The opinion of the court was delivered by: Paul G. Gardephe, U.S.D.J.
MEMORANDUM OPINION & ORDER
In this putative class action, Plaintiff Carlos Chaluisan asserts claims under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., and the New York Labor Law, § 650 et seq., on behalf of himself and all others similarly situated, for failure to pay overtime compensation. Plaintiff also asserts individual state law claims for breach of contract and unjust enrichment relating to Defendants' alleged failure to pay him vacation pay and a non-discretionary bonus.
Defendants have moved to dismiss the individual claims pursuant to Fed. R. Civ. P. 12(b)(1), contending that this Court should not exercise supplemental jurisdiction over them, because they are not sufficiently related to Plaintiff's FLSA claim for overtime pay. Defendants have also moved, in the alternative, to dismiss Plaintiff's claim for unjust enrichment pursuant to Fed. R. Civ. P. 12(b)(6), arguing that the FLSA preempts this claim.
After the motion to dismiss was filed, Plaintiff stipulated to the dismissal of the breach of contract and unjust enrichment claims as against Mark Santiago. (Pltf. Br. 5). Accordingly, those claims will be dismissed. For the reasons set forth below, Defendants' motion will otherwise be DENIED.
Plaintiff Carlos Chaluisan was employed by Defendant Simsmetal East LLC from approximately January 19, 2004, until September 10, 2008, when he was terminated. (Cmplt. ¶ 25) Plaintiff began his employment with Simsmetal as a laborer, but was promoted to supervisor on June 1, 2006. (Id. ¶ 27)
Defendant Simsmetal owns and operates scrap processing and recycling facilities in New York, and Defendant Mark Santiago is a principal of the Company. (Id. ¶¶ 24, 10)
The events that form the basis for Plaintiff's complaint took place while Plaintiff served as a supervisor. Plaintiff alleges that during this period -- from June 1, 2006, until his termination on September 10, 2008 -- Defendants failed to pay him overtime wages despite the fact that he routinely worked 55 to 60 hours per week. (Id. ¶ 30) Plaintiff alleges that during his first year as a supervisor, Defendant Santiago invariably recorded that Plaintiff had worked 40 hours during a five-day work week and 48 hours when he worked six days. (Id. ¶ 31) During his second year as a supervisor, Plaintiff's hours were recorded by computer, but Santiago nonetheless crossed out Plaintiff's actual hours and recorded his hours as "40" or "48" depending on whether Plaintiff had worked five or six days during that week. (Id. ¶ 32)
While referred to as a "salaried" employee, Plaintiff received additional pay when he worked on Saturdays, but only in the form of "straight" pay rather than time and a half. (Id. ¶ 34) As a laborer, Plaintiff had received overtime pay for work on Saturday, but once he was promoted to a supervisor position, he no longer received overtime pay. (Id. ¶ 33)
Plaintiff contends that he and others similarly situated were placed in supervisor positions that required little skill and no capital investment, and that they were given duties and responsibilities that did not include bona fide executive functions such as the power to hire or fire, or to set shifts, hours or pay for those supervised. (Id. ¶¶ 29, 38) Accordingly, Plaintiff argues that he was entitled to overtime pay despite his supervisor title, and that Defendants' failure to pay him and others similarly situated overtime compensation violated the provisions of the FLSA, 29 U.S.C. § 201 et seq. and the New York Labor Law, § 650 et seq. (Counts I and II). (Id. ¶¶ 42-53) Defendants argue, however, that Plaintiff became an "exempt" employee under the FLSA and the Labor Lawwhen he was promoted to the supervisor position. (Ans. ¶ 33)
In addition to his FLSA and Labor Law claims, the Complaint asserts individual claims for breach of contract and unjust enrichment related to Defendants' refusal to pay (1) vested vacation pay; and (2) an automatic, non-discretionary 8% bonus that Plaintiff had been scheduled to receive at the time of his termination (Count III and IV). (Id. ¶¶ 36, 37, 54-63)
I. THIS COURT HAS SUPPLEMENTAL JURISDICTION OVER PLAINTIFF'S STATE LAW CLAIMS
A. The Scope of Supplemental Jurisdiction
Defendants argue that Plaintiff's state law claims must be dismissed because they are not sufficiently related to his FLSA claims to justify this Court's exercise of supplemental jurisdiction.
When a defendant moves to dismiss under Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction, plaintiff bears the burden of showing that subject matter jurisdiction exists. See Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 507 (2d Cir. 1994). "A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it." Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000).
Title 28, U.S.C. § 1367 defines a federal court's supplemental jurisdiction as follows:
[I]n any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.
28 U.S.C. § 1367(a). "[D]isputes are part of the 'same case or controversy' within § 1367 when they 'derive from a common nucleus of operative fact.'" Achtman v. Kirby, McInerney & Squire, LLP, 464 F.3d 328, 335 (2d Cir. 2006) (quoting Promisel v. First Am. Artificial Flowers Inc., 943 F.2d 251, 254 (2d Cir. 1991)); see also In re Methyl Tertiary Butyl Ether (MTBE) Prods. Liab., 613 F. Supp. 2d 437, 440-41 (S.D.N.Y. 2009) (quoting Achtman, 464 F.3d at 335) ("Federal and state claims form 'one case or controversy,' and thus satisfy section 1367(a), if they 'derive from a common nucleus of operative facts or when both claims would normally be expected to be tried in a single judicial proceeding.'").
Supplemental jurisdiction has thus been exercised "'where the facts underlying the federal and state claims substantially overlap or where presentation of the federal claim necessarily brings the facts underlying the state claim before the court.'"
McConnell v. Costigan, No. 00 Civ. 4598 (SAS), 2000 WL 1716273, at *4 (S.D.N.Y. Nov. 16, 2000) (alterations omitted) (quoting Lyndonville Sav. Bank & Trust Co. v. Lussier, 211 F.3d 697, 704 (2d Cir. 2000)). Conversely, supplemental jurisdiction should not be exercised "when the federal and state claims rest on essentially unrelated facts." Lyndonville Sav. Bank & Trust Co., 211 F.3d at 704.
Under Section 1367(c), district courts may decline to exercise supplemental jurisdiction over a claim under subsection (a) if--
(1) the claim raises a novel or complex issue of State law,
(2) the claim substantially predominates over the claim or claims over which the district court ...