Colson v. Avnet, Inc.

• Decision Date: 27 January 2010
• Docket Number: No. 09-603-PHX-MHM.,09-603-PHX-MHM.
• Citation: 687 F. Supp.2d 914
• Parties: Michelle COLSON, on behalf of herself and all others similarly situated, Plaintiff, v. AVNET, INC., Defendant.
• Court: U.S. District Court — District of Arizona

687 F.Supp.2d 914

Michelle COLSON, on behalf of herself and all others similarly situated, Plaintiff, v. AVNET, INC., Defendant.

No. 09-603-PHX-MHM.

United States District Court, D. Arizona.

January 27, 2010.

Daniel Lee Bonnett, Jennifer Lynn Kroll, Susan Joan Martin, Martin & Bonnett PLLC, Phoenix, AZ, Joel W. Christiansen Christiansen Law, Portland, OR, for Plaintiff.

Jessica Leigh Catlett, Amy Abdo, Janice Kay Procter-Murphy, Fennemore Craig PC, Phoenix, AZ, Alexander K. Mircheff, Ann S. Robinson, Jesse A. Cripps, Jr., Julian W. Poon, Gibson Dunn & Crutcher

LLP, Los Angeles, CA, Eugene Scalia, Gibson Dunn & Crutcher LLP, Washington, DC, for Defendant.

ORDER

MARY H. MURGUIA, District Judge.

Currently pending before the Court is Plaintiff Michelle Colson's Motion for Collective Action Notification, (Dkt. # 18), as well as Defendant Avnet, Inc.'s Motion to Dismiss the First Amended Complaint, (Dkt. # 83). After reviewing the relevant pleadings and conducting oral argument, the Court issues the following Order.

I. BACKGROUND

This is a class action lawsuit filed by Michelle Colson, on behalf of herself and all others similarly situated, under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201, et seq., and two state wage laws—Ariz. Rev. Stat. § 23-350, et seq., and Or.Rev.Stat. § 653.015, et seq.

Defendant Avnet, Inc. is a Phoenix, Arizona-based industrial distributor of electronic components, computer and storage products and embedded subsystems. Avnet currently has more than 40 offices nationwide, and more than 470 Sales and Marketing Representatives ("SMRs") dispersed across those various offices. Plaintiff was for some undefined period of time employed by Defendant as a SMR in its Oregon office. Plaintiff alleges that she and all other SMRs—as well as those "who perform ... substantially the same duties as SMR employees"—were misclassified as exempt "administrative" employees under the FLSA. Due to this alleged mischaracterization, Plaintiff contends that she and other Avnet employees were improperly denied overtime wages for their work in excess of 40 hours per week.

A brief history of the procedural posture of this action is required. Plaintiff filed suit against Defendant on March 25, 2009. On April 9, 2009, this Court signed a stipulation that permitted Defendant to Answer by June 1, 2009. Before Defendant had the opportunity to Answer and/or file a Motion pursuant to Rule 12 of the Federal Rules of Civil Procedure, Plaintiff moved the Court for Collective Action Notification under 29 U.S.C. § 216(b) of the FLSA. On June 1, 2009, Defendant moved the Court to stay the proceedings pending the resolution of two cases pending before the Ninth Circuit Court of Appeals. At the same time, Defendant filed a Motion to Dismiss under Rule 12(b)(6) and Strike the Class Allegations pursuant to Rule 12(f). On July 6, 2009, Plaintiff lodged an Amended Complaint. On July 14, 2009, this Court issued an Order which noted that Plaintiff's Amended Complaint mooted Defendant's pending Motion to Dismiss. On July 17, 2009, within a reply brief, Plaintiff moved the Court to equitably toll the statute of limitations on her FLSA claim. On July 23, 2009, Defendant filed a Renewed 12(b)(6) and 12(f) Motion. On November 17, 2009, Plaintiff filed a Motion to Conduct Discovery. On November 18, 2009, this Court conducted a Status Hearing, at which time Plaintiff's Motion to Conduct Discovery was denied as untimely since the Court had not yet ruled on Defendant's Motion to Dismiss or conducted a Rule 16 Scheduling Conference.

On December 3, 2009, this Court conducted oral argument on all pending Motions. The Court denied from the bench Plaintiff's Motion to Equitably Toll the Statute of Limitations, (Dkt. # 81), and Defendant's Motion to Stay the Proceedings, (Dkt. # 22).

II. DEFENDANT'S MOTION TO DISMISS

A. Legal Standard for a Motion to Dismiss

To survive a motion to dismiss for failure to state a claim under Fed.R.Civ.P 12(b)(6), the plaintiff must allege facts sufficient "to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The "complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). Compare Wyler Summit Partnership v. Turner Broad. Sys. Inc., 135 F.3d 658, 661 (9th Cir.1998) ("All well-pleaded allegations of material fact are taken as true and construed in a light most favorable to the nonmoving party.") with Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir.2001) ("The court is not required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences."). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 129 S.Ct. at 1949; Twombly, 550 U.S. at 555, 127 S.Ct. 1955 ("A formulaic recitation of the elements of a cause of action will not do.").

However, "a dismissal for failure to state a claim is appropriate only where it appears, beyond doubt, that the plaintiff can prove no set of facts that would entitle it to relief." Morley v. Walker, 175 F.3d 756, 759 (9th Cir.1999). Also, in evaluating a motion to dismiss, a district court need not limit itself to the allegations in the complaint; but may take into account any "facts that are alleged on the face of the complaint and contained in documents attached to the complaint." Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir.2005).

B. Legal Standard under the FLSA

The FLSA provides that a covered employer shall not employ any employee "for a work week longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed." 29 U.S.C. § 207(a)(1). The FLSA provides a remedy for employees who have not been paid overtime compensation, and states that an employer who violates § 207 "shall be liable to the employee or employees affected in the amount of their ... unpaid overtime compensation ... and in an additional equal amount as liquidated damages." 29 U.S.C. § 216(b). At the same time, the FLSA provides a number of exemptions from these overtime regulations for certain employees, including "executive employees," 29 C.F.R. § 541.100, "administrative employees," § 541.200, "professional employees,"§ 541.300, "computer employees," § 541.400, and "outside sales employees," § 541.500, as well as "combination exemptions," for employees who "perform a combination of exempt duties" but might not directly qualify under any specific exemption. See id. at § 541.708. Here, Plaintiff contends that she and other Avnet employees who worked as SMRs or performed work comparable to a SMR were not eligible to be exempted from FLSA overtime pay requirement under the "administrative employees" exemption.

C. Oregon and Arizona State Law Claims

Arizona Revised Statutes § 23-351 provides that: "a) each employer in Arizona shall designate two or more days in each month, not more than sixteen days apart, as fixed paydays for payment of wages to his employees ... c) each employer shall, on each of the regular paydays, pay to each of his employees ... all wages due the employee up to such date...." A.R.S. § 23-351(3) provides that: "overtime or exception pay shall be paid no later than sixteen days after the end of the most recent pay period." According to the allegations contained in the First Amended Complaint, by failing to comply with the overtime wage requirements set forth under the FLSA, Defendant similarly violated A.R.S. § 23-351 by failing to pay FLSA mandated overtime within the time periods specified in § 23-351.

Oregon Revised Statutes § 653.055 provides that: "any employer who pays an employee less than the wages to which the employee is entitled under ORS 653.010 to 653.261 is liable to the employee affected." O.R.S. § 653.261 provides in relevant part:

The Commissioner of the Bureau of Labor and Industries may adopt rules prescribing such minimum conditions of employment, excluding minimum wages, in any occupation as may be necessary for the preservation of the health of employees. The rules may include, but are not limited to ... hours of work, but not less than eight hours per day or 40 hours per week; however, after 40 hours of work in one week overtime may be paid, but in no case at a rate higher than one and one-half times the regular rate of pay of the employees when computed without benefit of commissions, overrides, spiffs and similar benefits.

In O.A.R. § XXX-XXX-XXXX, the Commissioner adopted the following rule,

all work performed in excess of forty (40) hours per week must be paid for at the rate of not less than one and one-half times the regular rate of pay when computed without benefits of commissions, overrides, spiffs, bonuses, tips or similar benefits pursuant to ORS 653.261(1). Similar benefits include, but are not limited to, discretionary bonuses, gifts, profit sharing, thrift and savings program, trusts, reimbursements for expenses, holiday, or vacation pay.

Accordingly, Plaintiff alleges that Defendant violated Or.Rev.Stat. § 653.055 by failing to pay wages and overtime for work in excess of forty hours per week. To support her Oregon state law claim, Plaintiff seeks to certify an additional sub-class of employees under Rule 23 of the Federal Rules of Civil Procedure. This sub-class, consists of "all members of the Class employed by Defendant in the State of Oregon who worked in excess of forty hours during one of more workweeks without receiving overtime compensation within two (2) years of the date this action was commenced."

D. Analysis

1. Whether Plaintiff Failed To Plead...