Tag Archives: Collective Action Allegations

W.D.Mo.: Court Has Subject Matter Jurisdiction Over Claims That Could Be Brought By Members of Putative Class, But Could Not Be Brought By Named Plaintiffs

Nobles v. State Farm Mut. Auto Ins. Co.

This case concered off-the-clock claims that were brought as a so-called hybrid case, so named because the claims asserted were a hybrid of several state wage and hour laws, as well as under the FLSA.  As discussed here, the plaintiffs, employees of one State Farm entity (State Farm Fire) sued both their employer, and another State Farm entity (State Farm Mutual), alleging identical wage and hour violations were committed by both against similarly situated employees.  By Motion to Dismiss, State Farm Mutual challenged the named-plaintiffs’ standing to assert claims against it, asserting that the named plaintiffs lacked standing to do so, because it was not their employer.  The court rejected these arguments, in granting plaintiffs’ motions for conditional and class certification.

Addressing this issue the court explained:

“In its pending Motion to Dismiss, State Farm Mutual contends that because Plaintiffs lack standing to assert joint employer status, the Court lacks subject matter jurisdiction, and therefore that claim should be dismissed under Federal Rule of Civil Procedure 12(b)(1). Alternatively, State Farm Mutual contends that Plaintiffs have failed to state a claim for joint employer status and therefore it should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6).

State Farm Mutual argues that “[o]nly State Farm Fire employees could possibly have standing to assert joint employment claims under Plaintiffs’ … theory, and there are no such plaintiffs in this case.” [Doc. # 111, at 13]. Neither Nobles nor Atchison are employees of State Farm Fire. However, standing issues “must be assessed with reference to the class as a whole, not simply with reference to the individual named plaintiffs.” Payton v. County of Kane, 308 F.3d 673, 680 (7th Cir.2002). Here, unnamed class members of the certified classes and collective include State Farm Fire employees who would have standing to bring claims under State Farm Mutual’s status as a joint employer with State Farm Fire. Thus, the Plaintiffs in this litigation have standing to assert joint employment status for members of the class.

Two recently decided cases in this district, Gilmor v. Preferred Credit Corp., No. 10–0189–CV–W–ODS, 2011 WL 111238 (W.D. Mo. Jan 13, 2011), and Wong v. Bann–Cor Mortgage, No. 10–1038–CV–W–FJG, 2011 WL 2314198 (W.D. Mo. June 9, 2011), also concluded that the court had subject matter jurisdiction over claims that could be brought by members of the certified class, but could not have been brought by any of the named plaintiffs. However, as a practical matter, it may be prudent to have a specific named Plaintiff whose named employer is State Farm Fire. See Gilmor, 2011 WL 111238, at *7. Therefore, Plaintiffs shall file an appropriate motion to designate such an employee prior to the close of discovery on the merits.”

Addressing (and rejecting) the defendants’ contention that plaintiffs had failed to sufficiently plead joint employment, the court reasoned:

“To determine whether an individual or entity is an employer, courts analyze the economic reality of the relationship between the parties.” Loyd v. Ace Logistics, LLC, No. 08–CV–00188–W–HFS, 2008 WL 5211022, at *3 (citation omitted). Although the Eighth Circuit has not yet stated a test to determine joint employer status, four factors are typically examined by courts to make this determination. They are: “whether the alleged employer: (1) had the power to hire and fire the plaintiff; (2) supervised and controlled plaintiff’s work schedules or conditions of employment; (3) determined the rate and method of payment; and (4) maintained plaintiff’s employment records.” Id. at * 3 (citing Schubert v. BethesdaHealth Grp., Inc., 319 F.Supp.2d 963, 971 (E.D.Mo.2004)).

State Farm Mutual asserts that Plaintiffs have failed to allege the elements of joint employer status or single enterprise status. This argument rests on the contention that because all of the named plaintiffs in the litigation are not employees of State Farm Fire, none of their allegations concern State Farm Mutual’s power to hire or fire any plaintiff who is an employee of State Farm Fire. [Doc. # 111, at 7].

The Court finds that this argument is a re-characterization of State Farm Mutual’s standing argument. As previously stated, Plaintiffs in this case include the certified classes. See Gilmor, 2011 WL 111238, at *6 (citing Sosna v. Iowa, 419 U.S. 393, 399 (1975)). Plaintiffs in this case include State Farm Fire employees who were subject to State Farm Mutual’s policies; and the Second Amended Complaint alleges that State Farm Mutual had the power to hire or fire them.

Second, State Farm Mutual asserts that even if the Court finds that Plaintiffs have alleged the elements of joint employment status, Plaintiffs’ factual allegations are “broad, unsupported statements” that do not provide the required factual support for Plaintiffs’ joint employment claim. [Doc. # 111, at 9]. The Court disagrees with State Farm Mutual’s characterization of Plaintiffs’ allegations. The Plaintiffs allege in their Second Amended Complaint that (1) the human resources department in State Farm Mutual retains the power to promote, retain, and discipline State Farm Fire employees, (2) State Farm Fire employees’ work and compensation are subject to State Farm Mutual’s written pay and timekeeping policy, and (3) State Farm Mutual’s and State Farm Fire’s timekeeping records are housed together, which the Court liberally construes to imply that State Farm Mutual maintains State Farm Fire’s timekeeping records. 

For these reasons, the Court finds that Plaintiffs have sufficiently stated a joint employer claim.”

Click Nobles v. State Farm Mutual Automobile Insurance Company to read the entire Order.

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S.D.Tex.: Defendant’s Motion to Dismiss Collective Action Allegations Denied; Argument Inappropriately Raised at Pleading Stage

Richardson v. Wells Fargo Bank, N.A.

This case was before the court on the Motion to Dismiss Collective Action Allegations, or, in the Alternative, Motion for More Definite Statement (“Motion”).  Plaintiff, a former personal banker for Wells Fargo, filed this collective action alleging that Defendant violated the Fair Labor Standards Act (“FLSA”) by failing to pay him overtime compensation for hours worked in excess of forty (40) per week. Plaintiff purported to sue also on behalf of all Wells Fargo personal bankers throughout the United States.  Defendant filed the Motion, asserting that Plaintiff failed to plead sufficient facts to support the collective action allegations.

Holding such a motion was inappropriately made at the pleading stage, the court explained:

“Plaintiff alleges sufficient facts in his Complaint to satisfy the pleading requirements for collective actions under the FLSA. Plaintiff alleges that he and other similarly-situated personal bankers working for Wells Fargo were improperly classified as non-exempt, regularly worked more than forty hours per week, and were not paid overtime compensation for those additional hours. These are all factual allegations that, if proven, state a plausible claim for relief under the FLSA. See, e.g., Hoffman v. Cemex, Inc., 2009 WL 4825224, *3 (S.D.Tex. Dec.8, 2009) (Rosenthal, J.).

Additionally, dismissal of the collective action allegations under Rule 12(b)(6) is not appropriate. Whether the case should proceed as a collective action is properly addressed when Plaintiff moves for conditional certification and issuance of notice to the class. Id. at *4 (citing Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1212 (5th Cir.1995)).

For the same reasons that dismissal under Rule 12(b)(6) is unwarranted, there is no need for Plaintiff to file a more definite statement. Plaintiff alleges an adequate factual basis for the FLSA claim and the Federal Rules require no more at this stage.

Plaintiff has adequately pled his FLSA claim. Whether the case should proceed as a collective action will be determined if and when Plaintiff moves for conditional certification and the issuance of notice.”

Armed with recent Supreme Court jurisprudence (Iqbal and Twombly), FLSA defendants are making more and more motions to dismiss as here.  However, as this court correctly held, such motions, in effect, to “decertify” collective actions before they reach “stage 1″ or the conditional certification stage are inappropriately made at the pleading stage of a case.

Click Richardson v. Wells Fargo Bank, N.A. to read the entire Memorandum and Order.

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