Birdsong v. AT&T Corp.
| Decision Date | 18 March 2013 |
| Docket Number | NO. C12-6175 TEH,C12-6175 TEH |
| Court | U.S. District Court — Northern District of California |
| Parties | CATHY BIRDSONG, individually and on behalf of all others similarly situated, Plaintiff, v. AT&T CORP., AT&T SERVICES, INC., et al, Defendant. |
ORDER GRANTING
DEFENDANTS' MOTION TO
DISMISS
This case came before the Court on February 25, 2013, on Defendants' Motion to Dismiss Plaintiff's First Amended Complaint ("FAC") in its entirety. After carefully considering the parties' written and oral arguments and for the reasons set forth below, the Court GRANTS the motion.
BACKGROUND
Plaintiff was employed from October, 2008 until June, 2012 in Defendant AT&T Services, Inc.'s Information Technology business unit. FAC ¶¶ 5, 6, 16. In February, 2012, Plaintiff and others in the IT unit were reclassified from exempt from eligibility for overtime pay to nonexempt. Id.¶ 6. Plaintiff brings state and federal law claims for unpaid wages on behalf of herself and "All California employees of Defendants in the Business Unit 'information technology' who were informed that they were being changed from exempt to non-exempt status on or about February 2012, but were not paid wages for all hours worked prior to this reclassification." Id. ¶ 16.
Defendants attach to their motion a copy of a General Release and Waiver of Claims that Plaintiff signed in exchange for receiving a severance allowance. Dkt. No. 26-1.Plaintiff signed this agreement on June 26, 2012 when she was terminated. Id. at 7. By signing, Plaintiff agreed to release "AT&T Inc. and the Participating Company" and its subsidiaries and affiliates from "any claims, liabilities, demands or causes of action . . . that I may have or claim to have had as of . . . the date of this General Release and Waiver . . . based on my employment with the Companies or the termination of that employment. . . ." Id. The Release excepts "any claims that cannot be released as a matter of law." Id. It states in addition: "I agree that I will not bring or participate in any class action or collective action against the Company which asserts . . . any claim(s) which arose prior to the date I sign this Agreement, whether or not such claims are covered by the Release." Id.
Defendant now moves to dismiss the complaint in its entirety on the grounds that: (1) all claims except Plaintiff's individual FLSA claim are barred by the Release agreement; and (2) all causes of action are inadequately pleaded under Rules 8 and 12 of the Federal Rules of Civil Procedure.
LEGAL STANDARD
Dismissal is appropriate under Federal Rule of Civil Procedure 12(b)(6) when a plaintiff's allegations fail "to state a claim upon which relief can be granted." In ruling on a motion to dismiss, a court must "accept all material allegations of fact as true and construe the complaint in a light most favorable to the non-moving party." Vasquez v. Los Angeles Cnty., 487 F.3d 1246, 1249 (9th Cir. 2007). The court is not "bound to accept as true a legal conclusion couched as a factual allegation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted). A dismissal under Rule 12(b)(6) "can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).
To survive a motion to dismiss, a plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). This "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 555. Plausibility does not equate toprobability, but it requires "more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678. Dismissal of claims that fail to meet this standard should be with leave to amend unless it is clear that amendment could not possibly cure the deficiencies in the complaint. Steckman v. Hart Brewing, Inc., 143 F.3d 1293, 1296 (9th Cir. 1998).
DISCUSSION
As an initial matter, Defendants ask the Court to consider a Release agreement which Plaintiff signed and which Defendants submitted. In general, a court may not consider evidence extrinsic to the pleadings when deciding a motion to dismiss. See Fed. R. Civ. P. 12(d). However, under the doctrine of incorporation by reference, courts may consider extrinsic documents if they are "integral" to the plaintiff's claims and their authenticity is not in dispute. Parrino v. FHP, Inc., 146 F.3d 699, 706 & n.4 (9th Cir. 1998), superseded by statute as stated in Lacey v. Maricopa County, 693 F.3d 896 (9th Cir. 2012); see also Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005). A plaintiff's failure to refer to such documents "rais[es] the spectre that plaintiff failed to incorporate them by reference in the complaint as a means of avoiding Rule 12(b)(6) dismissal." Hotel Employees & Rest. Employees Local 2 v. Vista Inn Mgmt. Co., 393 F. Supp. 2d 972, 979 (N.D. Cal. 2005) (citing Parrino, 146 F.3d at 706).
The conditions for incorporation by reference are met here. Plaintiff argues extensively in her opposition to the motion that the Release agreement is unenforceable, but does not dispute that she signed it. The Release is an integral part of her allegations, for she would have no valid claims unless the release agreement did not bar them. Accord Lu v. AT & T Services, Inc., C 10-05954 SBA, 2011 WL 2470268, at *1 n.1 (N.D. Cal. June 21, 2011) (); Barber v. Remington Arms Co., Inc., CV 12-43-BU-DLC, 2013 WL 496202, at *1-*2 (D. Mont. Feb. 11, 2013) (). Furthermore, "the primary problem raised by looking to documents outside the complaint -lack of notice to the plaintiff - is dissipated [w]here plaintiff has actual notice . . . ." Hotel Employees, 393 F. Supp. 2d at 979 (internal quotation marks and citation omitted, brackets in original). Here, Plaintiff's counsel was clearly aware of the existence of the Release agreement. Counsel filed a related lawsuit in this district involving the same release agreement, which was held to have barred all of that plaintiff's claims except his individual FLSA claim. See Lu, 2011 WL 2470268. This raises the spectre that Plaintiff failed to mention the release agreement in order to avoid dismissal.
The Court therefore considers the Release agreement submitted by Defendants without converting this motion to one for summary judgment.
Defendants argue that all of Plaintiff's state law claims are barred by the Release because all of the claims stem from her employment with AT&T Services, Inc., and do not fall within the exceptions enumerated in the release. See Mtn. at 18; Dkt. No. 26-1 at 6-7 (Release Agreement). Plaintiff argues that the Release is unenforceable under California Labor Code § 206.5, because it seeks to eliminate statutory rights, and because Plaintiff wishes to amend to assert a claim under the Private Attorney General Act ("PAGA"). Opp'n at 16. The Court concludes that California law clearly permits the release of Plaintiff's claims and that Plaintiff's other arguments against enforcement of the Release are unavailing.
In general, California law strongly favors the settlement of disputes and the enforcement of releases. See In re Marriage of Hasso, 229 Cal. App. 3d 1174, 1184-85 (1991). Labor Code § 206.5(a) states that "[a]n employer shall not require the execution of a release of a claim or right on account of wages due, or to become due, or made as an advance on wages to be earned, unless payment of those wages has been made." Section 206 states that: "In case of a dispute over wages, the employer shall pay, without condition and within the time set by this article, all wages, or parts thereof, conceded by him to be due, leaving to the employee all remedies he might otherwise be entitled to as to any balance claimed."Courts have read both provisions together to mean that:
[W] ages are not considered "due" and unreleasable under Labor Code section 206.5, unless they are required to be paid under Labor Code section 206. When a bona fide dispute exists, the disputed amounts are not "due," and the bona fide dispute can be voluntarily settled with a release and a payment - even if the payment is for an amount less than the total wages claimed by the employee.
Watkins v. Wachovia Corp., 172 Cal. App. 4th 1576, 1587 (2009) (citation omitted); see also Reynov v. ADP Claims Services Group, Inc., C 06-2056-CW, 2007 WL 5307977, at *2-*3 (N.D. Cal. Apr. 30, 2007).
Plaintiff averred, when she signed the release agreement, that all wages and overtime payments "owed" to her had been paid. Dkt No. 26-1 at 7. She does not now allege that any of the wages she is claiming in this litigation were undisputedly owed to her. As long as there is a bona fide dispute over whether Defendants owed her the money she is claiming, any such claims were properly subject to settlement and were, in fact, released by Plaintiff when she signed the agreement and accepted the severance package.
Because Plaintiff is barred from bringing her own state law claims, she may not serve as class representative in a class action based on the same claims. Watkins, 172 Cal. App. 4th at 1592 (); O'Shea v. Littleton, 414 U.S. 488, 494 (1974) ().1 Plaintiff's state law claims are therefore and hereby DISMISSED.
Defendant argues that Plaintiff's...
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