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Garcia v. Freedom Mortgage Corp.

November 2, 2009


The opinion of the court was delivered by: Joseph E. Irenas, S. U.S.D.J.




Pursuant to the Court's September 18, 2009 order, Plaintiffs and Defendant submitted briefs on the renewed request for conditional certification of the collective action under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 216(b). Plaintiffs ask the Court to certify their collective action, approve a notice to be sent to prospective collective action members, including two subclasses, loan officers and loan processors, and finally request the Court to order the Defendant to produce the names and contact information of the prospective members. Defendants oppose all three of Plaintiffs' request, particularly the inclusion of branch loan officers in the notice, and in the alternative, request certain limitations be placed on any notice sent out to prospective collective action members.

Defendant argues that, even though there is a low standard for conditional certification, Plaintiffs have not met their burden of producing sufficient evidence that they and prospective class members are similarly situated. Defendant also contends that because two possible exemptions from the FLSA overtime payment requirement might apply to the loan officers (the administrative exemption and outside sales exemption), that discovery with regards to these would be inefficient and against Congressional intent.

For the reasons set forth below, the Court grants all three of the Plaintiffs' requests including the inclusion of branch loan officers within the loan officer subclass. With regards to the proposed notice, the Court agrees an 120 day opt-in period is appropriate and orders that information regarding statute of limitations pertinent to the FLSA is included in the notice.


Plaintiffs filed their original complaint, a collective action under the FLSA, on January 29, 2009, in the United States District Court for the Central District of California against Freedom Mortgage Corporation ("Freedom"). Upon joint stipulation this case was transferred to the District of New Jersey on May 29th, 2009.*fn1 On July 2, 2009, Plaintiffs filed a Motion Requesting Expedited Court Authorized Notice to Prospective FLSA Collective Action Members (First Motion for Certification). Docket No. 57. Defendant responded on August 3, 2009 with a Memorandum of Law in Opposition to Plaintiffs' Motion for Conditional Certification (First Opp. Br.). Docket No. 69. On September 18, 2009, the Court consolidated Garcia with an almost identical complaint, Perry*fn2 , and designated Garcia plaintiffs the named lead plaintiffs in the case. The Court also requested Plaintiffs resubmit their motion for conditional certification and scheduled a hearing to resolve any issues raised by the parties.


Defendant challenges all aspects of the Plaintiffs' requested collective action certification. In its First Opposition Brief, Defendant contended Plaintiffs' request should be denied because they failed to supply adequate evidence that similarly situated employees were affected by a common policy of Defendant. Defendant also alleged that because Plaintiffs might fall into one of the FLSA exempt categories, outside sales or administrative, they were not similarly situated. First Opp. Br., 1; 29 C.F.R. §§ 541.200, 541.500.

Defendant's argument in its second brief is entirely focused on the inclusion of branch loan officers along with the call center loan officers, in the loan officers subclass. Because branch loan officers at times work outside of the employer's office*fn3 , Defendant claims, they fit into the outside sales exemption for the overtime payment required under the FLSA. Therefore, Defendant contends, because certain plaintiffs might fit into an exempt category, their possible exemption might require a case-by-case determination of their status, and they are not similarly situated for collective action purposes.


Under 19 U.S.C. § 216(b), an employee who feels his/her right to receive overtime compensation has been violated may bring an action "for and in behalf of himself or themselves and other employees similarly situation." The term "similarly situated" is not defined in the FLSA. In "the absence of guidance from the Supreme Court and Third Circuit, district courts have developed a test consisting of two stages of analysis." Kronick v. Bebe Stores, Inc., 2008 U.S. Dist. LEXIS 78502 at *3 (D.N.J. 2008).

Plaintiff bears the burden of satisfying the similarly situated standard, and if he or she does so, then the court grants conditional certification of the collective action for the purpose of sending notice to the potentially effected employees (or former employees) and conducting discovery concerning the opt-in plaintiffs. Herring v. Hewitt Associates, Inc., 2007 WL 2121693, *3,4 (D.N.J. 2007)(noting a stage one finding "establishes nothing more than the right of the plaintiffs to establish a collective action."). "In the second stage, after more evidence is available, the court ...

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