Michele Metcalf v. Transperfect Global Inc.

Background

Michele Metcalf and Hannah Lawson filed a proposed class action alleging that TransPerfect Translations International, Inc. violated the New York Labor Law by failing to pay overtime to certain salaried employees who worked more than 40 hours per week in TransPerfect’s New York City office. They also alleged that TransPerfect failed to provide wage statements showing the overtime rate of pay, in violation of New York Labor Law § 195(3).

The operative complaint invoked federal jurisdiction under the Class Action Fairness Act, which allows federal courts to hear qualifying class actions when, among other requirements, the proposed class has at least 100 members and the amount in controversy exceeds $5 million. TransPerfect moved to dismiss for lack of subject-matter jurisdiction under Federal Rules of Civil Procedure 12(b)(1) and 12(h)(3), arguing that the evidence did not support the required amount in controversy.

Report and Recommendation

Magistrate Judge Katharine H. Parker recommended denying TransPerfect’s jurisdictional motion and dismissing the New York Labor Law § 195(3) wage-statement claims without prejudice because the plaintiffs had not adequately pleaded standing to bring those claims. TransPerfect objected to the recommendation concerning the amount in controversy but did not object to the recommendation concerning the wage-statement claims.

Amount in Controversy

Judge Ramos adopted the recommendation to deny the jurisdictional motion. The court explained that the plaintiffs had to show a reasonable probability that the proposed class’s aggregate claims exceeded $5 million. After that showing, TransPerfect had to establish to a legal certainty that the claims were worth less than $5 million.

The court upheld the preliminary calculations based on the complaint’s allegations that class members worked up to 15 overtime hours per week for 54 weeks, that the proposed class included at least 100 members, and that the applicable overtime rate could be approximately $40.38 per hour. Those figures produced approximately $3.3 million in compensatory damages and another $3.3 million in liquidated damages. The court also approved including a possible approximately $2.2 million in attorneys’ fees in the jurisdictional calculation.

The court rejected TransPerfect’s argument that it had to use a lower estimate of 6.56 overtime hours per week. That estimate was based on records for only 5 percent of the proposed class, and the court stated that it was not yet clear that those records disproved the complaint’s 15-hour allegation. The court also rejected TransPerfect’s argument that the calculation had to use 1.5 times the minimum wage, explaining that TransPerfect had not established to a legal certainty that a relevant Fair Labor Standards Act exemption applied. Finally, even under TransPerfect’s proposed method of estimating classwide damages from the named plaintiffs’ damages, the court concluded that the $5 million threshold was not disproved to a legal certainty.

Wage-Statement Claims

The court reviewed the recommendation concerning the New York Labor Law § 195(3) claims for clear error because neither party objected to that portion. Finding no error, the court adopted the recommendation and dismissed those claims without prejudice for failure to adequately plead standing.

Disposition

The court adopted Judge Parker’s Report and Recommendation, denied TransPerfect’s motion to dismiss under the Class Action Fairness Act, and dismissed the plaintiffs’ New York Labor Law § 195(3) claims without prejudice. The Clerk was directed to terminate the motion.