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FLSA Class Action Defense Case-Sherrill v. Sutherland Global: New York Federal Court Holds Conditional Certification Of FLSA (Fair Labor Standards Act) Collective Action Warranted But Limits Scope Of Proposed Class

Plaintiffs in Class Action/FLSA Collective Action Alleging Labor Law Violations Adequately Supported Motion for Conditional Certification under FLSA of Putative Class Including Non-New York Employees, but Limits Class to Telemarketers Rather than All Hourly Employees

Two plaintiffs filed a class action and FLSA (Fair Labor Standards Act) collective action lawsuit against telemarketing service provider Sutherland Global – which operated 9 call centers in New York, one in California and one in Virginia – alleging various state and federal labor law violations, after which 38 former telemarketing agents sought court approval to “opt in” to the class action/FLSA lawsuit as named plaintiffs. Sherrill v. Sutherland Global Servs., Inc., 487 F.Supp.2d 344, 346-47 (W.D.N.Y. 2007). Plaintiffs moved the court to conditionally certify an FLSA collective action and to provide notice to putative class members of their right to opt in, id., at 346. Defense attorneys did not oppose the motion, but requested the right to approve the notice, asked the federal court to limit the scope of the proposed class, and asked the federal court to set an “opt-in” deadline, id., at 351. The defense also requested that plaintiffs’ lawyer remove “inaccurate statements” from counsel’s website, but plaintiffs “voluntarily agreed to make the necessary corrections” rendering the issue moot, id. at 351 n.4. The district court granted plaintiff’s motion in part, agreeing with defense attorneys that notice should be sent only to current and former telemarketing agents rather than all Sutherland hourly employees, and

The class action/FLSA complaint alleged three labor law violations. First, that Sutherland’s timekeeping system automatically deducted 60 minutes for lunch from each employee’s daily pay, regardless of whether the employee took a lunch break or worked during part of their lunch break. Sherrill, at 347. The complaint further alleged that the workload and the pressure to meet performance goals required that telemarketing agents frequently work during lunch periods, and as part of their motion, plaintiffs submitted declarations supporting these allegations, id. Second, the class action alleged that Sutherland required its telemarketers to work “off the clock” by arriving 15-30 minutes before their scheduled shift but encouraging them not to “log on” until at or near their scheduled start time. Id. Finally, plaintiffs alleged – and in their motion introduced evidence supporting – that Sutherland improperly excluded commissions and bonuses in calculating its employees’ appropriate overtime rates, using instead the “regular rate of pay” for each employee “result[ing] in application of a lower overtime rate than would apply were commissions and bonuses properly included in the rate of pay,” id., at 348.

Plaintiffs requested that the collective action include “all current and former Sutherland hourly employees who worked for Sutherland since October 11, 2002.” Sherrill, at 348. Defense attorneys did not oppose conditional certification under the FLSA and did not oppose notifying putative class members of their opt-in rights, but they argued that the class should be narrowed in scope, id., at 349. After discussing the differences between conditional certification of an FLSA collection action and a Rule 23 class action, see id., at 348, the district court concluded that conditional certification of an FLSA collective action covering all Sutherland employees, including those in California and Virginia, was warranted, id., at 349-50. The court agreed, however, that the class should be limited to telemarketing agents, rather than include all hourly employees. Id., at 350.

NOTE: The district court also agreed to monitor the notification process and to set a deadline for opting in to the collective action, but plaintiffs’ lawyer had not opposed these requests.

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