United States District Court, E.D. Texas, Sherman Division
ELIZABETH ZACHARY, ON BEHALF OF HERSELF AND ALL OTHERS SIMILARLY SITUATED
COBALT MORTGAGE, INC.
MEMORANDUM OPINION AND ORDER
L. MAZZANT UNITED STATES DISTRICT JUDGE.
before the Court is Plaintiff's Motion for Notice and
FLSA Conditional Certification (Dkt. #18). Having considered
the pleadings, the Court finds that the motion should be
is a former employee of Defendant Cobalt Mortgage, Inc.
Defendant was a nationwide mortgage lender that ceased
operations in November 2014. Defendant employed Plaintiff as
a Senior Processor in its Plano, Texas office from September
2012 through February 2013 and from August 2013 through July
2014. Processors, Senior Processors, and other employees with
similar titles (collectively, “Processors”)
assisted Defendant's mortgage loan officers in processing
and closing mortgage products.
alleges that Defendant did not pay Processors overtime
compensation for hours worked over forty per week in
violation of the Fair Labor Standards Act
(“FLSA”), 29 U.S.C. § 201, et seq.
Plaintiff moves for conditional certification as a collective
action under the FLSA. Defendant opposes conditional
certification on the ground that Plaintiff has not provided
evidence of a common policy or plan affecting Processors.
and nine opt-in Plaintiffs from seven offices state that they
“usually worked in excess of forty (40) hours per
workweek” and that Defendant did not pay them overtime
for these excess hours. Plaintiff and opt-in Plaintiffs
further allege that their managers discouraged them from
reporting overtime hours and told them not to report overtime
hours. Plaintiff and opt-in Plaintiffs state that their
managers knew they were not fully reporting all of their
classified Processors as non-exempt, hourly employees under
the FLSA. Defendant concedes that Processors had the same job
descriptions and generally shared common job duties.
Defendant argues that it did not have a company-wide policy
or practice of requiring Processors to work overtime off the
clock and did not permit non-exempt employees to work off the
clock. Defendant states it required non-exempt employees to
report all time worked in its timekeeping software. According
to Defendant, it paid non-exempt employees overtime when
required by law, regardless of whether it had authorized
employees to work overtime. Defendant's timekeeping
records indicate that it paid Plaintiff and five opt-in
Plaintiffs overtime from September 2013 to November 2014.
further alleges that Defendant failed to include
non-discretionary bonuses in Processors' regular rate of
pay for overtime calculations. Defendant concedes that it did
not include non-discretionary bonuses in Processors'
regular rates of pay and does not oppose conditional
certification of the bonus collective groups.
December 8, 2016, Plaintiff filed the pending Motion for
Notice and FLSA Conditional Certification (Dkt. #18). On
January 17, 2017, Defendant filed a response (Dkt. #20). On
January 31, 2017, Plaintiff filed a reply (Dkt. #21).
Defendant filed a sur-reply on February 3, 2017 (Dkt. #22).
FLSA requires covered employers to compensate nonexempt
employees at overtime rates for time worked in excess of
statutorily defined maximum hours. 29 U.S.C. § 207(a).
Section 216(b) of the FLSA gives employees the right to bring
an action on behalf of themselves, as well as “other
employees similarly situated” for violations of the
FLSA. 29 U.S.C. § 216(b). “Under § 216(b),
district courts have the discretionary power to conditionally
certify collective actions and authorize notice to potential
class members.” Tice v. AOC Senior Home Health
Corp., 826 F.Supp.2d 990, 994 (E.D. Tex. 2011).
the Fifth Circuit has not specifically addressed the meaning
of “similarly situated” in this context,
“[t]wo approaches are used by courts to determine
whether collective treatment under § 216(b) is
appropriate: (1) the two-stage class certification set forth
in Lusardi v. Xerox, Corp., 118 F.R.D. 351 (D. N.J.
1987); and (2) the ‘Spurious Class Action' method
outlined in Shushan v. Univ. of Colorado, 132 F.R.D.
263 (D. Colo. 1990).” Cripe v. Denison Glass
Mirror, Inc., No. 4:11-CV-224, 2012 WL 947455, at *3
(E.D. Tex. Jan 27, 2012) report and recommendation
adopted, 2012 WL 947362 (E.D. Tex. Mar. 20, 2012);
Villatoro v. Kim Son Rest, L.P., 286 F.Supp.2d 807,
809 (S.D. Tex. 2003). “The Lusardi two-stage
approach is the prevailing standard among federal
courts.” Tice, 826 F.Supp.2d at 994 (citations
omitted). This Court has applied the Lusardi
approach in a number of other cases. See Halleen v. Belk,
Inc., No. 4:16-CV-00055, 2016 WL 5118646, at *2 (E.D.
Tex. Sept. 21, 2016); Miranda v. Mahard Egg Farm,
Inc., No. 4:15-CV-406, 2016 WL 1704861, at *1 (E.D. Tex.
Apr. 28, 2016); Stier v. Great Plains Nat'l
Bank, No. 4:15-CV-519, 2016 WL 1572194, at *1 (E.D. Tex.
Apr. 19, 2016). As such, the Court will apply the
Lusardi approach in this case.
Lusardi, “certification for a collective
action under § 216(b) is divided into two stages: (1)
the notice stage; and (2) the merits stage.”
Id. “At the notice stage, the district court
makes a decision-usually based only on the pleadings and any
affidavits which have been submitted-whether notice of the
action should be given to potential class members.”
Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1213-14
(5th Cir. 1995), overruled on other grounds by Desert
Palace, Inc. v. Costa, 539 U.S. 90 (2003). Because the
Court has minimal evidence before it at this stage,
“the determination is made using a fairly lenient
standard requiring nothing more than substantial allegations
that the putative class members were victims of a single
decision, policy or plan.” Tice, 826 F.Supp.2d
at 995. “Notice is appropriate if the court concludes
that there is ‘some factual nexus which binds the named
plaintiffs and potential class members together as victims of
a particular alleged [policy or practice].'”
Allen v. McWane, Inc., No. 2:06-CV-158 (TJW), 2006
WL 3246531, at *2 (E.D. ...