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Nationwide wage-hour class against Sprint not conditionally certified, but class against ‘Sprint Partner’ is

By Brandi O. Brown, J.D.

In a lawsuit alleging that the misclassification and piece-work payment of workers for soliciting customers resulted in less-than-minimum hourly wages and failure to pay overtime, a federal district court in New York declined to conditionally certify a class action against Sprint or an intermediary contractor. However, the court did conditionally certify a collective that was limited to employees of a “Sprint Partner” operating in New York City. The court also granted in part and denied in part the workers’ motion for discovery (Martin v. Sprint/United Management Company, January 4, 2016, Engelmayer, P.).

Discount services under “Assurance Wireless” brand. According to the workers, Sprint sold discount services to qualifying low-income customers through a series of intermediary contracting companies. It did so through its “Assurance Wireless” brand, for which it relied on grassroots outreach and marketing activities conducted by workers retained by intermediary companies across the country. Included among those was Wallace Morgan, a corporation headquartered in New York City that sold Assurance Wireless products. However, it did so through a contract with Credico, which in turn contracted with Sprint. The named plaintiffs worked for Wallace Morgan as account executives and, eventually, corporate trainers. Some of the opt-in plaintiffs also worked for other Sprint partners. The opt-in plaintiffs alleged common facts about their job responsibilities and their belief that they were Assurance Wireless employees based on the amount of control it exerted over them.

Flat rate pay and long hours. Each declarant stated that in spite of his or her apparent status as an employee, he or she was classified as an independent contractor and paid a flat rate for each secured and accepted application. In addition to the work securing applications, they claimed they were also required to attend morning meetings and to report back to the office at the end of the day. Because of those long hours, the workers argued that their pay in many weeks fell below the required minimum wage. They did not receive overtime pay. They filed suit alleging that Sprint and Wallace Morgan violated the FLSA and state law and later moved for conditional certification.

No actual Sprint policy. The court declined to conditionally certify a nationwide class of all Sprint agents because the plaintiffs failed to demonstrate an official Sprint policy that gave rise to the employment practice in question. Although the Assurance Wireless program put certain requirements on the Sprint partners, which did affect the agents’ activities, the documents and operating procedures relied upon by the plaintiffs were “conspicuously silent” as to how the agents were to be “classified and paid.” That was the critical element, the court explained, for determining the viability of a collective—the act that allegedly violated the statute in question. The operating procedures required appropriate staffing but did not require agents to work a specific number of hours, nor did they prescribe their compensation. The only specification of rates was between Sprint and Credico, and that called for a flat-rate payment to the intermediary for accepted applications.

Moreover, no policy could be inferred based on the common experiences described in the plaintiffs’ declarations. That “leap” was not logical, the court explained, because even assuming that each of the eight declarants were employed by Sprint, it was questionable that a small number of declarations could permit inference of a nationwide “unitary practice.” Although plaintiffs did not need to “submit evidence expressly implicating every Sprint Partner nationwide,” the court explained, they did need to provide at least a representative sample. That showing had not been made.

No trickle-down evidence. Nor did the plaintiffs present evidence situating the alleged decision outside of the hands of the intermediaries and into Sprint’s hands. Their declarations failed to include concrete allegations that agents employed by “Sprint Partners” across the nation were subject to the same practices or that the practices in question somehow trickled down from Sprint. While the existence of an intermediary would not necessarily preclude a finding of a “nationwide practice attributable to a common principal,” solid evidence of a common policy is needed, particularly in light of the obvious response that the practices in question were developed by the intermediaries.

The court also declined to certify a Credico-wide class. There were no provisions regarding hours and compensation of agents in the contract between Sprint and Credico. Also, the declarants only provided information about three of the subcontractors for Credico, including Wallace Morgan. Thus, the court explained, the declarations did not support an inference that a common policy existed across all of the contracting partners who contracted through Credico.

Certification of class against ‘partner’ Wallace Morgan. However, the court concluded that conditional certification of a class naming the Sprint Partner Wallace Morgan was possible, at least for agents employed in New York City. The complaint alleged that Wallace Morgan agents were misclassified as independent contractors, that they worked 11-12 hour days, five to six days per week, and that they were paid a flat rate of $10 per application approved. Those allegations were corroborated by two of the opt-in plaintiffs’ declarations and, along with the named plaintiffs, they alleged that they observed coworkers with similar jobs who were affected by the same rules. Although Wallace Morgan opposed certification, its arguments were mostly premature and focused on the merits of the claim.

As for the proposed scope and content of the notice, the court declined to equitably toll the statute of limitations, ruled that the notice should be directed to all agents who were employed by Wallace Morgan within three years of the date on which the court-approved notice was issued, and made other rulings regarding the form and content of the notice.