both matters. Id. On the same date, the parties in the Lauretti Action filed their Consent to the Exercise of Jurisdiction by a United States Magistrate Judge, which Judge Spatt also signed on that date, thereby placing the Lauretti Action before me for all purposes.

See Lauretti Docket (2:09-cv-2471), DE 30.*fn5

Also during the September 18, 2009 conference, the issue of a proposed notice of pendency arose and counsel for the respective Plaintiffs presented argument as to whether a single notice should issue and, if so, why their respective law firm should be the one which the opt-in forms are returned. Counsel for Defendants asserted that a uniform notice of pendency should be issued but took no position as to which law firm should take the lead. See DE 52. After hearing from the parties, I directed that counsel conduct a good faith meet and confer within two weeks to work out a solution to the issues related to the notice of pendency. I further directed that if the parties could not work out such a resolution within that time frame, the parties would present their arguments to me concerning whether the notices should or should not be sent together and whether and to what extent the notices should be differentiated. Id.

During a follow-up conference held on October 27, 2009, counsel informed me that although they reached an agreement on the general form of the proposed notice of pendency, they disagreed as to which counsel should appear on the proposed notice. See DE 54. Counsel for Defendants consented to the use of the Thompson Plaintiffs' proposed notice, but asserted that only one set of attorneys should appear on the notice (taking no position as to which set of attorneys that should be). Id. After hearing from counsel for all parties, I reserved decision on approval of the proposed notice of pendency, and set a deadline for the Thompson Plaintiffs to submit a letter regarding their qualifications and capacity to act as lead counsel, since counsel for the Lauretti Plaintiffs had already made that submission. Id. I further directed that all pretrial deadlines set forth in the Amended Case Management and Scheduling Order [DE 27] previously issued in the Thompson Action were held in abeyance pending issuance of the Court's decision on the motion for conditional certification of the class. Id.

Currently before the Court is Plaintiff Thompson's motion for certification as a collective action [DE 37]. Annexed as exhibits to the motion are: (1) three former World Alliance loan officers' consent forms to join the collective action (Ex. A); (2) a printout of World Alliance's website dated August 7, 2009 (Ex. B); (3) the affidavit of named Plaintiff Anthony Thompson (Ex. C); the affidavits of two additional opt-in plaintiffs (Exs. D-E); (4) Defendants' answers to Plaintiff's first set of interrogatories (Ex. F); (5) Judge Bianco's decision in Sexton v. Franklin First Financial, Ltd., No. 08-CV-4950, 2009 WL 1706535 (E.D.N.Y. Jun. 16, 2009), granting a motion for conditional certification as an FLSA collective action under factual circumstances similar to the instant case, which Plaintiff asserts is "directly on-point authority" (Ex. G); and (6) Plaintiff's proposed Notice of Pendency (Ex. H). Plaintiff Thompson later submitted a Supplement in Support of its Motion to Proceed as a Collective Action, which contained the declaration of a third opt-in plaintiff. See DE 38, Ex. 1.

Defendants did not file any opposition to the certification motion and, in fact, informed the Court that they consented to conditional certification of the collective action. See DE 52. Plaintiff's motion for conditional certification is therefore unopposed. However, in light of the procedural context in which the motion is made and the impact the outcome will have on the way this case is conducted, the Court has nonetheless considered the merits of ...


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