Plaintiffs Eric J. Eldred ("Eldred"), Richard Borden, Matthew Caezza, Brian Fink, and Mark MacLaury (collectively, "Plaintiffs") commenced this action on behalf of themselves and those similarly situated seeking class certification pursuant to § 216 of the Fair Labor Standards Act ("FLSA") and Rule 23 of the Federal Rules of Civil Procedure. Plaintiffs allege violations of the FLSA, the Labor Management Relations Act ("LMRA"), the National Labor Relations Act ("NLRA"), the Davis Bacon Act; the Racketeer Influenced and Corrupt Organizations Act ("RICO"), New York Labor Law ("NYLL"), as well as breach of contract, unjust enrichment, fraud, and conversion. Plaintiffs claim that Defendants Comforce Corporation and its various subsidiaries ("Comforce"), John Fanning ("Fanning"), Harry Maccarrone ("Maccarrone"), Peter Petix ("Petix"), Communication Workers of America, AFL-CIO ("CWA" or "the Union"), Andy Milburn ("Milburn"), Richard Kneupper ("Kneupper"), Donna Bentley ("Bentley"), CWA Local 6171("Local 6171"), Alan Whittaker ("Whittaker"), Mike Simmons ("Simmons"), and Linda James ("James") (collectively, "Defendants"), exploited the traditional employer/union relationship in unlawfully failing to pay Plaintiffs and members of the proposed class regular and overtime wages; making unauthorized deductions from their wages; failing to provide meaningful representation; making fraudulent misrepresentations regarding the true nature of the Comforce/CWA relationship; and engaging in a pattern of illegal racketeering. Compl. (Dkt. No. 1) at ¶¶ 9-13, 35. Currently before the Court is Plaintiffs' Motion for class certification (Dkt. No. 15) as amended (Dkt. No. 37-1); Defendants Fanning, Maccarrone, and Petix's Motion to dismiss Plaintiffs' Motion to proceed as a collective action and for class certification Motions to dismiss (Dkt. No. 43) and their separate Motion to dismiss (Dkt. No. 46); Defendant Comforce's Motion to dismiss (Dkt. No. 47); and Defendants CWA, Local 6171, Milburn, Kneupper, Bentley, Whittaker, James, and Simmons' Motion to dismiss (Dkt. No. 50).
Plaintiffs commenced the instant action on October 31, 2008, by filing their Complaint (Dkt. No. 1), which they amended on December 8, 2008 (Dkt. No. 24), and again January 30, 2009. (Dkt. No. 37) ("Second Amended Complaint"). Plaintiffs' Second Amended Complaint asserts fifteen claims for relief and court certification of three classes of plaintiffs. The claims relate to Plaintiffs' employment with Defendant Comforce from the mid-1990's to the present and the allegedly corrupt practices committed in concert byComforce and CWA. Second Am. Compl.¶ 2, 4.
Comforce, headquartered in Woodbury, New York, is engaged in several businesses including the installation of telecommunication equipment. Id. ¶ 3. Defendant Fanning is the Chairman of the parent company, Comforce Corp.; Maccarrone is the Chairman of at least three of its principle subsidiaries; and Petix is the Vice President and General Manager of Comforce Telecom, Inc. Id. ¶ 44-49. All have offices in New York. Id.
Comforce would instruct Plaintiffs to report to various job sites, to which they would travel, often staying away from home overnight. Plaintiffs' assert that many of these jobs involved projects partially funded with public funds. Once at the job site, they were often told that it was a union project. Plaintiffs allege that they were told that they were in a "pay to play" system under which they had to be union members and pay union dues. Id. ¶ 6.
Plaintiffs paid dues to CWA, a union headquartered in Washington, D.C. that represents individuals employed primarily in the telecommunications industry, and its affiliate Local 6171, based in Krum, Texas. Id. ¶¶ 24, 39. Milburn is the Vice-President of CWA District 6, the District responsible for locals situated in Texas; Kneupper is the Assistant to District Vice President of CWA District 6; and Bentley is a District 6 Staff Representative. Id. ¶¶ 66-76. All work out of offices in Texas. Id. Whittaker is the current President of Local 6171; Simmons was the previous President; James was the previous Executive Vice-President; collectively, they are responsible for the actions conducted in the name of Local 6171 during the relevant period. Id. ¶¶ 81-85.
Local 6171 provided Plaintiffs with temporary union cards whenever they were working on job sites that requested employees have these cards. Id. ¶ 92. Comforce would, accordingly, deduct dues from Plaintiffs' wages. Id. ¶ 6. Plaintiffs, allegedly, never authorized the deductions. Id.
CWA and Comforce entered into various collective bargaining agreements under which the terms and conditions of employment were documented. See, e.g., Contract Agreement between Sumtec and CWA (Dkt. No. 1-2) ("the CBA"). The CBA, signed on behalf of Comforce by Petix and on behalf of CWA by Bentley, recognized the Union as the "exclusive collective bargaining representative for the purpose of collective bargaining with respect to rates of pay, wages, hours of employment and other conditions of employment, for all of its employees in the collective bargaining unit." Id. Art. I. The CBA provides that "[t]he parties hereto agree to meet at the request of either party... for the purpose of negotiating with respect to wages, working conditions and other conditions of employment not covered by this initial Agreement." Id. Art VIII. It also contains provisions regarding discipline, including discharge of union employees and lays out grievance procedures. Id. Art. V. Plaintiffs never availed themselves of these procedures. Plaintiffs assert that they had knowledge of the CBA, but never saw a copy despite their requests, until one was provided by Bentley on February 23, 2006. Second Am. Compl. ¶ 98. Plaintiffs also allege that despite the CBA's guarantee that the Union would negotiate their employment contracts, in practice, employees had to negotiate these individually.
Plaintiffs allege that the whole arrangement between Comforce and the Union was "an enterprise designed to extract money from the plaintiffs and other similarly situated employees of Comforce for the benefit of the CWA." Id. ¶ 8. Essentially, Plaintiffs claim that Comforce unlawfully deducted wages, which they paid to the Union. CWA, meanwhile, provided no meaningful benefit to Plaintiffs and those similarly situated, but rather, in exchange for the dues paid to them by Comforce, "look[ed] the other way... while Comforce violated numerous federal and state laws that resulted in substantial economic loss to the plaintiffs." Id. Specifically, Plaintiffs allege that Comforce unlawfully deducted dues from its employees' wages and failed to pay them prevailing wages, proper per diem, travel expenses, and wages for travel time as required by state and federal law. CWA, meanwhile, is alleged to have failed to address these actions by Comforce or otherwise bargain on behalf of the employees it ostensibly represented.
Plaintiffs particularly emphasize the allegedly unilateral changes made by Comforce to its travel-time compensation policy. Plaintiffs assert that this policy had previously guaranteed payment for all work-related travel time. Id. ¶ 189. Allegedly, in 2002, Comforce unilaterally changed this policy, adopting a four hour maximum for compensable travel time. In 2004, Comforce adopted this policy in writing. Id. ¶¶192-94.
Plaintiffs allege, moreover, that they and others similarly situated, often worked, either including or excluding travel time, in excess of forty hours per week. Such work was to be paid at one and a half times the regular rate of pay pursuant to state and federal law. In such instances, however, Plaintiffs and those similarly situated were allegedly instructed that if their time sheets indicated they worked over forty hours in a given week, those sheets would be rejected. Id. at 208-13. Plaintiffs thus allege that Comforce failed to fully compensate them. Id. Plaintiffs further allege that they and others similarly situated performed numerous activities directly related to their primary employment duties for which they received no compensation. Id. ¶¶ 186-88. Plaintiffs also allege that many of the projects that they worked on were partially funded with public money, yet Comforce failed to pay them the prevailing wage as required by law. Id. ¶¶ 215-22.
Plaintiffs allege that Comforce would often adjust downwards the per diem rate that they were to receive and would inform Plaintiffs of this reduction only after they had accepted a job and often after they arrived at the job site. One such instance allegedly occurred in October 2005, when Eldred accepted a job in Philadelphia to be paid at $27.50 per hour with a $120 a day per diem. Id. ¶ 118. Eldred allegedly negotiated this rate of pay personally, receiving no assistance from CWA. Id. On the day he was to leave for Philadelphia, he was informed that the per diem would be reduced to $90 per day. He objected, stating that this was not enough to cover his lodging, and Comforce asked for a day to rectify the problem. Eldred went to Philadelphia, allegedly believing he would receive a $120 per day reimbursement. Once there, he was told the per diem would be $90 or $95 per day. Eldred told Comforce that this was not acceptable. Comforce allegedly responded, "do what you have to do" and Eldred returned to New York. Id. ¶ 122. Eldred never received a work offer again from Comforce and objected when Eldred filed for unemployment benefits by filing an appeal with the New York State Unemployment Appeals Board. Eldred received no representation from CWA or Local 6171 during this appeal, which ended in the Board's determination that he was fired for cause. Id. ¶¶ 125-27.
A. Defendants' Motions to Dismiss
When considering a motion to dismiss under 12(b)(6), a district court must accept the factual allegations made by the non-moving party as true and "draw all inferences in the light most favorable" to the non-moving party. In re NYSE Specialists Sec. Litig., 503 F.3d 89, 95 (2d Cir. 2007). "The movant's burden is very substantial, as 'the issue is not whether a plaintiff is likely to prevail ultimately, but whether the claimant is entitled to offer evidence to support the claims.'" Log On America, Inc. v. Promethean Asset Mgmt. L.L.C., 223 F. Supp. 2d 435, 441 (S.D.N.Y. 2001) (quoting Gant v. Wallingford Bd. of Educ., 69 F.3d 669, 673 (2d Cir. 1995) (internal quotation and citations omitted)). In order to survive a motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, U.S., 29 S.Ct. 1937, 1949 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A court should "begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Id. Next, if plaintiff provides well-pleaded factual allegations, "a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id.
2. Preemption Under the LMRA
Section 301 of the LMRA ("§301") provides that "[s]uits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce... may be brought in any district court of the United States having jurisdiction of the parties...." 29 U.S.C. § 185(a). The section is accorded "unusual pre-emptive power." Livadas v. Bradshaw, 512 U.S. 107, 122 n.16 (1994); Vera v. Saks & Co., 335 F.3d 109, 114 (2d Cir. 2003); Wynn v. AC Rochester, 273 F.3d 153 (2d Cir. 2001). Section 301 "governs claims founded directly on rights created by collective-bargaining agreements, and also claims 'substantially dependent on analysis of a collective-bargaining agreement.'" Caterpillar, Inc. v. Williams, 482 U.S. 386, 394 (1987) (quoting Electrical Workers v. Hechler, 481 U.S. 851, 859 n.3 (1987). Thus, "when resolution of a state-law claim is substantially dependent upon analysis of the terms of an agreement made between the parties in a labor contract, that claim must either be treated as a § 301 claim... or dismissed as pre-empted by federal labor-contract law." Allis-Chalmers Corp v. Lueck, 471 U.S. 202, 220 (1985). This rule has been applied to pre-empt claims brought under common law tort, contract, as well as under the NYLL where the claims required interpretation of a CBA. See Id. at 211; Sheehan v. United States Postal Service, 6 F. Supp. 2d, 141, 147-48 (N.D.N.Y. 1997) (Kahn, J.); Vera, 335 F.3d 109. It is not the case, however, that "every state-law suit asserting a right that relates in some way to a provision in a collective-bargaining agreement, or more generally to the parties to such an agreement, necessarily is pre-empted by § 301." Allis-Chalmers, 471 U.S. at 220; see also Wynn, 273 F.3d at 157. Rather, "when the meaning of contract terms is not the subject of dispute, the bare fact that a collective-bargaining agreement will be consulted in the course of state-law litigation plainly does not require the claim to be extinguished." Livadas, 512 U.S. at 124.
Where a claim is preempted, the LMRA requires that the plaintiff exhaust any grievance or arbitration procedures established under the CBA prior to bringing a suit under § 301(a). Clayton v. Int'l Union, United Auto., Aerospace, and Agric. Implement Workers of America, 451 U.S. 679, 681 (1981). For "hybrid actions," that is, actions alleging both violation of the CBA under § 301 by the employer and violation by the union of the duty of fair representation ("DFR"), the six-month statute of limitations provided for in § 10(b) of the NLRA applies. See DelCostello v. Int'l Bhd. of Teamsters, 462 U.S. 151 (1983); Cohen v. Flushing Hosp. and Med. Ctr., 68 F.3d 64 (2d Cir. 1995); Sheehan, 6 F. Supp. 2d at 145.
3. Plaintiffs' Causes of Action
a. Plaintiffs Fail to Make Allegations Against Certain Defendants
Although naming them as Defendants, Plaintiffs fail to make any allegations against Comforce subsidiaries Comforce Information Technologies, Inc., Comforce Technical, LLC, and Comforce Operating, Inc. Plaintiffs note that these Defendants are subsidiaries of Comforce and assert that all references in their Second Amended Complaint to "Comforce" include the named subsidiaries. Second Am. Compl. ¶ 2. However, Plaintiffs fail to allege or otherwise provide any evidence of acts attributable to these Defendants. Thus, all claims against Defendants Comforce Information Technologies, Inc., Comforce Technical, LLC, and Comforce Operating, Inc. are dismissed.
b. Claims Under the Fair Labor Standards Act Plaintiffs' First and Second
Causes of Action allege violations of the FLSA. In their first claim, Plaintiffs allege that Defendants Comforce, Fanning, Maccarrone, and Petix willfully failed to pay Plaintiffs for normal and overtime work performed, including travel time covered under the wage orders issued at 29 C.F.R. § 785.39,*fn1 in excess of forty hours per week. Plaintiffs' Second Cause of Action alleges that Comforce's unilateral change in policy regarding the reduction of compensable travel time is void because the change violated the CBA and further violated Plaintiffs' right to compensation for all travel-time covered under the FLSA, as well as time spent performing activities closely related to their primary employment.
Plaintiffs first claim requires no interpretation of the CBA. The rights it alleges to have been violated have an independent statutory basis in sections 206 and 207 of the FLSA, which provide, inter alia, that employers shall compensate employees at their regular wage for all hours worked up to 40 hours per week, and one and one-half times that wage for hours in excess of 40 per week. See 29 U.S.C. §§ 206, 207. The right to this compensation does not spring from the CBA, nor does the CBA, which is utterly silent as to the rate of pay, provide any basis for the Court's inquiry into the validity of the claim raised.*fn2 Plaintiffs' claim, therefore, is not preempted by § 301 and the simple fact that a CBA exists does not void Plaintiffs' rights under the FLSA.
29 U.S.C. § 255(a) sets the statute of limitations on FLSA claims at two years, or three where the violation is willful. Finding that Plaintiffs have sufficiently alleged a willful violation, the Court dismisses all claims under Plaintiffs First Cause of Action insofar as they arise prior to October 31, 2005. See McLaughlin v. Richland Shoe Co, 486 U.S. 128, 133 (1988).
Plaintiffs' second claim, turns on whether Comforce made unilateral changes to "working conditions" when it adopted the 2002 and 2004 policies affecting travel-time compensation. This claim explicitly notes the importance of the CBA, and asks the Court to interpret the CBA's requirement that Comforce negotiate all changes to working conditions. Second Am. Compl. ¶¶ 190-95. As such, it is preempted by the LMRA. Plaintiffs did not follow the grievance procedures detailed in the CBA or meet the LMRA's six-month statute of limitations. Their claim is dismissed.
c. Claims Under New York Labor Law
Plaintiffs' Third and Fourth Causes of Action allege that Comforce, Fanning, Maccarrone, and Petix violated state labor law. Their third claim alleges that these Defendants deducted wages from Plaintiffs' pay without authorization in violation of NYLL § 193. That section provides, in part, that "No employer shall make any deduction from the wages of an employee, except deductions which... are expressly authorized in writing by the employee and are for the benefit of the employee." N.Y. LABOR LAW § 193(1)(b).
The CBA includes an authorization form that employees are to sign prior to Comforce's withholding of wages. CBA Art III. The inclusion of that template, however, does not mean that Plaintiffs' rights to receive all wages not authorized to be withheld originate in the CBA. State law creates this right, and no interpretation of the CBA is required for Plaintiffs' allegation that these rights were violated. N.Y. LABOR LAW § 193(1)(b). The claim is not pre-empted by § 301. It is, however, subject to a six-year statute of limitations and dismissed insofar as the violations alleged predate October 31, 2002. See N.Y. LABOR LAW § 198(3).
Plaintiffs' fourth claim alleges violations of the NYLL resulting from the relevant Defendants' non-payment of wages and overtime pay. For the reasons noted in the discussion of their first claim, the Court is not required to interpret anything in the CBA in order to decide these claims. The claim is not pre-empted, but is also subject to a six-year statute of limitations. N.Y. LABOR LAW § 198(3).
d. Third-Party Beneficiary and Unjust Enrichment Claims
Plaintiffs assert in their fifth claim, that Comforce, Fanning, Maccarrone, and Petix were unjustly enriched by their failure to pay prevailing wage, per diem, and mileage reimbursement to Plaintiffs and those similarly situated on contracts funded, at least in part, with public funds. They claim breach of contract, allegedly as third-party beneficiaries to these public contracts. Plaintiffs bring these claims pursuant to federal and state law and seek judgment under NYLL § 198.
Plaintiffs' claim, insofar as it is alleged pursuant to federal law, is untenable. Though not mentioned in the Cause of Action, Plaintiffs' claim is based on the Davis Bacon Act. See Second Am. Compl. ¶¶ 10, 132; see also Pls.' Am. Mot. for Certification of Class Action (Dkt. No. 37-1) ("Pls.' Mot. for Certification") ¶ 4. The Second Circuit has held that no private right of action exists under that Act. See Chan v. City of New York, 1 F.3d 96, 102 (2d Cir. 1993). Next, to the extent that Plaintiffs' seek to use state law remedies to recover wages for federally funded projects, that too is precluded. See Grochowski v. Phoenix Constr., 318 F.3d 80, 86 (2d Cir. 2003). ("To allow a third-party private contract action aimed at enforcing wage schedules [in a federally funded project] would be inconsistent with the underlying purpose of the legislative scheme and would interfere with the implementation of that scheme to the same extent as would a cause of action directly under the statute.") (internal quotations omitted); see also Sobczak v. AWL Indus., Inc, 540 F. Supp. 2d 354, 360 (E.D.N.Y. 2007) ("to the extent that plaintiffs' claims arise under state funded contracts, to which state prevailing wage standards apply, Grochowski has no application").
New York Labor Law provides a similar statutory scheme for the administrative resolution of prevailing wage claims as does the Davis Bacon Act. See N.Y. LAB. LAW § 220(3). Under New York law, however, employees are permitted to pursue their claims under the administrative procedures provided therein or as third-party beneficiaries to the state funded contracts. Wright v. Herb Wright Stucco, Inc., 407 N.E.2d 1348 (N.Y. 1980); Fata v. S. A. Healy Co., 46 N.E.2d 339, 341 (N.Y. 1943); Sobczak, 540 F. Supp. 2d at 360-61. In this action, Plaintiffs bring their claim as third-party beneficiaries, thus obviating the need to comply with the procedures or statute of limitations under NYLL § 220. The relevant statute of limitations is six years. See N.Y. C.P.L.R. 213(2). Plaintiffs' contract claim, insofar as it relates to state-funded public contracts and arise no earlier than October 31, 2002, may proceed.
e. Claims Under the CBA and LMRA
Plaintiffs' Sixth and Seventh Causes of Action allege that Comforce, CWA, and Local 6171, breached the CBA and violated the LMRA respectively. Plaintiffs concede these claims arise under the CBA, are pre-empted by § 301, and are time-barred. Pls.' Mem. of Law in Opp'n to Def. Comforce and Individual Defs.' Mot. to Dismiss (Dkt. No. 56) ("Pls. Mem. Opp'n to Comforce") at 25. They are dismissed.
f. Claims that CWA and Local 6171 Violated the Duty of Fair Representation
Plaintiffs' Eighth Cause of Action alleges that CWA and Local 6171 breached their DFR by entering a CBA and receiving dues paid by Plaintiffs and those similarly situated but failing to provide any true or meaningful representation. As an initial matter, the CBA clearly states that CWA is the "exclusive collective bargaining representative." CBA Preamble; Art. I. Local ...