Hilaire v. Underwest Westside Operating Corp.

Background

Plaintiffs sued Underwest Westside Operating Corp., Moshe Winer, Martin Taub, Avi Golan, and Elad Eforati over alleged violations of the Fair Labor Standards Act (FLSA) and New York Labor Law. Plaintiffs performed non-managerial work at a carwash, including washing, drying, and detailing vehicles. They alleged that defendants retained portions of workers’ tips, claimed a tip credit without giving proper notice, and failed to pay overtime for work exceeding 40 hours per week.

Plaintiffs moved for three forms of relief: conditional certification of their FLSA claims as a collective action under 29 U.S.C. § 216(b), approval of a proposed notice to potential opt-in plaintiffs, and an order requiring defendants to produce contact information for non-exempt carwash employees employed during the previous six years. At least eleven additional people had consented to become plaintiffs during the case.

Conditional Certification

The FLSA allows employees with similar claims to join a collective action by filing written consent. Unlike a class action in which people may be included unless they opt out, an FLSA collective action requires eligible workers to opt in.

At this initial stage, the court applies a lenient standard. Plaintiffs must make a modest factual showing that they and potential opt-in plaintiffs were victims of a common policy or plan that violated the FLSA. The court does not weigh the ultimate merits, resolve factual disputes, or decide credibility at this stage.

The court held that plaintiffs met this preliminary burden. Four named plaintiffs submitted sworn declarations describing their hours, pay, and the same alleged pay and tip practices. The court found that the declarations showed the plaintiffs were similarly situated to one another and supported the existence of a common policy or plan. Defendants’ arguments that plaintiffs could not ultimately prove minimum-wage or overtime violations addressed the merits and therefore did not defeat conditional certification. Defendants also argued that the tip-retention collective should be limited to the period after March 23, 2018, when a cited statutory provision was amended, but the court found that issue depended on disputed facts and legal interpretation that were not appropriate for resolution at this stage.

Plaintiffs clarified that they were not seeking collective certification of their FLSA minimum-wage claim. The court therefore conditionally certified the FLSA unpaid-overtime claim and unlawful-tip-retention claim, but not the minimum-wage claim.

Notice

The court approved a three-year notice period rather than the six-year period plaintiffs requested. The court explained that the FLSA generally permits a two-year limitations period, extended to three years when willful misconduct is alleged, while New York Labor Law provides a six-year limitations period. Because no state-law class action had been certified, the court found that a six-year FLSA opt-in notice could confuse workers who might have state-law claims but could not join the FLSA collective through that notice.

The proposed notice had to be revised. The court required removal of most references to New York Labor Law, while allowing a separately titled section about state-law claims to remain if specified language was deleted or moved. The revised notice also had to include a neutral statement that people who join may be required to provide testimony and information about their work. The parties were directed to meet and confer about other notice language before plaintiffs submitted a revised notice for approval. The notice could not be posted on plaintiffs’ counsel’s website because plaintiffs did not contest defendants’ opposition to that proposal.

Employee Contact Information

The court ordered defendants, within 14 days after entry of an order approving the revised notice, to provide information located after a reasonable search of data within their possession, custody, or control. The information must cover non-exempt Westside carwash employees from the previous three years and include names, dates of employment, last known addresses, telephone numbers, and email addresses.

Disposition and Significance

Judge Robert W. Lehrburger granted in part and denied in part plaintiffs’ motion to conditionally certify an FLSA collective action, issue notice, and require production of employee contact information. The order allowed notice and further participation by potentially similarly situated non-exempt carwash workers, but it did not decide whether defendants actually violated the wage laws. The collective was limited to three years, and the notice and contact-information production had to follow the court’s specified conditions.