Lopez v. Thermo Tech Mechanical Inc.

Background

Juan Lopez sued Thermo Tech Mechanical Inc., its president and owner Gowkarran Budhu, and its accountant Shanti Budhu. He asserted claims under the Fair Labor Standards Act (FLSA), the New York Labor Law, and New York common law. Lopez alleged that the defendants failed to pay him for all hours worked, including overtime, by rounding down the beginning and end of shifts, deducting more time for lunch than he actually took, and, on two later occasions, paying him for fewer hours than electronic records showed. He also alleged failures involving wage notices and statements and claimed that he was not paid required prevailing wages for HVAC work on public-school projects.

Two motions were before the court: Lopez’s reinstated motion for conditional certification of an FLSA collective action and approval of a notice to potential opt-in plaintiffs, and his motion to compel broader, class-related discovery for a possible class action under Federal Rule of Civil Procedure 23.

FLSA Collective-Certification Motion

At the conditional-certification stage, an employee must make a modest factual showing that the employee and potential opt-in plaintiffs were subject to a common policy or plan violating the FLSA. The court found that Lopez’s allegations and declaration adequately supported an FLSA claim for unpaid overtime based on the alleged policy of rounding employees’ time down and deducting a full hour for lunch even when employees took shorter breaks. The court stated that this alleged non-neutral rounding policy could not be justified by the federal regulation permitting certain rounding practices when employees are fully compensated over time.

However, the court concluded that Lopez’s viable FLSA claim covered less than seven months—from October 30, 2017, through at the latest May 18, 2018. The FLSA’s three-year limitations period barred claims arising before that period. After the electronic timekeeping system was installed in May 2018, Lopez identified only unpaid regular, non-overtime hours in two weeks; because he worked fewer than 40 hours in each of those weeks, those allegations did not establish unpaid FLSA overtime.

The court further held that potential opt-in plaintiffs’ limitations periods continued to run until they filed written consents to join the case. Because the alleged common policy ended in May 2018 and no potential opt-in plaintiffs had timely FLSA claims, the court found that notice and opt-in forms should not be sent. It rejected Lopez’s request for equitable tolling, explaining that tolling could not revive limitations periods that had already expired.

Discovery Motion

The court explained that the failure of Lopez’s FLSA collective-certification motion did not prevent him from seeking certification of his New York state-law claims under Rule 23. It therefore permitted reasonable discovery concerning class-certification issues.

The court denied Lopez’s request for the names and contact information of every non-exempt HVAC installation, maintenance, and repair worker employed by Thermo Tech during the requested period because Lopez had not shown that contacting individual potential class members was necessary to support his Rule 23 arguments. The court also declined to require defendants to answer a detailed interrogatory seeking each covered employee’s occupation, schedule, rates, pay information, and related details, because the relevant information could be obtained more efficiently from payroll records and other documents.

The court required defendants to produce, for the covered employees, pay stubs or checks; underlying manual or electronic time records; New York wage notices and wage statements; and generally applicable manuals, memoranda, or other documents describing job duties, hours, wages, or timekeeping requirements. Because Lopez also asserted express and implied contract claims concerning prevailing wages on public-works projects, the court required production of documents showing the prevailing wages and supplemental benefits required for each qualifying project undertaken on or after October 30, 2014, as well as the wages and benefits actually paid. The parties were directed to meet and confer about which documents would satisfy that obligation, and production was ordered within 30 days of the order.

Disposition

The court denied Lopez’s motion for conditional certification of an FLSA collective. It granted in part Lopez’s letter-motion to compel classwide discovery to the extent described in the order. It denied as moot the defendants’ request for a partial stay of discovery. The existing December 15, 2023 deadline for completing fact discovery remained in place. Judge Barbara Moses signed the order.