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Holick v. Cellular Sales of New York, LLC

United States District Court, N.D. New York

March 28, 2013

JAN P. HOLICK, JR., STEVEN MOFFITT, JUSTIN MOFFITT, GURWINDER SINGH, and JASON MACK, Plaintiffs, on behalf of themselves and all others similarly situated,
v.
CELLULAR SALES OF NEW YORK, LLC, and CELLULAR SALES OF KNOXVILLE, INC., Defendants

Page 312

[Copyrighted Material Omitted]

Page 313

For Plaintiffs: GLEASON DUNN WALSH & O'SHEA, OF Ronald G. Dunn, Esq., Daniel A. Jacobs, Esq., Albany, New York.

For Defendant Cellular Sales of New York, L.L.C.: CHAMBERLAIN HRDLICKA WHITE WILLIAMS & AUGHTRY, OF Charles L. Carbo, III, Esq., Houston, Texas.

For Defendant Cellular Sales of Knoxville, Inc.: HINMAN STRAUB, P.C. OF Joseph M. Dougherty, Esq., Albany, New York.

OPINION

Honorable Norman A. Mordue, U.S. District Judge.

Page 314

MEMORANDUM-DECISION AND ORDER

I. INTRODUCTION

The present action is one brought pursuant to the Fair Labor Standards Act (the " FLSA" ), 29 U.S.C. § 201 et seq. and the New York State Labor Law (the " Labor Law" ), Article 6, § 190 et seq., and Article 19, § 650 et seq .. Plaintiffs allege tat they, and similarly situated Sales Representatives in New York, were misclassified as independent contractors in violation of the FLSA and the Labor Law and were therefore deprived of their guaranteed compensation under both laws. There are five motions presently pending before the Court. Both defendants move to dismiss the complaint pursuant to Fed.R.Civ.P. 12 (b) (1) for lack of subject matter jurisdiction, or in the alternative to compel mediation and stay the proceedings pending mediation. Defendant Cellular Sales of Knoxville, Inc. (" CSOKI" ) moves to dismiss the complaint against it for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12 (b) (2). Plaintiffs move, pursuant to 29 U.S.C. § 216(b), for this Court to conditionally certify a collective action and issue notice of the pending claims under the FLSA to all similarly situated

Page 315

individuals so that these current and former Sales Representatives will have the opportunity to exercise their rights under the FLSA. In addition, there are two letter motions, asking for the Court's consideration of additional matters. Plaintiffs oppose defendants' motions to dismiss. Defendants oppose plaintiffs' motion for conditional certification.

II. FACTUAL AND PROCEDURAL BACKGROUND

Defendants operate retail store locations throughout New York where sales representatives sell Verizon Wireless products and services on defendants' behalf to customers who enter fixed location stores. Plaintiffs assert that they were hired as sales representatives by defendants, but misclassified as independent contractors by defendants who at the outset of their relationship with plaintiff required plaintiffs to individually " incorporate" into limited liability companies. According to plaintiffs, this allowed defendants to shift their federal tax payroll burden for sales representatives' earnings onto each sales representative as if each was self-employed. According to defendants, they had non-exclusive independent sales agreements with plaintiffs agreements which specifically provided that the relationship between Cellular Sales of New York, L.L.C. (" CSNY-LLC" ) and plaintiffs was that of an independent contractor. Based upon these sales agreements, defendants assert that plaintiffs, and anyone else the plaintiffs' sales companies' hired, were employees of the sales companies, not CSNY-LLC. CSNY-LLC terminated its arrangement with plaintiffs' sales companies in 2011.

Defendants first moves to dismiss the complaint based on lack of subject matter jurisdiction. Specifically, defendants assert plaintiffs failed to comply with a condition precedent prior to filing this lawsuit. They contend that plaintiffs and CSNY-LLC are parties to afore-mentioned written non-exclusive sales agreements which contain valid and non-binding mediation clauses. Based thereupon, defendants argue that the Court should dismiss the complaint or stay the proceedings pending mediation of plaintiffs' claims.

Defendant CSOKI also moves to dismiss for lack of personal jurisdiction. According to defendants, it was CSNY-LLC, not CSOKI, that entered into non-exclusive independent sales agreements with plaintiffs' sales companies. According to defendants, CSOKI, has never entered into a sales agreement, or any other type of agreement, with plaintiffs or plaintiffs' sales companies. Defendants assert CSOKI has never employed plaintiffs, set their rate of pay, nor did it ever handle or issue paychecks or any other type of payment to ...


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