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Frederick L. Winfield, Zulma G. v. Citibank

January 30, 2012

FREDERICK L. WINFIELD, ZULMA G. MUNIZ, JAMES STEFFENSEN AND ADORAM SHEN, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED,
PLAINTIFFS,
v.
CITIBANK, N.A., DEFENDANT.



The opinion of the court was delivered by: John G. Koeltl, District Judge:

OPINION AND ORDER

The plaintiffs, Frederick L. Winfield, Zulma G. Muniz, James Steffensen, and Adoram Shen ("the plaintiffs"), bring this purported class action on behalf of themselves and all others similarly situated against the defendant, Citibank, N.A. ("the defendant"). The plaintiffs are personal bankers who were previously employed by the defendant. They were classified as "non-exempt" employees and therefore eligible for overtime payments under federal and state laws but claim that they were not paid overtime for which they should have been paid. The plaintiffs bring claims under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq., the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., and various state laws. The defendant now moves to dismiss the plaintiffs' ERISA claims; to dismiss plaintiff Shen's claim under California law and to strike the allegations asserted in that claim; and to strike the plaintiffs' claims for injunctive relief.

I.

In deciding a motion to dismiss pursuant to Rule 12(b)(6), the allegations in the complaint are accepted as true, and all reasonable inferences must be drawn in the plaintiff's favor. McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir. 2007). The Court's function on a motion to dismiss is "not to weigh the evidence that might be presented at a trial but merely to determine whether the complaint itself is legally sufficient." Goldman v. Belden, 754 F.2d 1059, 1067 (2d Cir. 1985). The Court should not dismiss the complaint if the plaintiff has stated "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). While the Court should construe the factual allegations in the light most favorable to the plaintiff, "the tenet that a court must accept as true all of the allegations contained in the complaint is inapplicable to legal conclusions." Id.

When presented with a motion to dismiss pursuant to Rule 12(b)(6), the Court may consider documents that are referenced in the complaint, documents that the plaintiff relied on in bringing suit and that are either in the plaintiff's possession or that the plaintiff knew of when bringing suit, or matters of which judicial notice may be taken. See Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002); see also Taylor v. Vt. Dep't of Educ., 313 F.3d 768, 776 (2d Cir. 2002); Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 47-48 (2d Cir. 1991); Kramer v. Time Warner, Inc., 937 F.2d 767, 773 (2d Cir. 1991).

II.

The following facts alleged in the Amended Complaint are accepted as true for the purposes of this motion to dismiss, unless otherwise indicated. The plaintiffs are personal bankers who were previously employed by the defendant. (Am. Compl. ¶ 12.) Their primary job responsibility was to sell the defendant's financial products and services to the general public in Citibank branches throughout the United States. (Am. Compl. ¶ 21.) They bring this purported class action on behalf of themselves and other future, current and former employees of Citibank who are similarly situated, asserting claims under ERISA and the FLSA ("the purported ERISA class" or "the purported FLSA class"). Plaintiffs Winfield, Muniz and Shen also bring purported class claims on behalf of District of Columbia, Illinois, and California subclasses, respectively, alleging violations of those states' laws. (Am. Compl. ¶¶ 14-16.)

The plaintiffs allege that, during their employment with the defendant, they and members of the purported FLSA class were classified as "non-exempt" employees and therefore eligible for overtime payments under federal and state laws. (Am. Compl. ¶ 22.) The plaintiffs claim, however, that the defendant has failed to pay them and the purported FLSA class the overtime compensation to which they were entitled and has thereby violated the FLSA and the laws of the District of Columbia, Illinois, and California. (Am. Compl. ¶¶ 84-120.)

The plaintiffs also allege that the defendant was a plan sponsor and fiduciary of the Citigroup 401(K) Plan ("the Plan"), an employee pension benefit plan within the meaning of § 3(2) of ERISA and an employee benefit plan within the meaning of § 3(3) of ERISA. (Am. Compl. ¶¶ 18, 70, 80.) The Plan provides matching funds for contributions made by employees. These contributions are calculated as a percentage of employees' eligible pay, which is defined as compensation paid to employees, including overtime pay. (Am. Compl. ¶¶ 72-73; Citigroup 401(K) Plan, attached as Ex. 1 to Supplemental Decl. of Jean Roma in Supp. of Def.'s Mot. to Dismiss ("Plan") at 6; Citigroup 401(K) Plan: Prospectus and summary plan description, attached as Ex. 1 to Decl. of Jean Roma in Supp. of Def.'s Mot. to Dismiss ("Summary Plan Description") at 6.) The parties dispute whether contributions under the Plan are linked only to actual compensation paid to employees or also to the number of hours worked by employees, for which compensation may have been earned but not actually paid. The plaintiffs allege that the defendant has breached its fiduciary duties under ERISA by failing to credit overtime work performed by the plaintiffs and members of the purported ERISA class as eligible compensation under the Plan. (Am. Compl. ¶¶ 77-83.) The plaintiffs seek an injunction requiring the defendant to credit all members of the purported ERISA class with eligible compensation under the Plan for the past and future overtime work those individuals have performed or will perform. (Am. Compl. ¶ 82.)

The plaintiffs also allege that the defendant has failed to maintain records indicating the hours that they and all members of the purported ERISA class have worked in excess of forty hours per week. (Am. Compl. ¶¶ 69, 74.) The plaintiffs claim that, by failing to do so, the defendant has violated the record-keeping requirement set forth in section 209(a)(1) of ERISA. (Am. Compl. ¶¶ 68-76.) The plaintiffs seek injunctive and equitable relief to remedy this alleged violation of ERISA. (Am. Compl. ¶¶ 75-76.)

The defendant now brings this motion seeking dismissal of the plaintiffs' record-keeping and breach of fiduciary duty claims under ERISA. The defendant also moves to dismiss plaintiff Shen's claim under California state law, which he seeks to bring on behalf of a California subclass, and to strike the class allegations asserted in that claim. Finally, the defendant moves to strike the plaintiffs' claims for injunctive relief.

III.

The defendant first moves to dismiss the plaintiffs' First Claim for Relief, namely the claim for failure to maintain accurate records. The defendant contends that the plaintiffs cannot bring this claim under either section 209(a)(1) or section 502(a)(3) of ERISA. The defendant also asserts that the plaintiffs have failed to state a claim for violation of the ERISA record-keeping requirement.

A.

Section 209(a)(1) of ERISA requires that "every employer shall . . . maintain records with respect to each of his employees sufficient to determine the benefits due or which may become due to such employees." 29 U.S.C. § 1059(a)(1). Section 209(b) provides that "[i]f any person who is required . . . to furnish information or maintain records for any plan year fails to comply with such requirement, he shall pay to the Secretary a civil penalty of $10 for each employee with respect to whom such failure occurs . . . ." 29 U.S.C. § 1059(b).

Courts have interpreted this language to mean that section 209 does not create a private right of action but instead affords the remedy of a civil penalty to be paid to the Secretary of Labor. See, e.g., Kifafi v. Hilton Hotels Ret. Plan, 616 F. Supp. 2d 7, 37-38 (D.D.C. 2009); Premick v. Dick's Sporting Goods, Inc., No. 06 Civ. 530, 2007 WL 141913, at *6 (W.D. Pa. Jan. 18, 2007); Colin v. Marconi Commerce Sys. Emps.' Ret. Plan, 335 F. Supp. 2d 590, 606 (M.D.N.C. 2004); Lowe v. Telesat Cablevision, Inc., 837 F. Supp. 410, 412 (M.D. Fla. 1993); Cartelli v. Plumbers and Steamfitters Local Union No. 422 Pension Fund, No. 89 Civ. 6783, 1991 WL 150039, at *3 (N.D. Ill. July 31, 1991).

The plaintiffs do not dispute that a private right of action is unavailable under section 209(a) of ERISA.*fn1 Instead, they contend that they have the right to sue under section 502(a)(3), ...


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