Davis v. Abington Mem'l Hosp.

• Decision Date: 10 February 2014
• Docket Number: 12–3521,Nos. 12–3512,12–3522.,12–3515,12–3514,s. 12–3512
• Citation: 765 F.3d 236
• Parties: Collette DAVIS; Erica Williams; Kevin Keller; Charlene Murdoch, on behalf of themselves and all other employees similarly situated, Appellants v. ABINGTON MEMORIAL HOSPITAL; Abington Health; Abington Memorial Hospital Foundation; Lansdale Hospital. Kenneth Lynn; Charlene Agnew; Margaret Knapp, on behalf of themselves and all other employees similarly situated, Appellants v. Aria Health System; Aria Health—Frankford Campus; Aria Health—Torresdale Campus; Aria Health—Bucks County Campus. Kenneth Lynn; Acadia Wilcox; Loretta McDonnell; Gerardina Ilaria; Patricia Green, on behalf of themselves and all other employees similarly situated, Appellants v. Jefferson Health System; Thomas Jefferson University Hospital; McGee Rehabilitation Hospital; Main Line Health Inc; Albert Einstein Healthcare Network; Aria Health System. Cassandra Ruff; Kesha Cardwell, on behalf of themselves and all other employees similarly situated, Appellants v. Albert Einstein Healthcare Network; Albert Einstein Medical Center John Duncheskie; Diane Read; Thelma Harris; Eleanor Jackson, Appellants v. Temple University Health; Temple University Hospital; Episcopal Hospital; Jeanes Hospital.
• Court: U.S. Court of Appeals — Third Circuit

765 F.3d 236

Collette DAVIS; Erica Williams; Kevin Keller; Charlene Murdoch, on behalf of themselves and all other employees similarly situated, Appellants

v.ABINGTON MEMORIAL HOSPITAL; Abington Health; Abington Memorial Hospital Foundation; Lansdale Hospital.

Kenneth Lynn; Charlene Agnew; Margaret Knapp, on behalf of themselves and all other employees similarly situated, Appellants

v.Aria Health System; Aria Health—Frankford Campus; Aria Health—Torresdale Campus; Aria Health—Bucks County Campus.

Kenneth Lynn; Acadia Wilcox; Loretta McDonnell; Gerardina Ilaria; Patricia Green, on behalf of themselves and all other employees similarly situated, Appellants

v.Jefferson Health System; Thomas Jefferson University Hospital; McGee Rehabilitation Hospital; Main Line Health Inc; Albert Einstein Healthcare Network; Aria Health System.

Cassandra Ruff; Kesha Cardwell, on behalf of themselves and all other employees similarly situated, Appellants

v.Albert Einstein Healthcare Network; Albert Einstein Medical Center

John Duncheskie; Diane Read; Thelma Harris; Eleanor Jackson, Appellants

v.Temple University Health; Temple University Hospital; Episcopal Hospital; Jeanes Hospital.

Nos. 12–3512, 12–3514, 12–3515, 12–3521, 12–3522.

United States Court of Appeals, Third Circuit.

Submitted Pursuant to Third Circuit

L.A.R. 34.1(a) Feb. 10, 2014.

Filed: Aug. 26, 2014.

Jared K. Cook, Esq., Michael J. Lingle, Esq., J. Nelson Thomas, Esq., Thomas & Solomon, Rochester, N.Y., for Appellants.

Kristen E. DiMaria, Esq., Julie A. Donahue, Esq., Ogletree, Deakins, Nash, Smoak & Stewart, Andrea M. Kirshenbaum, Esq., Post & Schell, Christopher J. Moran, Esq., Jan P. Levine, Esq., Andrea T. Ohta, Esq., Sara B. Richman, Esq., Robin P. Sumner, Esq., Justin J. Williams, Esq., Pepper Hamilton, Larry R. Wood, Jr., Esq., Blank Rome, Alexandra Bak–Boychuk, Esq., Shannon D. Farmer, Esq., David S. Fryman, Esq., John B. Langel, Esq., Rebecca L. Massimini, Esq., Ballard Spahr, Philadelphia, PA, Eric J. Bronstein, Esq., John M. Elliott, Esq., Mark J. Schwemler, Esq., Gregory S. Voshell, Esq., Elliott Greenleaf & Siedzikowski, Blue Bell, PA, Sean P. McDevitt, Esq., Kali T. Wellington–James, Esq., Pepper Hamilton, Berwyn, PA, for Appellees.

Before: CHAGARES, SHWARTZ, and ALDISERT, Circuit Judges.

OPINION

CHAGARES, Circuit Judge.

This is an appeal from, inter alia, the District Court's order dismissing the third amended complaint in five cases: Collette Davis, et al. v. Abington Memorial Hospital, et al., No. 09–cv–05520; Kenneth Lynn, et al. v. Aria Health System, et al., No. 09–cv–05548; Kenneth Lynn, et al. v. Jefferson Health System, Inc., et al., No. 09–cv–05549; Cassandra Ruff, et al. v. Albert Einstein Healthcare Network, et al., No. 09–cv–05550; and John Duncheskie, et al. v. Temple University Health System, Inc., No. 09–cv–05551.¹ Each of these putative collective and class actions arose from the plaintiffs' allegations that their employers, defendant healthcare systems and affiliates (collectively, the “defendants”), implemented timekeeping and pay policies that failed to compensate them for all hours worked in violation of the Fair Labor Standards Act (“FLSA”) and Pennsylvania law. For the reasons that follow, we will affirm.

I.

The five cases on appeal are among several similar actions brought by a single law firm alleging systemic underpayment in the healthcare industry. The parties are nurses and other patient-care professionals, on behalf of a putative class, and their alleged employers. Allegedly, the defendants ² maintained three unlawful timekeeping and pay policies (collectively, the “Policies”). First, under the “Meal Break Deduction Policy,” the defendants' timekeeping system automatically deducted thirty minutes of pay daily for meal breaks without ensuring that the employees actually received a break. Second, under the “Unpaid Pre- and Post–Schedule Work Policy,” the defendants prohibited employees from recording time worked outside of their scheduled shifts. Third, under the “Unpaid Training Policy,” the defendants did not pay employees for time spent at “compensable” training sessions. Because of the Policies, the plaintiffs allege that they “regularly worked hours both under and in excess of [forty] per week and were not paid for all of those hours.” Appendix (“App.”) 845, 1469, 1655, 2330–31, 3259.

In November 2009, the plaintiffs filed parallel complaints in the United States District Court for the Eastern District of Pennsylvania against the defendants,³ asserting violations of the FLSA, 29 U.S.C. §§ 201, et seq.; the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001, et seq.⁴; and the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961, et seq. Less than one week later, the same individual plaintiffs filed suit in the Court of Common Pleas of Philadelphia County, alleging that the Policies violated the Pennsylvania Wage Payment and Collection Law (“PWPCL”), 43 Pa. Stat. Ann. §§ 260.3, et seq.; the Pennsylvania Minimum Wage Act (“PMWA”), 43 Pa. Stat. Ann. §§ 333.101, et seq.; and Pennsylvania common law.

The defendants timely removed six of the seven state court actions to federal court, on the basis that several of the claims were completely preempted by ERISA § 502(a)(1), 29 U.S.C. § 1132(a)(1), and supplemental jurisdiction existed over the remaining claims because they formed part of the same case or controversy. The Jefferson Health and Albert Einstein defendants additionally argued that the plaintiffs' PWPCL and breach of contract claims were completely preempted by § 301 of the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185. The District Court denied the plaintiffs' motions to remand on September 15, 2010, holding that ERISA preempted the state claims “in full” and LMRA § 301 completely preempted the plaintiffs' PWPCL and breach of contract claims. App. 193–99. In the same order, the court consolidated each of the state cases with its federal counterpart and directed the plaintiffs to file consolidated complaints.

The plaintiffs filed amended complaints on October 15, 2010, averring, as before, that the defendants: denied them overtime in violation of the FLSA; failed to keep accurate records and breached their fiduciary duties in violation of ERISA; and, in so doing, violated RICO. The amended complaints also reasserted all of the state law claims. The District Court granted the defendants' joint motions to dismiss in a consolidated opinion. It found that the amended complaints did not plausibly allege that the defendants were the plaintiffs'employers and thus failed to state claims under the FLSA or ERISA. It also dismissed the RICO claims, on the ground that the complaints did not adequately allege the predicate act of mail fraud. Further, it “decline[d] to exercise supplemental jurisdiction” over the state law claims. App. 54. The court granted the plaintiffs leave to amend, but cautioned them to “remedy the gaping deficiencies” observed by it and other district courts that have dismissed substantially similar complaints. App. 55 & nn. 70–72 (citing cases). In particular, the plaintiffs were instructed to “clari[fy]” whether they were also seeking gap time wages. App. 49 n.49.

After the plaintiffs filed a second amended complaint in each case, the parties stipulated to the filing of third amended complaints. The third amended complaints, which were filed on February 10, 2012, abandoned the ERISA and RICO claims and instead sought relief solely under the FLSA and Pennsylvania law. The defendants moved to dismiss, and the District Court granted their motions in another consolidated opinion. The court dismissed the plaintiffs' FLSA claims with prejudice ⁵ on the grounds that they failed to plausibly allege employer-employee relationships between the plaintiffs and all of the defendants, or that any of the named plaintiffs had worked overtime and were not compensated. The court again “decline[d] to exercise supplemental jurisdiction” over the remaining state law claims, which it dismissed without prejudice to their reassertion in state court. App. 7, 72. The plaintiffs timely appealed “each and every part of this final order,” including the District Court's September 15, 2010 orders denying their motions to remand the state cases to the Philadelphia Court of Common Pleas. App. 8.

II.

The District Court had subject matter jurisdiction over the plaintiffs' FLSA claims pursuant to 28 U.S.C. § 1331, and we exercise jurisdiction over the District Court's dismissal of those claims pursuant to 28 U.S.C. § 1291. ⁶ Our review over a district court's grant of a motion to dismiss under Rule 12(b)(6) is plenary. Fleisher v. Standard Ins. Co., 679 F.3d 116, 120 (3d Cir.2012). “To survive a motion to dismiss, 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, 173 L.Ed.2d 868 (2009) (quotationmarks omitted). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. Though “detailed factual allegations” are not required, a complaint must do more than simply provide “labels and conclusions” or “a formulaic recitation of the elements of a cause of action.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).

A.

The plaintiffs first argue that the defendants did not compensate them for hours worked in excess of forty per week during meal breaks, at training programs, and outside of their scheduled shifts. The District Court found that the plaintiffs' overtime claim was factually inadequate, on the ground that, “[t]he abundance of allegations notwithstanding,” the plaintiffs “failed to allege a single specific instance in which a named Plaintiff worked overtime and was not...