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Harding v. Warner

January 26, 2010

SEAN HARDING, INDIVIDUALLY AND ON BEHALF OF OTHER MEMBERS OF THE GENERAL PUBLIC SIMILARLY SITUATED, PLAINTIFF,
v.
TIME WARNER, INC., A DELAWARE CORPORATION; AND DOES 1-50, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Hayes, Judge

ORDER

The matter before the Court is the Motion to Dismiss Plaintiff's First Amended Complaint, filed by Defendant Time Warner, Inc. ("Time Warner") on November 10, 2009. (Doc. # 22).

I. Background

On June 4, 2009, Plaintiff filed the Complaint in this Court, alleging federal question jurisdiction pursuant to the Fair Labor Standards Act of 1938 ("FLSA"), 29 U.S.C. § 216(b) and diversity jurisdiction pursuant to the Class Action Fairness Act, 28 U.S.C. § 1332(d)(2)(A). (Doc. # 1). On June 30, 2009, Time Warner filed a motion to dismiss the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). (Doc. # 6).

On August 18, 2009, the Court granted the motion to dismiss, and dismissed the Complaint without prejudice. (Doc. # 10). The Court held that the Complaint failed to satisfy the pleading standards of the Federal Rules of Civil Procedure, as interpreted by the Supreme Court in Bell Atlantic v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, ---- U.S. ----, 129 S.Ct. 1937 (2009).

On October 21, 2009, the Court granted Plaintiff's motion for leave to file an amended complaint. (Doc. # 19). On October 27, 2009, Plaintiff filed the First Amended Complaint. (Doc. # 20).

A. Allegations of the First Amended Complaint

The First Amended Complaint contains three Counts, each a purported collective or class action.

Count I is an FLSA claim, brought on behalf of Plaintiff and the following: "all current and former non-exempt employees of Time Warner who have worked in the United States at any time during the last three years." (Doc. # 20 ¶ 8). Count I alleges: "Time Warner violated the FLSA by failing to pay and properly calculate overtime. In the course of perpetrating these unlawful practices, Time Warner also willfully failed to keep accurate records of all hours worked by its employees." (Doc. # 20 ¶ 26). Count I further alleges:

30. Time Warner breached its duty to Plaintiff and all Class Members to timely and accurately provide all wages due on a timely basis. The breach was caused by and through a standard and uniform system of accounting and compensation practice, commonly referred to as 'rounding.' The practice works in the following way: Time Warner retains an electronic timekeeping system whereby each Class Member's time worked is recorded to the exact minute (the 'work minute'). Time Warner then alters the time worked by 'rounding' such recorded time to the nearest 15 minutes (i.e. top of the hour, the 15-minute mark, the 30-minute mark, or the 45-minute mark).... For example, an employee who recorded his/her start time as 8:07 a.m. would have the time 'rounded,' to 8:00 a.m., but an employee who recorded his/her start time as 8:08 a.m. would have the time 'rounded' to 8:15 a.m.... Any presumption that such a practice results in an equal chance of 'gaining' or 'losing' recorded work-time is based on a belief that there is an equal chance of either possibility, and is thus erroneous, for two separate and distinct reasons.

31. First, Time Warner possessed a standard policy and practice, whereby Class Members were instructed to refrain from reporting to work later than their scheduled time, or leaving earlier than their scheduled time, and were punished when they did so. However, Class Members only 'gain' time where they show up late, or leave early. As Time Warner restricted and/or precluded such options, and 'presumption' of an equal division of time-entries is in error.

32. Second, [because] FLSA guidelines require the payment of Overtime Compensation for any work in one workweek in excess of 40 hours, any 'rounding' practices are conceptually flawed and serve to damage Class Members. For example, an employee who makes $8.00 an hour and is scheduled to work from 9 a.m. to 5 p.m. actually 'clocks-in' at 9:00 a.m. and 'clocks-out' at 4:56, the 'clock-out' time is 'rounded-up' to 5:00 p.m., and the employee 'gains' 4 minutes at the Regular Rate of Pay, or 53 cents.... However, where the same employee 'clocks-out' at 5:04 p.m., the time is 'rounded-down' to 5:00 p.m., and the employee 'loses' 4 minutes at the Overtime Rate of Pay, or 80 cents.... Where an employee has already worked 32 hours in the workweek, that time in excess of forty hours on the aforementioned workday is unequivocally overtime, yet Time Warner fails to pay as such. Thus, any presumption that the employees are fully paid for all time actually worked is in error. (Doc. # 20 ¶¶ 30-32). "As a result of the ... willful violations of the FLSA's overtime pay provisions," Plaintiff seeks compensatory damages, liquidated damages, interest, attorney's fees and cost. (Doc. # 20 ¶ 37).

Count II is a claim for violation of the California Labor Code, brought on behalf of Plaintiff and "all current and former non-exempt employees of Time Warner who have worked in the state of California within the last three years." (Doc. # 20 ¶ 9). Count II contains the same allegations quoted above. (Doc. # 20 ¶¶ 40-42). Count II further alleges that, "due to its 'rounding policy,'" Time Warner violated the California Labor Code by failing to: "keep accurate 'Time records'"; "provide 'all wages' in a compliant manner"; "provide Overtime Compensation in a compliant manner"; "provide accurate Itemized Wage Statements"; and "comply with California Labor Code § 203 with respect to former employee[s] who were discharged, or who quit, employment." (Doc. # 20 ¶ 46 (quoting Cal. Labor Code § 204)). As a result of Time Warner's alleged violations of the California Labor Code, Plaintiff seeks "to recover wages due to Plaintiff ..., as well as recovery of interest, reasonable attorneys' fees, and costs." (Doc. # 20 ¶ 47).

Count III is a claim for unfair competition in violation of the California Business and Professions Code, brought on behalf of Plaintiff and "all current and former non-exempt employees of Time Warner who have worked in the state of California within the last four years." (Doc. # 20 ¶ 10). Count III alleges that "Time Warner's actions, including but not limited to the failure to maintain accurate employee time records, the failure to pay all wages earned, and the failure to pay overtime compensation, constitute fraudulent and/or unlawful and/or unfair business practices in violation of California Business and Professions Code §§ 17200, et seq." ...


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