United States District Court, E.D. New York
NOEL VELASQUEZ and CARLOS RIVERA, individually and on behalf of all others similarly situated, Plaintiffs,
DIGITAL PAGE, INC. d/b/a/, FUSION WIRELESS; CELLULAR CONSULTANTS, INC., d/b/a/, FUSION WIRELESS; CELLULAR CONSULTANTS OF NASSAU, INC., d/b/a/, FUSION WIRELESS; CELLULAR CONSULTANTS OF NASSAU ST/1, d/b/a/, FUSION WIRELESS; CELLULAR CONSULTANTS OF FARMINGDALE, d/b/a/, FUSION WIRELESS; BRANDON HAENEL and ROBERT PACHTMAN, Defendants.
VALLI KANE & VAGNINI LLP JAMES ALDO VAGNINI, ESQ., SUMANTRA T. SUNHA, ESQ., Garden City, New York, Attorneys for Plaintiffs.
MILMAN LABUDA LAW GROUP PLLC JOSEPH M. LABUDA, ESQ., JAMIE SCOTT FELSEN, ESQ., Lake Success, New York, Attorneys for Defendants.
MEMORANDUM AND ORDER
LEONARD D. WEXLER, District Judge.
Plaintiffs Noel Velasquez ("Velasquez") and Carlos Rivera ("Rivera") (collectively "Plaintiffs") commenced the action representing themselves, and seeking to represent a class of persons similarly situated,  pursuant to the Fair Labor Standards Act, 29 U.S.C. § 207 (the "FLSA"), and parallel provisions of the New York State Labor Law ("Labor Law"), against the Defendant corporate employer entities and individual Defendants Brandon Haenel ("Haenel") and Robert Pachtman ("Pachtman") (collectively, "Defendants"), who are the joint owners and partners of the Defendant corporate entities. Plaintiffs claim failure to pay overtime in violation of the FLSA and the NYLL, and failure to pay the statutorily required "spread of hours" pay under 12 NYCRR § 142-2.4. Before the Court is Defendants' partial motion for summary judgment, as well as Plaintiffs' motion for summary judgment, both made pursuant to Rule 56 of the Federal Rules of Civil Procedure. For the reasons that follow, Plaintiffs' motion is denied in its entirety, and Defendants' motion is also denied, except that Defendants' motion for summary judgment on Plaintiffs "spread of hours" claim is granted.
I. Factual Background
The following facts are taken from the complaint, and the parties Rule 56.1 Statements, with any disputes noted. Plaintiffs were employed as sales associates for the Defendant corporate entities, which operate multiple store locations selling cell phones, cell phone services and cell phone accessories. Plaintiffs' Rule 56.1 Statement ("Pl. 56.1 Stmt."), ¶ 1-3; Defendants' Counter 56.1 Statement ("Def. Counter-56.1 Stmt."), ¶ 1-3. Plaintiff Velasquez was a full time employee and when he started working for Defendants, he was paid $10.00 per hour until May 8, 2009, when he was paid $11.50 per hour. Pl. 56.1 Stmt., ¶ 8, 10; Def. Counter-56.1 Stmt., ¶ 8, 10. When he worked over 40 hours per week, he was compensated his straight rate of pay, and was not paid overtime in accordance with statutory requirements. Pl. 56.1 Stmt., ¶ 11, 12; Def. Counter-56.1 Stmt., ¶ 11, 12. It was Defendants' policy and practice to not pay sales associates overtime, and the Defendants' Employee Handbook states that "commissioned sales representatives are an example of exempt workers" who were not paid overtime. Pl. 56.1 Stmt., ¶ 15-17; Def. Counter-56.1 Stmt., ¶ 15-17.
Similarly, Plaintiff Rivera, who earned $9.00 per hour, was not paid overtime when he worked over forty (40) hours per week. Pl. 56.1 Stmt., ¶ 26-28; Def. Counter-56.1 Stmt., ¶ 26-28. Both Velasquez and Rivera claim that they were not paid an additional hour of pay as statutorily required when either worked over ten (10) hours in one day, and Defendants dispute that this requirement applies to either of them since their respective hourly rates of pay exceeded the minimum wage. Pl. 56.1 Stmt., ¶ 20, 31; Def. Counter-56.1 Stmt., ¶ 20, 31.
In support of their motion, Defendants assert that their attorney, Stuart Moshell, who served as their corporate counsel as of 2006 or 2007, advised them that "any employee who earns commission is exempt, " and that Moshell developed employee handbooks containing this policy. Defendants' 56.1 Statement ("Def. 56.1 Stmt."), ¶ 5-7; Plaintiffs' Counter-56.1 Statement ("Pl. Counter-56.1 Stmt."), ¶ 5-7. Plaintiffs do not dispute the Defendants claim they were so advised, id., but assert that Defendants could not have reasonably believed Moshell was experienced in employment matters, and that Moshell never reviewed the pay rates and commission earnings of the sales associates. Def. 56.1 Stmt., ¶ 1-4; Pl. Counter-56.1 Stmt."), ¶ 1-4.
II. The Present Motion
Defendants' partial motion for summary judgment seeks to limit Plaintiffs' FLSA claim to a two-year statue of limitation, deny an award of liquidated damages and dismiss Plaintiffs' spread of hours claim. Plaintiffs' motion seeks summary judgment on: the overtime claims under the FLSA and the NYLL; the "spread of hours" claim; the claim for liquidated damages under the FLSA and the NYLL since Defendants did not act in good faith; the claim that the three-year statute of limitations applies to the FLSA claims since Defendants acted "wilfully"; and the claims that the individual Defendants are personally liable for the FLSA and NYLL violations. Since these issues largely overlap, the Court will address categorize the arguments and address them accordingly.
I. Standards on Motion for Summary Judgment
The standards for summary judgment are well settled. Rule 56(a) of the Federal Rules of Civil Procedure states that summary judgment is appropriate only if "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); Mihalik v. Credit Agricole Cheuvreux North America, Inc., 715 F.3d 102, 108 (2d Cir. 2013). The moving party bears the burden of showing entitlement to summary judgment. See Huminski v. Corsones, 396 F.3d 53, 69 (2d Cir. 2005). In the context of a Rule 56 motion, the court "is not to weigh the evidence but is instead required to view the evidence in the light most favorable to the party opposing ...