Thomas v. Pauls Valley Boomarang Diner, LLC
| Decision Date | 05 July 2018 |
| Docket Number | Case No. CIV–17–1385–R |
| Parties | Tish THOMAS and Makita McGill, Plaintiffs, v. PAULS VALLEY BOOMARANG DINER, LLC, et al., Defendants. |
| Court | U.S. District Court — Western District of Oklahoma |
Brett Agee, Garvin Agee Carlton & Mashburn, Pauls Valley, OK, for Plaintiffs.
Byrona J. Maule, Hilary H. Clifton, Lauren Symcox Voth, Phillips Murrah PC, Oklahoma City, OK, for Defendants.
Before the Court is Defendants' Motion to Dismiss Plaintiffs' Amended Complaint, Doc. 23. Plaintiffs are former employees of Sulphur Boomarang Diner, LLC, one of a chain of "Boomarang"1 diners in Oklahoma. They brought an Amended Complaint (Doc. 21) for individual and collective Fair Labor Standards Act ("FLSA") violations and state-law defamation against nine Boomarang diners and Ms. Sheila Moehringer, a manager at each of Defendants' diners. Defendants' main issue with the Amended Complaint concerns whether employees of Sulphur Boomarang can sue the other Boomarangs for conduct that Defendants believe was limited to the Sulphur location, and if so whether Plaintiffs can sue on behalf of non-Sulphur Boomarang employees. The Court answers "yes" to both questions because Plaintiffs allege a plausible joint employment relationship. The Motion to Dismiss is denied with respect to these arguments and others, but granted as to Plaintiffs' individual claims for FLSA retaliation that fail to state a plausible claim for relief.
The Court accepts as true the following facts alleged in the Amended Complaint, Doc. 21. The Defendant Boomarang diners have a unique employment arrangement. On the one hand, they appear to share authority over and benefit from each other's employees—as in the employees that usually work at a particular location. Specifically, the diners have a "common pooling" arrangement in which they "specially assign[ ] employees" between locations for training and shift-covering purposes; utilize a "common payment source" and "central payroll system by which wages are paid to all of the defendants' employees"; exercise "joint control over" work conditions; share "common managers" across diners, such as Defendant Sheila Moehringer, "who acted as a manager at all of the defendants' Boomarang locations"; and host monthly meetings at Pauls Valley Boomarang with their managers and assistant managers to collect cash earned at each diner since the prior meeting. Id. at 2–4. Plaintiff Tish Thomas, a Sulphur Boomarang "assistant manager," trained at Davis Boomarang, occasionally filled in for absent Davis employees, and attended the monthly Pauls Valley meetings. Id. at 4–5, 11. Plaintiff Makita McGill, a Boomarang server, only worked at the Sulphur location. Id. at 5.
On the other hand, the Defendant Boomarang diners share a similar problem of wage and hour issues. Defendants did not pay wages to Thomas for time spent traveling to and from monthly Pauls Valley meetings, nor did they pay her mileage. Id. at 5. They also failed to pay wages to Thomas and other employees for time spent traveling on "special assignments" between Boomarang locations. Id. at 7, 11–12. Moreover, Plaintiffs and other similarly situated Boomarang employees "routinely worked in excess of 40 hours per week for the defendants without receiving overtime compensation." Id. at 5, 7. This was because Defendants instructed Thomas, McGill, and others not to "clock in" at certain times, such as when traveling to and from these special assignments. Id. at 4–5.
Plaintiffs Thomas and McGill also experienced issues at Sulphur Boomarang that may have led to their June 2017 exit. Id. at 5. Plaintiffs inquired "into being paid overtime pursuant to the FLSA." Id. at 8–10. Sometime after this, Defendant Moehringer, another Boomarang manager Curtis Abernathy, and Sulfur employee Andrew Tyson, knowingly circulated a false rumor to Plaintiffs' coworkers, "the community at large, including Thomas' children," and "diner patrons." Id. at 8–11. They said that Plaintiffs "had been stealing from the Sulphur location by charging defendants' customers full price but recording the sale as discounted, and then pocketing the discount." Id. at 8–9. Moehringer fired Thomas on June 21, 2017, and McGill left two days later due to what she calls "hostile working conditions" at Sulphur Boomarang amidst the stealing rumors. Id. at 5, 9.
Plaintiffs assert the following individual claims in their Amended Complaint: (1) FLSA failure to pay wages and overtime ("Count 1," Doc. 21, at 4–6); (2) defamation ("Count 3," id. at 8–1.); and (3) FLSA retaliation ("Count 3," id. ). Plaintiffs also bring collective claims under the FLSA, 29 U.S.C. § 216(b), "on behalf of all persons who have been, are and/or will be employed by the business entity defendants in a nonexempt position wherein the employees worked more than 40 hours per week but were not paid the overtime pay required by the FLSA," for (4) failure to pay overtime ("Count 2," Doc. 21, at 6–8); and (5) failure to pay wages for "special assignment" travel ("Count 4," id. at 11–12).
A complaint may be dismissed under Federal Rule of Civil Procedure 12(b)(6) for "failure to state a claim upon which relief can be granted." Dismissal is proper "if, viewing the well-pleaded factual allegations in the complaint as true and in the light most favorable to the non-moving party, the complaint does not contain ‘enough facts to state a claim to relief that is plausible on its face.’ " MacArthur v. San Juan County , 497 F.3d 1057, 1064 (10th Cir. 2007) (quoting Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 547, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ); see Ashcroft v. Iqbal , 556 U.S. 662, 676–80, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).
Defendants raise three arguments to dismiss Claims 1, 4, and 5 under the FLSA, which allows aggrieved employees to bring wage and hour claims on behalf of himself "and other employees similarly situated." 29 U.S.C. § 216(b). For the purpose of this Motion, Defendant Boomarang diners and "common manager" Defendant Moehringer are Plaintiffs' joint employers, and Plaintiffs allege plausible claims for FLSA overtime compensation.
Defendants first argue for dismissal of Plaintiffs' FLSA claims against the non-Sulphur Boomarang Defendants because Plaintiffs are only employees of Sulphur Boomarang—the question is whether all Defendant Boomarang diners jointly employed Plaintiffs or is only Sulphur Boomarang liable for potential FLSA violations.
At the outset, the parties disagree whether Defendants' joint employment status is a Rule 12(b)(1) jurisdictional question bearing on Plaintiffs' standing to bring a claim or a 12(b)(6) question about the elements of Plaintiffs' FLSA action. Courts have treated this joint employment question differently, based largely on varying interpretations of the FLSA's 29 U.S.C. § 216(b) and whether Congress "clearly state[d] that a threshold limitation on [its] scope shall count as jurisdictional." 2
Arbaugh v. Y & H Corp. , 546 U.S. 500, 515, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006).
The Court declines to settle this debate because under either inquiry—deciding if Plaintiffs meet standing's "causation" and "redressability" elements or assessing the plausibility of Plaintiffs' FLSA claims—the Court examines the nature of the employment relationship, accepting "as true all material allegations of the complaint" and "constru[ing] the complaint in favor of the complaining party,"3 and finds in Plaintiffs' favor. Warth v. Seldin , 422 U.S. 490, 501, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) ; see Spokeo, Inc. v. Robins , ––– U.S. ––––, 136 S.Ct. 1540, 1547, 194 L.Ed.2d 635 (2016).
The FLSA circularly defines an "employer" as "any person acting directly or indirectly in the interest of an employer in relation to an employee," and "employ" means to "suffer or permit to work." Baker v. Flint Eng'g & Const. Co. , 137 F.3d 1436, 1440 (10th Cir. 1998) (quoting 29 U.S.C. § 203(d), (g) ). A "striking[ly]" broad definition, "the meaning of ‘employee’ ... cover[s] some parties who might not qualify as such under a strict application of traditional agency law principles." Id. (quoting Nationwide Mut. Ins. Co. v. Darden , 503 U.S. 318, 326, 112 S.Ct. 1344, 117 L.Ed.2d 581 (1992) ). The Court's prime focus is "the economic realities of the relationship" between putative employee and employer—"whether the alleged employer has the power to hire and fire employees, supervises and controls employee work schedules or conditions of employment, determines the rate and method of payment, and maintains employment records." Id. None of the factors is dispositive; "the test is instead based on the totality of the circumstances." Johnson v. Unified Gov't of Wyandotte Cty./Kansas City, Kansas , 371 F.3d 723, 729 (10th Cir. 2004).
Because this "economic realities test" is a broad one, Department of Labor regulations provide guidance on discerning "joint employment"—when a "single individual ... stand[s] in the relation of an employee to two or more employers at the same time" for FLSA purposes—from "disassociated" employment. 29 C.F.R. § 791.2. If an employee works for two or more employers during a work week, the employers are "disassociated" if they act "entirely independently of each other" with respect to that employee. Id. § 791.2(a). By contrast, if an employee's work "simultaneously benefits two or more employers or works for two or more employers at different times during the workweek," joint employment is generally present in three types of situations:
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