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Otoniel Sosa Teoba, Individually and On Behalf of Others Similarly Situated v. Trugreen Landcare LLC

February 15, 2011


The opinion of the court was delivered by: Charles J. Siragusa United States District Judge



In this action Plaintiffs are asserting claims for unpaid wages pursuant to the Federal Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., and the minimum wage laws of the States of New York and New Hampshire. Now before the Court is Defendant's motion (Docket No. [#4]) to dismiss the Amended Complaint [#2], pursuant to Federal Rule of Civil Procedure ("FRCP") 12(b)(6). The application is denied.


Unless otherwise noted, the following facts are taken from Plaintiffs' Amended Complaint [#2]. Defendant Trugreen Landcare ("Defendant" or "Trugreen") is a provider of lawn and landscape services in the United States, with approximately two million customers. Plaintiffs are individuals who reside outside of the United States, who worked for Defendant in the U.S., pursuant to the federal H-2B visa*fn1 program, during the years 2007, 2008, and 2009.

Between 2004 and 2009, Defendant obtained permission from the U.S. Government to hire temporary foreign workers pursuant to the H-2B visa program. According to the U.S. Department of Labor, employers are only permitted to use the H-2B visa program to bring foreign guest workers into the country in very limited circumstances, and only after the Department of Labor has certified that there are not enough able and qualified U.S. workers available for the position and that the employment of foreign workers will not adversely affect the wages and working conditions of similarly employed U.S. workers.

U.S. Dept. of Labor, Employment Standards Administration, Field Assistance Bulletin No. 2009-2 ("Bulletin 2009-2") (citation omitted). More specifically, under the H-2B program, employers must first engage in recruitment efforts in the U.S. labor market to determine if a qualified U.S. worker is available for the position. In order to ensure that an adequate test of the U.S. labor market is made, the employer must obtain from the government a wage rate that must be offered in the recruitment of U.S. workers (which must be the highest of the prevailing wage rate, the federal minimum wage or the state minimum wage).

The employer also must submit a job order to the appropriate State Workforce Agency (SWA) for posting. See 20 C.F.R. § 655.15. The job order must include information regarding the job duties, the minimum qualifications required (if any), any special requirements, the expected dates of employment, and the rate of pay. The posting must remain open for at least 10 days. If the area of intended employment is in more than one state, the SWA must forward the information to all the other states listed as anticipated worksites. Where the employer is a party to a collective bargaining agreement covering the occupation at that worksite, the employer also must contact the local affiliate of the labor organization regarding the job opening. The employer must place two newspaper advertisements for the job, including one in the Sunday paper. The employer must: offer and subsequently pay throughout the period of employment a wage that is equal to or higher than the prevailing wage for the occupation at the skill level and in the area of intended employment; provide terms and conditions of employment that are not less favorable than those offered to the foreign workers; and not otherwise inhibit the effective recruitment and consideration of U.S. workers for the job. If the employer has laid off any U.S. workers in the occupation in that area within 120 days prior to the date it will need an H-2B worker, it must notify each laid-off worker of the job opportunity. See 20 C.F.R. § 655.15.

An employer may apply for a labor certification from the Department only after it has completed its U.S. recruitment efforts. The application requires the employer to provide a description of its business history and activities, and its schedule of operations throughout the year. The employer must demonstrate that its need is a temporary need, and explain how it meets the regulatory standards for a one-time occurrence, or a seasonal, peakload, or intermittent need, in order to qualify for guest workers. The employer also must justify any increase or decrease in the number of H-2B positions being requested from the previous year, if applicable. See 20 C.F.R. § 655.20-.22.

The regulations require the employer to prepare and submit to the Department a report regarding its recruitment efforts, including information such as the name and contact information of each U.S. worker who applied or was referred to the job, the disposition of each worker including any applicable laid-off workers, and the lawful job-related reason(s) for not hiring any such U.S. workers. The employer must maintain records of its recruitment efforts for three years, for potential review and audit or investigation by the Department. See 20 C.F.R. § 655.15. The employer is required to attest that it will abide by the conditions applicable to the program, including that it will notify its workers of the requirement that they leave the U.S. at the end of the authorized period of stay or separation from the employer, whichever is earlier. It also must attest that the job is not available because the prior occupants are on strike or locked out in the course of a labor dispute involving a work stoppage. See 20 C.F.R. § 655.22.

Bulletin 2009-2 at 8-9.

At all relevant times, Defendant recruited Plaintiffs for temporary employment through the H-2B visa program, apparently using a third-party recruiter. Plaintiffs paid their own expenses, including the cost of traveling from their home countries to the U.S., the cost of obtaining an H-2B visa, and recruiting fees. Defendant did not reimburse Plaintiffs for the recruitment, visa, or transportation expenses.

In this action, Plaintiffs allege that Defendant's failure to reimburse these expenses violated the FLSA and the laws of New York and New Hampshire, because the expenses were primarily for Defendant's benefit, and because such expenses in effect caused Plaintiffs' wages to fall below the minimum wage standards established by law. See, Amended Complaint ¶ 20 ("The visa, processing, recruitment and transportation costs . . . operated as de facto involuntary deductions from, and/or kickbacks of, [Plaintiffs' wages].").

However, Defendant contends that the Amended Complaint must be dismissed in its entirety, for failure to state a claim, for essentially seven reasons: 1) The FLSA does not apply to activities outside of the United States; 2) Plaintiffs' expenses did not primarily benefit Defendant since they were not integral to landscaping work; 3) Plaintiffs' expenses were not 'kickbacks' because they were not costs which Defendant should have paid; 4) the expenses were not analogous to in-kind payment of wages under FLSA § 3(m); 5) federal regulations dealing with H-2B visas do not expressly require employers to pay such expenses; 6) Plaintiffs have not shown any connection between Defendant and the recruiters who charged recruiting fees; and 7) Defendant is shielded by the Portal-to-Portal Act's safe harbor provision. Additionally, Defendant contends that Plaintiffs' New Hampshire class action claim must be dismissed, because New Hampshire does not permit Rule 23 class actions for minimum-wage claims.

On February 10, 2011, counsel for the parties appeared before the undersigned for oral argument.


The legal principles applicable to a 12(b)(6) application to dismiss for failure to state a claim are clear:

Federal Rule of Civil Procedure 8(a)(2) requires only a short and plain statement of the claim showing that the pleader is entitled to relief, in order to give the defendant fair notice of what the claim is and the grounds upon which it rests. While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 1964-65 (2007); see also, ATSI Communications, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007) ("To survive dismissal, the plaintiff must provide the grounds upon which his claim rests through factual allegations sufficient 'to raise a right to relief above the speculative level.'") (quoting Bell ...

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