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Velasquez v. Digital Page, Inc.

United States District Court, E.D. New York

December 9, 2014

NOEL VELASQUEZ and CARLOS RIVERA, individually and on behalf of all others similarly situated, Plaintiffs,
v.
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

For Plaintiffs: JAMES ALDO VAGNINI, ESQ., SUMANTRA T. SUNHA, ESQ., VALLI KANE & VAGNINI LLP, Garden City, New York.

For Defendants: JOSEPH M. LABUDA, ESQ., JAMIE SCOTT FELSEN, ESQ., MILMAN LABUDA LAW GROUP PLLC, Lake Success, New York.

MEMORANDUM AND ORDER

LEONARD D. WEXLER, UNITED STATES DISTRICT JUDGE.

Before the Court is the motion of Plaintiffs Noel Velasquez (" Velasquez") and Carlos Rivera (" Rivera") (collectively, " Plaintiffs") seeking class certification under Rule 23 of the Federal Rules of Civil Procedure (" Fed.R.Civ.Pro.") on Plaintiffs' claims for failure to pay overtime as required by New York law.[1] Plaintiffs' claims for failure to pay overtime under the Fair Labor Standards Act, 29 U.S.C. § 207, et seq . (" FLSA") were conditionally certified by order of Magistrate Judge A. Kathleen Tomlinson on May 19, 2014.[2] For the reasons that follow, Plaintiffs' motion for class certification is denied.

BACKGROUND

I. Factual Background

The following facts are taken from the complaint, court filings, and the parties' submissions in connection with this motion. Plaintiffs' complaint was first filed on August 12, 2011, containing individual, collective and class allegations for alleged violations of federal and state law. DE, at 1: Complaint (" Cmplt."), ¶ ¶ 1-2. According to the complaint, Plaintiffs were employed as sales associates for the Defendant corporate entities at certain store locations selling cell phones, cell phone services and cell phone accessories. Cmplt, at ¶ 32, 35-37, 45-47. Plaintiff Velasquez began working for Defendants[3] as a full time employee in the store location on Main Street in Port Washington in January 2008 and was paid $10.00 per hour until April 17, 2010, when he was paid $11.50 per hour. Affidavit of Noel Velasquez (" Velasquez Aff."), at ¶ ¶ 1, 2, 6. Even when he worked over forty (40) hours per week, he was compensated his straight rate of pay. Velasquez Aff., ¶ 8; Affirmation of S. Tito Sinha (" Sinha Aff."), Exhibit (Ex.") E: Velasquez Time sheets showing hours worked each day, and Ex. F: Velasquez Payroll Journal showing Velasquez' pay each week. He states that he typically worked 5 or 6 days per week, usually forty-five (45) to sixty (60) hours per week. Velasquez Aff., ¶ 4. Velasquez avers that other sales representatives working at his location and the other Port Washington location also were not paid overtime when they worked over forty (40) hours in a given week, and he understood that to be Defendants' policy. Velasquez Aff., ¶ 9-13. Velasquez also states he, like the other sales associates, earned commissions, and his commission payments were less than 50% of his earnings. Veslasquez Aff., ¶ 14; Sinha Aff., Ex. J: Velasquez' Commission Records.

Plaintiff Rivera worked as a sales associate at the Port Washington Boulevard location in Port Washington. He earned $9.00 per hour for the entire time he was employed by Defendants, from May 2009 until he was terminated in April 1, 2011. Affidavit of Carlos Rivera (" Rivera Aff."), ¶ 1, 2, 3, 5. He was also not paid overtime when he worked more than forty (40) hours per week, and was merely paid his straight rate of pay for those hours. Rivera Aff., ¶ 6-7; Sinha Aff., Ex. L: Rivera's Time sheets showing hours worked each day, and Ex. O: Rivera's Payroll Journal showing Rivera's pay each week. He avers that he worked on average fifty (50) to sixty (60) hours per week, and sometimes as much as seventy (70) hours per week. Rivera Aff. ¶ 4. Other sales associates he knew at his and other locations were also not paid overtime when they worked over forty (40) hours per week, and he understood that to be Defendants' practice. Rivera Aff., ¶ 8-13. He states that his commission payments were less then 50%, and were generally 1/3 of his earnings. Rivera Aff., ¶ 13; Sinha Aff., Ex.: P: Rivera's Commission Payments.

An opt-in plaintiff, Michael Nazario (" Nazario"), also submitted an affidavit in support of Plaintiffs' motion, stating that he was employed by Defendants from January through August 31, 2010 as a sales associates and earned $9.00 per hour. Affidavit of Michael Nazario (" Nazario Aff."), ¶ 1, 2, 7. He worked at two different locations and was only paid his straight rate of pay for hours worked over forty (40) per week. Nazario Aff., ¶ 7-9; Sinha Aff., Ex. R: Nazario's time sheets showing hours worked each day, and Ex. T: Nazario's Payroll Journal showing Nazario's pay each week. He worked on average fifty (50) to sixty (60) hours per week. Nazario Aff., ¶ 4. He knew other sales associates who also were not paid overtime when they worked over forty (40) hours per week. Nazario Aff., ¶ 10-17. Nazario's claims that the monthly commission he earned was approximately 25% of his earnings. Nazario Aff., ¶ 19; Sinha Aff., Ex: U: Nazario's Commission Payments.

There is no dispute that it was Defendants' policy and practice to not pay sales associates overtime. See Order, at 2-3. Indeed, Defendants' Employee Handbook states that " Commissioned Sales Representatives are an example of exempt workers" who were not paid overtime. See Sinha Aff., Exhibits H and I: Employee Handbooks for Fusion Wireless and Wireless Station, at 10.[4]

Plaintiffs claim that Defendants' blanket policy of deeming sales associates exempt from overtime, without any scrutiny of whether overtime is earned in a particular pay period, violates 29 U.S.C. § 207(i).[5] This statute states that employees of a retail or service establishment are exempt from receiving overtime for hours worked beyond 40 per week if: 1) their regular rate of pay is 11/2 times more than the prevailing minimum wage at that time; and 2) commissions earned constitute more than 50% of their compensation in a particular period of time. See 29 U.S.C. § 207(i); Pl. Mem., at 6, n. 3, 7.

II. Proposed Class

By this motion, Plaintiffs seek to certify the following class:

All Sales Associates and similarly situated persons employed by Defendants to perform Sales Associates work in any of Defendants' locations in any capacity during the statutory period within the State of New York who (1) worked in excess of 40 hours per week and were not compensated with overtime pay; and/or (2) were not compensated at the statutory rate for overtime pay.[6]

See Pl. Mem., at 1. Plaintiffs claim that according to Defendants' records, there are eighty-seven (87) sales associates who were employed by Defendants during the respective notice period, who represent the putative class members. See Pl. Mem., at 4, citing Affirmation of S. Tito Sinha (" Sinha Aff."), Exhibit C: Defendants' June 2014 Disclosure of Sales Associate Information.

DISCUSSION

I. Legal Principles

A. Class Certification


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