Oddo v. Bimbo Bakeries United States, Inc.

• Court: U.S. District Court — District of New Jersey
• Writing for the Court: MCNULTY, District Judge
• Decision Date: 17 May 2017
• Docket Number: Civ. No. 2:16-cv-04267-KM-JBC
• Citation: Oddo v. Bimbo Bakeries USA, Inc., Civ. No. 2:16-cv-04267-KM-JBC (D. N.J. May 17, 2017)
• Parties: CHRISTOPHER ODDO, PHILLIP BRUCATO and MICHAEL LENNON, on behalf of themselves and those similarly situated, Plaintiffs, v. BIMBO BAKERIES USA, INC., Defendant.

CHRISTOPHER ODDO, PHILLIP BRUCATO and MICHAEL LENNON,on behalf of themselves and those similarly situated, Plaintiffs, v. BIMBO BAKERIES USA, INC., Defendant.

Civ. No. 2:16-cv-04267-KM-JBC

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

May 17, 2017

OPINION

MCNULTY, District Judge

The plaintiffs, Christopher Oddo, Phillip Brucato, and Michael Lennon, filed an individual, collective, and class action civil complaint, seeking, on behalf of themselves and other similarly situated, lost wages, damages, and other relief for the alleged failure of defendant Bimbo Bakeries USA, Inc. (hereinafter "BBUSA") to pay overtime compensation, in violation of the Fair Labor Standards Act ("FLSA") and the New Jersey Wage and Hour Law ("NJWHL"). BBUSA brings a motion to dismiss on the grounds that: (1) the plaintiffs' claims are completely preempted by Section 301 of the Labor Management Relations Act ("LMRA"); and (2) the plaintiffs have not adequately pleaded a LMRA Section 301 claim. For the reasons discussed below, I will deny BBUSA's motion to dismiss.

I. BACKGROUND

The plaintiffs are Route Sales Representatives ("RSRs") for BBUSA. As such, their "primary duties are driving delivery trucks along established routes and delivering and stocking [BBUSA's] products at national chain, local chain, and independent retailers." (Compl. ¶ 33)¹ The plaintiffs (hereinafter, the "RSRs") allege that BBUSA pays them each "a base salary of $110.00 per week plus a 12% commission on proceeds generated from sales to retailers along [their] delivery route[s]." (Id. ¶¶35-37) They allege that, "[d]uring at least one workweek within the last three (3) years, [they and the putative class members] worked over 40 hours . . . ." (Id. ¶ 48) The RSRs claim the NJWHL and FLSA require BBUSA to pay them and putative class members additional compensation for hours worked beyond 40 hours per week—i.e., "overtime" pay, but that BBUSA does not. (Id. ¶¶ 38, 50) They also allege that BBUSA has failed to implement an hours tracking system. (Id. ¶ 59)

The RSRs allege they are "employees" within the meaning of the FLSA and NJWHL and that they have suffered damages as a result of the BBUSA's unlawful failure to pay overtime wages. (Id. ¶¶ 67, 73) They also aver, with respect to their FLSA claim, that BBUSA's failure is willful and not based in a reasonable interpretation of the law. (Id. ¶¶ 66) The RSRs seek: (i) injunctive relief to prohibit BBUSA from continuing its illegal policy and practice; (ii) compensation and reimbursement "for any and all pay and benefits they would have received" but for BBUSA's allegedly unlawful actions; (iii) liquidated damages in an amount equal to actual damages under the FLSA; (iv) costs and expenses; and (v) any other relief this Court deems just and proper. (Id. p. 11)

BBUSA's motion to dismiss hinges on a series of collective bargaining agreements (collectively, the "CBA") that BBUSA says are grounds for preemption of the RSRs' NJWHL and FLSA claims. The CBA, effective January 2015 through December 2018, is significant because BBUSA claims the RSRs are members of the International Brotherhood of Teamsters Local No. 802 union (the "Union"), which bargains with BBUSA for the terms and conditions of its members' employment and memorializes those terms and conditions in the CBA. (Br. 1, 4) The RSRs do not deny that the CBA governs the terms and conditions of their employment. (See, e.g., Lynch Decl. C p.2 (Oddo's claim filed with the New Jersey Division of Wage and Hour Compliance, alleging "[BBUSA] and Teamsters Local 802 have a collective bargaining agreement . . . ."))

BBUSA points to eight provisions in the CBA that purportedly govern the RSRs' pay. (Br. 4-6 (citing CBA Arts. 3,4, 8, 16, 27, 31, and Letter of Agreement) These provisions describe if and how RSRs are paid during vacation, holidays, birthdays, funeral leave, and service time, and also set forth a basic wage and overtime pay formula and scale. The CBA provides for an "alternative compensation program" for the RSRs, which incorporates the basic wage and overtime formula as an alternative to commission-based pay:

RSRs shall receive for each week the higher of (i) compensation calculated at the regular hourly rate of $21.00 for all hours worked in any 5-day regular work week and $31.50 for all overtime hours worked (not counting ½ hour daily for mandatory meal break) and (ii) their base pay plus commissions at the negotiated rates set forth in Article 27 of the CBA.

(Br. 5 (paraphrasing CBA Art. 27(b)-(c) & (i)(2)-(4)) The "negotiated rate" since January 3, 2016, has been $110 base pay with a 12% net commission—i.e., what the RSRs allege they receive in the complaint. (See Compl. ¶ 37)

Before setting forth the alternative compensation program, the CBA states: "The Company and the Union agree that the base pay and commission provisions of the parties' [CBA] compensate fully [RSRs] under federal and state overtime pay laws because of their job duties as outside salespersons andbecause the U.S. Secretary of Transportation has the power to regulate the [RSRs] in the performance of their duties. (CBA Art. 27(i)(1))

The CBA also requires BBUSA to institute a time recording system and to record RSR's hours. (CBA, Art. 27(i)(5)) Additionally, the CBA lays out a mandatory grievance and arbitration procedure, through which "all disputes," including disputes regarding pay, are to be resolved. (See CBA Arts. 9-10, 27(i)(2))²

II. LEGAL STANDARDS

A. Whether Rule 12(b)(1) or Rule 12(b)(6) Governs BBUSA's Motion

BBUSA moves to dismiss the RSRs' complaint for lack of subject matter jurisdiction, asserting a factual challenge based on the CBA. (See Defs. Br. 10) BBUSA fails to explain why its challenge should be jurisdictional, rather than merits-based. Some courts in this district have applied only a 12(b)(6) standard to determine LMRA preemption issues, see, e.g., Carluccio v. Parsons Inspection & Maint. Corp., No. CIV A 06-4354 JLL, 2007 WL 1231758, at *2 (D.N.J. Apr. 24, 2007), while others have applied Rule 12(b)(1), see, e.g., Johnson v. Langer Transp. Corp., No. CIV.A. 15-1256 JLL J, 2015 WL 2254671, at *3 (D.N.J. May 13, 2015). From its moving papers, I presume BBUSA reasons that because the LMRA preempts the RSRs' claims, the RSRs' only recourse is to bring suit against BBUSA for breach of the CBA. And, to bring a breach of CBA claim, the RSRs would be required to exhaust the CBA's grievance and arbitration procedures before suing in federal court unless they can state a "hybrid" claimagainst BBUSA and the Union.³ DelCostello v. Int'l Bhd. of Teamsters, 462 U.S. 151, 163, 103 S. Ct. 2281, 2290 (1983) ("It has long been established that an individual employee may bring suit against his employer for breach of a collective bargaining agreement. Ordinarily, however, an employee is required to attempt to exhaust any grievance or arbitration remedies provided in the collective bargaining agreement." (citation omitted)).

Because, BBUSA argues, the RSRs have not stated a hybrid claim, the RSRs must seek relief pursuant to the CBA's grievance and arbitration provisions. The RSRs contest the enforceability of these provisions. Nevertheless, "[i]t is a long-standing tenet of law that an employee must attempt to exhaust the grievance and arbitration procedures set forth in the collective bargaining agreement between his employer and his union before he has standing to maintain an action under Section 301 of the [LMRA]." Monacelli v. Revlon, No. CIV. 89-4369 (CSF), 1990 WL 105760, at *4 (D.N.J. July 2, 1990); see also Shaffer v. Mitchell Transport, Inc., 635 F.2d 261, 264 (3d Cir. 1980) (citations omitted) ("[I]f [a] collective bargaining agreement provide[s] for resolution of [a] dispute through arbitration, the court ha[s] no jurisdiction to address the merits."). With the RSRs' very ability to maintain a suit up for debate, I am satisfied that Rule 12(b)(1) is an appropriate rule to apply here.

B. Rule 12(b)(1)

Motions to dismiss for lack of subject matter jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1) may be raised at any time. Iwanowa v. Ford Motor Co., 67 F. Supp. 2d 424, 437-38 (D.N.J. 1999). "[B]ecause subject matter jurisdiction is non-waivable, courts have an independent obligation to satisfy themselves of jurisdiction if it is in doubt. See Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 278, 97 S. Ct. 568, 50 L.Ed.2d 471 (1977). A necessary corollary is that the court can raise sua sponte subject-matter jurisdiction concerns." Nesbit v. Gears Unlimited, Inc., 347 F.3d 72, 76-77 (3d Cir. 2003).

Rule 12(b)(1) challenges may be either facial or factual attacks. See 2 Moore's Federal Practice § 12.30[4] (3d ed. 2007); Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977). A facial challenge asserts that the complaint does not allege sufficient grounds to establish subject matter jurisdiction. Iwanowa, 67 F. Supp. 2d at 438. A court considering such a facial challenge assumes that the allegations in the complaint are true, and may dismiss the complaint only if it nevertheless appears that the plaintiff will not be able to assert a colorable claim of subject matter jurisdiction. Cardio-Med. Assoc., Ltd. v. Crozer-Chester Med. Ctr., 721 F.2d 68, 75 (3d Cir. 1983); Iwanowa, 67 F. Supp. 2d at 438. A factual attack, on the other hand, permits the Court to consider evidence extrinsic to the pleadings. Gould Elecs. Inc. v. United States, 220 F.3d 169, 178 (3d Cir. 2000), holding modified on other grounds by Simon v. United States, 341 F.3d 193 (3d Cir. 2003). Thus "Rule 12(b)(1) does not provide plaintiffs the procedural safeguards of Rule 12(b)(6), such as assuming the truth of the plaintiff's allegations." CNA v. United States, 535 F.3d 132, 144 (3d Cir. 2008).

The burden of establishing federal jurisdiction rests with the party asserting its existence, [citing DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n. 3, 126 S. Ct. 1854, 164

...