# Umbrino v. L.A.R.E. Partners Network, Inc.

> District Court, W.D. New York · February 15, 2022

URL: https://www.frixlaw.com/law-library/cases/10364639

## Case

- **Court:** District Court, W.D. New York
- **Decided:** February 15, 2022
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10364639

## How later opinions describe it (automated extraction)

- explaining that courts apply a “two-prong test” to determine “whether a defendant’s business is recognized as retail”: “(1) the establishment must be part of an industry in which there is a ‘retail concept’; and (2

## Opinion text

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK

VICKI UMBRINO, et al.,
DECISION AND ORDER
Plaintiffs,
v. 6:19-cv-06559 EAW

L.A.R.E PARTNERS NETWORK, INC., et al.,

Defendants.

INTRODUCTION
Plaintiffs Vicki Umbrino (“Umbrino”) and Richard Zoller (“Zoller”) (collectively
“Named Plaintiffs”) commenced this putative class and collective action on July 26, 2019,
asserting violations of the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. §§ 201
et seq. (the “FLSA”) and the New York Labor Law (the “NYLL”) by defendants L.A.R.E.
Partners Network, Inc. d/b/a L.A.R.E Partners f/k/a List Assist Real Estate, Inc. (“L.A.R.E.
Partners”), Real Agent Pro, LLC f/k/a L.A.R.E. Marketing, LLC (“Real Agent Pro”),
L.A.R.E. Properties, LLC (“L.A.R.E. Properties”), List-Assist of Rochester, LLC (“List-
Assist”), and Isaiah Colton (“Colton”) (collectively “Defendants”). (Dkt. 1). Upon
stipulation of the parties (Dkt. 12), the Court conditionally certified the matter as a collective
action under the FLSA on February 28, 2020. (Dkt. 13).
Currently before the Court are: (1) Named Plaintiffs’ motion to certify the matter as
a class action pursuant to Federal Rule of Civil Procedure 23 (Dkt. 68); (2) Defendants’
cross-motion to decertify the FLSA collective action (Dkt. 72); and (3) Named Plaintiffs’
motion for partial summary judgment (Dkt. 90)1. For the reasons that follow, the Court
grants in part and denies in part Named Plaintiffs’ motion for partial summary judgment,
grants in part and denies in part Named Plaintiffs’ motion for class certification, and denies

Defendants’ motion to decertify the FLSA collective action.
BACKGROUND
I. Factual Background
The facts set forth below are taken from the complaint (Dkt. 1); Named Plaintiffs’
Local Rule 56 Statement of Material Facts submitted in support of their motion for partial

summary judgment (Dkt. 90-2) and Defendants’ response thereto (Dkt. 107-1); and the
exhibits submitted by the parties. Relevant factual disputes have been noted by the Court.
At the outset, the Court acknowledges that the parties dispute whether Named
Plaintiffs are former employees of all Defendants or solely of Real Agent Pro, with Named
Plaintiffs taking the former position and Defendants taking the latter. (See Dkt. 90-2 at ¶ 1;

Dkt. 107-1 at ¶ 1). It is undisputed that Real Agent Pro operates in the real estate industry
and provides services to real estate agents, whom it matches with individuals looking to sell

1 The following motions are also pending in this action: (1) Defendants’ motion to
dismiss the claims of opt-in plaintiff Hajarah Conyers due to a failure to participate in
discovery (Dkt. 98); (2) Named Plaintiffs’ motion to strike certain of Defendants’
affirmative defenses (Dkt. 109); and (3) Defendants’ cross-motion for leave to file an
amended answer (Dkt. 114). The first of these motions has been referred to United States
Magistrate Judge Marian W. Payson for issuance of a report and recommendation. (Dkt.
99). The second and third involve matters that are distinct from those addressed in this
Decision and Order and will be decided by the Court in due course.
their homes. (Dkt. 90-2 at ¶ 3; Dkt. 107-1 at ¶ 3). Real Agent Pro’s goal was to be “a Zillow
for sellers” and to generate leads for real estate agents. (Dkt. 90-2 at ¶ 4; Dkt. 107-1 at ¶ 4).
Named Plaintiffs contend that Defendants do not sell any services directly to

homeowners and that “[h]omeowners who want to sell their homes are the product to be
delivered to defendants’ real estate agent-clients.” (Dkt. 90-2 at ¶ 8). Defendants dispute
this characterization, again asserting that it was only Real Agent Pro that contracted with the
real estate agents and further that in 2017 and 2018 Real Agent Pro sold homeowners a
“Mega Agent Pro subscription for access to education services.” (Dkt. 107-1 at ¶ 8).

Named Plaintiffs were employed as “inside sales employees” by at least Real Agent
Pro. (See Dkt. 1 at ¶¶ 39, 49, 56). Named Plaintiffs claim that they regularly worked more
than 40 hours in a workweek without being paid overtime compensation. (See id. at ¶¶ 39-
45, 48-53). Named Plaintiffs further claim that they were not provided with wage notices
as required by NYLL § 195, which is part of New York’s Wage Theft Prevention Act

(“WTPA”). (See id. at ¶¶ 67-70).
The parties disagree regarding the extent of Colton’s role with the business entity
defendants. They agree that Colton helped start the businesses and has served as Chief
Executive Officer (“CEO”) of the business entity defendants. (Dkt. 90-2 at ¶ 13; Dkt 107-1
at ¶ 13). It is further undisputed that Colton “provided strategic oversight to the various

defendants” and, as to Real Agent Pro, “directly supervised the managers, including
operations, controller and vice president of sales.” (Dkt. 90-2 at ¶ 14; Dkt. 107-1 at ¶ 14).
The parties also do not dispute that Colton “served as a sales director as the company started,
and then on an as-needed basis,” and that “early on” he “directly supervised inside sales
employees, and after the company grew, he supervised the managers responsible for
supervising the inside sales employees.” (Dkt. 90-2 at ¶¶ 16-17; Dkt. 107-1 at ¶¶ 16-17).
However, Defendants dispute Named Plaintiffs’ contention that Colton was involved

in the hiring process for inside sales employees, maintaining that while he “occasionally
referred an individual for hire, Real Agent Pro did not necessarily hire them.” (Dkt. 107-1
at ¶ 18). Defendants further contend that “only on very rare, infrequent occasions (almost
all prior to 2016) did [Colton] sit in on inside sales applicants’ employment interviews, but
did not make the decision on whether to hire an applicant.” (Id.). According to Defendants,

“Colton did not approve, or otherwise have involvement in, terminations of inside sales
employees.” (Id.).
Named Plaintiffs claim that Colton “helped train inside sales employees, evaluated
their performance and was involved with disciplining employees.” (Dkt. 90-2 at ¶ 21).
Defendants dispute this claim, maintaining that Colton “rarely conducted formal training of

inside sales employees” and “did not have direct involvement in performance evaluations or
discipline of inside sales employees.” (Dkt. 107-1 at ¶ 21). Defendants further deny Named
Plaintiffs’ claim that “Colton monitored employees’ performance, asking them if they were
working Saturdays or staying late, or directing employees to work more, if they were not
meeting their goals.” (Dkt. 90-2 at ¶ 22; Dkt. 107-1 at ¶ 22). According to Defendants, “[i]f

an [inside sales employee] worked at home, on the weekends, or outside of normal work
hours, then they decided to do so on their own accord without . . . Colton’s encouragement,
directive, or request.” (Dkt. 107-1 at ¶ 9).
The parties also disagree regarding Colton’s role in setting policies and determining
employee pay. Defendants state that Colton “did not create, draft, or revise Real Agent Pro’s
employment policies, including the Employee Handbook” and that he does not even “recall

ever reviewing them before their implementation.” (Dkt. 107-1 at ¶ 23). Defendants further
state the Colton “only reviewed or approved compensation plans as a part of the executive
team,” “did not have exclusive authority to approve compensation plans,” and “did not
directly review or approve [inside sales employees’] commissions and bonuses distributed
in the normal course of business.” (Dkt. 107-1 at ¶ 24).

Defendants further dispute the following claims by Named Plaintiffs: (1) Colton
made the decision to revoke an employee’s stock award; (2) Colton directed the human
resources manager “to actively engage in employee recognition, and he made decisions on
what benefits to provide to employees”; (3) Colton decided when the office would be closed
for holidays; (4) Colton decided not to pay inside sales employees overtime; and (5) Colton

maintained and reviewed personnel files. (Dkt. 90-2 at ¶¶ 26-29, 31; Dkt. 107-1 at ¶¶ 26-
29, 31).
II. Procedural Background
Named Plaintiffs commenced the instant action on July 26, 2019. (Dkt. 1).
Defendants failed to timely file an answer. (See Dkt. 5).

On October 16, 2019, Named Plaintiffs filed a motion for conditional certification of
the matter as a collective action under the FLSA. (Dkt. 4). Named Plaintiffs requested
Clerk’s entries of default on December 17, 2019, and the same were entered by the Clerk of
Court’s office on December 18, 2019. (Dkt. 6; Dkt. 7).
On February 24, 2020, the parties entered a stipulation whereby they agreed, among
other things, that: (1) the Clerk’s entries of default as to each of Defendants would be
vacated; and (2) Defendants would not oppose Named Plaintiffs’ motion for conditional

certification. (Dkt. 12). The Court so-ordered the parties’ stipulation on February 28, 2020.
(Dkt. 13).
Defendants filed an answer to the complaint on March 24, 2020. (Dkt. 15).
Defendants’ answer did not assert as an affirmative defense the “retail or service” exemption
to the FLSA’s and NYLL’s overtime requirements. See 29 U.S.C. § 207(i) (“No employer

shall be deemed to have violated . . . [29 U.S.C. § 207(a)] by employing any employee of a
retail or service establishment for a work week in excess of . . . [40 hours], if (1) the regular
rate of pay of such employee is in excess of one and one-half times the minimum hourly . . .
[wage], and (2) more than half his compensation for a representative period (not less than
one month) represents commissions on goods or services.”); 12 N.Y.C.R.R. § 142-2.2 (“An

employer shall pay an employee for overtime at a wage rate of one and one-half times the
employee’s regular rate in the manner and methods provided in and subject to the
exemptions of sections 7 and 13 of 29 USC 201 et seq., the Fair Labor Standards Act of
1938, as amended. . . .”).
Named Plaintiffs filed the instant motion for class certification on July 6, 2021. (Dkt.

68). Defendants filed their opposing papers and cross-motion to decertify the collective
action on July 28, 2021. (Dkt. 72). Named Plaintiffs filed their reply brief in further support
of their motion for class certification and their opposition to Defendants’ decertification
cross-motion on August 20, 2021. (Dkt. 80). Defendants filed their reply brief in further
support of their decertification cross-motion on September 3, 2021. (Dkt. 89).
Named Plaintiffs filed the instant motion for partial summary judgment on September

15, 2021. (Dkt. 90).
On October 25, 2021, Named Plaintiffs filed an amended complaint. (Dkt. 103).
Defendants’ answer to the amended complaint was filed on November 16, 2021, and does
include as an affirmative defense the retail or service exemption. (Dkt. 106).
Defendants filed their opposition to Named Plaintiffs’ motion for partial summary

judgment on November 19, 2021. (Dkt. 107). Named Plaintiffs filed their reply brief in
further support of their motion for partial summary judgment on December 17, 2021. (Dkt.
112).
DISCUSSION
I. Motion for Partial Summary Judgment

As discussed further below, Defendants’ opposition to Named Plaintiffs’ motion for
class certification and cross-motion for decertification of the FLSA collective action rests,
in part, on Defendants’ contention that the potential applicability of the retail or service
exemption precludes a finding of commonality. (See Dkt. 72-1 at 10). However, in their
motion for partial summary judgment, Named Plaintiffs ask the Court to find, among other

things, that the retail or service exemption is inapplicable as a matter of law. (See Dkt. 90-
1 at 14-22). Because resolution of that matter bears on the Court’s analysis of the
certification and decertification issues, the Court considers Defendants’ motion for partial
summary judgment first.
Named Plaintiffs seek partial summary judgment on two distinct points. First, as
noted above, they ask the Court to find as a matter of law that Defendants cannot prove the
applicability of the retail or service exemption. Second, they ask the Court to find as a matter

of law that Colton was an “employer” under both the FLSA and the NYLL. The Court
considers each of these issues below.
A. Legal Standard
Federal Rule of Civil Procedure 56 provides that summary judgment should be
granted if the moving party establishes “that there is no genuine dispute as to any material

fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The
Court should grant summary judgment if, after considering the evidence in the light most
favorable to the non-moving party, the Court finds that no rational jury could find in favor
of that party. Scott v. Harris, 550 U.S. 372, 380 (2007) (citing Matsushita Elec. Indus. Co.
v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986)).

“The moving party bears the burden of showing the absence of a genuine dispute as
to any material fact. . . .” Crawford v. Franklin Credit Mgmt. Corp., 758 F.3d 473, 486 (2d
Cir. 2014). “Where the non-moving party will bear the burden of proof at trial, the party
moving for summary judgment may meet its burden by showing the evidentiary materials
of record, if reduced to admissible evidence, would be insufficient to carry the non-movant’s

burden of proof at trial.” Johnson v. Xerox Corp., 838 F. Supp. 2d 99, 103 (W.D.N.Y. 2011)
(citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986)). Once the moving party has
met its burden, the opposing party “must do more than simply show that there is some
metaphysical doubt as to the material facts, and may not rely on conclusory allegations or
unsubstantiated speculation.” Robinson v. Concentra Health Servs., Inc., 781 F.3d 42, 44
(2d Cir. 2015) (quoting Brown v. Eli Lilly & Co., 654 F.3d 347, 358 (2d Cir. 2011)).
Specifically, the non-moving party “must come forward with specific evidence

demonstrating the existence of a genuine dispute of material fact.” Brown v. Eli Lilly & Co.,
654 F.3d 347, 358 (2d Cir. 2011). Indeed, “the mere existence of some alleged factual
dispute between the parties will not defeat an otherwise properly supported motion for
summary judgment; the requirement is that there be no genuine issue of material fact.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).

B. Retail or Service Exemption
The FLSA requires that “employees who work more than 40 hours per week . . . be
compensated for each hour worked over 40 ‘at a rate not less than one and one-half times
the regular rate at which [they are] employed.’” Young v. Cooper Cameron Corp., 586 F.3d
201, 204 (2d Cir. 2009) (quoting 29 U.S.C. § 207(a)(1)). However, the FLSA also contains

numerous exemptions to this requirement. Among them is the retail or service exemption,
which applies to “any employee of a retail or service establishment . . . if (1) the regular rate
of pay of such employee is in excess of one and one-half times the minimum hourly . . .
[wage], and (2) more than half his compensation for a representative period (not less than
one month) represents commissions on goods or services.” 29 U.S.C. § 207(i). In other

words, in order for the retail or service exemption to apply: (1) the employer must qualify
as a “retail or service establishment”; (2) the employee must have received more than 50%
of his or her income from commissions; and (3) the employee must have been paid at least
one and one-half times the applicable minimum wage for all hours worked. See Johnson v.
Wave Comm GR LLC, 4 F. Supp. 3d 423, 433 (N.D.N.Y. 2014). “[A]n employer bears the
burden of proving that its employees fall within an exempted category of the [FLSA].”
Martin v. Malcolm Pirnie, Inc., 949 F.2d 611, 614 (2d Cir. 1991).

“The NYLL does not, itself, require the payment of ‘overtime.’” Johnson, 4 F. Supp.
3d at 433. However, the New York Department of Labor has promulgated a regulation
providing, with exceptions not relevant here, that “[a]n employer shall pay an employee for
overtime at a wage rate of one and one-half times the employee’s regular rate in the manner
and methods provided in and subject to the exemptions of sections 7 and 13 of 29 USC 201

et seq., the Fair Labor Standards Act of 1938, as amended[.]” 12 N.Y.C.R.R. 142-2.2. In
other words, if the retail or service exemption applies, Defendants were not obligated to pay
overtime wages under either the FLSA or the NYLL.
Named Plaintiffs argue that the retail or service exemption does not apply to
Defendants’ inside sales employees because (1) Defendants have waived the exemption

defense and (2) Defendants cannot prove that they meet the definition of a retail or service
establishment. (Dkt. 90-1). The Court easily disposes of the first of these arguments. It is
true that as a general rule, “a claim of exemption under the FLSA is an affirmative defense
that, pursuant to Fed. R. Civ. P. 8(c), must be specifically pleaded or will be deemed
waived.” Schwind v. EW & Assocs., Inc., 357 F. Supp. 2d 691, 697 (S.D.N.Y. 2005).

However, as Defendants correctly point out in their opposition papers, they asserted the retail
or service exemption in their answer to the amended complaint, which is the operative
pleading. (See Dkt. 107 at 8). “In the absence of prejudice to [the plaintiff], [a defendant]
is permitted to raise related affirmative defenses in an answer to a newly amended
complaint.” GEOMC Co. v. Calmare Therapeutics, Inc., No. 3:14-CV-01222 (VAB), 2016
WL 6122930, at *4 (D. Conn. Oct. 19, 2016), aff’d, 918 F.3d 92 (2d Cir. 2019). Here, there
is no prejudice to Named Plaintiffs in Defendants’ assertion of the retail or service

exemption in their answer to the amended complaint. Indeed, Named Plaintiffs do not even
address the waiver argument in their reply papers. See Galin v. Hamada, No. 15-CV-6992
(JMF), 2016 WL 2733132, at *3 (S.D.N.Y. May 10, 2016) (“Defendant did not renew those
arguments in his reply after Plaintiff responded to them, so the Court deems them
abandoned.” (internal citations omitted)). Accordingly, the Court declines to grant summary

judgment on the basis of waiver.
The Court also cannot grant summary judgment as to whether any of the defendants
apart from Real Agent Pro are a retail or service establishment. As noted above, Defendants
assert that the documents and testimony relied upon by Named Plaintiffs describe only Real
Agent Pro’s business model. (See, e.g., Dkt. 107-1 at ¶¶ 3-10, 12). The record before the

Court contains scant information2 regarding this factual dispute and the Court cannot
determine as a matter of law at this point that the defendants, other than Real Agent Pro,
operated in the same industry or in the same manner as Real Agent Pro. Accordingly, the

2 For example, Sara P. Mason, who was employed by Real Agent Pro during the time
it was previously known as L.A.R.E. Marketing, LLC (“L.A.R.E. Marketing”), has
submitted an affirmation in which she states vaguely that L.A.R.E. Marketing worked with
unenumerated “related companies” with which it shared a “common purpose” and, “at
various times[,] . . . office space, bank accounts, and centralized payroll processing.” (Dkt.
90-6 at ¶ 5). The Court cannot grant summary judgment on the basis of these sorts of
conclusory statements.
Court limits its discussion of the remainder of Named Plaintiffs’ argument to Real Agent
Pro.
“Section 207(i) of Title 29 of the United States Code lacks guidance on what

constitutes a ‘retail or service establishment.’” Johnson, 4 F. Supp. 3d at 434. Instead,
courts “apply the definition contained in a now-repealed FLSA provision, § 13(a)(2), the
former ‘retail or service establishment’ exemption.” English v. Ecolab, Inc., No. 06 CIV.
5672 (PAC), 2008 WL 878456, at *2 (S.D.N.Y. Mar. 31, 2008); see 29 C.F.R. § 779.411
(“In order for an employee to come within the exemption from the overtime pay requirement

provided by section 7(i) for certain employees receiving commissions, the employee must
be employed by a retail or service establishment. The term ‘retail or service establishment’
is defined in section 13(a)(2) of the Act.”).  “Under the repealed section, a retail or service
establishment was defined as an establishment 75 per centum of whose annual dollar volume
of sales of goods or services (or of both) is not for resale and is recognized as retail sales or

services in the particular industry.” Sydney v. Time Warner Ent.-Advance/Newhouse P’ship,
No. 5:13-CV-286 FJS TWD, 2021 WL 2662047, at *4 (N.D.N.Y. Mar. 30, 2021) (citation
omitted).
In this context, “services” means “services rendered by establishments which are
traditionally regarded as local retail service establishments such as . . . restaurants, hotels,

barber shops, repair shops, etc.” 29 C.F.R. § 779.314. In addition, “the term ‘retail or service
establishment’ as used in the [FLSA] does not encompass establishments in industries
lacking a ‘retail concept.’” 29 C.F.R. § 779.316. The applicable regulations further explain
that a retail or service establishment is:
[O]ne which sells goods or services to the general public. It serves the
everyday needs of the community in which it is located. The retail or service
establishment performs a function in the business organization of the Nation
which is at the very end of the stream of distribution, disposing in small
quantities of the products and skills of such organization and does not take part
in the manufacturing process.

29 C.F.R. § 779.318(a). “[T]here is no bright line rule for determining whether an
establishment is a ‘retail or service establishment’ and a case-by-case approach is necessary
in making this determination.” Schwind v. EW & Assocs., Inc., 371 F. Supp. 2d 560, 565
(S.D.N.Y. 2005) (citation omitted).
Named Plaintiffs contend that Real Agent Pro operates in an industry—namely, the
real estate industry—that lacks a traditional retail concept and that it therefore cannot be
considered a retail or service establishment. (Dkt. 90-1 at 21). Named Plaintiffs further
contend that Real Agent Pro does not sell goods or services to the general public, does not
have a store front but instead works out of an office building, does not provide goods or
services used by the public for their comfort or convenience in the course of their daily lives,
and is involved in manufacturing the goods and services it provides, and thus has “none of
the hallmarks of a retail or service establishment.” (Id. at 22). Finally, Named Plaintiffs
contend that Real Agent Pro is not “at the end of the stream of distribution,” but is instead
in the middle. (Id.).
The Court agrees with Named Plaintiffs that the undisputed evidence is that Real
Agent Pro operates in the real estate industry and further finds that the real estate industry
lacks a retail concept. As to the first of these findings, Real Agent Pro does not argue that

it is not part of the real estate industry, nor does it point to any evidence controverting Named
Plaintiffs’ showing in this regard. Further, it is undisputed that Real Agent Pro’s business
model involved arranging appointments between real estate agents and individuals who were
interested in selling or potentially selling their homes. (See Dkt. 107-2 at ¶ 3).

As to the second finding, the Court notes that 29 C.F.R. § 779.317 previously set
forth a non-exhaustive list of establishments that lack a retail concept. See Gonzalez v.
Diamond Resorts Int’l Mktg., Inc., No. 2:18-CV-00979 APG NJK, 2021 WL 6123631, at *5
(D. Nev. Dec. 27, 2021) (“The [Department of Labor (“DOL”)] previously issued two
companion regulations, one that listed types of businesses that had a retail concept and one

that listed those that did not. 29 C.F.R. §§ 779.317, 779.320.”). However, the DOL withdrew
this regulation in May of 2020. See Partial Lists of Establishments that Lack or May Have
a “Retail Concept” Under the Fair Labor Standards Act, 85 FR 29867-01 (May 19, 2020);
see also Gonzalez, 2021 WL 6123631, at *5 (“The DOL rescinded both [29 C.F.R.
§§ 779.317 and 779.320] in May 2020 after criticism in the courts that the lists seemed to

have no analysis or rationale behind why some businesses were included on the respective
lists.”). Before it was rescinded, 29 C.F.R. § 779.317 listed “real estate companies” as
lacking a retail concept. See Davidson v. Orange Lake Country Club, Inc., No. 6:06-CV-
1674 ORL19KRS, 2008 WL 254136, at *5 (M.D. Fla. Jan. 29, 2008).
In their opening papers, Named Plaintiffs note that 29 C.F.R. § 779.317 has been

rescinded and do not suggest that the Court should apply it. (See Dkt. 90-1 at 17-18). Then,
in a footnote in their reply papers, Named Plaintiffs argue that “[t]he Court may . . . still rely
on 29 C.F.R. § 779.317 as it was in effect during the relevant time period, and there is no
clear indication that its withdrawal was retroactive.” (Dkt. 112 at 7). The Court will not
grant summary judgment on the basis of an argument made in reply, particularly not one
relegated to a footnote. Accordingly, the Court rejects Named Plaintiffs’ belated suggestion
that it should rely on 29 C.F.R. § 779.317 to conclude without further analysis that the real

estate industry lacks a retail concept.
However, considering the matter on its own merits, the Court concludes that Real
Agent Pro has not demonstrated a genuine issue of material fact as to whether the real estate
industry has a retail concept. The Court notes that “the question whether the industry itself
falls within the retail concept of the [FLSA] is one of law—of statutory interpretation.”

Brennan v. Keyser, 507 F.2d 472, 475 (9th Cir. 1974); see also Owopetu v. Nationwide
CATV Auditing Servs., Inc., No. 5:10-CV-18, 2011 WL 883703, at *8 (D. Vt. Mar. 11, 2011)
(“Although the statute’s language suggests that the term ‘retail’ is to be defined solely by
reference to industry standards, the Supreme Court has held that the term’s meaning is a
question of law to be determined by the courts, and not by the defendant or the defendant’s

industry.” (citing Idaho Sheet Metal Works, Inc. v. Wirtz, 383 U.S. 190, 204-05 (1966))).
“[T]he question of whether a particular industry can have a retail concept within the FLSA’s
meaning” is a “threshold inquiry” in assessing the availability of the retail or service
exemption. Delara v. Diamond Resorts Int’l Mktg., Inc., No. 2:19-CV-00022 APG NJK,
2021 WL 6123563, at *5 (D. Nev. Dec. 27, 2021).

It is the burden of an employer claiming the retail or service exemption to come
forward with facts supporting the conclusion that its industry has a retail concept. Sydney,
2020 WL 1530793, at *4. Here, Named Plaintiffs have pointed out a lack of evidence to
support the conclusion the real estate industry has a retail concept, including by producing
evidence from the United States Census Bureau supporting the conclusion that the real estate
industry lacks such a concept. (See Dkt. 90-28). In opposition, Defendants have neither
produced nor pointed to anything that would support the conclusion that the real estate

industry recognizes a retail concept. See Citizens Bank of Clearwater v. Hunt, 927 F.2d 707,
710 (2d Cir. 1991) (“The moving party has the initial burden of demonstrating that there is
no genuine issue of material fact for trial. That burden may be satisfied by pointing out the
absence of evidence to support the non-movant’s claims. The non-movant then bears the
burden of establishing the existence of elements essential to its case, which it would have to

prove at trial.” (citations omitted)). Instead, Defendants argue that the withdrawal of 29
C.F.R. § 779.317 means that the establishments within the real estate industry are no longer
per se excluded from claiming the retail or service exemption. (See Dkt. 107 at 13-14).
While this may be true, the lack of a per se exclusion does not relieve an employer in the
real estate industry of its threshold burden of demonstrating that such industry has a retail

concept. See e.g., Jelus v. All Creatures Animal Hosp., Inc., No. 1:15-CV-184 (WOB), 2016
WL 3074406, at *6 (S.D. Ohio May 27, 2016) (“As a threshold requirement, the employer
must be part of an industry with a retail concept.”); Selz v. Investools, Inc., No. 2:09-CV-
1042-TS, 2011 WL 285801, at *4 (D. Utah Jan. 27, 2011) (“[T]he threshold question in
determining whether a business is a retail or service establishment is whether the industry

lacks a retail concept.” (quotations omitted)).
Further, the Court agrees with Named Plaintiffs that even assuming that the real estate
industry has a retail concept, Defendants have not come forward with evidence to support
the conclusion that the particular services Real Agent Pro offers would be considered by the
industry to come within that concept. See Johnson, 4 F. Supp. 3d at 436 (explaining that
courts apply a “two-prong test” to determine “whether a defendant’s business is recognized
as retail”: “(1) the establishment must be part of an industry in which there is a ‘retail

concept’; and (2) the establishment’s services must be recognized as retail in that particular
industry”). In determining whether an employer’s “services are recognized as retail within
its industry,” the Court “should consider the understandings of persons with knowledge of
recognized industry classifications as well as sellers, purchasers, employers, employees, and
private or governmental research organizations.” Id. at 440. Here, Defendants have not

come forward with any information regarding how the relevant players within its industry
would view its services. See Owopetu, 2011 WL 883703 at *29 (finding the defendant had
“failed to meet its burden” of showing that it was a retail or service establishment because it
had not “offered any evidence as to how persons in the industry and with knowledge of the
industry view[ed] [its] business” (internal quotation marks omitted)). This is “an essential

element” of the exemption that Real Agent Pro is trying to assert. Id.
In sum, the record before the Court is devoid of evidence to establish that (1) the real
estate industry in which Real Agent Pro operates has a retail concept or (2) Real Agent Pro’s
services are viewed as retail within that industry. Real Agent Pro thus cannot establish the
necessary elements of the retail or service exemption. Named Plaintiffs are entitled to

summary judgment on this issue on this basis, and the Court need not and does not consider
the other arguments made by the parties respecting the viability of Real Agent Pro’s
invocation of the retail or service exemption.
C. Colton’s Status as an Employer
The Court turns next to Named Plaintiffs’ request for summary judgment on the issue
of whether Colton can be considered an employer under the FLSA and the NYLL. The

Court finds, for the reasons that follow, that genuine issues of material fact preclude
summary judgment on this point.
The FLSA “nowhere defines ‘employer’ in the first instance.” Irizarry v.
Catsimatidis, 722 F.3d 99, 103 (2d Cir. 2013). In the absence of such definition, “the
[Supreme] Court has instructed that the determination of whether an employer-employee

relationship exists for purposes of the FLSA should be grounded in economic reality rather
than technical concepts, determined by reference not to isolated factors, but rather upon the
circumstances of the whole activity.” Barfield v. New York City Health & Hosps. Corp.,
537 F.3d 132, 141 (2d Cir. 2008) (quotations omitted)). In other words, “employment for
FLSA purposes [is] a flexible concept to be determined on a case-by-case basis by review

of the totality of the circumstances.” Id. “[D]istrict courts in this Circuit have interpreted
the definition of employer under the NYLL coextensively with the definition used by the
FLSA.” Cho v. Osaka Zen Spa, No. 19 CIV. 7935 (ER), 2021 WL 1736813, at *3 (S.D.N.Y.
May 3, 2021) (original alteration omitted).
“In analyzing the question of whether a defendant is an employer, the overarching

concern is whether the alleged employer possessed the power to control the workers in
question.” Stewart v. Hudson Hall LLC, No. 20 Civ. 885 (PGG) (SLC), 2020 WL 8732875,
at *4 (S.D.N.Y. Oct. 19, 2020) (quotation omitted). “Several factors, known as the Carter
factors, guide the court’s analysis into whether a defendant exercised formal control[.]”
Weng v. HungryPanda US, Inc., No. 19 CIV. 11882 (KPF), 2022 WL 292799, at *4
(S.D.N.Y. Jan. 31, 2022) (citing Carter v. Dutchess Cmty. Coll., 735 F.2d 8 (2d Cir. 1984)).
These factors include “whether the alleged employer [i] had the power to hire and fire the

employees, [ii] supervised and controlled employee work schedules or conditions of
employment, [iii] determined the rate and method of payment, and [iv] maintained
employment records.” Carter, 735 F.2d at 12.
Here, the Court easily finds that genuine issues of material fact exist as to whether
Colton constitutes an employer for purposes of the FLSA and NYLL. In opposition to

Named Plaintiffs’ motion for partial summary judgment, Colton has submitted to the Court
a sworn declaration in which he states that: (1) he did not have operational control over
inside sales employees as CEO of Real Agent Pro; (2) he did not make hiring decisions with
respect to inside sales employees; (3) he did not make termination decisions with respect to
inside sales employees; (4) he did not set Real Agent Pro’s employment policies; (5) he did

not set work schedules for inside sales employees; (6) he lacked authority to unilaterally
determine methods and rates of pay for inside sales employees; (7) he had no approval role
with respect to inside sales employees’ commissions and bonuses; and (8) he did not
maintain employment records for Real Agent Pro. (Dkt. 107-2). In deciding Named
Plaintiffs’ motion for summary judgment, the Court must credit these statements by Colton.

Named Plaintiffs suggest in reply that the Court can grant their motion
notwithstanding these factual disputes because Colton admits that: (1) he provided strategic
oversight to Real Agent Pro; (2) he was a part of the executive team that approved
compensation plans for inside sales employees; (3) he directly supervised inside sales
employees “for a period of time” and supervised managers and human resources employees;
and (4) he was “an active presence in the office.” (Dkt. 112 at 12-13). Named Plaintiffs
argue that these facts are comparable to the facts that the Second Circuit found sufficient to

support a grant of summary judgment in Irizarry. (Id.). The Court disagrees. In Irizarry,
the individual defendant had essentially unfettered discretion over how the company was
run. See 722 F.3d at 99 (if the individual defendant “chose to make a decision” there was
no one with “the power to override him”). This included “the power to hire or fire anyone
he [chose]” as well as the authority to sign paychecks. (Id. at 114-15). The record before

the Court simply does not establish the same degree of control by Colton over Real Agent
Pro. In particular, the Court has no information about the membership or functioning of the
“executive team” referenced in the papers. Further, while Colton concedes that he directly
supervised inside sales employees for some period of time, the Court has no information
about whether this time period overlapped with Named Plaintiffs’ employment.

The undisputed facts of record are not sufficient, at this point in time, to allow the
Court to find as a matter of law that Colton was Named Plaintiffs’ employer for purposes of
the FLSA and the NYLL. The Court accordingly denies this aspect of Named Plaintiffs’
motion for partial summary judgment.
II. Motion for Class Certification

A. Legal Standard
Having resolved Named Plaintiffs’ motion for partial summary judgment, the Court
turns next to their motion for class certification (Dkt. 68). “In determining whether class
certification is appropriate, a district court must first ascertain whether the claims meet the
preconditions of [Federal] Rule [of Civil Procedure] 23(a). . . .” Teamsters Local 445
Freight Div. Pension Fund v. Bombardier Inc., 546 F.3d 196, 201-02 (2d Cir. 2008).
Specifically, the Court must conclude that the proposed class meets the following

requirements:
(1) the class is so numerous that joinder of all members is impracticable;
(2) there are questions of law or fact common to the class;
(3) the claims or defenses of the representative parties are typical of the
claims or defenses of the class; and
(4) the representative parties will fairly and adequately protect the
interests of the class.

Fed. R. Civ. P. 23(a). If all these requirements are met, the Court may grant class
certification where one of the scenarios set forth under Rule 23(b)(1)-(3) is satisfied. “The
party seeking class certification bears the burden of establishing by a preponderance of the
evidence that each of Rule 23’s requirements has been met.” Myers v. Hertz Corp., 624 F.3d
537, 547 (2d Cir. 2010).
Here, Plaintiffs seek certification of their proposed classes under Rule 23(b)(1)(A)
and (b)(3). (See Dkt. 68-1 at 27). Rule 23(b)(1)(A) “covers cases in which separate actions
by or against individual class members would risk establishing ‘incompatible standards of
conduct for the party opposing the class[.]’” Amchem Products, Inc. v. Windsor, 521 U.S.
591, 614 (1997). “Rule 23(b)(1) does not permit a class member to opt-out of the class,”
and accordingly “class actions brought under this rule are often referred to as ‘mandatory’
class actions.” DiDonato v. GC Servs. Ltd. P’ship, No. 20 CIV. 2154 (LGS), 2021 WL
4219504, at *6 (S.D.N.Y. Sept. 16, 2021). Because this can raise due process concerns, id.,
“[c]ourts generally apply Rule 23(b)(1)(A) restrictively, to classes where there is a statutory
obligation to treat all class members alike, or when practical necessity forces the opposing
party to act in the same manner toward the individual class members and thereby makes
inconsistent adjudications in separate actions unworkable or intolerable,” Borgese v. Baby

Brezza Enterprises LLC, No. 20 CIV. 1180 (VM), 2021 WL 634722, at *5 (S.D.N.Y. Feb.
18, 2021) (citation omitted).
Rule 23(b)(3) provides that a class may be certified if the Rule 23(a) criteria are
satisfied and if “the court finds that the questions of law or fact common to class members
predominate over any questions affecting only individual members, and that a class action

is superior to other available methods.” Fed. R. Civ. P. 23(b)(3). This provision is intended
to “secure judgments binding all class members save those who affirmatively elect[ ] to be
excluded,’ where a class action will ‘achieve economies of time, effort, and expense, and
promote . . . uniformity of decision as to persons similarly situated, without sacrificing
procedural fairness or bringing about other undesirable results.” In re Glob. Crossing Sec.

& ERISA Litig., 225 F.R.D. 436, 454 (S.D.N.Y. 2004) (alterations in original and quoting
Amchem Prod., 521 U.S. at 614-15).
“The Rule 23(b)(3) predominance inquiry tests whether proposed classes are
sufficiently cohesive to warrant adjudication by representation.” Amchem Prod., 521 U.S.
at 623. “Class-wide issues predominate if resolution of some of the legal or factual questions

that qualify each class member’s case as a genuine controversy can be achieved through
generalized proof, and if these particular issues are more substantial than the issues subject
only to individualized proof.” Moore v. PaineWebber, Inc., 306 F.3d 1247, 1252 (2d Cir.
2002).
B. The Proposed Classes
Plaintiffs ask the Court to certify the following two classes:
(a) Inside Sales Class: [all persons] who performed insides sales work for
defendants, including those who held job titles such as Business
Development Specialist, Business Development Coordinator, Client
Fulfillment Specialist, Client Fulfillment Coordinator, and Insides
Sales Associate, at any time from July 26, 2013 through the entry of
final judgment.

(b) Wage Theft Prevention Act Class: all persons who worked for
defendants who at any time from July 26, 2013 through the entry of
final judgment in this matter, did not receive the annual written notice,
when required, or notice upon hire as required under the Wage Theft
Prevention Act.

(Dkt. 68-1 at 16).
C. Defendants’ Objections to Class Certification
Defendants oppose class certification on several grounds. First, Defendants argue
that the proposed Wage Theft Prevention Act Class (the “WTPA Class”) is an impermissible
fail-safe class. (Dkt. 72-1 at 4). Second, Defendants argue that the WTPA Class cannot be
certified as proposed because “[t]he WTPA does not provide a private right of action for an
employer’s failure to provide required annual wage notices to its employees.” (Id. at 6).
Third, Defendants argue that their assertion of the retail or service exemption precludes a
finding of commonality. (Id. at 10).
Finally, Defendants argue that Named Plaintiffs lack standing to represent the
proposed classes. (Id. at 14). More particularly, Defendants note that the proposed classes
cover the period from July 26, 2013, through entry of final judgment in this matter, which
“span[s] 1 year before and nearly 5 years after the Named Plaintiffs’ employment with
Defendant Real Agent Pro.” (Dkt. 72-1 at 14). Defendants accordingly urge the Court to
“deny certification of the Rule 23 class for claims outside the dates of Named Plaintiffs’
employment with Defendant Real Agent Pro.” (Id. at 15).

Defendants’ commonality argument is disposed of by the Court’s grant of partial
summary judgment to Named Plaintiffs on the applicability of the retail or service
exemption.3 The Court is unpersuaded by Defendants’ remaining arguments, for the reasons
set forth below.
1. Standing

Because it bears on the viability of both proposed classes, the Court turns first to
Defendants’ standing argument. “The doctrine of standing tests whether a prospective
litigant may properly invoke the power of the federal courts.” Langan v. Johnson & Johnson
Consumer Companies, Inc., 897 F.3d 88, 93 (2d Cir. 2018). As a general rule of standing,
“one person cannot litigate injuries on behalf of another.” Id. However, class actions under

Rule 23 are an exception to that general rule. Id. (“Through Rule 23, Congress has
authorized plaintiffs to bring, under limited circumstances, a suit in federal court on behalf
of, not just themselves, but others who were similarly injured.”). In other words, “[a]lthough
a named class action plaintiff has not actually suffered the injuries suffered by her putative
class members (and therefore would not normally have standing to bring those suits),

3 While the Court declined to grant partial summary on this issue with respect to any
defendant other than Real Agent Pro, that was due to factual disputes regarding the role those
other defendants played in Named Plaintiffs’ employment. In other words, if Named
Plaintiffs are ultimately able to prove that the other defendants were also their employers,
the same analysis set forth above with respect to the retail or service exemption would apply
and the issue would be resolvable on a class wide basis.
Congress has said that the fact that the parties ‘possess the same interest’ and ‘suffered the
same injury’ gives the named plaintiff a sufficient stake in the outcome of her putative class
members’ cases.” Id. at 94 (alteration omitted and quoting Wal-Mart Stores, Inc. v. Dukes,

564 U.S. 338, 348 (2011)). Nevertheless, named plaintiffs in a Rule 23 action “must allege
and show that they personally have been injured, not that injury has been suffered by other,
unidentified members of the class to which they belong and which they purport to represent.”
Cent. States Se. & Sw. Areas Health & Welfare Fund v. Merck-Medco Managed Care,
L.L.C., 433 F.3d 181, 199 (2d Cir. 2005) (quoting Warth v. Seldin, 422 U.S. 490, 502

(1975)).
Some district courts in this Circuit have limited the temporal scope of class actions
under the NYLL based on the employment dates of the named plaintiffs. See Maddison v.
Comfort Sys. USA (Syracuse), Inc., No. 5:17-CV-0359 LEK ATB, 2018 WL 679477, at *8
(N.D.N.Y. Feb. 1, 2018) (“Plaintiff purports to represent the FLSA and Rule 23 Classes

from March 30, 2011—one month before Defendant employed him—to the entry of
judgment in this case—several years after May 2015, when he left Defendant’s employ.
Plaintiff cannot claim to have been injured by any underpayment made by Defendant to its
employees before or after his dates of employment. Accordingly, Plaintiff only has standing
to represent the Rule 23 and FLSA Classes regarding injuries that the putative classes

incurred between May 2011 and May 2015.”); Roach v. T.L. Cannon Corp., No. 3:10-CV-
0591 TJM DEP, 2015 WL 10818750, at *6 (N.D.N.Y. Sept. 4, 2015) (“Given the six year
statute of limitations, the earliest date the class period could commence is May 19, 2004.
Because Longo was the earliest employed member of the named plaintiffs with a start date
in April 2005, this is the earliest that a named plaintiff has standing to assert the claims in
this matter.”). However, at least one district court has rejected such an argument. See
Kinkead v. Humana at Home, Inc., 450 F. Supp. 3d 162, 193 (D. Conn. 2020) (in considering

whether to certify class under the NYLL, rejecting argument that “neither [New York]
named Plaintiff Caillo nor Plaintiff Mathieu have standing to assert an unpaid hours claim
prior to January 1, 2015, because neither worked in a live-in capacity prior to January 1,
2015” (alteration in original and citation omitted)). The Second Circuit has not decided the
issue.

Essentially, the question the Court must decide is whether the requirement that
Named Plaintiffs have suffered the same injury as the unnamed class members precludes
them from asserting claims outside their own dates of employment. The Court finds that it
does not. The Second Circuit has explained that the relevant inquiry in this regard is whether
the defendants’ conduct that allegedly injured the named plaintiffs “implicates ‘the same set

of concerns’ as the conduct alleged to have caused injury to other members of the putative
class by the same defendants.” NECA-IBEW Health & Welfare Fund v. Goldman Sachs &
Co., 693 F.3d 145, 162 (2d Cir. 2012). Here, Defendants’ alleged failure to comply with the
NYLL during the course of Named Plaintiffs’ employment plainly implicates the same set
of concerns as Defendants’ alleged failure to comply with the NYLL in precisely the same

manner during the unnamed class members’ employment. Accordingly, the Court does not
find a lack of standing on the part of Named Plaintiffs.
2. Objections Specific to the WTPA Class
Defendants have also raised two arguments specific to the WTPA Class—first, that
it is allegedly an impermissible fail-safe class and second, that it fails in part on the merits

because there is no private cause of action under the WTPA with respect to provision of
annual notices. Neither of these arguments establish that class certification should be denied.
“A fail-safe class is one whose definition shields the putative class members from
receiving an adverse judgment.” Hicks v. T.L. Cannon Corp., 35 F. Supp. 3d 329, 356
(W.D.N.Y. 2014) (quotation and alteration omitted). In other words, “[i]n a fail-safe class,

either the class members win or, by virtue of losing, they are not in the class, and therefore
not bound by the judgment.” Id. at 357 (citation omitted). Courts will not certify a proposed
fail-safe class “because it is unfair to defendants, it prevents an adverse judgment being
entered against plaintiffs, and it is unmanageable because the members of the class could
only be known after a determination of liability.” Id. (citation omitted). The Court has the

discretion to redefine a proposed fail-safe class “to bring it within the scope of Rule 23.” Id.
(quotation and alteration omitted).
In Hicks, this Court considered an argument extremely similar to the one advanced
by Defendants in this case. There, the plaintiffs had proposed two subclasses that were
defined in relevant part as employees who “were not provided wage statements listing

allowances claimed by [the employer] as required by 12 N.Y.C.R.R. §§ 137-2.2” and as
employees who “were not provided wage notices that included the tip credit as required by
12 N.Y.C.R.R. §§ 146-1.3; 146-2.2.” Id. at 356. The Court found that while the defendants
were largely “placing form over substance by arguing that the proposed subclasses are fail-
safe classes,” the proposed subclasses did “arguably have some fail-safe qualities[.]” Id. at
357. The Court determined that the proper result was not to deny certification entirely but
to slightly redefine the proposed subclasses. (Id. at 358).

Here, as in Hicks, the Court finds that any fail-safe concerns associated with the
WTPA Class can be addressed through a slight modification of the class definition. In
particular, the WTPA Class will be redefined as “all persons who worked for defendants at
any time from July 26, 2013 through the entry of final judgment in this matter, and who did
not receive written notice upon hire of the information set forth in New York Labor Law

§ 195(1)(a) and its associated regulations, or who did not receive annual written notice of
the same prior to February 27, 2015.”4 This proposed redefinition eliminates the legal
conclusion that a particular notice was or was not required by the NYLL and thus avoids
any fail-safe concerns.5
As to Defendants’ argument that there is not a private cause of action under the NYLL

for failure to provide annual wage notices, there is a split of authority on this point within
district courts in this Circuit. See Remache v. Mac Hudson Grp., No. 14-CV-3118 AMD
RML, 2018 WL 4573072, at *16 (E.D.N.Y. Sept. 7, 2018) (collecting cases reaching

4 “The annual wage-notice requirement was removed from NYLL § 195(1) effective
February 27, 2015.” Gamero v. Koodo Sushi Corp., 272 F. Supp. 3d 481, 510 (S.D.N.Y.
2017) (quotation omitted), aff’d, 752 F. App’x 33 (2d Cir. 2018).

5 In addition, while Defendants did not raise this issue, it would not be appropriate for
the Court to adopt a class definition that refers to the “Wage Theft Prevention Act” without
further explanation, inasmuch as New York is not the only state with a law known as the
Wage Theft Protection Act. The Court’s revised definition addresses this issue by
identifying the specific New York statute at issue.
contrary conclusions as to this issue), adopted, 2018 WL 4568860 (E.D.N.Y. Sept. 24,
2018). However, the Court need not wade into those waters at this time, because class
certification does not resolve the merits of any particular claim. See Nestle Waters N. Am.,

Inc. v. City of New York, No. 15 Civ. 05189 (ALC), 2016 WL 3080722, at *5 (S.D.N.Y.
May 25, 2016) (“class certification is a procedural question, distinct from the merits of a
case”). As the Supreme Court has explained, it is necessary at the class certification stage
“that questions common to the class predominate, not that those questions will be answered,
on the merits, in favor of the class.” Amgen Inc. v. Connecticut Ret. Plans & Tr. Funds, 568

U.S. 455, 459 (2013). Here, if the WTPA Class ultimately loses on the merits of any claims
related to the provision of annual wage notices, it will do so as a class. Accordingly, this
argument by Defendants does not provide a basis to deny class certification.
D. The Remaining Rule 23 Requirements
Defendants have not raised any additional objections with respect to Plaintiff’s

showing on the requirements of Rule 23. However, even in the absence of any such
objection, the Court “has an independent obligation to consider the evidence in the record
and assess whether the proposed class[es]” satisfy all of the relevant requirements. Callari
v. Blackman Plumbing Supply, Inc., 153 F. Supp. 3d 590, 593 (E.D.N.Y. 2015).
Accordingly, the Court has performed its own assessment, which is set forth below.

1. Rule 23(a) Requirements
The Court finds that the numerosity, commonality, typicality, and adequacy
requirements of Rule 23(a) are satisfied. As to numerosity, it is undisputed that the proposed
classes consist of at least 40 members. This is sufficient to establish numerosity. See
Shahriar v. Smith & Wollensky Rest. Grp., Inc., 659 F.3d 234, 252 (2d Cir. 2011).
With respect to commonality, this requirement is satisfied where an issue of law or

fact is common to the class, and where a classwide proceeding is capable of “generat[ing]
common answers apt to drive the resolution of the litigation.” Wal-Mart, 564 U.S. at 349-
50 (citation omitted). “Challenges to labor policies tend to be amenable to precisely this
type of class-wide proof, and as a result commonality is usually satisfied in wage cases where
the plaintiffs allege that defendants had a common policy of unlawful labor practices.”

Carollo v. United Cap. Corp., 528 F. Supp. 3d 37, 54 (N.D.N.Y. 2021) (quotation omitted).
Here, as noted above, the Court’s resolution of Named Plaintiffs’ motion for partial summary
judgment has mooted Defendants’ contention that the potential applicability of the retail or
service exemption does not allow for a finding of commonality. Further, Named Plaintiffs
have identified multiple common questions of fact and law related to Defendants’ alleged

employment practices. (See Dkt. 68-1 at 22). Accordingly, the Court finds the commonality
requirement satisfied. See Wal-Mart, 564 U.S. at 359 (“even a single common question” is
sufficient for purposes of Rule 23(a)(2)).
As to typicality, this requirement can be satisfied by a showing that the named
plaintiffs and the members of the proposed class were subject to common employment

policies. Shahriar, 659 F.3d at 252. Here, Umbrino has submitted a sworn declaration
indicating that inside sales employees were subject to uniform compensation policies. (See
Dkt. 4-4 at ¶ 12). Zoller has similarly submitted a sworn declaration indicating the same.
(See Dkt. 4-5 at ¶¶ 16, 19). Defendants have not controverted this assertion, but have instead
stipulated that inside sales employees “were paid under the same policies and in the same
manner” and “performed their job duties under the same policies and in the same manner.”
(Dkt. 68-3 at 3). The Court thus finds the typicality requirement satisfied.

The Court further finds that Named Plaintiffs will fairly and adequately protect the
interests of the proposed classes. In making this determination, the Court must make the
following findings: “(1) the [named] plaintiffs’ attorneys must be qualified, experienced and
generally able to conduct the litigation, and (2) the [named plaintiffs’] interests must not be
antagonistic to those of the remainder of the class.” Hicks, 35 F. Supp. 3d at 353 (internal

citation omitted). As to the first of these elements, Named Plaintiffs are represented by
Thomas & Solomon, a well-established employment law firm that has prosecuted numerous
wage and hour class action lawsuits. (See Dkt. 68-2 at ¶¶ 5-13). As to the second, Named
Plaintiffs have adequately shown that they have no interests that diverge from those of the
proposed classes. (See id. at ¶ 14); see also Damassia v. Duane Reade, Inc., 250 F.R.D.

152, 158 (S.D.N.Y. 2008) (“The fact that plaintiffs’ claims are typical of the class is strong
evidence that their interests are not antagonistic to those of the class; the same strategies that
will vindicate plaintiffs’ claims will vindicate those of the class.”).
Finally, while it is not expressly required by Rule 23(a), courts have imposed an
implied requirement of ascertainability in considering motions for class certification. See

Hicks, 35 F. Supp. 3d at 354. “The ascertainability doctrine that governs in this Circuit
requires only that a class be defined using objective criteria that establish a membership with
definite boundaries.” In re Petrobras Sec., 862 F.3d 250, 264 (2d Cir. 2017). The proposed
classes in this case (taking into account the Court’s modification of the WTPA Class
definition) satisfy this requirement.
2. Rule 23(b) Requirements

The Court next considers whether Named Plaintiffs have demonstrated that the
requirements of either Rule 23(b)(1)(A) or Rule 23(b) are satisfied. As to Rule 23(b)(1)(A),
Named Plaintiffs have not demonstrated that this case falls within the relatively narrow
circumstances that warrant certification of a mandatory class action under that provision.
Multiple federal courts have held that wage and hour class actions are not suitable for

certification under Rule 23(b)(1)(A). See, e.g., Encinas v. J.J. Drywall Corp., 265 F.R.D. 3,
9 (D.D.C. 2010); Kamar v. Radio Shack Corp., 254 F.R.D. 387, 398 (C.D. Cal. 2008), aff’d,
375 F. App’x 734 (9th Cir. 2010). Moreover, this is a case in which the primary relief sought
is monetary damages, and accordingly certification under Rule 23(b)(1)(A) would raise
significant due process concerns. See DiDonato, 2021 WL 4219504, at *6 (“Here, Plaintiff

seeks only individualized monetary damages. Accordingly, certification is denied under
Rule 23(b)(1)(A) because potential class members would not have the opportunity to opt-
out of the class and litigate for themselves their entitlement to, and amount of, individual
damages.”).
However, the Court does find that the requirements of Rule 23(b)(3) are satisfied in

this case.6 As noted above, Rule 23(b)(3) allows for class certification where “the court

6 Because the Court reaches this conclusion, it need not and does not reach Named
Plaintiff’s alternative argument that certification is appropriate under Rule 23(c)(4). (See
Dkt. 68-1 at 31-32).
finds that the questions of law or fact common to class members predominate over any
questions affecting only individual members, and that a class action is superior to other
available methods.” Fed. R. Civ. P. 23(b)(3). The predominance requirement is satisfied

“if resolution of some of the legal or factual questions that qualify each class member’s case
as a genuine controversy can be achieved through generalized proof, and if these particular
issues are more substantial than the issues subject only to individualized proof.” Moore, 306
F.3d at 1252. “[W]hen plaintiffs are allegedly aggrieved by a single policy of
defendants, . . . the case presents precisely the type of situation for which the class action

device is suited since many nearly identical litigations can be adjudicated in unison.” In re:
Nassau County Strip Search Cases, 461 F.3d 219, 228 (2d Cir. 2006) (quotation omitted).
Here, as the Court has previously explained, it is undisputed that inside sales
employees “were paid under the same policies and in the same manner” and “performed
their job duties under the same policies and in the same manner.” (Dkt. 68-3 at 3). Common

issues of law and fact thus predominate, because the matter of liability can be determined on
a class-wide basis with generalized proof. While there may be individualized questions as
to damages, “the fact that damages may have to be ascertained on an individual basis is not
sufficient to defeat class certification under Rule 23(b)(3).” Roach v. T.L. Cannon Corp.,
778 F.3d 401, 405 (2d Cir. 2015) (quotation omitted).

As to the superiority inquiry, “Rule 23(b)(3) lists four factors that clearly implicate
the superiority inquiry.” Adkins v. Morgan Stanley, 307 F.R.D. 119, 146 (S.D.N.Y. 2015)
(quotation omitted), aff’d, 656 F. App’x 555 (2d Cir. 2016). Those factors are: “(A) the
class members’ interests in individually controlling the prosecution or defense of separate
actions; (B) the extent and nature of any litigation concerning the controversy already begun
by or against class members; (C) the desirability or undesirability of concentrating the
litigation of the claims in the particular forum; and (D) the likely difficulties in managing a

class action.” Id. (citation omitted). Of these factors, “the most critical issue in determining
whether a class action is a superior means of adjudication is manageability.” Id.
Here, neither side has identified any other pending litigation regarding the claims at
issue in this lawsuit. This is also an appropriate forum for the claims, and the nature of the
case is such that it is infeasible for each class member to individually expend the resources

necessary to bring a lawsuit. Further, there is no reason to conclude that this litigation will
be any less manageable than the numerous wage and hour class actions that have previously
passed through this District.
For all these reasons, the Court certifies the following two classes:
(a) Inside Sales Class: all persons who performed insides sales work for
defendants, including those who held job titles such as Business
Development Specialist, Business Development Coordinator, Client
Fulfillment Specialist, Client Fulfillment Coordinator, and Inside Sales
Associate, at any time from July 26, 2013 through the entry of final
judgment in this matter.

(b) Wage Theft Prevention Act Class: all persons who worked for
defendants at any time from July 26, 2013, through the entry of final
judgment in this matter, and who did not receive written notice upon
hire of the information set forth in New York Labor Law § 195(1)(a)
and its associated regulations, or who did not receive annual written
notice of the same prior to February 27, 2015.

E. Notice to the Class
Named Plaintiffs have submitted to the Court a proposed form for notice to the
certified classes. (Dkt. 68-9). However, the Court will not approve the proposed notice as

it is currently written. In particular, the Court finds that the following language is inaccurate:
“The other class consists of all employees who worked for defendants any time from July
26, 2013 to the present as a result of defendants’ failure to provide wage notices.” (Id. at 2).
Not only does this sentence not accurately describe the WTPA Class, it makes no sense
grammatically, inasmuch as it indicates that it was Defendants’ alleged failure to provide

wage notices that caused the employees to work for Defendants. Further, the proposed
notice frequently refers to a singular “Class” notwithstanding the fact that there are two
classes in this case, which is likely to confuse class members.
Rather than simply rewriting the proposed notice, the Court instead finds it
appropriate to direct the parties to confer and propose a mutually acceptable form of notice.

See Hicks, 25 F. Supp. 3d at 358 (“Courts routinely direct parties to confer and submit a
jointly-acceptable form of notice in class actions.” (collecting cases)). Accordingly, the
parties are directed to confer in good faith and make a joint submission to the Court
proposing a single form of notice for the certified classes within twenty (20) days of entry
of this Decision and Order. In the event the parties are unable to agree on a single form of

notice, they shall each submit a letter of not more than five pages setting forth any disputes
and their respective positions.
F. Provision of Class Members’ Personal Information
Named Plaintiffs also ask the Court to “order defendants to provide plaintiffs’ counsel
in both electronic format (in an Excel spreadsheet) and by hard copy, a list containing the

following information for each class member in a separate field: name, current or last known
address, phone number, job title, dates of employment, last four digits of social security
number, date of birth and e-mail address, within 15 days of the issuance of” the instant
Decision and Order. (Dkt. 68-1 at 33). Defendants have not addressed this request by
Named Plaintiffs.

The Court finds Named Plaintiffs’ request for information overly broad. Courts in
this Circuit have found it inappropriate to order the production of social security numbers
for notice purposes, at least unless the plaintiff “can demonstrate that names and contact
information are insufficient to effectuate notice.” Wang v. Empire State Auto Corp., No. 14-
CV-1491 WFK VMS, 2015 WL 4603117, at *15 (E.D.N.Y. July 29, 2015) (quotation

omitted and collecting cases). In the similar context of notice for potential opt-in plaintiffs
in an FLSA collective actions, courts in this Circuit have also held that dates of birth and job
titles are not relevant for purposes of effectuating notice. See Cheng v. Via Quadronno LLC,
No. 20-CV-8903 (LJL), 2021 WL 4319569, at *5 (S.D.N.Y. Sept. 23, 2021) (collecting
cases). On the other hand, courts routinely order disclosure of “names, mailing addresses,

email addresses, telephone numbers, and dates of employment” for notice purposes. Id.
Accordingly, the Court orders that Defendants provide only the names, current or last
known address, phone number, dates of employment, and e-mail address as to members of
the certified classes. Because Defendants have not objected to Named Plaintiffs’ formatting
request—namely, that the information be provided both in hard copy and as an Excel
spreadsheet with each item of information in a separate field—or to the time frame proposed
by Named Plaintiffs, those requests are granted.

III. Defendants’ Motion for Decertification of the FLSA Collective Action
A. Legal Standard
The Court turns finally to Defendants’ motion for decertification of the FLSA
collective action. “Section 216(b) of the FLSA authorizes collective actions to recover
damages for unpaid wages where all employees are ‘similarly situated.’” Ruiz v. Citibank,

N.A., 93 F. Supp. 3d 279, 297 (S.D.N.Y. 2015) (quoting 29 U.S.C. § 216(b)), abrogated on
other grounds by Scott v. Chipotle Mexican Grill, Inc., 954 F.3d 502, 518 (2d Cir. 2020).
“Although they are not required to do so by FLSA, district courts have discretion, in
appropriate cases, to implement [§ 216(b) of the FLSA] . . . by facilitating notice to potential
plaintiffs of the pendency of the action and of their opportunity to opt-in as represented

plaintiffs.” Myers v. Hertz Corp., 624 F.3d 537, 554 (2d Cir. 2010) (quotation omitted).
This is often referred to as certification, although as the Second Circuit observed in Myers,
it is not “certification” in the traditional class action sense and “nothing in the text of the
statute prevents plaintiffs from opting in to the action by filing consents with the district
court, even when the notice . . . has not been sent, so long as such plaintiffs are ‘similarly

situated’ to the named individual plaintiff who brought the action.” Id. at 554 n.10.
District courts in this Circuit apply a two-step method for determining whether to
exercise their discretion under § 216(b):
The first step involves the court making an initial determination to send notice
to potential opt-in plaintiffs who may be “similarly situated” to the named
plaintiffs with respect to whether a FLSA violation has occurred. The court
may send this notice after plaintiffs make a modest factual showing that they
and potential opt-in plaintiffs together were victims of a common policy or
plan that violated the law. At the second stage, the district court will, on a
fuller record, determine whether a so-called “collective action” may go
forward by determining whether the plaintiffs who have opted in are in fact
“similarly situated” to the named plaintiffs. The action may be “de-certified”
if the record reveals that they are not, and the opt-in plaintiffs’ claims may be
dismissed without prejudice.

Id. at 555 (internal citations and quotations omitted). The first of these steps is typically
referred to as “conditional certification.” See Ruiz, 93 F. Supp. 3d at 297. “At the second
step, typically the defendant moves for decertification, and the district court will, on a fuller
record, determine whether a so-called ‘collective action’ may go forward by determining
whether the plaintiffs who have opted in are in fact ‘similarly situated’ to the named
plaintiffs.” Id. Similarly situated in this context means that the named plaintiff and the opt-
in plaintiffs “share one or more similar questions of law or fact material to the disposition
of their FLSA claims.” Scott, 954 F.3d at 521.
B. Defendants’ Arguments
Defendants make two arguments in support of their request for decertification: (1)
that application of the retail or service exemption renders Named Plaintiffs and the opt-in
plaintiffs not similarly situated; and (2) Named Plaintiffs lack standing with respect to any
claims outside their dates of employment.
These arguments are easily disposed of. As repeatedly explained above, the Court
has determined as a matter of law that Real Agent Pro cannot establish that it is a retail or
service establishment. The same legal analysis will apply to any of the other defendants
who are ultimately determined to have employed Named Plaintiffs or the opt-in plaintiffs.
Accordingly, Defendants cannot prevail with respect to this aspect of their decertification

motion.
As to Defendants’ standing argument, “[t]he FLSA . . . does not require that a plaintiff
possess the ‘same interest’ and ‘same injury’ as members of a collective, as is required in
Rule 23 class actions.” Douglas v. Anthem Prods., LLC, No. 18-CV-5789 (VEC), 2019 WL
78988, at *4 (S.D.N.Y. Jan. 2, 2019) (citation omitted). Instead, so long as the named

plaintiff in an FLSA action has standing as to his or her own individual claim, a collective
action can be certified as to other similarly situated employees. Id.
The differences between a Rule 23 class action and an FLSA collective action explain
why the standing analysis is distinct in each context. Unlike in a Rule 23 class action, the
named plaintiff in an FLSA collective action is not permitted to pursue claims on behalf of

absent parties—instead, “a collective action brought under the FLSA is binding only upon
those employees who affirmatively ‘opt in’ by giving consent in writing to become a party
to the action.” Bowens v. Atl. Maint. Corp., 546 F. Supp. 2d 55, 81 (E.D.N.Y. 2008). By
becoming parties to the action, see Zambrano v. Strategic Delivery Sols., LLC, No. 15 CIV.
8410 (ER), 2021 WL 4460632, at *8 (S.D.N.Y. Sept. 28, 2021) (“Courts in this Circuit have

. . . held that opt-in plaintiffs become parties to a FLSA action upon filing written consent,
which renders the opt-in plaintiff party to the lawsuit through a separate action joined to the
original lawsuit, which commences on the date written consent is filed.” (quotation
omitted)), the opt-in plaintiffs provide the necessary standing with respect to their own
individual claims.
Accordingly, Defendants’ standing argument is misplaced. Instead, the relevant

question is whether any difference in dates of employment renders Named Plaintiffs and the
opt-in plaintiffs not similarly situated. As to Zoller, Defendants are correct that his
employment apparently “ended before the relevant collective action period[.]” (Dkt. 89 at
6). However, the complaint in this action makes clear that it is Umbrino who “bring[s] this
action on behalf of herself and all other similarly situated employees as authorized under 29

U.S.C. § 216(b).” (Dkt. 1 at ¶ 83; see also id. at ¶ 86 (“Named Plaintiff Umbrino should be
permitted to bring this action as a collective action for and on behalf of those employees
similarly situated pursuant to the opt-in provision of the FLSA, 29 U.S.C. § 216(b).”)).
Umbrino was employed during the relevant collective action period. (See Dkt. 89 at
7). Further, while her employment allegedly ended in October of 2016, that does not mean

that she is not similarly situated to the opt-in plaintiffs. See Douglas, 2019 WL 78988, at
*4 (“Plaintiff’s collective action need not be limited to employees who worked for
Defendants prior to the time that Plaintiff terminated his employment.”) (certifying
collective action as to “all hourly employees who worked for Defendants between June 26,
2015 and the present” notwithstanding the fact that the named plaintiff ceased working for

the defendants on August 28, 2017); Viriri v. White Plains Hosp. Med. Ctr., 320 F.R.D.
344, 352 (S.D.N.Y. 2017) (“It is always the case in an FLSA collective action that, absent
equitable tolling, the representative plaintiff who initially brings the action will have a
different period of recoverable wages from the opt-in plaintiffs, who can recover, at most,
only wages from three years prior to their opting in. . . . It makes little sense to hold that
simply because there is no overlap between the representative plaintiff’s recoverable wages
and the opt-in plaintiff’s recoverable wages that conditional certification is inappropriate.”).

Umbrino and the opt-in plaintiffs are similarly situated, because they “share one or
more similar questions of law or fact material to the disposition of their FLSA claims.” Scott,
954 F.3d at 521. Accordingly, Defendants’ motion for decertification (Dkt. 72) is denied.
CONCLUSION
For the reasons set forth above, Named Plaintiffs’ motion for partial summary

judgment (Dkt. 90) is granted in part and denied in part. Specifically, the Court grants
summary judgment to the extent that it finds that defendant Real Agent Pro, LLC f/k/a
L.A.R.E. Marketing, LLC is not a retail or service establishment for purposes of the retail
or service exemption and denies Named Plaintiffs’ motion for partial summary judgment in
all other respects.

The Court grants Named Plaintiffs’ motion for class certification (Dkt. 68) to the
extent that it certifies the following two classes under Federal Rule of Civil Procedure 23:
(a) Inside Sales Class: all persons who performed insides sales work for
defendants, including those who held job titles such as Business
Development Specialist, Business Development Coordinator, Client
Fulfillment Specialist, Client Fulfillment Coordinator, and Inside Sales
Associate, at any time from July 26, 2013, through the entry of final
judgment in this matter.

(b) Wage Theft Prevention Act Class: all persons who worked for
defendants at any time from July 26, 2013, through the entry of final
judgment in this matter, and who did not receive written notice upon
hire of the information set forth in New York Labor Law § 195(1)(a)
and its associated regulations, or who did not receive annual written
notice of the same prior to February 27, 2015.
However, the Court denies Named Plaintiffs’ request for approval of their proposed
notice. Instead, the parties are directed to confer in good faith and make a joint submission
to the Court proposing a single form of notice for the certified classes within 20 days of entry

of this Decision and Order. Within 15 days of entry of this Decision and Order, Defendants
shall provide Plaintiffs’ counsel in both hard copy and an Excel spreadsheet, a list containing
the following information for each class member in a separate field: name, current or last
known address, phone number, dates of employment, and e-mail address.
Defendants’ motion for decertification of the FLSA collective action (Dkt. 72) is

denied.
SO ORDERED.

________________________________
ELIZABETH A. WOLFORD
Chief Judge
United States District Court
Dated: February 15, 2022
Rochester, New York

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10364639. Public record. Not legal advice.