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Aflalo v. Cantor Fitzgerald, L.P.

United States District Court, S.D. New York

March 30, 2018

KAREN AFLALO, Plaintiff,

          Eric Robert Stern Sack & Sack, LLP New York, New York Counsel for Plaintiff

          Nirav Sanjay Shah Cantor Fitzgerald New York, New York Counsel for Defendants

          OPINION & ORDER


         Plaintiff Karen Aflalo brings this suit pursuant to the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 215(a)(3), and New York Labor Law (“NYLL”), N.Y. Lab. Law § 215, against Defendants Cantor Fitzgerald, L.P., Cantor Fitzgerald Securities, Inc. (collectively, “Cantor Fitzgerald”), BGC Partners, Inc. (“BGC”), GFInet, Inc., and GFI Group, Inc. (“GFI, ” and together with BGC and Cantor Fitzgerald, “Defendants”), alleging that Defendants terminated her employment in retaliation for her internal complaints with respect to Cantor Fitzgerald's misclassification of employees as exempt from overtime.

         Before me is Defendants' motion to dismiss Plaintiff's complaint under Federal Rule of Civil Procedure 12(b)(6). Because I find that Plaintiff has failed to establish that she was engaged in “protected activity” for the purpose of establishing a prima facie claim under the FLSA, Defendants' motion to dismiss is GRANTED with respect to Plaintiff's FLSA claim, and this claim is dismissed. Because I have dismissed Plaintiff's FLSA claim, I decline to exercise supplemental jurisdiction over Plaintiff's NYLL claim, and Defendants' motion to dismiss is also GRANTED with respect to this claim and it is dismissed without prejudice to filing that claim in state court.

         I. Background[1]

         A. Plaintiffs Employment at GFI, BGC, and Cantor Fitzgerald

         Plaintiff started working at GFI in approximately March 2002, and remained employed there until February 2015 when BGC, an affiliate of Cantor Fitzgerald, L.P., acquired GFI, and Plaintiff became either a BGC or Cantor Fitzgerald employee. (Compl. ¶¶ 22, 26.)[2] At GFI, Plaintiff was a “well respected, senior human resources employee responsible for managing, developing, and administering strategies for employee relations, talent acquisition, performance management, HR compliance, payroll, compensation, and benefits supporting all back and front staff in the Americas region.” (Id. ¶ 27.)

         When Plaintiff started working at either BGC or Cantor Fitzgerald after the acquisition announcement, she met with senior personnel in the human resources group, including: (1) Lori Pennay, Cantor Fitzgerald's Global Head of Human Resources; (2) Stephen Merkel, Cantor Fitzgerald's General Counsel; (3) Dan Aiken, a Cantor Fitzgerald “Vice President, Human Resources Generalist” and “Human Resources Business Partner who supported Accounting, Finance, and Operations;” and (4) Patricia Dreste, another senior-level Cantor Fitzgerald executive. (See Id. ¶¶ 28-35, 74.) Plaintiff worked closely with Pennay, who “relied heavily on [Plaintiff] to serve in a global capacity working with other GFI Human Resources Directors in the [Europe, Middle East, and Africa regions] and Asia Regions in order to streamline . . . countless global headcount reports, global payroll reports, and information on GFI's global benefits and policies.” (Id. ¶ 31.) Beginning in March 2015, Plaintiff also began working closely with Aiken to help “integrate the GFI Accounts Payable, Accounts Receivable, Accounting, and Middle/Back Office Operations staff into Cantor's teams and business.” (Id. ¶ 36.)

         B. Puente Action

         On or about July 6, 2015, Steven Puente, a former Cantor Fitzgerald employee who worked at the company's helpdesk, filed a class action suit in the Southern District of New York against Cantor Fitzgerald, alleging violations of the FLSA and the NYLL (“Puente Action”). (Id. ¶ 37.) The Puente Action alleged that Cantor Fitzgerald was systematically misclassifying certain categories of employees as exempt from overtime and failing to pay these employees their overtime wages. (See Id. ¶¶ 37-38.) It also alleged that Cantor Fitzgerald was (1) systematically trying to force misclassified employees into signing a contract that would give away their rights to overtime, (2) failing to notify employees of the FLSA and NYLL overtime provisions, and (3) failing to keep adequate records. (Id. ¶ 41.)

         C. Plaintiff's Discovery of Misclassifications

         In connection with Plaintiff's work with Pennay and Aiken, Plaintiff looked into how GFI and Cantor Fitzgerald classified employees for the purpose of overtime-i.e., exempt or non-exempt. (Id. ¶ 39-40, 46-57.) For example, during a telephone call Pennay asked Plaintiff how GFI had classified employees working at its helpdesk, and Plaintiff told her that when she started working at GFI employees had been “misclassified as exempt employees; but that, following an FLSA audit that was completed in conjunction with the guidance of the law firm Epstein, Becker & Green, ‘Helpdesk' employees were properly re-classified as non-exempt.” (Id. ¶¶ 39-40.) Separately, in connection with the work she was doing with Aiken, Plaintiff began “investigating the manner in which Cantor was classifying different employees in the Operation/Accounting department” for Aiken. (Id. ¶ 47.)

         After the Puente Action commenced, Plaintiff helped with reviewing classes of employees at Cantor Fitzgerald to determine whether they were being misclassified. (Id. ¶ 46.) She found that Cantor Fitzgerald was misclassifying employees in the Accounts Payable, Accounts Receivable, and Junior Accountant departments, and as she identified the erroneous classifications, Plaintiff brought them to the attention of both Aiken and Pennay. (Id. ¶¶ 48-49.) When she described the misclassifications to Aiken he was “repeatedly dismissive, ” and “deflected” telling Plaintiff that he would raise the issue with Dreste but that he “did not think that anything would change, as that's the way they have always been paid.” (Id. ¶¶ 49-50.)

         Plaintiff also offered solutions to these issues based on her “vast experience reviewing the employment duties of all staff at GFI.” (Id. ¶¶ 51-52.) She told Pennay of her experience “investigat[ing] GFI's classification of other employee classes” and informed Pennay that “in order to remediate GFI's unlawful classification, [she] had worked with GFI's legal department to hire outside FLSA experts from [a] law firm . . . to assist with her investigation.” (Id. ¶ 53.) Plaintiff told Pennay that in addition to overseeing this audit, she managed an internal FLSA audit. (Id. ¶ 54.)

         Pennay responded by displaying “her apparent relief that [Plaintiff] clearly had extensive experience with FLSA legal and compliance matters.” (Id. ¶ 55.) Pennay also stated that she would rely on Plaintiff to conduct investigations to “help determine . . . which classifications of employees would be exempt and which would be non-exempt from mandatory overtime.” (Id. ¶ 56.) Pennay told Plaintiff that she “had been mandated” by Cantor Fitzgerald's CEO to “clean up the mess right away” and was counting on Plaintiff to help her do so. (Id. ¶¶ 55-56.) Pennay also informed Plaintiff that she was interviewing law firms to help with the process. (Id. ¶ 57.)

         D. Cantor ...

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