Helfand v. W.P.I.P., Inc.

• Decision Date: 23 February 2016
• Docket Number: CIVIL NO. JKB-15-3438
• Citation: 165 F.Supp.3d 392
• Parties: Carl Helfand, Plaintiff v. W.P.I.P., Inc., et al., Defendants
• Court: U.S. District Court — District of Maryland

165 F.Supp.3d 392

Carl Helfand, Plaintiff

v.W.P.I.P., Inc., et al., Defendants

CIVIL NO. JKB-15-3438

United States District Court, D. Maryland.

Signed February 23, 2016

Filed February 24, 2016

Joseph E. Spicer, James A. Lanier, The Law Office of Peter T. Nicholl, Baltimore, MD, for Plaintiff.

Kevin J. Pascale, Meighan Griffin Burton, Pascale Stevens LLC, Baltimore, MD, for Defendants.

MEMORANDUM

James K. Bredar, United States District Judge

Carl Helfand (“Plaintiff”) brought this action against W.P.I.P., Inc. (“WPIP”) and Mark J. Einstein¹ (collectively, “Defendants”), alleging violations of the Fair Labor Standards Act (“FLSA”) of 1938, as amended, 29 U.S.C. §§ 201 et seq. ; the Maryland Wage and Hour Law (“MWHL”), Md. Code Ann., Lab. & Empl. §§ 3–401 et seq. ; and the Maryland Wage Payment and Collection Law (“MWPCL”), Md. Code Ann., Lab. & Empl. §§ 3–501 et seq. Now pending before the Court is Defendants' Motion to Dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (ECF No. 3.)² The issues have been briefed (ECF Nos. 3–1, 6 & 7), and no hearing is required, see Local Rule 105.6 (D. Md. 2014). For the reasons explained below, Defendants' Motion will be DENIED.

I. Background³

Plaintiff worked from January 2, 2014, through August 20, 2015, as an office clerk and security guard for WPIP, a Maryland business that provides parking, storage, and lot–rental services for independent tractor–trailer drivers and corporate fleet drivers. (ECF No. 1 ¶ 9.) In his clerical capacity, Plaintiff performed administrative tasks including bill collecting and customer service; he was also responsible for light groundskeeping and maintenance. (Id. ¶ 20.) As a security guard, Plaintiff was responsible for inspecting WPIP's facilities and monitoring the stored belongings left by WPIP's clients. (Id. ¶ 21.)

According to Plaintiff, at the outset of his employment Defendants informed him that “he would not receive overtime pay, even though he [would] work well over forty (40) hours each week.” (Id. ¶ 28.) True to their word, from January through November 2014, Defendants allegedly paid Plaintiff for forty hours of work each week even though he consistently worked as many as fifty or sixty hours. (Id. ¶¶ 29, 32.) Beginning in November 2014, Defendants scheduled Plaintiff for fifty–two hours of work each week, paying him “straight time” (i.e. , no overtime compensation) for those fifty–two hours; Plaintiff continued to work additional hours without any compensation whatsoever. (Id. ¶¶ 33–34.) This pattern of undercompensation continued until Plaintiff's employment ended in August 2015.

Plaintiff filed suit on November 11, 2015, charging Defendants with violations of the FLSA, the MWHL, and the MWPCL. (ECF No. 1.) On December 14, 2015, Defendants filed the pending Motion to Dismiss pursuant to Rule 12(b)(6),⁴ contending that (1) the Court should dismiss Plaintiff's FLSA count with prejudice and (2) the Court should decline to exercise supplemental jurisdiction over Plaintiff's state–law counts. (ECF No. 3.) Plaintiff filed a response in opposition (ECF No. 6), and Defendants replied (ECF No. 7). Defendants' Motion to Dismiss is now ripe for decision.

II. Standard of Review

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) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). In analyzing a Rule 12(b)(6) motion, the Court views all well–pleaded allegations in the light most favorable to the plaintiff. Ibarra v. United States , 120 F.3d 472, 474 (4th Cir.1997). “[A] well–pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable....”

Twombly , 550 U.S. at 556, 127 S.Ct. 1955. Even so, “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Id. at 555, 127 S.Ct. 1955. A “pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action will not do.’ Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’ ” Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (alteration in original) (quoting Twombly , 550 U.S. at 555, 557, 127 S.Ct. 1955 ).

III. Analysis

Plaintiff alleges that Defendants undercompensated him in violation of the FLSA and the MWHL; because of these violations, Plaintiff further avers that Defendants are liable for damages under the MWPCL.

The FLSA requires covered employers to pay their employees a minimum wage, currently fixed at $7.25 per hour. 29 U.S.C. § 206(a). Covered employers must also pay their employees an overtime rate of one and one–half times the regular rate of pay for each hour worked in excess of forty per week. § 207(a). The MWHL requires Maryland employers to pay a minimum wage equal to the greater of the prevailing federal rate or the state rate;⁵ the MWHL includes an overtime provision similar to the FLSA's overtime requirement. Md. Code Ann., Lab. & Empl. §§ 3–413, –415, –420. The MWPCL in turn requires Maryland employers to pay their employees' wages “at least once in every 2 weeks or twice in each month.” § 3–502(a)(1)(ii). The statute adds that, upon cessation of employment, the employer “shall pay [the] employee...all wages due for work that the employee performed before the termination of employment, on or before the day on which the employee would have been paid the wages if the employment had not been terminated.” § 3–505(a).

In their pending Motion, Defendants do not challenge Plaintiff's state–law theories. They do, however, challenge his FLSA theory, arguing that he cannot satisfy the interstate–commerce requirements of a FLSA claim. (ECF No. 3–1 at 4.) To recover for minimum–wage or overtime violations under the FLSA, a plaintiff–employee must demonstrate that either (1) his employer is an “enterprise engaged in commerce or in the production of goods for commerce” or (2) the plaintiff himself has “engaged in commerce or in the production of goods for commerce” in his capacity as an employee. 29 U.S.C. §§ 206(a), 207(a)(1). The statute broadly defines “commerce” to include “trade, commerce, transportation, transmission, or communication among the several States or between any State and any place outside thereof.” § 203(b).

As between the two avenues of FLSA coverage, enterprise coverage is particularly expansive: the statute defines such coverage to reach an employer with employees “handling, selling, or otherwise working on goods or materials that have been moved in or produced for commerce by any person.” § 203(s)(1)(A)(i). To curb what might otherwise constitute virtually limitless coverage, Congress included a revenue threshold: enterprise coverage will only attach to an organization whose “annual gross volume of sales made or business done is not less than $500,000 (exclusive of excise taxes at the retail level that are separately stated).” § 203(s)(1)(A)(ii); see also 29 C.F.R. § 779.259(a) (“The annual gross volume of sales made or business done of an enterprise consists of its gross receipts from all types of sales made and business done during a 12–month period.”). It is this gross–revenue requirement that Defendants raise as the primary basis for their Motion: they contend that WPIP generated less than $500,000 in revenues during 2014 and 2015. (ECF No. 3–1 at 6.) To support their contention, Defendants appended certain financial statements to their Motion, at least some of which statements were apparently filed in an unrelated bankruptcy proceeding before the United States Bankruptcy Court for the District of Maryland (No. 13–12517).⁶

The 2014 financial statements do appear to show that WPIP generated only $439,919.60 in “total income” during that calendar year. (ECF Nos. 3–3 to 3–14.)⁷ Conversely, the 2015 financial statements, which are truncated and unsigned, are also incomplete: Defendants seem to have inadvertently switched the April 2015 statement with an April 2014 statement, and the final statement provides summary coverage from July 1 through December 10, leaving the Court to guess at revenues for the final twenty–one days of the year. Given that, at the pleading stage, the Court is duty–bound to construe all “facts and reasonable inferences derived therefrom in the light most favorable to the plaintiff,” Ibarra , 120 F.3d at 474, it would hardly be appropriate for the Court to assume that the 2015 statements, if complete, would show revenues totaling less than $500,000. Moreover, these documents appear to have been prepared by agents of WPIP: there is no indication that a third–party auditor or court–appointed supervisor drafted the statements, and in fact the 2014 statements are signed by Manus Suddreth, purported owner of the company. The Court will not deny Plaintiff—who alleges that Defendants cheated him out of his lawful wages over a period of many months—the opportunity to undertake discovery on his FLSA theory simply because Defendants say their company generated less than $500,000 in recent years. Rather, because Plaintiff alleges that WPIP's “annual dollar volume of business” exceeds $500,000 (ECF No. 1 ¶ 6), and because—at this stage—the Court accepts Plaintiff's well–pleaded allegations as true, Iqbal , 556 U.S. at 678, 129 S.Ct. 1937, the Court will allow Plaintiff's FLSA claim to proceed.

Furthermore, even had the Court accepted Defendants' enterprise–coverage argument, the Court would still allow Plaintiff's FLSA claim to proceed on a theory of individual coverage. The individual avenue for FLSA liability is admittedly narrower than the enterprise avenue: as the Supreme Court recognized in Mitchell v. Lublin , 358 U.S. 207, 211, 79 S.Ct. 260, 3 L.Ed.2d 243 (1959), “Congress, by excluding from the [FLSA's] coverage employees whose activities merely ‘affect commerce,’...