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Charbonneau v. Mortgage Lenders of America, L.L.C.

United States District Court, D. Kansas

December 6, 2018

BEAU CHARBONNEAU, on behalf of himself and all others similarly situated, Plaintiff,



         Plaintiff Beau Charbonneau brings this putative collective action under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201, et seq., claiming that his former employer-defendant Mortgage Lenders of America L.L.C.-misclassified a certain employment position (“team lead”) as an exempt position. Plaintiff also claims that defendant requires non-exempt employees (specifically, loan officers) to perform work off the clock, without pay. Plaintiff has worked for defendant in both capacities-as a team lead and as a loan officer. This matter is before the court on plaintiff's Motion for Conditional Class Certification of Class Claims Under § 216(b) of the FLSA (Doc. 36). Plaintiff seeks conditional certification of two separate FLSA classes: team leads and loan officers. For the following reasons, the court grants the motion.

         I. Legal Standards

         Conditional certification of a class under the FLSA requires compliance with the FLSA collective action mechanism, which states: “An action to recover the liability prescribed in either of the preceding sentences may be maintained . . . by any one or more employees for and in behalf of himself or themselves and other employees similarly situated.” 29 U.S.C. § 216(b). Whether an employee may maintain a § 216(b) collective action, then, depends on whether he or she is “similarly situated” to other members of the putative class. Although § 216(b) does not define the term “similarly situated, ” the Tenth Circuit has endorsed the ad hoc method of determination. Thiessen v. Gen. Elec. Capital Corp., 267 F.3d 1095, 1105 (10th Cir. 2001).

         Under the ad hoc method, “a court typically makes an initial ‘notice stage' determination of whether plaintiffs are ‘similarly situated.'” Id. at 1102 (citation omitted). This initial determination “‘require[s] nothing more than substantial allegations that the putative class members were together the victims of a single decision, policy, or plan.'” Id. (citation omitted); see also Hadley v. Wintrust Mortg. Corp., No. 10-2574-EFM, 2011 WL 4600623, at *2 (D. Kan. Oct. 3, 2011); Shockey v. Huhtamaki, Inc., 730 F.Supp.2d 1298, 1300 (D. Kan. 2010). This standard is a lenient one. Williams v. Sprint/United Mgmt. Co., 222 F.R.D. 483, 485 (D. Kan. 2004).

         “Because the court has minimal evidence, [the notice stage] determination . . . typically results in ‘conditional certification' of a representative class.” Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1214 (5th Cir. 1995). The “similarly situated” standard is considerably less stringent than Rule 23(b)(3) class action standards. Grayson v. K-Mart Corp., 79 F.3d 1086, 1096 (11th Cir. 1996). Ordinarily, the court makes the determination fairly early in the litigation, before the parties complete discovery. Brown v. Money Tree Mortg., Inc., 222 F.R.D. 676, 679 (D. Kan. 2004). And in making the determination, the court does not reach the merits of the plaintiff's claims. Renfro v. Spartan Computer Servs., Inc., 243 F.R.D. 431, 435 (D. Kan. 2007); Hoffman v. Sbarro, Inc., 982 F.Supp. 249, 262 (S.D.N.Y. 1997) (citation omitted). But a plaintiff must provide more than speculative allegations. Stubbs v. McDonald's Corp., 227 F.R.D. 661, 666 (D. Kan. 2004). And “conclusory and general allegations” are insufficient. Blancarte v. Provider Plus, Inc., No. 11-2567-JAR, 2012 WL 4442641, at *4 (D. Kan. Sept. 26, 2012).

         The court must therefore determine whether plaintiff has offered substantial allegations that members of each putative class are similarly situated.

         II. Plaintiff's Allegations

         A. Misclassification of Team Leads as Exempt

         Defendant classifies its team leads as exempt, thereby denying them overtime compensation. Plaintiff claims that the primary duty of team leads is to sell mortgages. They regularly work over forty hours a week. Defendant is aware of team leads' excess hours because defendant directs its customers to contact team leads on their personal cell phones and sees the team leads' loan production results.

         Defendant does not pay team leads at least $455 per week on a salary basis. Instead, team leads receive a $1, 000 recoverable monthly draw. Team leads receive a monthly amount equal to $175 times the number of members on each lead's team. Defendant then nets out the monthly amount from the $1, 000 recoverable draw. Because of this pay structure, plaintiff argues, team leads do not qualify for a white collar FLSA exemption.

         Team leads also get commissions from their own sales and the sales of the loan officers assigned to their teams. But defendant withholds certain fees from the team leads' wages. Plaintiff claims that this compensation structure is uniformly applied.

         According to plaintiff, team leads do not regularly supervise and manage the work of their team members. They offer encouragement, assistance, and support, but they primarily spend their time selling loans. Team leads do not exercise discretion and independent judgment on significant matters. They implement and follow federal guidelines and defendant's policies and procedures.

         Team leads share common job duties and descriptions. Defendant has presented evidence that the duties are different than what plaintiff represents, but defendant's evidence still suggests that team leads share common duties-whatever those duties ultimately are shown to be. As noted above, team leads are classified as exempt employees and perform work without overtime compensation. And ...

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