UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
November 14, 2011
LEROY WILLIAMS, INDIVIDUALLY AND ON BEHALF OF ALL OTHER PAST AND PRESENT SIMILARLY SITUATED EMPLOYEES, PLAINTIFF,
SKYLINE AUTOMOTIVE INC. D/B/A/ TOYOTA OF MANHATTAN, DEFENDANT.
The opinion of the court was delivered by: Shira A. Scheindlin, U.S.D.J.
OPINION AND ORDER
Leroy Williams brings this collective action against his employer, Skyline Automotive, Inc., alleging that Skyline failed to pay him and others overtime compensation under the Fair Labor Standards Act ("FLSA"),*fn1 and requesting permission to provide notice of his collective action to other similarly situated employees. Williams also claims that Skyline failed to pay him overtime compensation under the New York Labor Law.*fn2
Defendant now moves to dismiss Williams' Complaint for failure to state a claim upon which relief can be granted. For the following reasons, defendant's motion is denied. However, plaintiff's motion to provide preliminary notice of his collective action to potential plaintiffs is granted.
In May of 2002, Williams was hired as a mechanic/technician for Skyline, a New York corporation operating approximately twenty automobile dealerships.*fn4 Williams alleges that the terms of his employment were set out in a collective bargaining agreement ("CBA").*fn5 According to the terms of the CBA, Skyline paid Williams and other similarly situated employees overtime pay according to an "incentivized hourly rate," not the FLSA overtime rate.*fn6 This contractual overtime system only increased employees' pay for weekly work done beyond 42.5 hours, and the increase resulted in substantially less pay than FLSA's time-and-a-half guarantee.*fn7
Williams alleges that he and others similarly situated "frequently worked more than forty (40) hours a week," and were paid for these hours according to this incentivized hourly rate.*fn8 Because Williams alleges that neither he nor others similarly situated are exempt from the FLSA's overtime requirements, they were and are entitled to receive overtime payments at the rate of time-and-a-half.*fn9 He claims this denial of overtime pay was willful,*fn10 and under the FLSA seeks "payment of time-and-a-half for each and every hour worked overtime during the three (3) years prior to the filing of the this Complaint," as well as an equal amount in liquidated damages for the same period.*fn11 Under the New York Labor Law, he seeks "time-and-a-half for each and every hour worked overtime during the six (6) years prior to the filing of this action," as well as an award of liquidated damages equal to twenty-five percent of the total amount of overtime wages he is due.*fn12
III. APPLICABLE LAW
A. Rule 12(b)(6)
In deciding a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the court evaluates the sufficiency of the complaint under the "two-pronged approach" suggested by the Supreme Court in Ashcroft v. Iqbal.*fn13
First, a court "'can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.'"*fn14
"Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice" to withstand a motion to dismiss.*fn15 Second, "[w]hen there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief."*fn16 To survive a Rule 12(b)(6) motion to dismiss, the allegations in the complaint must meet a standard of "plausibility."*fn17 A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."*fn18
Plausibility "is not akin to a probability requirement;" rather, plausibility requires "more than a sheer possibility that a defendant has acted unlawfully."*fn19
"In considering a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), a district court may consider the facts alleged in the complaint, documents attached to the complaint as exhibits, and documents incorporated by reference in the complaint."*fn20 However, the court may also consider a document that is not incorporated by reference, "where the complaint 'relies heavily upon its terms and effect,' thereby rendering the document 'integral' to the complaint."*fn21
"A motion to dismiss is often not the appropriate stage to raise affirmative defenses."*fn22 However, "[a]n affirmative defense may be raised by a pre-answer motion to dismiss under Rule 12(b)(6), without resort to summary judgment procedure, if the defense appears on the face of the complaint."*fn23 A defendant presenting an affirmative defense "on a Rule 12(b)(6) motion instead of a motion for summary judgment must accept the more stringent standard applicable to this procedural route."*fn24
The FLSA's overtime provision requires that employees receive compensation for hours worked in excess of forty hours per week "at a rate not less than one and one-half times the regular rate at which he is employed."*fn25 The statute provides a two-year statute of limitations for actions to enforce its provisions "except that a cause of action arising out of a willful violation may be commenced within three years after the cause of action accrued."*fn26
Skyline argues that in order for an overtime claim to survive a motion to dismiss, the complaint must approximate the number of uncompensated overtime hours worked.*fn27 It quotes seemingly unequivocal language from a number of district court opinions ostensibly describing such a requirement.*fn28
On closer analysis, the majority of the cases cited by Skyline do not support its proposed rule. Despite the opinions' strong language, the complaints being addressed generally suffered from other defects making an approximation of overtime hours especially critical. For example, when addressing a complaint that is internally inconsistent*fn29 or fails to even allege that the plaintiff worked over forty hours a week,*fn30 the absence of an approximation of hours affects the plausibility of the complaint. Such an omission similarly undermines a complaint alleging that multiple defendants permitted a diverse group of plaintiffs to perform uncompensated work during breaks or after hours, but failing to identify "which entity, among the many named defendants, employed the respective plaintiffs," and failing to "allege any specific facts about the plaintiffs' employment, such as their dates of employment, pay, or positions."*fn31
While often useful, such approximations are not absolutely
necessary.*fn32 If a complaint "pleads factual content
that allows the court to draw the reasonable inference"*fn33
that the defendant unlawfully denied the plaintiff overtime
wages, and the allegations "give the defendant fair notice of
[plaintiff's] claim and
the grounds upon which it rests,"*fn34 the complaint
is not subject to dismissal simply because it fails to approximate the
number of overtime hours worked.
2. Mechanics' Exemption
The FLSA contains several express exemptions from its overtime requirements. "Because the FLSA is a remedial law, exemptions to the overtime pay requirement are narrowly construed against the employers seeking to assert them and their application limited to those establishments plainly and unmistakably within their terms and spirit."*fn35 "[T]he application of an exemption under the Fair Labor Standards Act is a matter of affirmative defense on which the employer has the burden of proof."*fn36
The FLSA exempts from its overtime requirements "any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles . . . if he is employed by a nonmanufacturing establishment primarily engaged in the business of selling such vehicles or implements to ultimate purchasers."*fn37 The exemption's plain language includes three requirements: first, "that the employee be either a salesman, partsman, or mechanic;" second, "that such salesman, partsman, or mechanic be 'primarily engaged in selling or servicing' the vehicles set forth in the statute;" and third, "that such salesman, partsman, or mechanic's employer be a 'nonmanufacturing establishment primarily engaged in the business of selling such vehicles or implements to ultimate purchasers.'"*fn38
3. Collective Action
Section 216(b) of the FLSA provides: "[a]n action may be maintained
against any employer . . . by any one or more employees for and on
behalf of himself or themselves and other employees similarly
situated."*fn39 While the statute does not define
"similarly situated," courts in this Circuit require only that the
named plaintiffs make a "modest factual showing sufficient to
demonstrate that they and potential plaintiffs together were victims
of a common policy or plan that violated the law."*fn40
"[T]he Court need not evaluate the merits of plaintiffs'
in order to determine whether a 'similarly situated' group
opt-in notice is to be sent to potential plaintiffs under the FLSA is
an issue within the discretion of the district court."*fn42
C. New York Labor Law
The New York Labor Law generally mirrors the guarantees and exemptions of the FLSA with regards to overtime pay. However, some employees exempt from the FLSA's overtime provisions are entitled to an overtime wage of at least "one and one-half times the basic minimum hourly rate."*fn43 Claims under the New York Labor Law are subject to a six-year statute of limitations.*fn44
A. Sufficiency of Overtime Allegations
Williams alleges that Skyline's "practice of paying Plaintiff and others similarly situated an incentivized hourly rate in place of the required overtime rate of time-and-a-half constitutes a violation" of the FLSA.*fn45 He includes this pay scale in his Complaint,*fn46 alleges he was paid at the rate for "A" technicians,*fn47 and describes base pay increases dependent on attainment of professional certifications.*fn48 He further attaches a portion of the CBA, which includes Skyline's alternative "hourly bonus plan" for overtime.*fn49 Under this plan, hourly pay is only increased after an employee has worked more than 42.4 hours in a week. Pay for these overtime hours is significantly less than one-and-one-half times the employees' base pay.*fn50 The CBA also contains more comprehensive information regarding Skyline's payment practices with regards to other categories of employees.*fn51 While Williams alleges that he "frequently worked more that forty (40) hours per week,"*fn52 he does not approximate the number of overtime hours he worked.
Skyline argues that because the Complaint "contains only the vague allegations that the Plaintiff and others similarly situated frequently worked more than forty hours per week and frequently worked over ten (10) hours per day," without specifying the relevant period of time or approximating the number of hours involved, his "Complaint should be dismissed as deficient."*fn53
I disagree. Williams' allegations regarding his position with Skyline and Skyline's official payment policy are sufficient to allow the court to "draw the reasonable inference" that the defendant unlawfully denied the plaintiff overtime wages.*fn54 Further, the allegation that overtime was denied through the application of an explicit contractual overtime scale, which was set out in the Complaint, is more than sufficient to "give the defendant fair notice of [plaintiff's] claim and the grounds upon which it rests."*fn55 Assuming at this early stage of the litigation that Skyline kept track how many hours Williams and others were working, it should be easy to determine the number of overtime hours at issue. The Complaint is not deficient simply because Williams failed to provide a rough approximation of the number of overtime hours he and others have worked.
B. Mechanics' Exemption
Williams alleges that he worked as a "mechanic/technician" and was classified as a "Technician A" by Skyline.*fn56 He characterizes Skyline as a corporation with "approximately twenty (20) dealerships."*fn57 Skyline argues that because it is "a non-manufacturing establishment in the business of selling and servicing automobiles," and because Williams pleads that "he was employed as a technician/mechanic," Williams has admitted the essential elements of the mechanics' exemption.*fn58
I again disagree. While Williams' title of "mechanic/technician" may suggest that he falls within the mechanics' exemption, "[a]n employee['s] exempt status depends less on his title, and more on the actual duties performed."*fn59 The Complaint is silent as to the actual duties performed by Williams. It is therefore impossible for me to determine at this stage whether he is a mechanic within the terms of the exemption; it is similarly impossible to determine if he is "primarily engaged in selling or servicing the vehicles set forth" in the exemption.*fn60 "[T]he application of an exemption under the Fair Labor Standards Act is a matter of affirmative defense on which the employer has the burden of proof.,"*fn61 and a party choosing to raise such a defense "on a Rule 12(b)(6) motion instead of a motion for summary judgment must accept the more stringent standard applicable to this procedural route."*fn62 While Skyline's argument may ultimately have merit, further factual inquiry is needed before a determination can be made as to whether Williams and other similarly situated employees are covered by the mechanics' exemption.
Williams argues that the legislative history of the mechanics' exemption indicates that it should only apply to employees working irregular hours and paid by commission.*fn63 While the disposition of this motion does not turn on the question, this argument overstates the role of legislative history in statutory interpretation. Legislative history plays a role in statutory interpretation "if the text of the statute itself is not clear."*fn64 Otherwise, "the sole function of the courts is to enforce [the statute] according to its terms."*fn65 While Congress made at least one overtime exemption explicitly dependent on a commission-based pay system, it did not include a similar requirement in the mechanics' exemption.*fn66 Courts referencing the legislative history of the mechanics' exemption and considering the role played by commission-based payment systems did so only when it was useful in determining whether certain plaintiffs were covered by the exemption.*fn67 More often, however, the plain language of the exemption will cover many mechanics, partsmen, and salesmen. When that is the case, there is no need to reference legislative history. The fact that Williams did not receive commissions will only become relevant if his job duties leave doubt as to whether he is covered by the exemption. At this time, I cannot evaluate whether the question of commissions will be relevant.
C. Collective Action
Williams requests that he "be allowed to give notice of this
collective action, or that the court issue such notice, to all persons
who are presently, or have been at any time during the three years
immediately preceding the filing of this suit . . . been employed by
the Defendant as mechanics/technicians."*fn68 By
the CBA as the common source of the alleged violation, Williams has
established the necessary "'factual nexus' between his . . . situation
and the situation of other current and former employees."*fn69
As such, the Court grants Williams' request to provide
preliminary notice to potential plaintiffs.
D. New York Labor Law
Most workers are entitled to an overtime wage of one and one-half times their regular rate of pay under both the FLSA and the New York Labor Law.
Workers covered by the FLSA's mechanics' exemption are not entitled to that overtime wage premium under either the federal or the state law. However, under the New York Labor Law they are entitled to an overtime wage of at least one and one-half times the statutory minimum wage. According to his complaint, both Williams' regular rate of pay and his "incentivized" overtime rate were higher than one and one-half times the statutory minimum wage. Thus, although he alleges that he did not receive an overtime wage of one and one-half times his regular rate of pay, he acknowledges that he did receive an overtime wage of at least one and one-half times the minimum statutory rate. Therefore, Williams' overtime claim under the New York Labor Law turns on whether or not he is covered by the mechanics' exemption. For the reasons stated above, the applicability of the exemption cannot be decided on a motion to dismiss. Accordingly, Skyline's motion to dismiss Williams' New York Labor Law claim is likewise denied.
For the reasons stated above, the defendant's motion to dismiss Williams' claims is denied. Williams' request to provide notice of a collective action is granted. The Clerk of the Court is directed to close this motion [Docket #3]. The parties shall adhere to the scheduling order set by the Court on October 18, 2011. A final pre-trial conference has been scheduled for May 9, 2012 at 4:30 pm. If the parties wish to conver with the Court before that time, they may request a conference by contacting chambers.