Category Archives: Pleadings

N.D.Ill.: Former Attorney and Accountant Improper Third-Party Defendants in FLSA Case; Non-Employers Not Subject to Liability

Strauss v. Italian Village Restaurant, Inc.

This case was before the court on the third-party defendants’ motion to dismiss. The defendant, sued for FLSA violations, sought to implead its former attorneys and accountant, on the basis that the faulty legal/accounting advice they rendered resulted in the potential liability at issue in this wage and hour case. While indemnification by the professionals who rendered allegedly bad advice which led to the liability would seem to be a legitimate claim, the court dismissed the claim, because neither of the third-party defendants were alleged to be the plaintiffs’ employer (or joint employers), a prerequisite for the imposition of liability under the FLSA.

Reasoning that the professional consultants at issue were not subject to liability under the FLSA, Illinois state wage and hour laws, or similar counts derived from such statutes, the court explained:

Multiple employers may be held liable under the FLSA when “the facts establish that the employee is employed jointly by two or more employers.” The Supreme Court has held that the determination of whether a party is an employer is based on the “economic reality” of the situation. Courts have considered a variety of factors when making this determination, including the ability to hire or fire the employees, supervision of the employees’ schedules, determination of wages, and the maintenance of employment records. The Seventh Circuit has held that an “employer must exercise control over the working conditions of the employee.”

As these third-party defendants accurately point out, there is nothing in the Italian Villages’s conclusory allegations in these counts that suggests that these defendants could ever be considered “employers” within the meaning of the FLSA. There are no allegations that these third-party defendants had any control over these plaintiffs’ working conditions as the case law require; that they could hire, fire or manage them. Nor could there be. These firms were hired by the Italian Village to negotiate the employment contracts and to manage employee payroll. Their work in this respect was controlled by the Italian Village. Regardless of how much The Italian Village chose to rely on the advice and counsel of their third-party contractors with respect to these issues, there is no authority that the Court could find that supports the argument that the Italian Village’s reliance on these firms’ transforms these into “employers” under the FLSA.

Essentially the Italian Village is asking the Court to by-pass the statutory scheme set forth in the FLSA and shift responsibility for compliance with the FLSA from itself, the employer, to third-party consultants which it paid for services rendered. But nothing in the FLSA suggests that the Italian Village’s alleged “reasonable reliance” on its consultants can shift compliance with the law on to them as well. Moreover, there is ample authority that holds that the FLSA precludes all such potential blame-shifting and bars third-party actions for contribution and indemnity using any tort theories.

The Italian Village’s response to this raft of authority is that it is directed only at attempts by employers to shift liability to certain key employees, not to third parties like the accountants and attorneys sued here. Actually this is not correct. In Chao v. St. Louis Internal Medicine, the court held that an accounting firm could not be sued as a third-party defendant in an FSLA case under a tort theory. But even if this case did not so hold, this Court can see no real distinction between efforts to shift liability to employees, which is prohibited by the case law, and the Italian Village’s efforts to shift liability to their third-party consultants. Either scenario is barred by the FLSA’s express language that liability for compliance rests with the employer and the employer only so that the statute’s mandates are not diluted.

Click Strauss v. Italian Village Restaurant, Inc. to read the entire Memorandum Opinion and Order.

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W.D.Mo.: Plaintiffs Sufficiently Pled a “Rounding” Claim, Where Alleged Defendants’ Policy of Rounding Resulted in Improper Denial of Wages

McClean v. Health Systems, Inc.

The Plaintiffs, Certified Nursing Assistants (“CNAs”) for Defendant, claimed that they were required to work off the clock during automatically deducted meal breaks, during mandatory meetings and training sessions, and while performing mandatory data entry known as “dart charting.”  The result of these policies was to allegedly deny the Plaintiffs wages and overtime. After the Plaintiffs amended their Complaint the Defendants filed a motion to dismiss regarding several of Plaintiffs’ allegations.  As discussed here, the court denied Defendants’ motion as it pertained to Plaintiffs’ claims arising from Defendants’ policy of rounding their time to the nearest quarter of an hour, regardless of actual time worked.

Discussing the sufficiency of the rounding claim, the court explained:

“One of the Plaintiffs’ substantive allegations is that the Defendants have a practice of “reduc[ing] [their] employees’ work hours by rounding their hours to the nearest quarter hour of time to their detriment (i.e., the rounding did not average out to equally benefit Defendants and its employees over time) which results in Defendants not paying its employees for all time worked.” Doc. 51 at ¶ 112. Defendants cite federal regulations which expressly allow the practice of rounding to the nearest 15–minute increment. 29 C.F.R. § 785.48(b) (“For enforcement purposes this practice of [rounding to 5, 10 or 15–minute increments] will be accepted, provided that it is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked.”).  The Defendants submit Harding v. Time Warner, Inc. in support of their position that the Plaintiffs have not sufficiently pled a claim of improper rounding. No. 09cv1212–WQH–WMC, 2010 WL 457690 (S .D.Cal. Jan. 26, 2010). In Harding, the court found that, despite describing the allegedly improper rounding procedures in detail, Harding had failed to provide “specific factual allegations” showing that employees had been underpaid. Id. at *5. The Plaintiffs provided the following statements regarding rounding in their Amended Complaint:

112. Defendants further reduce its [sic] employees’ work hours by rounding their hours to the nearest quarter hour of time to their detriment (i.e., the rounding did not average out to equally benefit Defendants and its [sic] employees over time) which results in Defendants not paying its [sic] employees for all time worked. This practice results in Plaintiffs and all other similarly situated employees being denied wages including overtime premiums and Defendants’ illegal rounding practices are not de minimus. [sic]

113. Even though Defendants had a computerized timekeeping system in place and could have easily recognized and paid Plaintiffs’ and other similarly situated employees’ actual hours worked, Defendants deliberately disregarded the system’s records and rounded Plaintiffs’ and other similarly situated employees work time down to the nearest quarter of an hour.”

114. Defendants willfully and illegally rounded Plaintiffs’ and other similarly situated employees’ work time down to the nearest quarter of a [sic] hour.

Doc. 51 at ¶¶ 112–14 (legal conclusions in bold). Iqbal requires “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 129 S.Ct. at 1949. The Plaintiffs allege that the rounding did not average out properly. They further allege that the Defendants maintain a computerized system which keeps time, but still chose to use rounding. Assuming the truth of these allegations, the Court can plausibly infer that the Defendants chose to round time because it would be more favorable than paying for actual time worked on a minute by minute basis, thus violating the averaging rationale inherent to rounding. While the Plaintiffs could have chosen to state more, to require them to plead, for example, specific minutes on specific days for which they were denied wages would be fact pleading inconsistent with Iqbal. Hamilton v. Palm, 621 F.3d 816, 817 (8th Cir.2010) (noting that “Iqbal did not abrogate the notice pleading standard of Rule 8(a)(2)”). The Defendants’ Motion to dismiss the Plaintiffs’ rounding claim is DENIED.”

Click McClean v. Health Systems, Inc. to read the entire Order.

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Filed under Break Time, Pleadings, Recordkeeping, Wage Theft, Work Time

9th Cir.: Complaint That Failed To Allege Entity Exercised Control Over Nature And Structure Of The Employment Relationship Did Not Properly Allege Defendant Was “Employer”

Dianda v. PDEI, Inc.

Plaintiff-appellant Joseph Dianda worked for two days as a “best boy” in the production of a television commercial, but was allegedly paid three days late. Dianda sued the production company and PDEI, Inc. (“PDEI”) for various violations under the Fair Labor Standards Act (“FLSA”) and California law.  In the case below, all defendants moved to dismiss the action. The district court denied the motion as to the production company, but granted the motion as to PDEI after determining that PDEI was not Dianda’s “employer” under the FLSA or California law.  Dianda appealed and the 9th Circuit affirmed, discussing the requirements for an “employer” under both the FLSA and California law.  Here, because the Complaint failed to adequately allege that PDEI exercised control over the nature and structure of the Plaintiff’s employment, the Court affirmed the dismissal as to PDEI.

“I. ‘Employer’ Status Under California’s Labor Code and FLSA

The essence of the test for “employer” status under the California Labor Code is “whether the principal has the right to control the manner and means by which the worker accomplishes the work.” Estrada v. FedEx Ground Package Sys., Inc., 64 Cal.Rptr.3d 327, 335 (Cal.Ct.App.2007). FLSA’s test is broader, asking whether the “individual [here, PDEI] exercises control over the nature and structure of the employment relationship.” Boucher v. Shaw, 572 F.3d 1087, 1090-91 (9th Cir.2009) (quotation marks omitted).

Dianda has not shown that PDEI had the right to control the details of his work or that PDEI exercised control over his employment relationship. In his deposition, Dianda admitted that PDEI did not tell him how to do his job, PDEI did not hire him, PDEI did not terminate him, PDEI never communicated with him in any way, and Dianda never took instructions or directions from PDEI concerning the commercial. Nonetheless, Dianda argues that his pay stub and W-2 form identify PDEI as the “employer.” However, “[t]he parties’ label is not dispositive and will be ignored if their actual conduct establishes a different relationship.” Estrada, 64 Cal.Rptr.3d at 335-36. See also Real v. Driscoll Strawberry Assocs., Inc., 603 F.2d 748, 755 (9th Cir.1979) (“Economic realities, not contractual labels, determine employment status for the remedial purposes of the FLSA.”). Furthermore, PDEI’s alleged use of its own account to pay wages and PDEI’s maintenance of payroll records are explainable as part of the service it provides as a payroll company. See, e.g., Moreau v. Air France, 356 F.3d 942, 950-52 (9th Cir.2004) (determining that Air France was not a joint employer of contracted service workers where Air France’s involvement was to ensure compliance with regulatory requirements).”

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11th Cir.: Although § 255(a)’s Statute Of Limitations Is An Affirmative Defense That Must Be Specifically Pled, Defendants Sufficiently Did So With Language Referencing 2-3 Year Period In Their Pleadings

Following a jury verdict in favor of the Defendants, the Plaintiff appealed, based on a jury instruction the Court gave regarding the FLSA’s 2-3 statute of limitations.  Specifically, the Plaintiffs asserted that the Court erred in giving an instruction framing the applicable limitations period, because Defendants had failed to specifically plead statute of limitations as an affirmative defense.  However, construing Defendants’ pleadings in the case, as described below, to have pled such an affirmative defense, the Court affirmed the lower Court’s jury verdict, based on the instruction at issue.

The Eleventh Circuit explained:

“The district court instructed the jury as follows:

The Plaintiff is entitled to recover lost wages from the present time back to no more than two years before this lawsuit was filed on June 18, 2008, unless you find the employer either knew, or showed reckless disregard for the matter of whether its conduct was prohibited by the FLSA. If you find that the employer knew, or showed reckless disregard for the matter of whether its conduct was prohibited by the FLSA, the Plaintiff is entitled to recover lost wages from the present time back to no more than three years before this lawsuit was filed.

The jury answered “no” to the first question on the verdict form, concerning whether Appellees failed to pay Navarro overtime wages as required by law. Thereafter, Navarro filed this appeal.

On appeal, Navarro urges that the district court’s application of § 255(a)‘s limitation was improper because Appellees had waived the limitation by failing to properly plead it in their Answer. Appellees, on the other hand, urge that § 255(a) is not a traditional statute of limitations that must be raised as an affirmative defense. In the alternative, they claim that they adequately raised the limitation in their Answer and in the pretrial stipulations submitted to the district court.

The Court reviews a district court’s instructions to the jury for abuse of discretion. U.S. v. Lopez, 590 F.3d 1238, 1247-48 (11th Cir.2009). The Court reviews de novo a district court’s grant of a F.R.Civ.P. 50 motion for judgment as a matter of law. D’Angelo v. Sch. Bd., 497 F.3d 1203, 1208 (11th Cir.2007).

This Court has held that the § 255(a) statute of limitations is “an affirmative defense which must be specifically pled.” Day v. Liberty Nat’l Life Ins. Co., 122 F.3d 1012, 1015 (11th Cir.1997) (citing F.R.Civ.P. 8(c)).  In Day, the Court ruled that the defendant had waived the § 255(a) statute of limitations by failing to assert it until after the jury had rendered a verdict. As a result, the Court reversed the district court’s grant of a judgment notwithstanding the verdict based on the statute of limitations defense. Id. at 1015-16 The Day Court emphasized the fact that the defendant’s failure to raise the defense until after the jury rendered a verdict deprived the plaintiff of the opportunity to contest the application of the limitation. Id. at 1015 (“[I]f [the defendant] had brought the limitations issue to the court during the … trial, [the plaintiff] could have offered evidence that the statute was tolled during some period of time, or have insisted that the jury instructions reflect the effect of the statute of limitations on any possible recovery by him.”). In finding a waiver, the Day Court relied on the Fifth Circuit’s earlier opinion in Pearce v. Wichita County, 590 F.2d 128, 134 (5th Cir.1979). The Pearce Court had addressed a situation almost identical to that in the Day case. In Pearce, the defendant had not raised the statute of limitations defense in its pleadings or in objection to the court’s jury instructions. Id. It had waited until after the jury verdict, finally bringing the limitations issue to the Court’s attention in a motion for judgment notwithstanding the verdict. Id. The Pearce Court held that such a delay constituted waiver of any objection to the limitations period that was applied. Id.

The case at hand is clearly distinguishable from the Day and Pearce cases, however, as Appellees raised § 255(a) several times before the case was submitted to the jury. First, Appellees stated in their Answer (under the heading “Affirmative Defenses”) that “[a]ny violation of the [FLSA] by Defendants was not willful, and was wholly unintentional. Defendants continuously acted in good faith with regard to the administration of its [sic] pay plan.” Next, more than a month before trial, the two-or-three-year limitation was referenced more than once in the parties’ Joint Pretrial Stipulation. Specifically, under the heading “Defendants’ Statement of the Case,” Appellees stated that “Defendants dispute … that Plaintiff was not paid for any overtime he may have worked during the last two or three years of his employment.” Also, in the Stipulation, the parties stated that the following fact was agreed upon and would not require proof at trial: “The corporate Defendant grossed in excess of $500,000.00 per year during the last three years of Plaintiff’s employment.” Finally, the parties and the court addressed this matter during trial, when, following the close of Navarro’s case, the Appellees based several motions for directed verdict on the three-year maximum limitations period. Navarro’s counsel, armed with case law, responded with the contention that the Appellees had not pled § 255(a) as an affirmative defense. The Court reviewed the proffered case, but ultimately ruled that § 255(a) would apply so that, at most, Navarro would recover for a three-year time period. Thus, this case stands in stark contrast to the Day and Pearce cases, where defendants had waived the defense by not raising it until after the jury had rendered a verdict.

The Court finds that Appellees timely raised the § 255(a) statute of limitations. Even if Appellees’ assertions in their Answer did not comply with a strict reading of F.R.Civ.P. 8(c), under this Court’s precedent, the limitation was still not waived. That is, although Rule 8(c) requires that a statute of limitations defense be raised as an affirmative defense, this Court has noted that “the purpose of Rule 8(c) is to give the opposing party notice of the affirmative defense and a chance to rebut it,” and, as a result, “if a plaintiff receives notice of an affirmative defense by some means other than the pleadings, ‘the defendant’s failure to comply with Rule 8(c) does not cause the plaintiff any prejudice.’ “ Grant v. Preferred Research, Inc., 885 F.2d 795, 797 (11th Cir.1989) (quoting Hassan v. U.S. Postal Serv., 842 F.2d 260, 263 (11th Cir.1988)). In Grant, the defendant raised the statute of limitations defense for the first time in a motion for summary judgment filed approximately one month before trial. Id. This court ruled that, because the plaintiff was “fully aware” that the defendant intended to rely on the defense, and because the plaintiff did not assert any prejudice from the lateness of the pleading, the defendant’s failure to comply with Rule 8(c) did not result in a waiver. Id. at 797-98.

As demonstrated above, in this case, Navarro was given ample notice of Appellees’ intent to rely on § 255(a) in several instances prior to trial. Moreover, when the issue was debated in light of the Appellees’ directed verdict motions, Navarro’s counsel made a thorough argument (including case citations) against the statute’s application. He never claimed during that argument that he had been surprised or somehow otherwise prejudiced by defense counsel’s reliance upon § 255(a) at trial. As a result, the district court did not err in limiting the jury’s consideration of unpaid overtime to the two-or three-year period prior to the filing of the complaint. Further, because it was uncontested that there was no evidence that Domingo or Rosa Santos exercised any active supervisory control over the company for the period three years prior to the filing of the complaint, the district court did not err in granting Appellees’ motion for judgment as a matter of law on the issue of the individual liability of either of them. Accordingly, we affirm the judgment entered on the jury’s verdict.”

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M.D.Pa.: Although Sovereign Immunity Bars FLSA Suit Against State Of Pennsylvania, State Official May Be Sued In His Official Capacity For Non-Monetary Declaratory Relief

Dino v. Pennsylvania

Plaintiffs filed a collective action to enforce the provisions of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., against the Commonwealth and against Defendant Beard in his official and personal capacities.  Specifically, Plaintiffs allege that they were or are employed by the Commonwealth’s Department of Corrections in the job classification of Corrections Officers 3 (“CO3 s”).  Plaintiffs contend that they should be classified as “non-exempt” for FLSA overtime purposes and are entitled to cash compensation for hours worked in overtime.

Both Defendants moved to dismiss or for summary judgment in the alternative citing the Eleventh Amendment.  The Court granted the State’s Motion, but denied Beard’s Motion in his individual capacity, holding that the Plaintiffs properly stated a cause of action against Beard (in both his official and individual capacity) solely for non-monetary declaratory relief.

Discussing the claims against Beard the Court stated, “[t]he Supreme Court has made clear that the Eleventh Amendment bars federal courts from entertaining suits by private parties against states. Alden v. Maine, 527 U.S. 706, 752, 119 S.Ct. 2240, 144 L.Ed.2d 636 (1999). Generally, Eleventh Amendment immunity also extends to state officials sued in their official capacity because in such a case the state is the real party in interest. Melo v. Hafer, 912 F.2d 628, 635 (3d Cir.1990) (citing Kentucky v. Graham, 473 U.S. 159, 165-66, 105 S.Ct. 3099, 87 L.Ed.2d 114 (1985)). “Eleventh Amendment immunity is, however, subject to three primary exceptions: (1) congressional abrogation, (2) waiver by the state, and (3) suits against individual state officers for prospective injunctive and declaratory relief to end an ongoing violation of federal law.” Pa. Fed’n of Sportsmen’s Clubs, Inc. v. Hess, 297 F.3d 310, 323 (3d Cir.2002).

Plaintiffs argue that Eleventh Amendment immunity is inapplicable here based on the third exception, the doctrine of Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908). “In Ex Parte Young, the Supreme Court carved out an exception to Eleventh Amendment immunity by permitting citizens to sue state officials when the litigation seeks only prospective injunctive relief in order to end continuing violations of federal law.” Balgowan v. State of New Jersey, 115 F.3d 214, 217 (3d Cir.1997). “The doctrine applies to violations of the United States Constitution and to violation of federal statutes.” Hess, 297 F.3d at 323. In determining whether the Young doctrine applies, a court need only go through the straight-forward inquiry of whether (1) the complaint alleges an ongoing violation of federal law and (2) whether the complaint seeks relief properly characterized as prospective. Id. at 324. “However, Young does not apply if, although the action is nominally against individual officers, the state is the real, substantial party in interest and the suit in fact is against the state.” Id. “[W]hen the action is in essence one for the recovery of money from the state, the state is the real, substantial party in interest and is entitled to invoke its sovereign immunity from suit even though individual officials are nominal defendants.” Regents of the University of California v. Doe, 519 U.S. 425, 429, 117 S.Ct. 900, 137 L.Ed.2d 55 (1997) (citation and internal quotation marks omitted).

In Balgowan, the Third Circuit addressed a case with similar facts to the one at bar. In that case, New Jersey Department of Transportation (“DOT”) engineers brought FLSA overtime compensation claims against the New Jersey DOT Commissioner. 115 F.3d at 217-18. The Third Circuit noted that it would not have jurisdiction over claims for injunctive relief, since FLSA limited such claims to those brought by the United States Secretary of Labor. Id. at 218. However, the appellate court allowed the engineers’ compensation claims to proceed against the commissioner under the Young doctrine because the engineers were seeking prospective declaratory relief. Id.

Like the DOT engineers in Balgowan, Plaintiffs have claims for declaratory relief that fall within the Young exception. First, Plaintiffs allege that Defendant Beard has violated the FLSA by failing to pay them “time and a half” for time worked in excess of the maximum hours per week period. (Doc. No. 1 ¶ 47-50.) Second, Plaintiffs seek prospective declaratory relief: a ruling that they are nonexempt employees under the FLSA and are entitled to compensation for excess hours worked. (Doc. No. 1 at 15-16.)

Defendant Beard asserts that the Young doctrine does not apply to him since the Commonwealth is the real party in interest. Yet Plaintiffs call for prospective relief that does not include recovery of money from the state. Specifically, Plaintiffs assert that Beard can: (1) remind the Commonwealth to uphold the law, (2) schedule and deploy CO3s to avoid the need for overtime, (3) direct subordinate Commonwealth staff to comply with the FLSA, or (4) resign his position. (Doc. No. 26, at 11.)

The Court finds that Plaintiffs have adequately alleged that Defendant Beard falls within the Young exception. This comports with the reasoning behind Young. Specifically, “[t]he theory behind Young is that a suit to halt the enforcement of a state law in conflict with the federal constitution is an action against the individual officer charged with that enforcement and ceases to be an action against the state to which sovereign immunity extends; the officer is stripped of his official or representative character and becomes subject to the consequences of his individual conduct…. The Young doctrine is accepted as necessary to permit federal courts to vindicate federal rights and to hold state officials responsible to the ‘supreme authority of the United States.’ “  Hess, 297 F.3d at 323 (quoting MCI Telecomm. Corp. v. Bell Atlantic-Pa., 271 F.3d 491, 506 (3d Cir.2001) (citations omitted)).

Because Plaintiffs’ allegations against Defendant Beard in his official capacity fall within the Young exception, Defendant Beard’s motion on the pleadings for immunity based on his official capacity will be denied.

B. Individual Capacity

Defendant Beard next asserts that he is entitled to qualified immunity in his individual capacity.

The doctrine of qualified immunity protects government officials ‘from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known.’ “ Pearson v. Callahan, — U.S. —-, 129 S.Ct. 808, 815, 172 L.Ed.2d 565 (2009) (quoting Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982)). In Saucier v. Katz, 533 U.S. 194, 201, 121 S.Ct. 2151, 150 L.Ed.2d 272 (2001), the Supreme Court set forth a two-tiered analysis to assist in determining whether a defendant is entitled to qualified immunity:

First, a court must decide whether the facts that a plaintiff has alleged (see Fed. Rules Civ. Proc. 12(b)(6), (c)) or shown (see Rules 50, 56) make out a violation of a constitutional right. Second, if the plaintiff has satisfied this first step, the court must decide whether the right at issue was “clearly established” at the time of defendant’s alleged misconduct. Qualified immunity is applicable unless the official’s conduct violated a clearly established constitutional right.  Pearson, 129 S.Ct. at 815-16 (citing Saucier, 533 U.S. 194, 121 S.Ct. 2151, 150 L.Ed.2d 272) (internal citations removed). In Pearson, the Supreme Court clarified that the order of the Saucier analysis was flexible, and that a court should “exercise [its] sound discretion in deciding which of the two prongs of the qualified immunity analysis should be addressed first in light of the circumstances in the particular case at hand.” Bayer v. Monroe County Children and Youth Services, 577 F.3d 186, 191-92 (3d Cir.2009) (quoting Pearson, 129 S.Ct. at 818).

Whether Defendant Beard should be afforded qualified immunity is likely to turn on the second Saucier prong of whether the right at issue was clearly established. In Bayer, the Third Circuit outlined the applicable analysis:

“The relevant, dispositive inquiry in determining whether a right is clearly established is whether it would be clear to a reasonable officer that his conduct was unlawful in the situation he confronted.” Saucier, 533 U.S. at 202. “This inquiry … must be undertaken in light of the specific context of the case, not as a broad general proposition,” id. at 201, and “turns on the ‘objective legal reasonableness of the action, assessed in light of the legal rules that were clearly established at the time it was taken.’ “ Pearson, 129 S.Ct. at 822 (quoting Wilson v. Layne, 526 U.S. 603, 614, 119 S.Ct. 1692, 143 L.Ed.2d 818 (1999) (internal quotation marks omitted)) ….Bayer, 577 F.3d at 192-93. “To be established clearly, however, there is no need that ‘the very action in question [have] previously been held unlawful.’ “ Safford Unified School Dist. No. 1 v. Redding, — U.S. —-, 129 S.Ct. 2633, 2643, 174 L.Ed.2d 354 (2009) (quoting Wilson v. Layne, 526 U.S. 603, 615, 119 S.Ct. 1692, 143 L.Ed.2d 818 (1999)).

In the present case, the parties dispute whether the CO3 positions at the Department of Corrections should be exempted from the FLSA. The FLSA exempts from its overtime pay requirements “any employee employed in a bona fide executive, administrative, or professional capacity.” See 29 U.S.C. § 213(a)(1). The Code of Federal Regulations defines executive employees as those (1) who receive compensation “of not less than $455 per week”; (2) whose “primary duty” is the management of the enterprise in which the employee is employed or of a customarily recognized department thereof; (3) who customarily and regularly direct the work of two or more other employees; and (4) who have the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees are given “particular weight.” 29 C.F.R. § 541.100(a).

The Court is without the necessary facts regarding the CO3 positions in this case to determine whether their status as non-exempt was clearly established and whether it should have been clear to Defendant Beard that a failure to categorize them as such was unlawful in the situation he confronted. The Court notes that Defendant Beard points to a number of factors that help to support his position that he acted reasonably. First, his position was consistent with the Commonwealth’s analysis that police lieutenants were exempt under the FLSA. (Doc. 18-4, Ex. A-2.) Additionally, the Commonwealth’s Office of Administration had classified the CO3 position as exempt from the FLSA for approximately 30 years. (Doc. No. 18-2, Ex. A ¶ 7.). 

However, absent further factual evidence regarding the pay, duties, and administrative responsibilities given to the CO3s the Court is unable to determine “whether a right is clearly established [by] whether it would be clear to a reasonable officer that his conduct was unlawful in the situation he confronted.” Saucier, 533 U.S. at 202. Therefore, the Court will allow the parties limited discovery on the qualified immunity issue in order to assist the Court in making such a determination.

IV. CONCLUSION

For the foregoing reasons, the Court finds that Defendant Beard does not have immunity in his official capacity. As a result, Defendant Beard’s motion on the pleadings as to Count I will be denied. As to Count II, the Court will allow the parties discovery in order to brief the Court as to whether Defendant Beard should be granted qualified immunity. “

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S.D.Ind.: Pursuant to FRCP 9(b), Generalized Allegations Of Willfulness Sufficient To Survive Motion To Dismiss Relating To Statute Of Limitations

Bockler v. R.J. McGough & Associates, Inc.

This cause is before the Court on the Defendant’s Motion to Dismiss and Plaintiff’s Motion to Amend his Complaint.  Specifically, Defendant sought to have the Complaint dismissed on statute of limitations grounds, averring that Plaintiff’s Complaint was insufficient to state of claim where the 3 year statute of limitations could be applicable, rather than the FLSA’s default 2 year statute of limitations.  Denying Defendant’s Motion, the Court cited to the generalized allegations of willfulness, noting that the Complaint must be construed in favor of the Plaintiff on a Motion to Dismiss.   Citing FRCP 9(b), the Court held Plaintiff’s allegations of willfulness sufficient to sustain Defendant’s Motion.

“[T]he statute of limitations for ordinary FLSA violations is two years. For willful violations of the FLSA, the statute of limitations is enlarged to three years. As the Supreme Court noted in McLaughlin v. Richland Shoe Co., 486 U.S. 128, 132 (1988), “[t]he fact that Congress did not simply extend the limitations period to three years, but instead adopted a two-tiered statute of limitations, makes it obvious that Congress intended to draw a significant distinction between ordinary violations and willful violations.”

In the instant case it is undisputed that Bockler missed the two-year deadline for filing an ordinary FLSA violation. However, Bockler’s Amended Complaint alleges that McGough willfully violated the FLSA, which adds one year to the statute of limitations and makes Bockler’s claim timely. McGough’s Motion to Dismiss alleges that Bockler “has failed to satisfy his burden for pleading a viable claim,” Def. Br. at 2, because he fails to provide “even inferential allegations as to how McGough’s conduct could be construed as ‘willful.’ “ Id. at 8.

Federal Rule of Civil Procedure 9(b) allows “[m]alice, intent, knowledge, and other conditions of a person’s mind” to be alleged generally. Accordingly, to survive a motion to dismiss, Bockler’s Amended Complaint must give McGough “fair notice of what the … claim is and the grounds upon which it rests.”   Pisciotta, 499 F.3d at 633 (7th Cir.2007). Furthermore, the “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Id. (citation omitted). Bockler has informed McGough what the claim is and the grounds upon which it rests. The Amended Complaint clearly alleges that “Defendant knowingly, willfully, or with reckless disregard, carried out its illegal pattern or practice of failing to pay at least one and one-half times the regular rate of pay for all overtime hours with respect to Plaintiff….” Amended Compl. ¶ 25. Although McGough may dispute these allegations, as this is Defendant’s Motion to Dismiss, all reasonable inferences are drawn in Bockler’s favor. Bockler has plead enough facts to satisfy Rule 9(b). Accordingly, McGough’s Motion to Dismiss is DENIED.”

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