Duane Morris Class Action Review - 2023 - Report - Page 347
New York courts addressed this issue in 2022 in Rutella, et al. v. National Securities
Corp., 2022 N.Y. Misc. LEXIS 2311 (N.Y. Sup. Ct. May 25, 2022). In Rutella, the
plaintiffs sought class action certification for claims brought pursuant to New York Labor
Law Article 19, §§ 652, 653 and 12 NYCRR 142-2.1 and 142-2.2 for unpaid minimum
and overtime wages stemming from the plaintiffs’ alleged misclassification as
independent contractors by National Securities Corp. (NSC) and National Holdings
Corp. (NHC). Id. at *1-2. NSC is a Broker-Dealer engaged in trading securities and
brokerage products; NSC is a wholly-owned subsidiary of NHC, a holding company.
The plaintiffs, and the putative class, are current and former registered representatives
charged with selling products for NSC pursuant to Registered Representative
Agreements. Id. at *2. In seeking certification under New York’s Civil Practice Law &
Rules §§ 901 and 902, the plaintiffs maintained that they each consistently worked
beyond 40 hours per week; did not have managerial duties or possess the ability to hire,
fire, demote or promote employees; did not exercise independent judgment or discretion
on matters of significance; and were subject to the control of NSC/NHC in completing
assigned tasks. Id. at *3-4. In opposition, NSC/NHC asserted that the plaintiffs failed to
demonstrate sufficient grounds for class certification, arguing, among other points, that
the independent contractor versus employee classification analysis necessitates a
highly fact-specific inquiry inappropriate for class treatment, and, that the plaintiffs could
not show that their experiences were typical of the putative class given the various work
practices, schedules, and compensation of other registered representatives across the
different New York offices. Id. *16-17. The court disagreed. In granting class
certification, the court explicitly rejected the NSC/NHC’s individualized assessment
argument by citing state court precedent which had consistently found the analysis
inapplicable to CPLR § 901. Id. at *19-20. The court further determined that the
plaintiffs’ claims were suitable for class-wide treatment where they arose from the
standardized Registered Representative Agreements and practices of NSC/NHC, were
based on the same theory of misclassification, and resulted in the same injury, i.e.,
uncompensated minimum and overtime wages. Id. at *20. The court also rejected
NSC/NHC’s challenge to the superiority requirement, where they argued that
individualized “mini trials” would be required to calculate damages and administrative
remedies, and instead holding that such inquiries do not defeat class certification. Id. at
*23. Simultaneous with its class certification order, the court also denied NSC/NHC’s
motion for summary judgment as premature given that discovery up to that point had
been limited to the facts necessary to support or oppose the motion for class
certification only. Id. at *8-9.
In Settecasi, et al. v. Gotham Hall LLC, 2022 N.Y. LEXIS 494 (N.Y. Sup. Ct. May 17,
2022), the plaintiffs, a group of food service workers, brought a class action lawsuit to
recover damages for alleged wage and overtime violations under the New York Labor
Law against the defendants, who facilitated private catered events. Id. at *3. The
plaintiffs alleged that they worked in a food and service capacity as wait staff, servers,
bussers, and bartenders, and that the defendants charged clients a “service charge,”
but failed to disclose that the charge was not gratuity for staff. Id. at *4. The plaintiffs
alleged violations of Labor Law § 196-d, which is a statute designed to end the “unfair
and deceptive” practice of an employer retaining money paid by a patron under the
impression that he is giving it to the employee and not the employer. Id. at *6. The
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Duane Morris Class Action Review – 2023
