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Martin v. Sprint United Management Co.

United States District Court, S.D. New York

October 31, 2017

JAMIE MARTIN and DANEISHA SINGLETON, on behalf of themselves and all others similarly situated, and the Proposed New York Rule 23 Class, Plaintiffs,
v.
SPRINT UNITED MANAGEMENT CO., CREDICO USA, LLC, and WALLACE MORGAN, INC., Defendants.

          OPINION & ORDER

          PAUL A. ENGELMAYER UNITED STATES DISTRICT JUDGE

         Plaintiffs Jamie Martin and Daneisha Singleton brought this action on behalf of themselves and similarly situated persons, alleging violations of the Fair Labor Standards Act, 29 U.S.C. § 201, et. seq. ("FLSA"), and the New York Labor Law, N.Y. Lab. Law § 650, et. seq. ("NYLL"). Plaintiffs served as field agents securing low-income customers to acquire wireless telephones of defendant Sprint/United Management Company ("Sprint") pursuant to a federal subsidy program. They claimed primarily that they were misclassified as independent contractors rather than employees and that, as a result, they were denied statutorily required minimum wage and overtime compensation. They sought to hold Sprint and co-defendants Credico (USA), LLC ("Credico") and Wallace Morgan, Inc. ("Wallace Morgan") jointly responsible for this willful misclassification.

         On September 27, 2017, this Court issued an opinion and order granting summary judgment in favor of defendants and denying partial summary judgment to plaintiffs. See Martin v. Sprint United Mgmt. Co., 15 Civ. 5237 (PAE), 2017 WL 4326109 (S.D.N.Y. Sept. 27, 2017). Without deciding whether plaintiffs were properly classified as employees or independent contractors, the Court held that (1) Sprint and Credico were not plaintiffs' joint employers, and (2) plaintiffs fell within the outside sales exemptions to the FLSA and NYLL. See Id. That ruling precluded liability altogether for Sprint and Credico, and precluded liability for Wallace Morgan on all claims against it save two: plaintiffs' wage-notice claims under NYLL sections 195(1)(a) and (3). Because the parties' briefing at summary judgment did not directly address those claims, the Court commissioned letter memoranda from plaintiffs and Wallace Morgan as to (1) whether an employer is bound to comply with the NYLL wage-notice provisions where New York's outside sales exemption applies, and (2), if so, how the Court ought to proceed with respect to these claims. See Martin, 2017 WL 4326109, at *34.

         The Court is now in receipt of those submissions. For the reasons that follow, the Court declines to exercise supplemental jurisdiction over these pendent state-law claims.

         I. Background

         The Court assumes the parties' familiarity with the facts and procedural history of this case, as set forth in the Court's summary judgment opinion. See Martin, 2017 WL 4326109, at *2-l 1. The Court nevertheless briefly recites certain facts relevant to the issue at hand.[1]

         Plaintiffs worked as field agents for Wallace Morgan on Sprint's Assurance Wireless campaign. JSF ¶ 52. Martin worked for Wallace Morgan from approximately March 29, 2015 through May 7, 2015. Id.¶l. Singleton worked for Wallace Morgan from approximately April 3, 2015 through May 7, 2015. Id. ¶ 4. Each signed an "Independent Sales Representative Agreement, " and each was paid by Wallace Morgan as an independent contractor. Id. ¶¶ 49-50, 56.

         Upon hire, field agents completed "Agent Acknowledgment Forms" listing their "Outreach Agency, " "Agent Name, " "Agent Code, " "Agent Start Date, " and the geographical areas in which they would work. PI. 56.1 ¶¶ 206, 208. In connection with the Assurance Wireless campaign, Credico used a database system it referred to as "ARC." Wallace Morgan 56.1 ¶ 75. That system generated "Office Payment Summaries" containing each field agent's badge number, name, and commissions, with the latter listing "full pay, " "advance, " "remain, " "recover, " and "total" amounts. Id. ¶ 83. Further, ARC generated "Agent Commission Statements" for each agent containing the agent's name, the agent's total compensation, the current sales week, and the pay date, as well as entries for the following categories: "Client ID, " "Signed Date, " "Customer Name, " "Client Status/Reason, " "Product, " "Pay Action, " "Amount, " and "Total For [Field Agent]." Id. ¶¶ 85-87. Wallace Morgan also maintained payroll records, PI. 56.1 ¶ 83, which included the following information: "Company, " "Check Date, " "Name, " "Hours, " "Total Paid, " "Tax Withheld, " "Deductions, " "Net Pay, " "Check No, " "Employer Liability, " "Total Expense, " "Pay Frequency, " "Department, " "Total Net Pays, " "Pay Frequency Totals, " and "Company Totals." First Srey Deck, Exs. 30, 31.

         The parties' statements of undisputed fact otherwise lack information related to whether plaintiffs received wage notices at hiring and/or regular pay statements.

         II. Applicable Legal Standards

         A. Supplemental Jurisdiction

         Federal district courts have supplemental jurisdiction over state-law claims "that are so related to claims in the action within [the courts'] original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution." 28 U.S.C. § 1367(a). However, "such jurisdiction is discretionary, " Vuona v. Merrill Lynch & Co., 919 F.Supp.2d 359, 393 (S.D.N.Y. 2013) (citing City of Chicago v. Int'l Coll of Surgeons, 522 U.S. 156, 173 (1997)), and "a district court 'may decline to exercise supplemental jurisdiction' if it 'has dismissed all claims over which it has original jurisdiction.'" Id. (quoting 28 U.S.C. § 1367(c)(3)). "[I]n the usual case in which all federal-law claims are eliminated before trial, the balance of factors to be considered under the pendent jurisdiction doctrine-judicial economy, convenience, fairness, and comity-will point toward declining to exercise jurisdiction over the remaining state-law claims." Sefovic v. Mem'l Sloan Kettering Cancer Ctr., No. 15 Civ. 5792 (PAC), 2017 WL 3668845, at *8 (S.D.N.Y. Aug. 23, 2017) (quoting Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 n.7 (1988)); see also Marcus v. AT&T Corp., 138 F.3d 46, 57 (2d Cir. 1998) ("In general, where the federal claims are dismissed before trial, the state claims should be dismissed as well.").

         B. NYLL Wage-Notice Provisions

         NYLL section 195(1)(a) requires "[e]very employer" to provide his or her employees, "in writing ... at the time of hiring, " a notice containing ...


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