725 F.3d 34 (1st Cir. 2013), 12-1573, Manning v. Boston Medical Center Corp.

Docket Nº:12-1573, 12-1653
Citation:725 F.3d 34
Opinion Judge:LIPEZ, Circuit Judge.
Party Name:ELIZABETH MANNING ET AL., Plaintiffs, Appellants, v. BOSTON MEDICAL CENTER CORPORATION; ELAINE ULLIAN; JAMES CANAVAN, Defendants, Appellees, BOSTON REGIONAL MEDICAL CENTER, INC.; BOSTON REGIONAL MEDICAL CENTER, LLC; BOSTON MEDICAL CENTER 403B RETIREMENT PLAN, Defendants
Attorney:Guy A. Talia, with whom Patrick J. Solomon and Thomas & Solomon LLP were on brief, for appellants. C.J. Eaton, with whom Richard L. Alfred, Kristin G. McGurn, Jessica M. Schauer, and Seyfarth Shaw LLP were on brief, for appellees.
Judge Panel:Before Thompson, Stahl, and Lipez, Circuit Judges. STAHL, Circuit Judge, concurring in part and dissenting in part. CONCUR BY: STAHL (In Part) DISSENT BY: STAHL (In Part) STAHL, Circuit Judge,
Case Date:August 01, 2013
Court:United States Courts of Appeals, Court of Appeals for the First Circuit

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725 F.3d 34 (1st Cir. 2013)

ELIZABETH MANNING ET AL., Plaintiffs, Appellants,

v.

BOSTON MEDICAL CENTER CORPORATION; ELAINE ULLIAN; JAMES CANAVAN, Defendants, Appellees,

BOSTON REGIONAL MEDICAL CENTER, INC.; BOSTON REGIONAL MEDICAL CENTER, LLC; BOSTON MEDICAL CENTER 403B RETIREMENT PLAN, Defendants

Nos. 12-1573, 12-1653

United States Court of Appeals, First Circuit

August 1, 2013

As Amended September 20, 2013.

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS. Hon. Rya W. Zobel, U.S. District Judge.

Guy A. Talia, with whom Patrick J. Solomon and Thomas & Solomon LLP were on brief, for appellants.

C.J. Eaton, with whom Richard L. Alfred, Kristin G. McGurn, Jessica M. Schauer, and Seyfarth Shaw LLP were on brief, for appellees.

Before Thompson, Stahl, and Lipez, Circuit Judges. STAHL, Circuit Judge, concurring in part and dissenting in part.

OPINION

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LIPEZ, Circuit Judge.

Plaintiffs Elizabeth Manning, Lisa Rivers, Rhonda Williams, and Reva McCarthy bring this wage-and-hour action against defendants Boston Medical Center Corporation (" BMC" ), Elaine Ullian, and James Canavan. Current and former BMC employees, plaintiffs allege that defendants deprived them of their wages through the use of timekeeping policies and employment practices that required them to work through their meal and rest periods, put in

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extra work time before and after their regularly scheduled work shifts, and attend mandatory training sessions. The complaint asserts causes of action under the Fair Labor Standards Act (" FLSA" ) and Massachusetts common law for recovery of their unpaid wages. Plaintiffs also seek certification of a collective action pursuant to FLSA § 16(b), 29 U.S.C. § 216(b), and a class action pursuant to Federal Rule of Civil Procedure 23.

This case began as two separate actions, one in federal court raising FLSA claims, and another in the Massachusetts Commonwealth court raising state law claims. Defendants removed the latter action to federal court. After the two cases were joined via the filing of a single amended complaint, defendants moved to dismiss all of the claims, both federal and state, and sought to strike the class and collective action allegations. The district court granted defendants' motion in its entirety, and plaintiffs now appeal.

We have seen this case before, albeit with different parties. As explained in our prior opinions, see Pruell v. Caritas Christi, 678 F.3d 10 (1st Cir. 2012); Cavallaro v. UMass Memorial Healthcare, Inc., 678 F.3d 1 (1st Cir. 2012), numerous lawsuits of this kind have been filed against hospitals across the country, all alleging similar forms of systematic undercompensation. These cases, which we have previously dubbed " hospital compensation cases," assert " that [defendants] require[] unpaid work through meal-breaks due to an automatic timekeeping deduction, unpaid preliminary and postliminary work, and unpaid training sessions." Pruell, 678 F.3d at 13-14. A number of these actions are being litigated by counsel for plaintiffs in this case. See id. at 11; Cavallaro, 678 F.3d at 2.

After careful consideration of the numerous arguments raised on appeal, we vacate the district court's dismissal of the FLSA claims against BMC and Ullian, as well as the Massachusetts common law claims for breach of contract, promissory estoppel, money had and received, unjust enrichment, and conversion. We also vacate the striking of plaintiffs' class and collective allegations. We affirm the district court's directive that the plaintiffs in the two cases file a single consolidated complaint and, by extension, the district court's assumption of jurisdiction over the state law claims. We also affirm the dismissal of the FLSA claims against Canavan, the fraud and negligent misrepresentation claims, and the denial of further leave to amend the complaint.

I.

A. Factual Background

BMC refers to a group of related organizations that operate a set of healthcare facilities in the Boston area. The two individual defendants are Elaine Ullian, BMC's former president and chief executive officer, and James Canavan, BMC's former senior human resources director. Plaintiffs are three registered nurses (Manning, Rivers, and Williams) and one administrative assistant (McCarthy) who worked or currently work for BMC at several of its locations. They seek to represent a group of over 4,000 people who were or are currently employed by BMC as hourly workers. This group includes individuals in a broad range of positions, from nurses, medical assistants, technicians, and physical therapists, to administrative staff, custodians, and home health aides.

The crux of plaintiffs' claims is that defendants denied BMC's workers full compensation for their work through a combination of unlawful pay practices and timekeeping policies. The complaint alleges

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that BMC employees are not properly compensated for time spent performing work during their regularly scheduled meal breaks, as well as time spent before and after their scheduled shifts. The work that employees perform during their meal breaks and before and after their shifts includes tending to patients, doing paperwork, preparing charts, and responding to phone calls. Employees are often not relieved by other employees when the time comes for their meal breaks, forcing them to work during times when they are ostensibly not supposed to be working.

The complaint suggests that BMC consciously takes advantage of its employees' dedication and commitment to their patients, knowing that they would not abandon their caregiving responsibilities simply because their work hours are over or because they are due to take a meal or rest break.1

A key aspect of plaintiffs' claims is the interaction of BMC's alleged policies and practices with the company's timekeeping system. BMC maintains time records using an automated system that is programmed to deduct time from the employees' paychecks for meals, breaks, or other noncompensable time. Despite the fact that plaintiffs spend much of this time performing regular work responsibilities, the deductions for their meal break time are automatic. Plaintiffs also allege that they are " not allowed to record all their work performed" before and after their shifts, and, even when they are permitted to record that time, they are not compensated " properly."

Additionally, BMC employees are not paid for time spent during required training sessions. These trainings take place during regular work hours and cover subjects directly related to employees' work responsibilities, including new areas of medical research and procedure as well as instruction on basic protocols such as administering cardiopulmonary resuscitation (" CPR" ).

The complaint further states that BMC and the employees' supervisors are well aware that employees are performing work without being paid. Employees are often asked to take on responsibilities during their meal breaks and before and after their work shifts. The work is performed on BMC's premises during operational hours, " in full view of the defendants' managers and supervisors." Plaintiffs also allege that due to staffing shortages and other industry demands, BMC's management knows that the tasks they assign require their employees to work through their meal breaks and before and after their regularly scheduled shifts.

B. Procedural History

As noted, this case began as two separate actions, one initiated in the District of Massachusetts and the other in the Commonwealth courts. We recount their respective paths to this court.

1. The Initiation of the Two Actions

Three of the named plaintiffs, Manning, Rivers, and Williams, filed an action in federal court in September 2009 (" Manning I" ),

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alleging claims under the FLSA and other federal statutes.2 Defendants moved to dismiss all of those claims under Federal Rule of Civil Procedure 12(b)(6). As to the FLSA claim specifically, the motion challenged the sufficiency of the complaint's factual allegations and also contended that because the then-existing plaintiffs were all union members, the claim was precluded by the operation of federal labor laws governing the union-employer relationship, including the National Labor Relations Act (" NLRA" ).

Also in September 2009, Manning, Rivers, and Williams initiated a parallel action in the Massachusetts Commonwealth courts (" Manning II" ). This complaint pled a number of Massachusetts statutory and common law claims, relying on the same facts as the federal case. Defendants removed the case to federal court, contending that all of plaintiffs' claims were completely preempted by § 301 of the Labor Management Relations Act (" LMRA" ), 29 U.S.C. § 185(a), because plaintiffs were union workers covered by a collective bargaining agreement (" CBA" ) and their causes of action were founded directly on or necessarily required the interpretation of the CBA. Defendants then requested consolidation of Manning I and Manning II under Federal Rule of Civil Procedure 42, and also filed a motion to dismiss the Manning II complaint for failure to state a claim. Plaintiffs, for their part, sought to remand Manning II as improperly removed.

On September 16, 2010, the district court held a hearing on all of the pending motions in Manning I and Manning II. The court then took the motions under submission and stated that it would defer ruling on defendants' motion to consolidate the two actions until it resolved the motions to dismiss, as the dismissal of the complaints would moot the consolidation request.

In February 2011, the court granted the motion to dismiss the Manning I complaint, ruling that the facts alleged were insufficient to state a plausible claim for relief under the FLSA. The district court...

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