Curry v. P&G Auditors and Consultants, LLC

Background

Kenneth Curry, Ricardo Mazzitelli, and Jacqueline Brown Pilgrim brought a proposed collective and class action under the Fair Labor Standards Act and New York Labor Law. They principally alleged that P&G Auditors and Consultants, LLC; GRC Solutions, LLC; PGX, LLC; and Apple Bancorp, Inc., doing business as Apple Bank for Savings, failed to pay required overtime compensation.

The plaintiffs worked on an Apple Bank project connected to regulatory requirements concerning the bank’s suspicious-activity monitoring and anti-money-laundering programs. GRC entered into agreements with Apple Bank to provide consulting services, and the plaintiffs were engaged directly or indirectly under those agreements. Curry worked as an anti-money-laundering investigator, Mazzitelli as a team lead, and Pilgrim as an anti-money-laundering investigator. They worked at an Apple Bank branch, used Apple Bank computers and information technology, and, according to evidence they submitted, received feedback from Apple Bank employees through their GRC superiors. Curry also stated that his duties and work location did not change when PGX replaced GRC and P&G as the named employer on his employment paperwork.

The plaintiffs said they regularly worked more than 40 hours per week without receiving overtime pay. They filed the action on August 27, 2020.

Apple Bank’s Motion

Apple Bank moved for summary judgment under Federal Rule of Civil Procedure 56 on all claims against it. Summary judgment is a decision entered without a trial when the moving party shows that no genuine dispute of material fact exists and that it is entitled to judgment as a matter of law.

Apple Bank argued that it was not the plaintiffs’ employer under either the Fair Labor Standards Act or New York Labor Law. It also argued that the plaintiffs’ Fair Labor Standards Act claims were barred by the statute of limitations because any overtime violation by Apple Bank was not willful. The complaint was filed more than two years but less than three years after the claims accrued, so the federal claims were timely only if the alleged violations were willful.

Joint-Employer Issue

The court explained that the Fair Labor Standards Act broadly defines employment and that joint-employer status depends on the economic realities of the relationship. The court identified factors including whether Apple Bank had power to hire or fire the workers, controlled their schedules or working conditions, determined their pay, maintained employment records, provided the premises and equipment, supervised their work, and received their exclusive or predominant services.

Apple Bank submitted evidence from its human-resources officer stating that Apple Bank did not hire or terminate the GRC workers, did not have authority to do so, did not maintain their employment or personnel records, did not pay them, and did not control their workdays or hours. The plaintiffs disputed or lacked knowledge of several of those assertions because discovery had not occurred.

The plaintiffs identified evidence that could support their position, including Apple Bank’s Acceptable Use Policy, which referred to possible discipline or termination by the bank; their assertions that Apple Bank might have retained weekly time records; their work at Apple Bank’s premises using its computers and information technology; feedback from Apple Bank employees; and their exclusive work on the Apple Bank project. The court stated that joint-employer status is fact-intensive and that summary judgment on that issue is rare, particularly before discovery.

The court concluded that Apple Bank had not shown that this was one of the rare cases in which summary judgment was appropriate before discovery. It therefore denied the motion to the extent it relied on Apple Bank’s argument that it was not the plaintiffs’ employer, as premature and without prejudice to renewal after discovery.

Statute-of-Limitations Issue

The Fair Labor Standards Act generally provides a two-year limitations period, extended to three years for a willful violation. A violation is willful when the employer knew, or recklessly disregarded whether, its conduct was prohibited by the statute.

Apple Bank argued that the evidence supporting its position that it was not the plaintiffs’ employer made the plaintiffs’ willfulness theory unsupportable. The plaintiffs identified evidence that Apple Bank arranged additional security so they could work late and on weekends, may have reviewed their time sheets to determine amounts owed to the contractor defendants, and directed GRC to require extremely long hours to meet project deadlines.

The court held that, at this early stage and given Apple Bank’s greater burden before discovery, the plaintiffs’ showing was enough to overcome the motion. It denied the motion to the extent it relied on the Fair Labor Standards Act’s statute of limitations, again as premature and without prejudice to renewal after discovery.

Disposition

The court denied Apple Bank’s motion for summary judgment in its entirety as premature, without prejudice to renewal upon completion of discovery. The order did not finally decide whether Apple Bank was the plaintiffs’ employer or whether its alleged conduct was willful. The case remained referred to Magistrate Judge Sarah Cave for general pretrial proceedings, and the order resolved docket entry number 40.