Thompson v. Real Estate Mortg. Network

• Decision Date: 03 April 2014
• Docket Number: No. 12–3828.,12–3828.
• Citation: 748 F.3d 142
• Parties: Patricia THOMPSON, Appellant v. REAL ESTATE MORTGAGE NETWORK; Security Atlantic Mortgage Company; Noel Chapman, an individual; Samuel Lamparello, an individual.
• Court: U.S. Court of Appeals — Third Circuit

748 F.3d 142

Patricia THOMPSON, Appellant

v.REAL ESTATE MORTGAGE NETWORK; Security Atlantic Mortgage Company; Noel Chapman, an individual; Samuel Lamparello, an individual.

No. 12–3828.

United States Court of Appeals, Third Circuit.

Argued Nov. 6, 2013.

Filed April 3, 2014.

Mitchell A. Schley, Esq. [argued], East Brunswick, NJ, Judith L. Spanier, Esq., Abbey Spanier, New York, NY, Counsel for Appellant.

Ari Karen, Esq. [argued], Offit Kurman, Maple Lawn, MD, Douglas R. Kay, Esq., Offit Kurman, Tysons Corner, VA, Forrest G. Read, IV, Esq., Offit Kurman, Bethesda, MD, Counsel for Appellees.

Before: GREENAWAY, JR., VANASKIE, and ROTH, Circuit Judges.

OPINION OF THE COURT

VANASKIE, Circuit Judge.

In this case we consider the efforts of plaintiff Patricia Thompson to hold her former employers responsible for alleged overtime violations under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201–219, and the New Jersey Wage and Hour Law, N.J. Stat. Ann.. §§ 34:11–56a–34:11–56a38. Thompson appeals from an order of the United States District Court for the District of New Jersey, which granted the motion of defendants to dismiss each of Thompson's claims under Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the following reasons, we will vacate and remand.

I.

In June 2009, appellant Patricia Thompson, a New Jersey resident, was hired as a mortgage underwriter by defendant Security Atlantic Mortgage Company (“Security Atlantic”), a “nationwide direct mortgage lender.” ¹ App. 23. Shortly thereafter, however, she was assigned to a training class led by a representative for a different mortgage company, defendant Real Estate Mortgage Network (“REMN”). That employee “represented that REMN was a sister company of Security Atlantic.” App. 93.

In February 2010, allegedly in response to an investigation being conducted by the U.S. Department of Housing and Urban Development (“HUD”) into Security Atlantic's mortgage practices, Thompson and many of her colleagues were asked by supervisors to fill out new job applications to work for REMN. Thompson completed the application as requested. From roughly that date forward, Thompson's paychecks were issued by REMN instead of Security Atlantic. Defendants characterize Security Atlantic, which is no longer in business, as “defunct.” ²

Despite Thompson's transfer to REMN, virtually no change occurred in on-site operations.Thompson and her colleagues continued to do the same work, at the same desks, at the same location. Thompson's pay rate, work email address, and direct supervisors remained the same. Thompson alleges that no employees were laid off during this transition, although some of her colleagues continued to receive paychecks from Security Atlantic.

The basis for this lawsuit against both Security Atlantic and REMN is Thompson's allegation that between June 2009 and the end of her employment with REMN on August 5, 2010:

[D]efendants suffered and permitted plaintiff and other underwriters, closers and HUD reviewers to regularly work more than eight hours per day and more than forty hours per week without overtime compensation for all overtime hours worked. Employees [were] given turnaround times for assignments and employees routinely worked through lunch and at home to meet these requirements.

App. 99. Thompson also alleges that “[d]efendants uniformly misrepresented to plaintiff and other mortgage underwriters, closers and HUD reviewers that they were exempt, salaried employees and, therefore, ineligible to receive overtime pay.” App. 101. The misconduct was allegedly “widespread, repeated and consistent.” Id.

Aside from her claims against Security Atlantic and REMN, Thompson also seeks relief from defendants Samuel Lamparello (the co-owner and President of Security Atlantic) and Noel Chapman (the co-owner and Executive Vice President of Security Atlantic). The Amended Complaint alleges that throughout the time periods at issue, Chapman and Lamparello “made decisions concerning [Security Atlantic's] and REMN's day-to-day operations, hiring, firing, promotions, personnel matters, work schedules, pay policies, and compensation.” App. 93. When a work or personnel issue arose at Security Atlantic or REMN that Thompson's immediate supervisor could not address alone, “the supervisor would consult with, among others, Chapman or Lamparello.” Id.

In June 2010, Thompson directly asked Chapman about overtime compensation. He responded that he “did not pay overtime to underwriters.” App. 99. In July 2010, Chapman sent an email to “All Departments” stating, in part, “So many of you worked long hours, late nights and even weekends to make sure that all REMN customers are happy customers.” App. 92. Thompson quit her job at REMN on August 5, 2010. In 2011, both Chapman and Lamparello became officers of REMN.

Thompson filed her “class and collective action” complaint on March 16, 2011. ³ On December 30, 2011, the District Court dismissed the complaint without prejudice for failure to state a claim.

Thompson filed her Amended Complaint on January 27, 2012. She asserts that all four defendants violated the FLSA by “failing to properly compensate plaintiff, failing to pay plaintiff overtime pay for time worked in excess of 40 hours in a workweek, and misclassifying plaintiff as exempt from the overtime wage requirements of the FLSA.” App. 95. Thompson further seeks to hold REMN liable for SAMC's own statutory violations under theories of joint liability and successor liability. She also contends that Chapman and Lamparello were her “employer[s] and/or joint employer[s]” by virtue of their positions with the defendant companies, and therefore are “personally, jointly and severally liable for the violations of the FLSA and the [New Jersey Wage and Hour Law] by [Security Atlantic] and REMN.” App. 92–93.

On August 31, 2012, the District Court dismissed without prejudice the entirety of Thompson's Amended Complaint. Thompson filed a timely notice of appeal and has not sought leave to file a second amended complaint.

II.

We have jurisdiction under 28 U.S.C. § 1291 over a district court's dismissal without prejudice where, as here, the plaintiff elects to stand on the dismissed complaint without further amendment. Hagan v. Rogers, 570 F.3d 146, 151 (3d Cir.2009).⁴ Our review of a District Court's dismissal under Rule 12(b)(6) is de novo. Fowler v. UPMC Shadyside, 578 F.3d 203, 206 (3d Cir.2009). Under the “notice pleading” standard embodied in Rule 8 of the Federal Rules of Civil Procedure, a plaintiff must come forward with “a short and plain statement of the claim showing that the pleader is entitled to relief.” As explicated in Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), a claimant must state a “plausible” claim for relief, and “[a] claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Although “[f]actual allegations must be enough to raise a right to relief above the speculative level,” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), a plaintiff “need only put forth allegations that raise a reasonable expectation that discovery will reveal evidence of the necessary element.” Fowler, 578 F.3d at 213 (quotation marks and citations omitted); see also Covington v. Int'l Ass'n of Approved Basketball Officials, 710 F.3d 114, 117–18 (3d Cir.2013).

III.

A.

The FLSA and its state-law counterpart, the New Jersey Wage and Hour Law, allow employees to sue their past or present employers for various employment-related causes of action. Like the District Court and parties, we will distinguish between Thompson's federal-law claims and state-law claims only as necessary.

Relevant here, the FLSA provides:

[N]o employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.

29 U.S.C. § 207(a)(1).⁵ For employees who have been wrongly denied overtime pay, the FLSA offers a private cause of action to recover the corpus of the unpaid compensation along with equivalent liquidated damages, costs, and attorney's fees. Id. § 216(b).

Our first inquiry in most FLSA cases is whether the plaintiff has alleged an actionable employer-employee relationship. An “employer” is “any person acting directly or indirectly in the interest of an employer in relation to an employee....” Id.§ 203(d). An “employee” is “any individual employed by an employer.” Id.§ 203(e)(1). To “employ” means “to suffer or permit to work.” Id.§ 203(g). As we have recently recognized, the breadth of these definitions is both intentional and obvious:

When determining whether someone is an employee under the FLSA, “economic reality rather than technical concepts is to be the test of employment.” Under this theory, the FLSA defines employer “expansively,” and with “striking breadth.” The Supreme Court has even gone so far as to acknowledge that the FLSA's definition of an employer is “the broadest definition that has ever been included in any one act.”

In re Enterprise Rent–A–Car Wage & Hour Emp't Prac. Litig., 683 F.3d 462, 467–68 (3d Cir.2012) (citations omitted).

Thompson first challenges the District Court's dismissal of her most straightforward claims, i.e., that (1) Security Atlantic committed statutory violations by failing to compensate Thompson appropriately between her date of hiring in June 2009 and her transfer to REMN in February 2010, and (2) REMN committed entirely separate statutory violations by failing to compensate Thompson appropriately between...