United States District Court, E.D. New York
POONAM SHARMA, BRIAN ROACH, RONNEL JARIN, and LIKITA SIMON, on behalf of themselves and all other similarly situated, Plaintiffs,
BURBERRY LIMITED a/k/a BURBERRYS LIMITED, Defendant.
David Harrison, Esq., HARRISON, HARRISON & ASSOC., LTD., Red Bank, NJ, Attorneys for Plaintiffs.
Douglas Weiner, Esq., D. Maimon Kirschenbaum, Esq., JOSEPH & KIRSCHENBAUM LLP, New York, NY, Attorneys for Plaintiffs.
Lyle S. Zuckerman, Esq., Amy L. Bess, Esq., Joseph K. Mulherin, Esq., VEDDER PRICE P.C., New York, NY, Attorney for Defendant.
MEMORANDUM AND ORDER
LEONARD D. WEXLER, District Judge.
Plaintiffs Poonam Sharma ("Sharma"), Brian Roach ("Roach"), Ronnel Jarin ("Jarin"), and Likita Simon ("Simon"), sales associates for Burberry Limited ("Burberry" or "Defendant") bring this action on behalf of themselves and others similarly situated claiming violations of the FLSA and the New York State Labor Law ("Labor Law") for Defendant's failure to pay overtime for hours worked in excess of 40 hours per week. Defendant moves for a partial dismissal of Plaintiff's claim for "overtime on commission" pursuant to Federal Rules of Civil Procedure ("Fed.R.Civ.Proc."), Rule 12(b)(1), arguing that Defendant's Rule 68 Offer of Judgment - which was not accepted or rejected by the Plaintiffs - and subsequent payment to all putative class members, fully compensates every potential class member on the "overtime on commission" claims. Defendant argues the claim is therefore moot, and the court has no subject matter jurisdiction. For the reasons discussed below, Defendant's motion is denied.
I. Factual Background
The facts discussed here are from Plaintiffs' amended complaint or from the documents appropriately before the court in the context of this motion. Plaintiffs allege that they and all putative class and collective action members worked as sales associates for Burberry and that they regularly worked hours "off-the-clock" either before or after their shift, or during lunches and breaks for which they were not compensated. AC, ¶ 36-41. Furthermore, Plaintiffs allege that when they were paid overtime, it was at the wrong overtime rate since Defendant did not include commission payments when determining the regular rate of pay. AC, ¶ 42-51. The amended complaint asserts a claim for overtime violations under FLSA, and overtime violations claim under NYLL.
On May 30, 2013, Defendant tendered a Rule 68 Offer of Judgment ("Offer") to the four named Plaintiffs and one opt-in Plaintiff. The Offer offers each Plaintiff a different sum based on "payments which were (inadvertently) not calculated as part of the regular rate of pay (including all commissions payments), and thus excluded from overtime wages paid to Plaintiff [X]". See Defendant's Memorandum in Support, ("Def. Mem."), Exhibit ("Ex.") A: Offer of Judgment. The Offer includes a $350 named Plaintiff service fee,  and "reasonable attorneys' fees, costs and expenses as the Court may determine." The Offer claims this is the amount due by Defendant for "any liability claimed in this action for the failure to include compensation earned (including commissions payments) in the regular rate of pay for the purpose of calculating overtime wages" to the Plaintiffs. Def. Mem., Ex. A., at 2.
Also submitted with Defendant's motion is a declaration of Danielle Caserta ("Caserta Dec."), the Director of Human Resources Operations, Burberry Americas, stating that Burberry recalculated all of the overtime due to "eligible sales associates" to "account for earned commissions and bonus payment" in the New York retail stores. She states that liquidated damages and interest were added thereto, and that "Burberry added a 2% premium' to safeguard against miniscule/rounding errors, " and hired a third-party administrator to calculate withholding taxes due, and to process and "mail compensatory payment checks to all Eligible Sales Associates (other than plaintiffs and opt-in plaintiff)." Attached to her declaration is a spreadsheet listing the payments made. Caserta Dec., Ex. A. 90% of the checks were cashed. Id., ¶ 6-12.
II. The Motion
Defendant argues that the Offer and the payment to all putative class members more than satisfies any liability they have to Plaintiffs on the "overtime on commission" claim, thus mooting that claim and depriving the court of subject matter jurisdiction. In response, Plaintiffs argue that the Offer does not satisfy their claim. Principally, Plaintiffs argue that the Offer only compensates Plaintiffs and putative class members for overtime on hours already paid, and that their claim is for overtime that has NOT been paid, and which requires an initial calculation of the actual regular hours worked and the correct regular rate of pay, which will then dictate the overtime due. Plaintiff argue that the amount of the Offer only covers overtime that was already paid, and not the overtime hours due as a result of time actually worked. Plaintiffs' Memorandum in Opposition ("P1. Mem."), at 7-8. Finally, they argue that the Offer is deficient since it does not include both liquidated damages permitted under both the FLSA and NYLL. Pl. Me., at 8-9.
Defendants disagree. They claim that Plaintiffs are now combining what has always been two separate claims in this litigation - one seeking compensation for "off the clock" hours worked, and the other seeking proper "overtime on commission." To argue that the Offer does not satisfy the "overtime on commission" claim on the basis that it should be tied to the "off-theclock" claim is disingenuous. ...