Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_07-cv-01666/USCOURTS-casd-3_07-cv-01666-1/pdf.json

Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 29:206 Collect Unpaid Wages

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

JIMMY TRINH et. al.,

Plaintiffs,

CASE NO. 07-CV-1666 W (WMC)

ORDER DENYING MOTION

FOR CONDITIONAL CLASS

CERTIFICATION (Doc. No. 15)

vs.

JP MORGAN CHASE & CO. et. al.,

Defendants.

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.)

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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.

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All future references to “Rule” are to the Federal Rules of Civil Procedure, unless

otherwise noted.

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(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 23,1

 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. 

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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 their regular rate of pay for all

hours worked beyond 40 hours in such workweek.

(Pls.’ Mot. 3–4.) To this end, Plaintiffs request that the Court conditionally certify the

proposed class and order Defendants to disclose the names and addresses of all

individuals described above. (Id. 2.) Plaintiffs request that notice of this lawsuit be sent

to each individual, affording each an opportunity to “opt-in,” which would purportedly

advance judicial efficiency by resolving common issues of law and fact. (Id. 2, 4–6.) 

Plaintiffs argue that the conditional certification standard is lenient and that they

only need to present a modest factual showing to establish that other employees are

“similarly situated” to themselves. (Pls.’ Mot. 4–9.) Additionally, Plaintiffs argue that

because the issuance of notice depends solely on the existence of similarly situated

employees, the Court should not, at this time, consider the merits of the underlying suit.

(Pls.’ Mot. 10–11.) 

Defendants, in response, contend that Plaintiffs cannot show that they are

similarly situated to every other JPMorgan loan officer across the country. (Defs.’ Mot.

10–24.) Because of the individualized inquiry required to determine whether each loan

officer is “exempt,” Defendants argue, Plaintiffs cannot show that they are similarly

situated to other employees in different offices with different duties and different pay.

(Id. 10–21.) Regardless, Defendants contend, Plaintiffs have not shown that

Defendants have an unlawful policy of misclassifying loan officers as exempt from

federally-mandated overtime laws. (Id. 21–24.) 

 For a FLSA “opt-in” procedure to be permissible, the Court must determine

whether Plaintiffs are similarly situated to each other and to other individuals. Wynn

v. NBC, 234 F. Supp. 2d 1067, 1081 (C.D. Cal. 2002). In making the “similarly

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situated” determination, courts apply a two-tiered approach. Id. at 1082 (collecting

various circuit cases). In the first or “notice” stage, the court makes a decision based on

the pleadings and any affidavits that have been submitted. Id. The “similarly situated”

determination is made based on a fairly lenient standard, and typically results in a

“conditional certification” of a representative class. Id. In general, courts appear to

require nothing more than substantial allegations that the putative class members were

together the victims of a single decision, policy, or plan infected by discrimination. Id.

(citing Sperling v. Hoffman-LaRoche, Inc., 118 F.R.D. 392, 407 (D.N.J. 1988). 

Determining whether proposed class members are similarly situated is fact

specific. Wynn, 234 F. Supp. 2d at 1082. Courts look at several factors in determining

whether plaintiffs are similarly situated, including: (1) whether there is evidence that

the alleged activity was part of an institution wide practice; (2) the extent of the

similarities among the members of the proposed collective action, in particular whether

the members all are challenging the same employment practice; and (3) the extent to

which the members of the proposed action will rely on common evidence. Hyman v.

First Union Corp., 982 F. Supp. 1, 3–5 (D.D.C. 1997). Plaintiffs have the burden of

making substantial allegations of class-wide discrimination, that is, detailed allegations

supported by affidavits which successfully engage a defendant’s affidavits to the contrary.

Hipp v. Nat’l Liberty Life Ins. Co., 252 F.3d 1208, 1219 (11th Cir. 2001).

A. Plaintiffs Do Not Show That They Are Similarly Situated To All Loan

Officers In the Proposed Class 

i. Plaintiffs Have Not Shown the Extent Of Similarities Between

Themselves and the Members of the Proposed Collective Action

In support of their conditional certification request, Plaintiffs simply state that

Plaintiffs and members of the putative class had essentially the same job description and

training and were compensated in the same manner. (Pls.’ Mot. 6.) The remainder of

Plaintiffs’ argument is comprised of boilerplate and legal conclusions. (Pls.’ Mot. 7–10,

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2

Several courts have found that merely alleging that a class of employees was wrongly designated “exempt” does not constitute a showing of an unlawful, institution-wide policy.

See, e.g., Chemi v. Champion Mortgage, No. 05cv01238-WHW-CCC, at 6 (D.N.J. June 19, 2006) (finding allegation of improper exempt classification insufficient because if that were true

“every case brought before the courts alleging improper designation as non-exempt employees would automatically qualify for conditional certification.”); Morisky v. Pub. Serv. Elec. & Gas

Co., 111 F. Supp. 2d 493, 498 (D.N.J. 2000) (denying conditional certification because plaintiff’s alleged common scheme was nothing more than defendant’s “determination that

they are exempt under the FLSA”). Because Plaintiffs’ only allegation that Defendants engaged in a wrongful policy is that Defendants uniformly classified Plaintiffs and other loan officers as “exempt,”the Court follows Morisky and other courts in finding that Plaintiffs have failed to make substantial allegations identifying an unlawful nationwide policy. 

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(“Plaintiffs have provided extensive evidence in their own declarations of the factual

and legal nexus binding Plaintiffs and potential class members...”).) 

The Court cannot agree with Plaintiffs that they have met their burden, however

lenient, to conditionally certify the broad FLSA class they propose. Plaintiffs’

declarations state the following: (1) Plaintiffs briefly worked at JPMorgan’s Del Mar,

California office as sub-prime loan officers, (Trinh Decl. ¶ 3; Storey Decl. ¶ 3); (2)

Plaintiffs attended training in Southern California with several other (presumably new,

sub-prime) loan officers from around the country, (Trinh Decl. ¶ 4–5; Storey Decl.

¶ 4–5); (3) Plaintiffs understood that other loan officer employees in Southern

California performed the same functions and received the same compensation, (Trinh

Decl. ¶ 7–8; Storey Decl. ¶ 7–8); and (4) based on (1) through (3), Plaintiffs believed

that all loan officers, everywhere, had the same job functions and were compensated in

the same fashion and based on the same criteria (Trinh Decl. ¶ 8; Storey Decl. ¶ 8.) 

Although assuming—for now—that Plaintiffs have alleged that “misclassifying

loan officers as exempt” was an improper institution-wide practice,2

 they have not

detailed the extent to which all JPMorgan loan officers, nationwide, are similar. See

Hyman, 982 F. Supp. at 3–5 (laying out “similarly situated” factors). At most, Plaintiffs’

affidavits establish a few similarities in training and compensating rookie sub-prime loan

officers in the singular Southern California market. Plaintiffs provide no real evidence,

beyond their own speculative beliefs, suggesting that all JPMorgan loan officers across

the country, regardless of location or experience, receive the same compensation and

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3

On the other hand, Defendants have provided affidavits suggesting that JPMorgan loan officers have varied job duties and compensation depending on their location, experience, business plans, whether they attend loan closings, whether they spend time on credit counseling, whether they use assistants, how many loans they close, how their managers operate, and how successful they are. (Defs.’ Mot. 14–20 (comparing affidavits in Darren

Campbell Decl., Exs. A–L.) However, Plaintiffs have raised the specter of a discovery violation by Defendant for failing to turn over the declarations. The Court does not now decide whether

or not Defendants violated their discovery obligations, and it suffices to say that Plaintiffs have failed to carry their burden regardless of whether Defendant’s declarations are considered.

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are required to work in the same manner. Although Plaintiffs’ burden is lenient, the

Court nonetheless finds that Plaintiffs have failed to provide the modest factual showing

that they and the broad class they wish to represent are similarly situated with respect

to job requirements and pay provisions. See Harper v. Lovett’s Buffet, Inc., 185 F.R.D.

358, 362 (M.D.Ala. 1999) (“Plaintiffs have the burden of demonstrating a reasonable

basis for crediting their assertions that aggrieved individuals exist in the broad class that

they propose.”).3

 

ii. Plaintiffs Have Not Shown the Extent To Which Proposed Class

Members Will Rely on Common Evidence

The thrust of Plaintiffs’ conditional certification argument is that all JPMorgan

loan officers were unlawfully classified as “exempt” employees, and Defendant owes

them overtime for time worked over forty hours and on weekends. (Compl. ¶¶ 13–14.)

Neither Plaintiffs’ declarations nor moving papers, however, argue that Plaintiffs and the

purported class will rely on common evidence in proving the merits of their collective

case. Defendants argue that, indeed, this would be impossible; whether or not an

employee is “exempt” under relevant labor laws involves an analysis of each individual

loan officer’s daily duties and compensation and whether they meet several statutory

and administrative exemptions. (Defs.’ Mot. 10–13.)

If the ultimate issue to be determined is whether each employee was properly

classified as exempt under the FLSA, the “similarly situated” inquiry must be analyzed

in terms of the nature of each putative plaintiff’s job duties. Holt v. Rite Aid Corp., 333

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4

For instance, there are many relevant inquiries a fact-finder must answer when deciding whether any particular loan officer is exempt from FLSA overtime requirements. These include: the job duties actually performed by each loan officer on a daily basis, Haines v. Southern Retailers, Inc., 939 F. Supp. 441, 447 (E.D. Va. 1996); the time each loan officer

spent performing day-to-day tasks, Scott v. Maersk, Inc., No. G035746 (Cal. Ct. App. Aug. 30, 2006); the importance of the duties performed by each loan officer, 29 C.F.R. § 541.700(a); whether each loan officer collected and analyzed information regarding a customer’s financial picture and, if so, how much time was spent performing this function, 29 C.F.R. § 541.203(b); the extent to which each loan officer engaged in sales duties, 29 C.F.R. § 541.500(a)(1)–(2); the amount of time each loan officer worked outside the office, 29 C.F.R. § 541.500(a)(1)–(2); whether each loan officer made over $100,000, 29 C.F.R. § 541.601(a); and whether each loan officer performed a sufficient mix of different types of exempt duties to qualify for the

combination exemption, 29 C.F.R. § 541.708. Plaintiffs have not alleged that the putative class and themselves are so similarly situated that evidence common to all of them will suffice

to show that each Plaintiff falls outside these exemptions.

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F. Supp. 2d 1265, 1272 (M.D.Ala. 2004). 

 In this case, whether JPMorgan loan officers are “exempt” necessarily involves

a fact-by-fact inquiry into the circumstances of each employee to see if he or she falls

within an administrative, outside sales, highly compensated, combination, or any other

exemption.4

 Plaintiffs have not put forth any arguments suggesting that Plaintiffs and

the putative class will rely on any common evidence to prove that each putative plaintiff

falls outside each of these exemptions and is due overtime compensation. Other courts

analyzing complex litigation concerning whether loan officers were exempt have

concluded that the need for individual evidence makes a class or collective action an

unwieldy method for determining the rights of many litigants. See, e.g., Olivo v. GMAC

Mortgage Corp., 374 F. Supp. 2d 545 (E.D. Mich. 2004) (denying collective action

notice due to presence of outside sales exemption); Vinole v. Countrywide Home Loans,

246 F.R.D. 637, 641 (S.D. Cal. 2007) (denying, in Rule 23 class action, class

certification for mortgage loan officers because court would need to make individualized

inquiry in determining award of back pay); Chemi v. Champion Mortgage, No.

2:05cv01238-WHW-CCC, at 9 (D.N.J. June 19, 2006) (denying collective action notice

in mortgage loan officer case, holding that “any determination of whether an employee

is properly exempted under the FLSA involves a fact-intensive inquiry into each

putative class member’s employment circumstances.”); see also Holt, 333 F. Supp. 2d

at 1272 (denying collective action notice to store managers and assistant store managers

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5

Plaintiffs’ Reply, in arguing that no individual inquiries are necessary because none of the exemptions actually apply to Plaintiffs Trinh and Storey, cuts against their first argument that Plaintiffs are similarly situated to all JPMorgan loan officers nationwide. (Pls.’ Reply 8–9.) For instance, Plaintiffs argue that each exemption fails because their primary job was selling loans to various third parties, they were not regularly engaged in business away from the office, they were not highly compensated, and the combination exemption is inapplicable. (Id.) However, Plaintiffs have not alleged—nor does the Court believe that they could allege—that all JPMorgan loan officers, nationwide, only sell loans to third parties, do not regularly work away from the office, are not highly compensated, and are not eligible from the combination

exemption. 

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where duties of each employee needed to be individually evaluated); Pfohl v. Farmers

Ins. Group, 2004 U.S. Dist. LEXIS 6447, at *27 (C.D. Cal. Mar. 1, 2004) (“[D]iffering

job duties and [an] individualized inquiry to determine whether these varying duties

meet the administrative exemption preclude a collective action.”).

Recognizing that Plaintiffs have not shown that they plan to rely on common

evidence does not equal a determination on the merits. C.f. Hoffman v. Sbarro, Inc.,

982 F. Supp. 249, 262 (S.D.N.Y. 1997) (holding weighing merits at notice stage

improper). Here, the Court is not opining whether Plaintiffs, or any other loan officers,

have meritorious claims to overtime compensation; rather, the Court is examining the

legal backdrop and type of evidence required to prove whether any employee is exempt

or not.5

 Because of the individualized inquiries involved, the Court finds that judicial

economy would not be advanced by allowing this suit to proceed as a collective action.

See Hinojos v. Home Depot, Inc., 2006 U.S. Dist. LEXIS 95434, at *6 (D. Nev. Dec.

1, 2006) (“[T]he need for separate mini-trials to resolve each individual’s claim... is the

antithesis of collective action treatment.”). 

IV. CONCLUSION

For the above reasons, the Court finds that Plaintiffs have failed to show that they

are entitled to an order conditionally certifying a FLSA opt-in collective action and

directing Defendants to provide the names and addresses and notify all current and

former JPMorgan loan officers who worked for Defendants in the last three years who

worked over forty hours and did not receive overtime pay. Simply, Plaintiffs’

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declarations do not establish that they are similarly situated to other members of the

proposed class. Moreover, determining whether employees are “exempt” from FLSA

overtime requirements involves a highly individualized inquiry into the job duties and

compensation of each employee. Because Plaintiffs do not allege that they will rely on

common evidence to prove their class-wide claims, the Court finds that certifying a

collective action would not advance the collective action’s goal of judicial economy.

Accordingly, the Court DENIES Plaintiffs’ motion for an order conditionally certifying

an FLSA collective action. (Doc. No. 15.)

IT IS SO ORDERED.

DATED: April 22, 2008

Hon. Thomas J. Whelan

United States District Judge

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