Category Archives: State Law Claims

W.D.Ark.: FLSA Does Not Preempt State Common Law Claims; Claims Dismissed On Other Grounds

Montize v. Pittman Properties Ltd. Partnership No.1

This case was before the Court on one of the Defendant’s  Motion for Partial Judgment on the Pleadings filed.  The Plaintiffs did not file any response to the Motion.  Of interest, the Court held that certain non-FLSA state law claims were not preempted by the FLSA.  In so holding, the Court noted its agreement with the Ninth Circuit and disagreement with the Fourth Circuit on this issue.  Nonetheless the claims at issue were dismissed for failure to state a claim, because they failed to allege, with specicificity, the facts on which such claims could rest.

The Court dicussed the following facts (as pled) as relevant to its inquiry:

“In this action, Plaintiffs were migrant agricultural workers employed by Pittman Nursery Corporation for seasonal work. They allege that a former Pittman Nursery employee, Dawood Aydani, extorted money from them over the course of several years, in the form of kickbacks, and that such extortion effectively reduced Plaintiffs’ net compensation below the federal and state minimum wage. Specifically, Plaintiffs allege that Mr. Aydani required Plaintiffs to pay him $1,000 cash to secure and keep their employment. They further allege that these funds were then shared with some of the other Defendants in this action.

Plaintiffs assert causes of action under the Fair Labor Standards Act (“FLSA”), under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), and for negligent supervision. Pittman Nursery asks the Court to dismiss the non-FLSA claims and argues that these claims are preempted by the FLSA.”

Discussing the issue of preemption, the Court held: 

“The FLSA authorizes workers to file private actions to recover unpaid wages, damages, costs, and attorneys’ fees. 29 U.S.C. § 216(b). Pittman Nursery argues that, because Congress intended that these remedies be exclusive, duplicative claims seeking damages beyond those established under the FLSA are preempted by federal law. In the present case, Pittman Nursery asserts that the FLSA preempts Plaintiffs’ state law and RICO claims because these claims are duplicative. The Court does not agree.

The Eighth Circuit has not addressed the issue of whether the remedies under the FLSA are exclusive. The Court is aware that the Fourth Circuit has held that the FLSA preempts claims that “depend on establishing that [the employer] violated the FLSA.” Anderson v. Sara Lee Corp., 508 F.3d 181, 193 (4th Cir.2007). Several other district courts outside of the Eighth Circuit have ruled that state claims are preempted by the FLSA where those claims merely duplicate the FLSA claims. Id. at 194. On the other hand, the Ninth Circuit has held that the FLSA does not preempt common law fraud claims and that the FLSA does not provide exclusive remedies for violating its provisions. Williamson v. Gen. Dynamics Corp., 208 F.3d 1144, 1151-53 (9th Cir.2000). Also, several district court cases within the Eighth Circuit have held that the FLSA does not provide the exclusive remedy for its violations and does not preempt state law claims even when there is a common core of operative facts. See Cortez v. Neb. Beef, Inc., Nos. 8:08CV90, 8:08CV99, 2010 WL 604629 (D.Neb. Feb.16, 2010); Bouaphakeo v. Tyson Foods, Inc., 564 F.Supp.2d 870, 886 (N.D.Iowa 2008); Robertson v. LTS Management Services, LLC, 642 F.Supp.2d 922, 928 (W.D.Mo.2008); Osby v. Citigroup, Inc., No. 07-CV-06085-NKL, 2008 WL 2074102 (W.D.Mo. May 14, 2008). Most district courts in the Eighth Circuit agree that the FLSA’s savings clause, which allows states to enact stricter wage, hour, and child labor provisions, indicates that the FLSA does not provide an exclusive remedy for its violations. Bouaphakeo, 564 F.Supp.2d at 882. In fact, “it would seem that state law may offer an alternative legal basis for equal or more generous relief for the same alleged wrongs.” Cortez, 2010 WL 604629, at *6.

Here, the Court is more persuaded by the opinions of district courts within the Eighth Circuit and adopts the view that the FLSA does not provide an exclusive remedy for violations of its provisions. Accordingly, the Court does not agree with Pittman Nursery that Plaintiffs’ non-FLSA claims are preempted by the FLSA.”

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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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D.Mass.: Skycaps’ State Law Claims Preempted By Airline Deregulation Act Of 1978 (ADA)

Travers v. JetBlue Airways Corp.

Skycaps, who assist airline passengers with the curbside check-in of their luggage, receive most of their compensation in the form of tips paid by the passengers. The plaintiffs, past and present skycaps for JetBlue Airways Corporation (“JetBlue”), accuse the airline of diverting tip revenue to itself by its imposition of a $2 fee assessed for each bag checked at the curbside (the “curbside check-in fee”). According to the plaintiffs, passengers erroneously believe the $2 fee goes directly to the skycaps because it is cash only, physically collected by the skycaps, and in an amount typically (that is, historically) given as a tip. The plaintiffs allege that the curbside check-in fee has caused their compensation to decrease dramatically because few passengers give a tip in addition to the $2 fee.

The amended complaint asserted claims under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201, the Massachusetts Minimum Wage Law, Mass. Gen. Laws ch. 151, §§ 1, 7, the Massachusetts Tips Law, Mass. Gen. Laws ch. 149, § 152A, and state common law claims for tortious interference with contractual and/or advantageous relations and unjust enrichment/quantum meruit. JetBlue has moved to dismiss all state law claims as expressly preempted by the Airline Deregulation Act of 1978 (“ADA”), 49 U.S.C. § 41713(b) (1), or impliedly preempted by the Federal Aviation Act (“FAA”), 49 U.S.C. § 49191 et seq. Alternatively, JetBlue moves to dismiss the tortious interference and unjust enrichment claims for failure to state a claim.

The Court discussed preemption under the ADA in general stating, “All preemption challenges “ultimately turn[ ] on congressional intent,” Good v. Altria Group, Inc., 501 F.3d 29, 33 (1st Cir.2007), and the “primary indicator of intent is the text of the congressional act claimed to have the preemptive effect,” id. at 34.

The ADA’s preemption provision states: “[A] State … may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier….” 49 U.S.C. § 41713(b)(1) (emphasis added). Relying on the words “related to,” the Supreme Court has emphasized that the ADA expresses a broad preemptive purpose. Morales v. Trans World Airlines, Inc., 504 U.S. 374, 384 (1992); see Altria Group, Inc. v. Good, 129 S.Ct. 538, 547 (2008) (recognizing the “unusual breadth of the ADA’s preemption provision”). State law claims are “related to” an airline’s prices, routes, or services, and thus preempted, if the state law either, on its face, “explicitly refers to” or, in application, has a “significant effect” on an airline’s prices, routes, or services. Buck v. Am. Airlines, Inc., 476 F.3d 29, 34 (1st Cir.2007); United Parcel Serv., Inc. v. Flores-Galarza, 318 F.3d 323, 335 (1st Cir.2003). On the other hand, state law claims having only a “tenuous, remote, or peripheral” relationship to an airline’s prices, routes, or services are not preempted. Morales, 504 U.S. at 390. Evaluation of this relationship centers “on the effect that the state law has on airline operations,” not on “the state’s purpose for enacting the law.” N.H. Motor Transp. Ass’n v. Rowe, 448 F.3d 66, 78 (1st Cir.2006) (emphasis in original).”

Turning to the facts in the case before it, the Court said, “[t]he question here, therefore, boils down to this: Are the plaintiffs’ state law claims “related to” JetBlue’s prices, routes, or services? The answer seems obvious. The plaintiffs seek to impose liability under the Massachusetts statutory and common law claims for JetBlue’s action in setting (and collecting) a price for a service provided to its customers. To avoid liability under the state claims, JetBlue would have to alter its decisions about its price and services. Potential liability under the state claims, therefore, is a means by which the State effectively regulates JetBlue’s price and service with respect to curbside check-in.

The plaintiffs’ own argument necessarily acknowledges that their claims “relate to” JetBlue’s price for the curbside baggage check-in. They claim not to challenge the existence of JetBlue’s curbside check-in fee, but only the manner in which the fee is collected (i.e., cash-only, by the skycaps, and in an amount typically given as a tip). Two alternatives, which preserve skycap tip income, are proposed by the plaintiffs: JetBlue could charge the $2 fee either when passengers purchase their tickets or during self-check-in, and then list the charges as “baggage handling fees” on the passengers’ receipts. (See Pls.’ Opp’n to Def. JetBlue Airways Corp.’s Mot. to Dismiss 10 n.8.) To propose these two alternatives is to implicitly acknowledge that their state law claims are a vehicle for regulating JetBlue’s assessment and collection of a fee for the curbside check-in service. The question, however, is not whether such regulation would be beneficial or desirable, but whether it is permitted in light of the ADA’s broad preemption of any state regulation of an airline’s “prices” or “services.”

Furthermore, any argument that the state law claims here have no more than a “tenuous, remote, or peripheral” relationship to JetBlue’s prices or services is belied by the plaintiffs’ own complaint. They seek not only money damages for past wrongs, but also injunctive relief “ordering Defendants to cease their violations of the law.”(Am.Compl.10.) Whether indirectly, by threat of liability for money damages, or directly, by injunctive order, the plaintiffs’ broader goal is to compel JetBlue to change its practices with respect to the imposition and collection of the curbside check-in fee. That relationship to JetBlue’s prices and services is not “tenuous, remote, or peripheral.

In sum, the ADA preempts the plaintiffs’ state law claims. The defendant’s Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(6) ( dkt. no. 46) is GRANTED. Counts II-V of the amended complaint are dismissed as against JetBlue.”

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W.D.Pa.: Although FLSA Does Not Provide Coverage For Work Performed In Foreign Countries, Pennsylvania Wage And Collection Act (PMWA) Does

Truman v. DeWolff, Boberg & Associates, Inc.

Plaintiff commenced this action against Defendant alleging violations of section 16(b) of the Fair Labor Standards Act of 1938 (“FLSA”) 29 U.S.C. 216(b); the Pennsylvania Minimum Wage Act of 1968 (“PMWA”) 43 P.S. §§ 333.101-333.115; and the Pennsylvania Wage Collection Act of 1961, 43 Pa. Cons.Stat. Ann. §§ 260.1-260.45. Before the Court is Defendant’s motion for Partial Summary Judgment seeking dismissal of Mr. Truman’s claim that he is due overtime pay under the FLSA for the period of time he worked outside of the United States. Defnedant filed a Reply to Mr. Truman’s Response arguing for the first time that Mr. Truman was also not entitled to overtime payments under the PMWA for the period of time he worked in foreign countries. Thereafter, Plaintiff filed a Sur-Reply opposing the imposition of Partial Summary Judgment to his PMWA claim. The Court denied the motion for Partial Summary Judgment with regards to the PMWA claim.

After discussing the statutory basis for granting Defendant’s Motion regarding the FLSA and the foreign work, the Court turned to Plaintiff’s claims for the same work under the PMWA, stating, “[t]he Pennsylvania Minimum Wage Act guarantees that employees will be paid one and one-half times their regular rate for any overtime worked. 43 P.S. § 333.104(c). Exemptions to this statutory provision are recorded in 43 P.S. § 333.105. Unlike the FLSA, the PMWA does not contain an explicit exemption for work performed outside of the United States. However, the PMWA has been construed to extend its protections to employees who work outside of Pennsylvania. Friedrich v. U.S. Computer Systems, Inc., 1996 WL 32888 (E.D.Pa. Jan.22, 1996). In Friedrich the Court permitted the PMWA to apply to Pennsylvania-based employees who perform work in states outside of Pennsylvania. 1996 WL 32888, at *8-9. Allowing employees who perform work outside of Pennsylvania to benefit from the PMWA is in accord with the PMWA’s Declaration of Policy. 43 P.S. § 333.101 (“Employes employed in such occupations are not as a class on a level of equality in bargaining with their employers in regard to minimum fair wage standards … wages in such occupations are often found to bear no relation to the fair value of the services rendered”). Thus, there is nothing within the PMWA that restricts the benefits of the PMWA to work performed within the United States.

The FLSA does not preempt state minimum wage acts from offering greater protection to state employees than does the FLSA. For example, the FLSA states that, “[n]o provision of this Act … or of any order thereunder shall excuse noncompliance with any Federal or State law or municipal ordinance establishing a minimum wage higher than the minimum wage established under this Act.”29 U.S.C. § 218(a). Additionally, several courts have found that explicit FLSA exemptions do not preempt state laws from offering state employees greater protections than FLSA. See e.g., Pacific Merchant Shipping Ass’n v. Aubry, 918 F.2d 1409, 1417 (9th Cir.1990) (“We hold that [29 U.S.C.] section 213(b)(6) does not preempt California from applying the state’s overtime pay laws to FLSA-exempt seamen working off the California coast.”); Pennsylvania Dept. of Labor and Industry v. Whipple, 1989 WL 407328, at *3 (Pa.Com.Pl., 1989) (Overtime exemptions under FLSA “do not affect coverage under Pennsylvania Minimum Wage Act”); Ploufe v. Farm & Ranch Equip. Co., 174 Mont. 313, 320, 570 P.2d 1106 (Mont.1977) (holding that FLSA did not preempt Montana from regulating overtime and wages under the Montana Minimum Wages and Hours Act). In light of the FLSA’s explicit recognition that states may offer greater protections to its employees than the FLSA, we are reluctant to find an unstated foreign-work exemption in the PMWA based solely on the fact that the FLSA contains such an exemption. Baum v. Astrazeneca LP, 605 F.Supp.2d 669, 674 (W.D.Pa.2009) (finding that “[b]ecause the FLSA is a remedial act, the exemptions are typically narrowly construed”).

In Williams v. W.V.A. Transit Co., 472 F.2d 1258 (D.C.Cir.1972), the Court of Appeals for the District of Columbia found that the District of Columbia Minimum Wage Act was not limited by an explicit FLSA exemption:

[A]n employee does not lose his status of being employed in the District merely because he receives an assignment, for a relatively short period, that calls on him to spend all his time for that period at some location outside the District. Otherwise, that status would be lost or suspended through relatively isolated or occasional employment outside the District, and from the common sense of the matter we conclude that this is not the legislative intent. 472 F.2d at 1265-1266. As in Williams, we find that, although there is an applicable FLSA exemption, we cannot find an implied foreign work exemption in the PMWA to remove coverage from Pennsylvania residents who have been given assignments outside of Pennsylvania. If the Pennsylvania legislature had wanted to exempt foreign work from the PMWA it could have expressly included that exemption within the PMWA. See Friedrich, 1996 WL 32888, at *5 (“The Pennsylvania legislature enacted the PMWA to protect those employees who do not benefit from federal protection [under the FLSA].”) Our conclusion is in accord with the FLSA and its regulations that permit state laws to offer greater protections than the FLSA. See29 U.S.C. 218(a) (Section 218“expressly contemplates that workers covered by state law as well as FLSA shall have any additional benefits provided by the state law higher minimum wages; or lower maximum work week.” Williams, 472 F.2d at 1261);29 C.F.R. § 778.5 (“[n]othing in the act, the regulations or the interpretations announced by the Administrator should be taken to override or nullify the provisions” of state and local laws.)

In support of its argument that the FLSA and PMWA should have an identical analysis, DBA relies on Paul v. UPMC Health Sys., C.A. No. 06-1565, 2009 WL 699943 (W.D.Pa. Mar.10, 2009). In Paul, the defendant argued that the plaintiff was properly classified as an administrative employee and was therefore exempt from the overtime requirements under both the FLSA or the PMWA. The Paul Court noted that the “administrative exemptions” set forth in both the FLSA and PMWA are identical, and therefore only analyzed “the applicability of the administrative exemption to plaintiff’s FLSA claim,” noting that “the same analysis, however, also applies to plaintiff’s PMWA claim.” 2009 WL 699943, at *8, n. 1. The Paul Court applied an identical analysis only because both Acts contain express administrative exemptions. The Paul case does not address the circumstance when the FLSA contains an explicit exemption and the PMWA contains no corresponding exemption.

DBA’s reliance on Mitchell v. Abercrombie & Fitch, No. C2-04-306, 2005 WL 1159412 (S.D.Ohio May 17, 2005) is also misplaced. The Mitchell case concerned application of the Ohio Minimum Fair Wage Standards Act to a plaintiff who not only did all of his work outside of Ohio, but also did not reside in Ohio. The Mitchell Court found that the Ohio legislature did not intend the Act to apply to workers, “who perform no work within the territorial limits of the State of Ohio [and that] the Commerce Clause of the United States Constitution prohibits Ohio from regulating the working conditions of a non-resident who performs work and earns wages outside of the state.” 2005 WL 1159412, at *3 (emphasis added). The Mitchell Court also noted that there was “no claim that [plaintiff] ever worked for even a brief period of time in Ohio, which would change the analysis as to the applicability of Ohio law to his employment relationship.” 2005 WL 1159412, at *4. Here, there is no dispute that Mr. Truman is a Pennsylvania-based employee.

The employer has the burden of proof of to show that an employee fits into an exemption. Baum, 605 F.Supp.2d at 674. Mr. Truman has conceded that work he performed outside of the United States is not protected by the FLSA, and thus we will grant DBA’s motion in this respect. However, DBA has failed to show that Mr. Truman is an exempt employee under the PMWA for the work performed in England and Canada. Nothing within the language of the statute implies that work performed in a foreign country by a Pennsylvania resident does not deserve the same protections as work performed within Pennsylvania by the same resident and for the same company. Accordingly, we will deny the motion for partial summary judgment with regards to the PMWA claim.”

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D.N.J.: Defendant’s Motion To Dismiss Opt-out NJWL Claims As Incompatible With FLSA Opt-in Claims Denied At Pleading Stage

Perry v. Freedom Mortg. Corp.

This case was before the Court on Defendant’s motion to dismiss or strike count II of Plaintiffs Complaint, which alleged overtime law violations pursuant to the New Jersey Wage Law (“NJWL”). The Court denied Defendant’s motion, explaining that it was premature at the pleading stage. This case is of note, because there is conflict of authority within the 3rd Circuit, as to whether Rule 23 “opt-out” classes and 216(b) “opt-in” classes can ever be brought together, or whether the Court should necessary deny its inherent supplemental authority necessarily in such cases.

“The underlying Complaint in this case is a putative class claim, filed by Plaintiff, contending that Freedom violated the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq. and the New Jersey’s Wage Law (“NJWL”), N.J.S.A. 34:11-56a et seq. by improperly classifying mortgage loan officers to prevent them from receiving overtime pay for work in excess of 40 hours a week. In its motion to dismiss Plaintiff’s NJWL claim, Freedom argues that Plaintiff’s FLSA and NJWL claims are legally incompatible. This Court concurs with and adopts Judge Linares’ reasoning in Freeman v. Hoffman-Laroche, Inc. No. 07-1503, 2007 U.S. Dist. LEXIS 92589, at * 70*10 (N.J.D. Dec. 18, 2007), determining that dismissal of a cause of action under NJWL solely for “inherent incompatibility” with FLSA is not appropriate.

Freedom’s additional argument is that the Court should dismiss Count II because Plaintiff cannot establish the “superiority” test required for class certification under Federal Rule of Civil Procedure 23(b)(3). The Court holds that this argument is premature. The parties have conducted no discovery. No motions for class certification have been filed. The Court will be in a much better position to address this issue at the class certification stage.”

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Costco Accused Of Wage Law Violations

The New York Times is reporting that Costco Wholesale, the warehouse club, has been sued by a California worker alleging false imprisonment because, she says, employees are locked in stores against their will for 15 minutes after they are off duty.

The complaint, which seeks to represent several hundred Costco workers in California, asks for $50 million in back pay plus damages from 2005 until the present.

To read the full story, go to the New York Times website.

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D.Kan.: Defendant Not Entitled To Sanctions Due To Plaintiff’s Refusal To Dismiss Certain Claims

Armstrong v. Wackenhut Corp.

Finding that the lead plaintiff in a wage-and-hour suit against G4S Wackenhut Corp. did not unreasonably refuse to dismiss state law claims, a federal judge has refused to grant Wackenhut attorneys’ fees for expenses it incurred filing a motion to dismiss those claims.  In an order handed down last week, the District Court Judge in the U.S. District Court for the District of Kansas rejected Wackenhut’s bid for attorneys’ fees under Section 1927 and under Rule 11.

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