Brown v. Abm Indus., Inc.
| Decision Date | 01 December 2015 |
| Docket Number | Case No. 15 C 6729 |
| Parties | VERONICA BROWN, individually and on behalf of all others similarly situated, Plaintiffs, v. ABM INDUSTRIES, INC., et al., Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
AMY J. ST. EVE, District Court Judge:
On September 17, 2015, Plaintiff Veronica Brown, individually and on behalf of all others similarly situated, filed the present Second Amended Collective and Class Action Complaint alleging violations of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. ("FLSA"), and the Illinois Minimum Wage Law, 820 ILCS 105/1, et seq. ("IMWL") based on Defendants' alleged failure to pay overtime compensation for all hours worked in excess of 40 hours in a week. Before the Court is Defendants' motion to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(6) and 12(b)(1), as well as Defendants' Rule 12(f) motion to strike. For the following reasons, the Court denies Defendants' motion to dismiss. The Court, in its discretion, grants in part and denies in part Defendants' motion to strike.
"A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) challenges the viability of a complaint by arguing that it fails to state a claim upon which relief may be granted." Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 736 (7th Cir. 2014). Under Rule 8(a)(2), a complaint must include "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The short and plain statement under Rule 8(a)(2) must "give the defendant fair notice of what the claim is and the grounds upon which it rests." Bell Atlantic v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007) (citation omitted). Under the federal notice pleading standards, a plaintiff's "factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555. Put differently, a "complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009) (quoting Twombly, 550 U.S. at 570). When reviewing the sufficiency of a complaint under the Twombly/Iqbal plausibility standard, courts must accept the well-pleaded facts as true and draw all reasonable inferences in the plaintiff's favor. See Tierney v. Advocate Health & Hosp. Corp., 797 F.3d 449, 451 (7th Cir. 2015). The relevant question at the motion to dismiss stage is not whether the plaintiff will ultimately prevail on the merits, but whether the complaint is sufficient to cross the federal pleading threshold. See Skinner v. Switzer, 562 U.S. 521, 529-30, 131 S.Ct. 1289, 179 L.Ed.2d 233 (2011).
Federal Rule of Civil Procedure 12(b)(1) allows a party to raise as a federal court's lack of subject matter jurisdiction. See Fed. R. Civ. P. 12(b)(1). When bringing a facial challenge to subject matter jurisdiction under Rule 12(b)(1) "the district court must accept as true all material allegations of the complaint, drawing all reasonable inferences therefrom in the plaintiff's favor, unless standing is challenged as a factual matter." Remijas v. Neiman Marcus Group, LLC, 794 F.3d 688, 691 (7th Cir. 2015) (citation omitted). The party invoking federal jurisdiction bearsthe burden of establishing the required elements of standing. See Johnson v. U.S. Office of Personnel Mgmt., 783 F.3d 655, 661 (7th Cir. 2015).
"Rule 12(f) provides that a district court 'may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.'" Delta Consulting Grp., Inc. v. R. Randle Const., Inc., 554 F.3d 1133, 1141 (7th Cir. 2009) (quoting Fed.R.Civ.P. 12(f)). Motions to strike are generally disfavored, but may be appropriate if they serve to expedite litigation. See Heller Fin., Inc. v. Midwhey Powder, 883 F.2d 1286, 1294 (7th Cir. 1989); see also Talbot v. Robert Matthews Distrib. Co., 961 F.2d 654, 664 (7th Cir. 1992) (). District courts have considerable discretion to strike allegations under Rule 12(f). See Delta, 554 F.3d at 1141-42.
In her Second Amended Complaint, Plaintiff brings her FLSA and IMWL claims against Defendant ABM Industries, Incorporated ("ABM Industries") and its subsidiaries, which provide janitorial services for large office buildings in Chicago and employ thousands of hourly paid janitors. .) Plaintiff alleges that during the statutory period, Defendants used three methods of timekeeping, namely, handwritten time sheets, punch cards, and electronic timekeeping devices. (Id. ¶ 53.) This case involves janitors who used handwritten time sheets. (Id. ¶ 54.) According to Plaintiff, Defendants instructed and required janitors to write down and record only their scheduled hours on handwritten time sheets, rather than record all of the time worked each work day and workweek. (Id. ¶ 55.) Plaintiff specifically alleges that during the relevant statutory period, Defendants had a policy thatrequired janitors to collect and prepare their cleaning supplies and equipment prior to the start of their scheduled shift time, but did not pay them for this pre-shift work. (Id. ¶ 58.)
In the present motion to dismiss, Defendants explain that this is the fifth collective/class action that Plaintiff's counsel have filed against ABM and its affiliates. Defendants posit that the key distinction in the present lawsuit is that Plaintiff and the putative class allegedly spent unpaid, pre-shift time gathering and preparing their supplies and recorded their time on paper time sheets - not via punch cards or electronic timekeeping devices. Defendants move to dismiss based on Plaintiff's lack of standing arguing that Plaintiff has failed to allege an employer-employee relationship with any of the named Defendants. In their opening brief, Defendants focus on the FLSA's definition of "employer" and maintain that Plaintiff has failed to allege that the four ABM entities at issue are joint employers under the "economic reality test." (R. 32, Open. Brief, at 5.) To give Defendants' argument context, the Court first examines the FLSA's definitions of "employee" and "employer."
The FLSA imposes minimum hourly and overtime wages for employees who are "engaged in commerce or in the production of goods for commerce" or "employed in an enterprise engaged in commerce or in the production of goods for commerce." 29 U.S.C. §§ 206(a), 207(a)(1). As such, at this juncture, Plaintiff must sufficiently allege that she is an employee who is engaged in commerce (individual-based coverage) or that her employer is an enterprise engaged in commerce (enterprise-based coverage). See Tony & Susan Alamo Found. v. Secretary of Labor, 471 U.S. 290, 295, 105 S.Ct. 1953 (1985). Thus, to address Defendants'argument, the Court must determine whether Plaintiff has sufficiently alleged that Defendants fulfill the definition of employer under the FLSA. An employer is an "enterprise" covered under the FLSA if it "has employees engaged in commerce or in the production of goods for commerce, or [ ] has employees handling, selling, or otherwise working on goods or materials that have been moved in or produced for commerce by any person" and "is an enterprise whose annual gross volume of sales made or business done is not less than $500,000." 29 U.S.C. § 203(s)(1)(A)(i),(ii).
In response to Defendants' motion, Plaintiff maintains that whether a FLSA defendant is an "employer" or "joint employer" is a substantive element of a plaintiff's claim - not a jurisdictional requirement, and thus Defendants' argument does not concern subject matter jurisdiction. To date, the Seventh Circuit has yet to address whether meeting the statutory definition of "employer" in the context of the FLSA is a jurisdictional requirement or statutory element, but has "held that failure to meet the statutory definition of an employer in a Title VII or ADEA context is not a defect of subject matter jurisdiction but an ordinary failure to meet a statutory requirement." Saperstein v. Hager, 188 F.3d 852, 855 n.1 (7th Cir. 1999). Moreover, courts in this district have concluded that a challenge to whether an employer is a covered enterprise under the FLSA relates to the merits of the claim and not subject matter jurisdiction. See Torres v. Pallets 4 Less, Inc., No. 14 CV 4219, 2015 WL 920782, at *3 (N.D. Ill. Mar. 2, 2015) (collecting cases).
The Court agrees with the reasoning in these cases, especially in light of the United States Supreme Court's decision in Arbaugh v. Y & H Corp., 546 U.S. 500, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006). In Arbaugh, the Supreme Court held that the issue of whether a party is an"employer" under Title VII was an element of the party's claim - not a jurisdictional requirement. See id. at 516. In particular, the Supreme Court noted that "[s]ubject matter jurisdiction in federal-question cases is sometimes erroneously conflated with a plaintiff's need and ability to prove the defendant bound by the federal law asserted as the predicate for relief - a merits-related determination." Id. at 511 (quoting 2 J. Moore et al., Moore's Federal Practice § 12.30[1], p. 12-36.1 (3d ed. 2005)). After reviewing the definition of employer under Title VII, namely, 42 U.S.C. § 2000e(b), the Supreme Court concluded that whether an employer falls within this definition is a merits-based determination and held that "when Congress does not rank a statutory limitation on coverage as jurisdictional, courts should treat the restriction as nonjurisdictional in character." Arbaugh, 546 U.S....
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