The opinion of the court was delivered by: David G. Larimer United States District Judge
Plaintiff Patrick Tracy, on behalf of himself and a class of plaintiffs who have opted in, brings this action against defendant NVR, Inc. ("NVR") pursuant to the Fair Labor Standards Act, 29 U.S.C. §201 et seq. ("FLSA") and the New York Labor Law. Commenced in 2004, this matter presents claims for overtime compensation by and on behalf of Ryan Homes Sales and Marketing Representatives ("SMRs") employed by NVR. NVR claims that the SMRs are exempt from the FLSA's overtime provisions under the outside sales exemption. Plaintiffs disagree.
In June 2007, the Court conditionally certified the matter as an FLSA collective action, concluding that Tracy had met his minimal burden to justify issuance of notice to class members. (Dkt. #136). Since notice was issued, numerous SMRs have consented to join the litigation, and the parties have spent four years conducting discovery and engaging in vigorous motion practice.
NVR now moves to decertify the FLSA collective action, for summary judgment dismissing the claims of three opt-in plaintiffs whose testimony allegedly establishes that they were correctly classified as exempt outside salespersons, and to strike some of the evidence submitted by plaintiffs in opposition to the summary judgment motion. Plaintiffs have cross moved for certification of a class action under Fed. R. Civ. Proc. 23, for summary judgment in favor of the three opt-in plaintiffs that are the subject of NVR's summary judgment motion, and to strike some of the evidence submitted by NVR in support of the decertification and summary judgment motions.
For the reasons that follow, NVR's motion to decertify the collective action (Dkt. #616) is granted, plaintiff's motion for Rule 23 certification (Dkt. #693) is denied, and the remaining motions (Dkt. #607, #610, #613, #654, #662, and #679) are denied as moot.
In brief, this action challenges NVR's classification of its SMRs as "outside salespersons" for purposes of the FLSA. SMRs are engaged in selling new homes to be constructed in newly-developed housing communities. SMRs work on a commission basis, and are not expected to track or report their working hours to NVR. Their primary duty is to sell new, to-be-constructed homes, although the means by which SMRs accomplish that goal, and the amount of time they opt to allocate to each of the activities customarily associated with it, are largely within each SMR's personal discretion. Although SMRs are not assigned to a permanent office, their operations are based out of model homes or trailers in or near the real properties that are intended for development and sale by NVR.
Familiarity with the pertinent claims and facts, as summarized below and described in detail in the Court's prior decision denying summary judgment to NVR (Dkt. #34), is presumed.
The FLSA requires compensation at one and a half time the regular rate when an employer requires the employee to work more than forty hours per week. See 29 U.S.C. §207(a)(2). To establish an FLSA claim or a parallel claim under the New York Labor Law, plaintiff must prove that: (1) he was an employee who was eligible for overtime (i.e., that he was not exempt from the Act's overtime pay requirements); and (2) that he actually worked overtime hours for which he was not compensated. See Barry v. Town of Elma, 2005 WL 711842 at *2 (W.D.N.Y. 2005).
However, several categories are exempted from the FLSA's overtime compensation requirements, including those classified as "outside salespersons," generally defined as any employee who is, "customarily and regularly engaged away from his employer's business in . . . making sales [or] obtaining orders . . ." 29 C.F.R. 541.500.
Alleged exemptions are narrowly construed against the employer, and once Tracy has established a prima facie case by showing that he performed more than forty hours per week as an employee of NVR, for which he was not compensated at the statutory rate, NVR bears the burden of demonstrating that Tracy's SMR position is an FLSA-exempt "outside sales" position. See Arnold v. Ben Kanowsky, Ind., 361 U.S. 388, 392 (1960).
I. NVR's Motion for Decertification of the FLSA Collective Action
In contrast to the lenient standard required for conditional certification of a collective action under the FLSA, the Court, with the benefit of a fuller record, must apply a more stringent standard in considering NVR's motion for decertification. While the Second Circuit has not prescribed a specific course of analysis of a motion to decertify, courts in this circuit have traditionally looked to: (1) whether the factual and employment settings of the individual plaintiffs are disparate; (2) whether the defenses available to the defendant are individual to each plaintiff; and (3) the fairness and procedural considerations militating for or against collective action treatment. See Morano v. Intercontinental Capital Group, Inc., 2012 ...