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Trinh v. JP Morgan Chase & Co.

April 22, 2008

JIMMY TRINH ET. AL., PLAINTIFFS,
v.
JP MORGAN CHASE & CO. ET. AL., DEFENDANTS.



The opinion of the court was delivered by: Hon. Thomas J. Whelan United States District Judge

ORDER DENYING MOTION FOR CONDITIONAL CLASS CERTIFICATION (Doc. No. 15)

On August 22, 2007 Plaintiffs Jimmy Trinh et. al. ("Plaintiffs") commenced this class action alleging violations of federal and California labor law against Defendants JPMorgan Chase & Co. et. al. ("Defendants"). (Doc. No. 1.) On January 15, 2008 Plaintiffs moved for an order conditionally certifying a FLSA class and authorizing a proposed FLSA notice. (Doc. No. 15.) The Court decides the matter on the papers submitted and without oral argument. See S.D. Cal. Civ. R. 7.1(d)(1). For the following reasons, the Court DENIES Plaintiffs' motion to conditionally certify a FLSA class. (Doc. No. 15.)

I. BACKGROUND

The Fair Labor Standards Act ("FLSA") requires employers to pay employees one and one-half times their regular rates of pay for all hours worked in excess of forty in a workweek if the employees are not "exempt" under several recognized categories. 29 U.S.C. § 207. Under various sections of federal and administrative law, employees may be exempt from mandatory overtime compensation if, inter alia, they are employed in an administrative capacity, if they are employed as outside salespersons, if they are highly compensated, or a combination of all three. See 29 U.S.C. § 213(a)(1) (Administrative and Outside Sales Exemptions); 29 C.F.R. § 546.601(a) (Highly Compensated Employee Exemption); 29 C.F.R. § 541.708 (Combination Exemption).

In late 2006, Defendant JPMorgan Chase & Co. hired Plaintiff Jimmy Trinh ("Trinh") and Plaintiff Eric Storey ("Storey") as loan officers to sell sub-prime mortgage loans from JP Morgan's Del Mar, California office. (Trinh Decl. ¶¶ 3, 12; Storey Decl. ¶ 3.) Under the employment terms, JPMorgan classified Plaintiffs as "commission" employees exempt from FLSA-mandated overtime compensation. (Pls.' Mot. 1.)

Plaintiffs Storey and Trinh declare that, in order to sell as many loans as possible, Defendant required them to work ten-plus hours per day during the week. (Trinh Decl. ¶ 9; Storey Decl. ¶ 9.) Plaintiffs also declare that towards the end of their employment they were required to work approximately three hours on weekends. (Id.) Both Storey and Trinh worked at JPMorgan for less than six months, only closed a single loan between them, and were ultimately terminated for poor performance and misconduct, respectively. (Schilling Stmt. ¶¶ 2--6.)

On August 22, 2007 Plaintiffs commenced this class action alleging violations of federal and California labor law against Defendants JPMorgan Chase & Co et. al. (Doc. No. 1.) Plaintiffs allege that they, and others similarly situated, were improperly classified as "commission" employees and denied overtime for hours worked in excess of forty per week. (See generally Compl.) Plaintiffs seek for themselves and others similarly situated unpaid wages, damages, restitution, penalties and injunctive relief.

(Compl., Prayer.)

On January 15, 2008 Plaintiffs moved for an order conditionally certifying a FLSA class and authorizing a proposed FLSA notice. (Doc. No. 15.) Plaintiffs want to send notice to all current and former loan officers in California and nationwide, employed by Defendants, who did not receive overtime over the last three years, despite working over forty hours per week. (Pls.' Mot. 3--4.) Plaintiffs ask the Court to order Defendants to disclose the names and addresses of all such individuals. (Id.) Unlike class actions under Federal Rule of Civil Procedure 23,*fn1 Plaintiffs propose a FLSA "opt in" class action. (Id. 4--5.)

On March 3, 2008, after receiving an extension, Defendant filed its opposition to Plaintiffs' motion. (Doc. No. 27.) On April 3, 2008 Plaintiffs submitted their reply brief. (Doc. No. 37.)

II. LEGAL STANDARD

An employee alleging violations of the FLSA may bring an action on behalf of himself or herself and all others "similarly situated." 29 U.S.C. § 216(b). Such "collective actions" benefit the judicial system by enabling the efficient resolution in one proceeding of common issues of law and fact. Hoffman-LaRoche, Inc. v. Sperling, 493 U.S. 165, 170 (1989). However, unlike a Rule 23 class action, plaintiffs in a FLSA collective action must affirmatively "opt-in" to participate in the litigation. 29 U.S.C. § 216(b), Hipp v. Liberty Nat'l Life Ins., 252 F.3d 1208, 1217 (11th Cir. 2001). The Supreme Court has held that courts in actions under the FLSA may facilitate the issuance of a Notice informing potential "opt-in" plaintiffs of the pending collective action. Hoffman-LaRoche, 493 U.S. at 170.

III. DISCUSSION

Plaintiffs propose a FLSA collective action on behalf of All current and former loan officers of [Defendants] who, at any time in the three year period before the filing of this action or at any time thereafter, worked more than 40 hours in any given workweek but were not paid at least one and one-half times ...


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