Umbrino v. L.A.R.E Partners Network, Inc.

585 F.Supp.3d 335

Vicki UMBRINO, et al., Plaintiffs,

v.L.A.R.E PARTNERS NETWORK, INC., et al., Defendants.

6:19-cv-06559 EAW

United States District Court, W.D. New York.

Signed February 15, 2022

Adam Thomas Sanderson, Jonathan W. Ferris, Michael J. Lingle, Thomas & Solomon LLP, Rochester, NY, for Plaintiffs Vicki Umbrino, Richard Zoller.

Adam Thomas Sanderson, Jessica Lynne Lukasiewicz, Thomas & Solomon LLP, Rochester, NY, for Plaintiffs Aaron Grippo, Thomas M. Coccitti, William H. Davis, Constance Flowers, Ronnie L. Green, Jr., Molly Kearns-Ryder, Andrew J. Tackling, Sean M. Pronti.

Adam Thomas Sanderson, Michael J. Lingle, Thomas & Solomon LLP, Rochester, NY, for Plaintiffs Bradley Schaefer, Hajarah B. Conyer, Angel Griner, Troy M. Cordell, Jr., Grace Bernunzio, Zachary Lang, Thomas Stein, Cory Goodwin, Stuart Rock, Alicia Hill, Patrick Collins, Geoffrey Haller, Madison Miranda, Earl Greason, Quiana Barrett-Nevarez, Morgan Clark, Arika Whitaker, Javonne Jackson, Clayton Gates, Terrell Gladney, Johnathan Williams, Chassidy Johnson, Glenn Manzek, Samuel Bittker, Parris Dobbins, Patricia Nasca, Mark Schoen, Emily Simpson, Kevin Baez, Amber Bell, Michelle Seoud, Norman VanVoorhis, David Fitzsimmons, Abby Covington, LaQuesha Nero, Wanda Ware.

Ross Michael Greenky, Barclay Damon, LLP, Syracuse, NY, for Defendants.

DECISION AND ORDER

ELIZABETH A. WOLFORD, Chief Judge

INTRODUCTION

Plaintiffs Vicki Umbrino ("Umbrino") and Richard Zoller ("Zoller") (collectively "Named Plaintiffs") commenced this putative class and collective action on July 26, 2019, asserting violations of the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. §§ 201 et seq. (the "FLSA") and the New York Labor Law (the "NYLL") by defendants L.A.R.E. Partners Network, Inc. d/b/a L.A.R.E Partners f/k/a List Assist Real Estate, Inc. ("L.A.R.E. Partners"), Real Agent Pro, LLC f/k/a L.A.R.E. Marketing, LLC ("Real Agent Pro"), L.A.R.E. Properties, LLC ("L.A.R.E. Properties"), List-Assist of Rochester, LLC ("List-Assist"), and Isaiah Colton ("Colton") (collectively "Defendants"). (Dkt. 1). Upon stipulation of the parties (Dkt. 12), the Court conditionally certified the matter as a collective action under the FLSA on February 28, 2020. (Dkt. 13).

Currently before the Court are: (1) Named Plaintiffs’ motion to certify the matter as a class action pursuant to Federal Rule of Civil Procedure 23 (Dkt. 68); (2) Defendants’ cross-motion to decertify the FLSA collective action (Dkt. 72); and (3) Named Plaintiffs’ motion for partial summary judgment (Dkt. 90)¹ . For the reasons that follow, the Court grants in part and denies in part Named Plaintiffs’ motion for partial summary judgment, grants in part and denies in part Named Plaintiffs’ motion for class certification, and denies Defendants’ motion to decertify the FLSA collective action.

BACKGROUND

I. Factual Background

The facts set forth below are taken from the complaint (Dkt. 1); Named Plaintiffs’ Local Rule 56 Statement of Material Facts submitted in support of their motion for partial summary judgment (Dkt. 90-2) and Defendants’ response thereto (Dkt. 107-1); and the exhibits submitted by the parties. Relevant factual disputes have been noted by the Court.

At the outset, the Court acknowledges that the parties dispute whether Named Plaintiffs are former employees of all Defendants or solely of Real Agent Pro, with Named Plaintiffs taking the former position and Defendants taking the latter. (See Dkt. 90-2 at ¶ 1; Dkt. 107-1 at ¶ 1). It is undisputed that Real Agent Pro operates in the real estate industry and provides services to real estate agents, whom it matches with individuals looking to sell their homes. (Dkt. 90-2 at ¶ 3; Dkt. 107-1 at ¶ 3). Real Agent Pro's goal was to be "a Zillow for sellers" and to generate leads for real estate agents. (Dkt. 90-2 at ¶ 4; Dkt. 107-1 at ¶ 4).

Named Plaintiffs contend that Defendants do not sell any services directly to homeowners and that "[h]omeowners who want to sell their homes are the product to be delivered to defendants’ real estate agent-clients." (Dkt. 90-2 at ¶ 8). Defendants dispute this characterization, again asserting that it was only Real Agent Pro that contracted with the real estate agents and further that in 2017 and 2018 Real Agent Pro sold homeowners a "Mega Agent Pro subscription for access to education services." (Dkt. 107-1 at ¶ 8).

Named Plaintiffs were employed as "inside sales employees" by at least Real Agent Pro. (See Dkt. 1 at ¶¶ 39, 49, 56). Named Plaintiffs claim that they regularly worked more than 40 hours in a workweek without being paid overtime compensation. (See id. at ¶¶ 39-45, 48-53). Named Plaintiffs further claim that they were not provided with wage notices as required by NYLL § 195, which is part of New York's Wage Theft Prevention Act ("WTPA"). (See id. at ¶¶ 67-70).

The parties disagree regarding the extent of Colton's role with the business entity defendants. They agree that Colton helped start the businesses and has served as Chief Executive Officer ("CEO") of the business entity defendants. (Dkt. 90-2 at ¶ 13; Dkt 107-1 at ¶ 13). It is further undisputed that Colton "provided strategic oversight to the various defendants" and, as to Real Agent Pro, "directly supervised the managers, including operations, controller and vice president of sales." (Dkt. 90-2 at ¶ 14; Dkt. 107-1 at ¶ 14). The parties also do not dispute that Colton "served as a sales director as the company started, and then on an as-needed basis," and that "early on" he "directly supervised inside sales employees, and after the company grew, he supervised the managers responsible for supervising the inside sales employees." (Dkt. 90-2 at ¶¶ 16-17; Dkt. 107-1 at ¶¶ 16-17).

However, Defendants dispute Named Plaintiffs’ contention that Colton was involved in the hiring process for inside sales employees, maintaining that while he "occasionally referred an individual for hire, Real Agent Pro did not necessarily hire them." (Dkt. 107-1 at ¶ 18). Defendants further contend that "only on very rare, infrequent occasions (almost all prior to 2016) did [Colton] sit in on inside sales applicants’ employment interviews, but did not make the decision on whether to hire an applicant." (Id. ). According to Defendants, "Colton did not approve, or otherwise have involvement in, terminations of inside sales employees." (Id. ).

Named Plaintiffs claim that Colton "helped train inside sales employees, evaluated their performance and was involved with disciplining employees." (Dkt. 90-2 at ¶ 21). Defendants dispute this claim, maintaining that Colton "rarely conducted formal training of inside sales employees" and "did not have direct involvement in performance evaluations or discipline of inside sales employees." (Dkt. 107-1 at ¶ 21). Defendants further deny Named Plaintiffs’ claim that "Colton monitored employees’ performance, asking them if they were working Saturdays or staying late, or directing employees to work more, if they were not meeting their goals." (Dkt. 90-2 at ¶ 22; Dkt. 107-1 at ¶ 22). According to Defendants, "[i]f an [inside sales employee] worked at home, on the weekends, or outside of normal work hours, then they decided to do so on their own accord without ...Colton's encouragement, directive, or request." (Dkt. 107-1 at ¶ 9).

The parties also disagree regarding Colton's role in setting policies and determining employee pay. Defendants state that Colton "did not create, draft, or revise Real Agent Pro's employment policies, including the Employee Handbook" and that he does not even "recall ever reviewing them before their implementation." (Dkt. 107-1 at ¶ 23). Defendants further state the Colton "only reviewed or approved compensation plans as a part of the executive team," "did not have exclusive authority to approve compensation plans," and "did not directly review or approve [inside sales employees’] commissions and bonuses distributed in the normal course of business." (Dkt. 107-1 at ¶ 24).

Defendants further dispute the following claims by Named Plaintiffs: (1) Colton made the decision to revoke an employee's stock award; (2) Colton directed the human resources manager "to actively engage in employee recognition, and he made decisions on what benefits to provide to employees"; (3) Colton decided when the office would be closed for holidays; (4) Colton decided not to pay inside sales employees overtime; and (5) Colton maintained and reviewed personnel files. (Dkt. 90-2 at ¶¶ 26-29, 31; Dkt. 107-1 at ¶¶ 26-29, 31).

II. Procedural Background

Named Plaintiffs commenced the instant action on July 26, 2019. (Dkt. 1). Defendants failed to timely file an answer. (See Dkt. 5).

On October 16, 2019, Named Plaintiffs filed a motion for conditional certification of the matter as a collective action under the FLSA. (Dkt. 4). Named Plaintiffs requested Clerk's entries of default on December 17, 2019, and the same were entered by the Clerk of Court's office on December 18, 2019. (Dkt. 6; Dkt. 7).

On February 24, 2020, the parties entered a stipulation whereby they agreed, among other things, that: (1) the Clerk's entries of default as to each of Defendants would be vacated; and (2) Defendants would not oppose Named Plaintiffs’ motion for conditional certification. (Dkt. 12). The Court so-ordered the parties’ stipulation on February 28, 2020. (Dkt. 13).

Defendants filed an answer to the complaint on March 24, 2020. (Dkt. 15). Defendants’ answer did not assert as an affirmative defense the "retail or service" exemption to the FLSA's and NYLL's overtime requirements. See 29 U.S.C. § 207(i) ("No employer shall be deemed to have violated ... [ 29 U.S.C. § 207(a) ] by employing any employee of a retail or service establishment for a work week in excess of ... [40 hours], if (1) the regular rate of pay of such employee is in excess of one and one-half times the minimum hourly ... [wage], and (2) more than half his compensation for a representative period (not less than one month)...