United States District Court, S.D. New York
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For William Klein, Plaintiff: Robert Lee Rotmil, LEAD ATTORNEY, Morganville, NJ.
For Torrey Point Group, LLC, Defendant: Neil Anthony Capobianco, LEAD ATTORNEY, Dentons U.S. LLP (NY), New York, NY; Lindsay Faye Ditlow, Dentons U.S. LLP (NY), New York, NY.
OPINION AND ORDER
KATHERINE POLK FAILLA, United States District Judge.
Plaintiff William Klein brings this employment action alleging that Defendant Torrey Point Group, his former employer, failed to make required overtime, severance, commission, and bonus payments to him in violation of the Fair Labor Standards Act (" FLSA" ), the New York Labor Law (" NYLL" ), and various common-law causes of action. Pending before the Court are Defendant's motion for summary judgment with respect to all claims, Plaintiff's cross-motion for partial summary judgment, and Plaintiff's motion to compel production and for sanctions. For the reasons set forth in the remainder of this Opinion, the Court (i) grants in part and denies in part Defendant's motion for summary judgment; (ii) grants in part and denies in part Plaintiff's motion for summary judgment; (iii) grants in part and denies in part Plaintiff's motion to compel production; and (iv) denies Plaintiff's motion for sanctions and/or costs and fees.
A. Plaintiff's Employment with Defendant
The following facts are undisputed or, with respect to the issues on which a party has moved for summary judgment, construed in the light most favorable to the non-movant. Defendant Torrey Point Group, a software and hardware reseller and consulting firm, hired Plaintiff William Klein as an Inside Account Manager on February 1, 2011. (Def. 56.1(a) ¶ 1; Pl. 56.1(b) ¶ 1). The job offer that Plaintiff
ultimately accepted was memorialized in an offer letter (the " Offer Letter" ), which incorporated by reference a written job description that, inter alia, set forth a detailed list of " Primary Responsibilities." ( See Ditlow Decl. Exh. A).
A separate spreadsheet encapsulated the compensation plan for Plaintiff's position. (Compl. Exh. A 4). Plaintiff was compensated with an annual salary of $55,000, or $4,583.33 per month, supplemented by a bonus and commissions based " on gross profits on paid revenues ... secured by" Plaintiff. (Def. 56.1(a) ¶ ¶ 3, 4, 7; Pl. 56.1(b) ¶ ¶ 3, 4, 7). No provision was made for the payment of overtime. (Def. 56.1(a) ¶ 18; Pl. 56.1(a) ¶ ¶ 23, 24).
Plaintiff began his employment on February 7, 2011. (Def. 56.1(a) ¶ 10; Pl. 56.1(b) ¶ 10). His duties involved supporting the sales efforts of Chris Kolb, one of Defendant's Senior Account Managers, and his " Primary Responsibilities" were enumerated as follows:
o Provide price quote assistance, product sourcing, OEM [original equipment manufacturer] communication, customer credit applications for external sales team members in field
o Facilitate communication between operations/finance and external sales team members
o Track product delivery dates, shipments, engineering needs, quality performance and communicate these to the customer and internal business units
o Manage and maintain pipeline opportunities, CRM [customer relationship management], sales reports data for all sales team members
o Support communication between sales team and our clients
o Explore new OEM vendor partnerships and assist in the development of these new product sales strategies
o Single point of contact for sales team and help troubleshoot issues in the field as they arise
o Assist in the development and presentation of training materials for external sales team members
o Develop & Maintain communication (both internal and external) channels
o Review sales orders, purchase orders, NSP's and verify all aspects meet minimum margin requirements while submitting to finance for approval
o Support the sales team to help plan events, customer visits and general customer marketing initiatives
o Sell and maintain accounts on an as needed basis
o Organize sales and marketing materials to support customer presentations by sales team
o Respond to RFP's [requests for proposals], RFI's [requests for information] and general corporate paperwork
o Run reports of sales team results to goal each week in Sales Force
(Ditlow Decl. Exh. A).
Plaintiff's employment was terminated approximately eight months after it began, on October 5, 2011. (Def. 56.1(a) ¶ 19; Pl. 56.1(b) ¶ 19). Thereafter, Defendant provided Plaintiff with a separation agreement (the " Separation Agreement" ) that conditioned the payment of two weeks' severance pay on Plaintiff's execution of a general release of all claims against Defendant. (Def. 56.1(a) ¶ ¶ 20, 22, 23; Pl. 56.1(b) ¶ ¶ 20, 22, 23). Plaintiff refused to agree to this release. (Def. 56.1(a) ¶ 21; Pl. 56.1(b) ¶ 21).
B. The Instant Litigation
Plaintiff brought this action on February 16, 2012, seeking what he alleges are the overtime, severance, bonus, and commission payments rightfully owed, as well as pleading a quantum meruit claim. (Dkt. #1). Defendant moved for summary judgment with respect to all claims on July 18, 2013. (Dkt. #31).
On July 23, 2013, Plaintiff filed a cross-motion for partial summary judgment with respect to (i) the FLSA administrative exemption, (ii) the proper way to determine the amount of the allegedly owed overtime payments, and (iii) the propriety of Plaintiff seeking commissions based on customer payments received after his termination. (Dkt. #42). Plaintiff also filed a separate motion to compel discovery and for sanctions. (Dkt. #41). Plaintiff then filed his opposition to Defendant's motion for summary judgment on August 1, 2013. (Dkt. #49).
On August 2, 2013, Defendant opposed Plaintiff's motion to compel production and for sanctions (Dkt. #54), as well as Plaintiff's cross-motion for partial summary judgment (Dkt. #58). Plaintiff then filed a reply supporting his motion to compel and for sanctions on August 5, 2013. (Dkt. #59).
A. Applicable Law
1. Summary Judgment Generally
Under Fed.R.Civ.P. 56(a), summary judgment may be granted only if all the submissions taken together " show that there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law." See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The moving party bears the initial burden of demonstrating " the absence of a genuine issue of material fact." Celotex, 477 U.S. at 323. A fact is " material" if it " might affect the outcome of the suit under the governing law," and is genuinely in dispute " if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248; see also Jeffreys v. City of New York, 426 F.3d 549, 553 (2d Cir. 2005) (citing Anderson, 477 U.S. at 248). The movant may discharge this burden by showing that the nonmoving party has " fail[ed] to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322; see also Selevan v. N.Y. Thruway Auth., 711 F.3d 253, 256 (2d Cir. 2013) (finding summary judgment appropriate where the non-moving party fails to " come forth with evidence sufficient to permit a reasonable juror to return a verdict in his or her favor on an essential element of a claim" (internal quotation marks omitted)).
If the moving party meets this burden, the nonmoving party must " set out specific facts showing a genuine issue for trial" using affidavits or otherwise, and cannot rely on the " mere allegations or denials" contained in the pleadings. Anderson, 477 U.S. at 248, 250; see also Celotex, 477 U.S. at 323-24; Wright v. Goord, 554 F.3d 255, 266 (2d Cir. 2009). The nonmoving party " must do more than simply show that there is some metaphysical doubt as to the material facts," Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (internal quotation marks omitted), and cannot rely on " mere speculation or conjecture as to the true nature of the facts to overcome a
motion for summary judgment," Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 12 (2d Cir. 1986) (quoting Quarles v. General Motors Corp., 758 F.2d 839, 840 (2d Cir. 1985)). Furthermore, " [m]ere conclusory allegations or denials cannot by themselves create a genuine issue of material fact where none would otherwise exist." Hicks v. Baines, 593 F.3d 159, 166 (2d Cir. 2010) (quoting Fletcher v. Atex, Inc., 68 F.3d 1451, 1456 (2d Cir. 1995) (internal quotation marks and citations omitted)).
2. The FLSA's Overtime Requirement and the Administrative Exemption
The FLSA mandates that employers pay time-and-a-half per hour when employees work more than 40 hours per week. 29 U.S.C. § 207(a). This requirement is subject to several exemptions, including one for " administrative" employees. Id. § 213(a)(1). According to Department of Labor (" DOL" ) regulations, an employee who makes more than $455 per week -- such as Plaintiff here -- is an administrative employee if two separate requirements are satisfied. First, the employee's " primary duty" must consist of " the performance of office or nonmanual work directly related to management policies or general business operations of his employer." Id. § 541.200(a)(2). Second, the employee must exercise " discretion and independent judgment" in executing his duties. Id. § 541.200(a)(3).
" Primary duty," under the DOL regulations, " means the principal, main, major or most important duty" of the employee, as determined based on factors such as " the relative importance of the exempt duties as compared with other types of duties; the amount of time spent performing exempt work; the employee's relative freedom from direct supervision; and the relationship between the employee's salary and the wages paid to other employees for the kind of nonexempt work performed by the employee." 29 C.F.R. § 541.700. This exemption, as with all FLSA exemptions, is to be construed narrowly. Schwind v. EW & Associates, Inc., 357 F.Supp.2d 691, 704 (S.D.N.Y. 2005) (citing Reich v. New York, 3 F.3d 581, 586-87 (2d Cir. 1993)). The question of what an employee's duties are " is one of fact, but the question of whether those activities" fall into an FLSA exemption is a question of law. Chenensky v. New York Life Ins. Co., No. 07 Civ. 11504 (WHP), 2010 WL 2710586, at *2 (S.D.N.Y. June 1, 2010) (citing Icicle Seafoods v. Worthington, 475 U.S. 709, 714, 106 S.Ct. 1527, 89 L.Ed.2d 739 (1986)).
The Secretary of Labor, via interpretive regulations, has provided a helpful explanation of how to identify duties " directly related to management policies or general business operations." They are duties " directly related to assisting with the running or servicing of the business, as distinguished, for example, from working on a manufacturing production line or selling a product in a retail or service establishment." 29 C.F.R. § 541.201(a). Illustratively, they include, without limitation, such duties as:
tax; finance; accounting; budgeting; auditing; insurance; quality control; purchasing; procurement; advertising; marketing; research; safety and health;
personnel management; human resources; employee benefits; labor relations; public relations; government relations; computer network; internet and database administration; legal and ...