In re Lowe's Cos. Inc. Fair Labor Standards Act (FLSA) & Wage Hour Litig.

Decision Date03 February 2021
Docket NumberCIVIL ACTION NO. 5:20-MD-02947-KDB-DSC
CourtU.S. District Court — Western District of North Carolina

THIS MATTER is before the Court on Defendant Lowe's Companies, Inc.'s ("Lowe's") Motion to Compel Arbitration Under Fed. R. Civ. P. 12(B)(1), to Dismiss Under Fed. R. Civ. P. 12(B)(6), and for Judgment on the Pleadings Under Fed. R. Civ. P. 12(C) (Doc. No. 17) (collectively, "MTD") in this multi-district litigation in which Plaintiffs assert claims under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq. and the wage and hour laws of twenty different states. The Court has carefully considered these motions and the parties' extensive briefs and exhibits.1 For the reasons and to the extent described below, the Court will in part GRANT and in part DENY the motions.


A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for "failure to state a claim upon which relief can be granted" tests whether the complaint is legally and factually sufficient. See Fed. R. Civ. P. 12(b)(6); Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); Coleman v. Md. Court of Appeals, 626 F.3d 187, 190 (4th Cir. 2010), aff'd, 566 U.S. 30 (2012). A court need not accept a complaint's "legal conclusions, elements of a cause of action, and bare assertions devoid of further factual enhancement." Nemet Chevrolet, Ltd. v., Inc., 591 F.3d 250, 255 (4th Cir. 2009). The court, however, "accepts all well-pled facts as true and construes these facts in the light most favorable to the plaintiff in weighing the legal sufficiency of the complaint." Id. Construing the facts in this manner, a complaint must contain "sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Id. Thus, a motion to dismiss under Rule 12(b)(6) determines only whether a claim is stated; "it does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Republican Party v. Martin, 980 F.2d 943, 952 (4th Cir. 1992).

Lowe's also moves for a judgment on the pleadings under Federal Rule of Civil Procedure 12(c). Rule 12(c) provides that "[a]fter the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings." Burbach Broad. Co. of Del. v. Elkins Radio Corp., 278 F.3d 401, 405-06 (4th Cir. 2002). A motion for judgment on the pleadings is governed by the standard applicable to a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure. See Burbach Broadcasting Co. of Delaware v. Elkins Radio, 278 F.3d401, 405 (4th Cir. 2002); Shipp v. Goldade, No. 5:19-CV-00085-KDB-DCK, 2020 WL 1429248, at *1 (W.D.N.C. Mar. 19, 2020).

In analyzing a Rule 12 motion, a court may consider "documents incorporated into the complaint by reference and matters of which a court may take judicial notice." See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007). In particular, when considering a Rule 12(c) motion, "a court may consider official public records, documents central to plaintiff's claim, and documents sufficiently referred to in the complaint . . . so long as the authenticity of these documents is not disputed." Chapman v. Asbury Auto. Grp., Inc., No. 3:13 cv 679, 2016 U.S. Dist. LEXIS 121043, at *3 (E.D. Va. Sept. 7, 2016) (quoting Witthohn v. Fed. Ins. Co., 164 F. App'x 395, 396-97 (4th Cir. 2006)); see also Goines v. Valley Cmty. Servs. Bd., 822 F.3d 159 (4th Cir. 2016). "[I]n the event of conflict between the bare allegations of the complaint and any attached exhibit, the exhibit prevails." Slater v. Bank of Am., No. 1:10-1091, 2012 U.S. Dist. LEXIS 101687, at *21 (S.D. W.Va. June 26, 2012) (citing Fayetteville Investors v. Commercial Builders, Inc., 936 F.2d 1462, 1465 (4th Cir. 1991)).

Finally, a motion to dismiss based on Federal Rule of Civil Procedure 12(b)(1) addresses whether the court has subject-matter jurisdiction to hear the dispute. See Fed. R. Civ. P. 12(b)(1). "Whether the parties have agreed to arbitrate their disputes is a jurisdictional question," and where all of the claims at issue in a lawsuit are arbitrable, the court may dismiss the lawsuit for lack of subject matter jurisdiction pursuant to Rule 12(b)(1). See Wake Cnty. Bd. of Educ. v. Dow Roofing Sys., LLC, 792 F. Supp. 2d 897, 900 (E.D.N.C. 2011) (citing Bhd. of Ry. & S.S. Clerks, Freight Handlers, Express & Station Emp. v. Norfolk S. Ry. Co., 143 F.2d 1015, 1017 (4th Cir. 1944) ("Arbitration deprives the judiciary of jurisdiction over the particular controversy and the courtshave long ruled that there must be strict adherence to the essential terms of the agreements to arbitrate.")); see also Choice Hotels Intern., Inc. v. BSR Tropicana Resort, Inc., 252 F.3d 707, 709-10 (4th Cir. 2001) ("[D]ismissal is a proper remedy when all of the issues presented in a lawsuit are arbitrable.").

Federal policy strongly favors arbitration, and the FAA represents "a liberal federal policy favoring arbitration agreements" and applies "to any arbitration agreement within the coverage of the [FAA]." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983). Under the FAA, a written arbitration agreement "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. At the same time, it is well-settled that a "party cannot be required to submit to arbitration any dispute which he has not agreed to so submit." Levin v. Alms & Assocs., Inc., 634 F.3d 260, 266 (4th Cir. 2011) (quotation omitted).

In order for federal district courts to compel parties to arbitrate under 9 U.S.C. § 4, four elements must be present: (1) the existence of a dispute between the parties, (2) a written agreement that includes an arbitration provision which purports to cover the dispute, (3) the relationship of the transaction, which is evidenced by the agreement, to interstate or foreign commerce, and (4) the failure, neglect or refusal of [a party] to arbitrate the dispute. Galloway v. Santander Consumer USA, Inc., 819 F.3d 79, 84 (4th Cir. 2016); see also Chorley Enters., Inc. v. Dickey's Barbecue Rests., Inc. 807 F.3d 553, 563 (4th Cir. 2015). The party seeking to compel arbitration must establish an agreement to arbitrate. See In re Mercury Constr. Corp., 656 F.2d 933, 939 (4th Cir. 1981), aff'd sub nom. Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983).In determining whether the parties agreed to arbitrate, the Court looks to relevant state contract law principles. Hill v. Peoplesoft USA, Inc., 412 F.3d 540, 543 (4th Cir. 2005).


Headquartered in Mooresville, North Carolina, Lowe's is a retail company that operates a chain of more than 2,000 home improvement and hardware stores in the United States and Canada. (Doc. No. 16, at ¶ 3). Lowe's employs non-exempt hourly managers, including Department Managers, Service Managers, and Support Managers (hereinafter collectively referred to as "Hourly Managers"), to supervise and oversee the retail stores, or various departments within the retail stores, and to manage the retail stores' employees. (Id. at ¶ 4).

Hourly Managers are required to work a full-time schedule, with occasional overtime; however, the Plaintiffs allege that the Hourly Managers were not compensated for all the hours worked during their shifts. (Id. at ¶ 5). Specifically, they allege that the Hourly Managers were required to perform work tasks before and after their scheduled shifts and during their unpaid meal periods, when they are not clocked into Lowe's timekeeping system. (Id. at ¶ 6). Plaintiffs argue that this time qualifies as overtime or "gap time" (unpaid time in weeks when the employee works less than the overtime hour threshold, typically 40 hours) within the meaning of applicable federal and state laws; therefore, Plaintiffs and Hourly Managers claim they are owed additional pay (as well as damages, injunctive relief, penalties, attorneys' fees and costs) related to this alleged uncompensated, off-the-clock work. (See Id.).

With respect to the details of this action's procedural history, North Carolina Plaintiff Daniel Danford first filed suit in this Court on April 11, 2019, asserting a claim under the FLSA on behalf of a putative nationwide collective and a claim under the North Carolina Wage and HourAct ("NCWHA"), N.C. Stat. § 95-25.1, on behalf of a putative state-wide Rule 23 class. Danford also brought common-law claims for unjust enrichment and breach of contract on behalf of putative nationwide Rule 23 classes. (See Danford Doc. No. 1). The Court conditionally certified an FLSA collective on October 2, 2019. (Id. at Doc. No. 50). 3,890 individuals opted-in to the collective, 1,039 of whom then were dismissed because they had valid and enforceable arbitration agreements with Lowe's (945 by stipulation and 94 on the basis of a motion to compel arbitration by Lowe's). (See Danford Doc. No. 185). All Plaintiffs currently pursuing state-law claims against Lowe's are also FLSA opt-in plaintiffs in Danford, with the exception of Plaintiff Hyde (Maryland).

In March and April 2020, Plaintiffs filed putative statewide class actions against Lowe's in 19 other courts across the country. All of these Plaintiffs were represented by the same counsel and made the same allegations as in Danford: namely, that Lowe's failed to compensate them and other hourly managers for alleged time spent opening and closing stores and responding to smartphone communications while off-the-clock. (See Doc. No. 1). Lowe's filed a motion with the Judicial Panel on Multidistrict Litigation to consolidate the 18 federal court cases as an MDL and that motion was granted on August 5, 2020. (Id)....

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