Mebane v. GKN Driveline N. Am., Inc.

• Decision Date: 05 November 2020
• Docket Number: 1:18CV892
• Court: U.S. District Court — Middle District of North Carolina
• Parties: James MEBANE and Angela Worsham, on behalf of themselves and all others similarly situated, Plaintiffs, v. GKN DRIVELINE NORTH AMERICA, INC., Defendant.

499 F.Supp.3d 220

James MEBANE and Angela Worsham, on behalf of themselves and all others similarly situated, Plaintiffs,

v.GKN DRIVELINE NORTH AMERICA, INC., Defendant.

1:18CV892

United States District Court, M.D. North Carolina.

Signed November 5, 2020

Charlotte C. Smith, Gilda A. Hernandez, Law Office of Gilda A. Hernandez, PLLC, Cary, NC, for Plaintiffs.

Paul Decamp, Maxine A. Adams, Epstein Becker & Green, P.C., Washington, DC, Kevin Scott Joyner, Regina W. Calabro, Ogletree Deakins Nash Smoak & Stewart, P.C., Raleigh, NC, for Defendant.

MEMORANDUM OPINION AND ORDER

LORETTA C. BIGGS, District Judge.

Plaintiffs initiated this action alleging that the above-named Defendant violated the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201, et seq. , the North Carolina Wage and Hour Act ("NCWHA"), N.C. Gen. Stat. § 95-25.1, et seq. , the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621, et seq. , and North Carolina common law.¹ (ECF No. 43.) Before the Court is Defendant's Partial Motion to Dismiss Plaintiffs’ Second Amended Complaint filed pursuant to Rules 12(b)(1) and 12(b)(6). (ECF No. 49.) For the reasons set forth below, this motion is granted in part and denied in part.

Plaintiffs James Mebane and Angela Worsham are former employees of the Mebane, North Carolina, manufacturing facility operated by Defendant GKN Driveline North America, Inc. ("GKN"). (ECF No. 43 ¶¶ 2, 15, 16.) They have filed a Second Amended Collective and Class Action Complaint ("the Complaint") on behalf of themselves and others similarly situated bringing a range of federal and state law claims. (Id. ¶ 1.) First, they allege multiple wage and hour violations under FLSA and the NCWHA in Counts One and Two, respectively. (Id. at ¶¶ 99–128.) Further, as the result of a workplace incident with a fellow employee, Plaintiff Mebane individually alleges age discrimination under the ADEA in Count Three as well as several North Carolina common law tort claims in Counts Four through Nine. (Id. ¶¶ 129–75.)

Defendant now moves for partial dismissal of Count Two to the extent that Plaintiffs seek recovery for alleged unauthorized deductions for a "tobacco surcharge" and overtime wages under the NCWHA pursuant to Rule 12(b)(6). (ECF No. 50 at 1.) Defendant also moves to dismiss Plaintiff Mebane's ADEA claim pursuant to Rule 12(b)(1) for lack of subject matter jurisdiction as well as three of the related common law tort claims pursuant to Rule 12(b)(6). (Id. at 1–2.)

Because the operative facts of Plaintiffs’ wage-related claims are in large part distinct from those relating to the incident between Plaintiff Mebane and another co-worker out of which the ADEA and state common law claims arise, the Court will first consider the motion to partially dismiss the NCWHA claim before turning to those claims stemming from Plaintiff Mebane's individual allegations.

I. FLSA AND NCWHA CLAIMS

As background, Defendant GKN operates three regional manufacturing facilities in North Carolina one of which employed Plaintiffs as non-exempt, hourly paid employees until April 2018. (ECF No. 43 ¶¶ 2, 14–16.) According to the Complaint, Plaintiffs typically worked overlapping eight-and-one-half-hour shifts, five days per week, with one thirty-minute lunch break as was typical of employees in their positions. (Id. ¶¶ 36, 39, 45.) During "seasons of heavy demand," employees were additionally subject to mandatory overtime shift assignments. (Id. ¶ 45.)

Plaintiffs allege that, during this time and in subsequent years, "Defendant's pay practices and policies [have been] in direct violation of the FLSA and the NCWHA" for which they seek past wages, damages, and fees for several alleged failures to adequately compensate employees. (Id. ¶ 3.) They contend that Defendant did not pay overtime compensation "for work performed in excess of forty (40) hours in a single workweek." (Id. ¶ 103.) Plaintiffs also assert that Defendant willfully failed to pay employees any wages for either the duties they performed to prepare for their shift or for the additional assignments they were expected to undertake prior to clocking out. (Id. ¶¶ 46–47, 50, 104.) In addition to these allegations brought under both federal and state statutes, Plaintiffs also bring three charges exclusively under the NCWHA. First, they allege that "Defendant promised Plaintiffs a paid lunch break" but failed to compensate them for this time. (Id. ¶ 120.) Second, Plaintiffs allege that Defendant did not provide promised premium pay for employees who worked evening shifts. (Id. ¶ 121.) Finally, they allege that Defendant violated the NCWHA by deducting from paychecks, without authorization, the cost of uniforms as well as a monetary penalty for employees who used tobacco products. (Id. ¶ 124.)

The Court will first consider Defendant's motion to dismiss Count Two of Plaintiff's Complaint "insofar as Plaintiffs seek recovery of wages under [the NCWHA] for alleged unauthorized deductions for ‘tobacco surcharges.’ " (ECF No. 50 at 1.) Defendant argues that this count must be dismissed because Plaintiffs’ claims are preempted by ERISA, 29 U.S.C. § 1001, et seq. (Id. at 5.)

A. Tobacco Surcharge

Plaintiffs first claim that Defendant deducted a "tobacco surcharge" from their paychecks without obtaining "the required advance written authorization" or "providing advance written notice of the amount to be deducted" in violation of N.C. Gen. Stat. § 95-25.8. (ECF No. 43 ¶ 8.) Defendant argues that this claim must be dismissed because the deduction is a component of GKN's employee benefit plan (the "Plan") and thus is preempted by ERISA. (ECF No. 50 at 5–14.) When considering ERISA preemption, it is necessary to first make a preliminary finding as to whether an action is governed by the statute before determining what effect such preemption might have on the claim. See, e.g. , Shaw v. Delta Air Lines, Inc. , 463 U.S. 85, 100, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983) (finding first that state laws "relate to" an employment benefit plan and are thus preempted by ERISA before considering "whether any of the narrow exceptions to § 514(a)" precludes dismissal).

"Congress enacted ERISA to ‘protect ... the interest of participants in employee benefit plans and their beneficiaries’ by setting out substantive regulatory requirements" and to " ‘provid[e] for appropriate remedies, sanctions and ready access to Federal courts.’ " Aetna Health Inc. v. Davila , 542 U.S. 200, 208, 124 S.Ct. 2488, 159 L.Ed.2d 312 (2004) (quoting 29 U.S.C. § 1001(b) ). Its purpose has thus been to offer "a uniform regulatory regime over employee benefit plans." Id. To this end, "ERISA includes expansive pre-emption provisions, which are intended to ensure that employee benefit regulation would be ‘exclusively a federal concern.’ " Id. (citations and quotation omitted.); see also Sejman v. Warner-Lambert Co., Inc. , 845 F.2d 66, 68 (4th Cir. 1988) (calling ERISA "the most sweeping federal preemption statute ever enacted by Congress" (citation and quotation omitted)). Moreover, "[t]he Supreme Court has repeatedly emphasized that ERISA's preemptive scope is not limited to ‘state laws specifically designed to affect employee benefit plans.’ "

Wilmington Shipping Co. v. New England Life Ins. Co. , 496 F.3d 326, 341 (4th Cir. 2007) (quoting Pilot Life Ins. Co. v. Dedeaux , 481 U.S. 41, 47–48, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987) ). By its own statutory language, ERISA "supersede[s] any and all state laws insofar as they may now or hereafter relate to any employee benefit plan." 29 U.S.C. § 1144(a). "[F]or ERISA to apply, there must be (1) a plan, fund or program, (2) established or maintained (3) by an employer, employee organization, or both, (4) for the purpose of providing a benefit, (5) to employees or their beneficiaries." Custer v. Pan Am. Life Ins. Co. , 12 F.3d 410, 417 (4th Cir. 1993) (citing Donovan v. Dillingham , 688 F.2d 1367, 1371 (11th Cir. 1982) (en banc )).

The Court initially considers whether Defendant's Plan meets the definition of an "employee benefit plan" under ERISA. Defendant attaches four documents to support its contentions that it does. Exhibit 1 is the "Plan Document and Summary Plan Description" outlining the "GKN Employee Welfare Benefit Plan." (ECF No. 50-1 at 2.) Exhibits 1-A through 1-C are documents describing, over a three-year period, the RedBrick Health Wellness Program ("Wellness Program") which outline a tobacco surcharge and, according to Defendant, is a component of the Plan.² (ECF Nos. 50-2 at 7; 50-3 at 7; 50-4 at 4–5.)

A review of these documents reveals that, first, the Plan is described as a "plan" or "program" by its own language as well as by both parties. (See, e.g. , ECF Nos. 50-1 at 3; 50 at 5–8; 59 at 11.) Second, there is no dispute that it has been both established and maintained. (See, e.g. , ECF No. 50-1 at 3 (identifying the Plan's effective date).) Third, it was established by an employer, namely GKN North America Services, Inc. (Id. at 2–3.) Finally, it meets the remaining two requirements in that its purpose is to provide a benefit to employees and/or their beneficiaries. (See, e.g. , id. at 3 ("We have worked hard to design a benefit package that is both responsive to your needs and affordable to you and the Company.").)

Plaintiffs claim that, even if this is so, Defendant has not demonstrated that the Wellness Program that describes the tobacco surcharge is a part of the Plan. (ECF No. 59 at 11–12.) The Court, however, disagrees. Within its four corners, the Plan specifies several programs that comprise the full employment benefit package, and the Wellness Program is identified expressly. (ECF No. 50-1 at 9–10, 27, 88 (communicating that the "Plan's Medical and Prescription Drug benefits include a voluntary Wellness Program" and refers to it as the RedBrick Health Wellness Program).) The Wellness Program documents also provide both the same phone number and GKN-specific website that is specified in the Plan. (Co...