Gonzalez v. Fallanghina, LLC

          ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND RE: DKT. NO. 25

          MARIA-ELENA JAMES United States Magistrate Judge

         INTRODUCTION

         Plaintiff Jose Gonzalez (“Plaintiff”) filed this action on behalf of himself and others similarly situated against Defendants Fallanghina LLC (“Fallanghina”), Longbranch Berkeley LLC (“Longbranch”), Hal Brandel, and Walter Wright (collectively “Defendants”), alleging they violated various federal and California labor and employment laws. Pending before the Court is Defendants' Motion to Dismiss Plaintiff's First Amended Complaint (“FAC”) under Federal Rule of Civil Procedure (“Rule”) 12(b)(6). Dkt. No. 25. Plaintiff filed an Opposition (Dkt. No. 29), and Defendants filed a Reply (Dkt. No. 30). The Court finds this matter suitable for disposition without oral argument and VACATES the July 28, 2016 hearing. See Fed. R. Civ. P. 78(b); Civ. L.R. 7-1(b). Having considered the parties' positions, relevant legal authority, and the record in this case, the Court GRANTS Defendants' Motion for the following reasons.

         BACKGROUND

         Plaintiff filed his initial Complaint on April 11, 2016, alleging Defendants (1) did not pay him or other non-exempt current and former employees overtime or minimum wages as required by federal and California law, and (2) did not give them meal or rest breaks as required under California law. Compl., Dkt. No. 1. In doing so, Plaintiff also asserted Fair Labor Standards Act (“FLSA”) claims of unpaid overtime and unpaid minimum wage on a collective-action basis. Id. Defendants filed a Motion to Dismiss on May 17, 2016, and subsequently, Plaintiff filed his FAC, removing the minimum wage claims and providing other allegations regarding the overtime claims. See FAC, Dkt. No. 22. The FAC asserts five causes of action: (1) failure to pay overtime under the FLSA, 29 U.S.C. § 207; (2) failure to pay overtime under California Labor Code “Section 501, et. al”; (3) failure to provide proper meal and rest breaks under California Labor Code §§ 226.7, 512; (4) failure to make payments within the time required after termination under California Labor Code §§ 201, 202, 203; and (5) restitution of unpaid overtime wages under California's Unfair Competition Law (“UCL”), Business and Profession Code §§ 17200, et seq. Id. The FAC does not state which Defendant(s) is allegedly liable for which cause(s) of action.

         Plaintiff appears to allege Defendants Fallanghina and Longbranch “were joint employers” engaged in the “restaurant business.” Id. ¶ 5. Plaintiff worked in some capacity at Paisan Osteria, “the restaurant owned and managed by Fallenghina[, ]”^[1] as well as Longbranch Saloon, “the restaurant owned and managed by Longbranch[.]” Id. Plaintiff alleges “[b]oth restaurant operations were housed in the same building, . . . shared employees . . . a common refrigerator . . . the same chefs and supervisor, inter alia[.]” Id. Plaintiff does not explain his role at the restaurant (i.e., whether he was a waiter, a line cook, a dishwasher, a host, a busser, etc.)^[2] but alleges he worked in “shifts” and he “performed . . . non-exempt duties under both California and Federal law[.]” Id. ¶ 8.

         He contends “Plaintiffs worked for each joint employer and were subject to a plan, scheme and policy of Fallaghina [] and Longbranch [] to deprive them of their lawfully earned overtime compensation by issuing separate payroll checks to avoid paying overtime compensation.” Id. ¶ 6. Plaintiff explains that “during the pay period October 5, 2015 to October 18, 2015, [he] worked 78.54 hours at the Paisan Osteria restaurant and 41.81 hours at the Longbranch Saloon, and was only paid .65 hours overtime for the Paisan Osteria restaurant.” Id. ¶ 9. He further alleges that “[d]uring the pay period December 15, 2014 to December 28, 2014, [he] was denied meal breaks and rest breaks at both LLCs.” Id. ¶ 10.

         Plaintiff also sues Defendants Hal Brandel and Walter Wright, who Plaintiff alleges are “the principals and controlling stockholders” in Fallaghina and Longbranch, respectively. Id. ¶ 2. According to the FAC, “Plaintiffs are informed and believe and thereon allege that Fallaghina LLC and Longbranch Berkeley LLC are the alter egos of the Walter Wright and Hal Brandel, respectively, and those LLCs were formed, among other reasons, to defraud workers like Plaintiffs by erecting a corporate shield to protect the individual Defendants from liability for their wrongful conduct[.]” Id. (errors in original). Plaintiff alleges “monies and assets are comingled between the LLC and the individuals, the formalities of corporate structure are disregarded, and the corporate separateness is ignored[.]” Id. He contends they are employers under the FLSA because they

acted directly or indirectly in the interest of the LLCs in relation to Plaintiff Gonzales and other similarly situated employees by their authority over the operations of the LLCs, including authority over the daily operations of the LLCs and their managers, authority over the financial operations of the LLCs and their payrolls; establishment of a payroll system; control over the hiring and firing of employees their authority over the managerial staff of the LLCs; authority over the method of payment of the LLCs staff; participation in the decisions to operate the two LLCs in the same physical building and to share employee work among the LLCs[.]

Id. ¶ 3 (errors in original).

         Defendants filed their pending Motion to Dismiss on June 21, 2016. Dkt. No. 25. They move to dismiss Plaintiffs' FAC on two grounds: (1) “[t]o the extent that Plaintiff alleges any causes of action against the named individual defendants Hal Brandel and Walter Wright based on an alter ego theory, Defendants move to dismiss Hal Brandel and Walter Wright as defendants from this action”; and (2) “[t]o the extent that Plaintiff alleges a cause of action for violations of California Labor Code sections 226.7 and 512 (meal and rest break claims), Defendants move to dismiss Plaintiff's claim on the grounds that Plaintiff has failed to plead any facts supporting that cause of action.” Mot. at 1. They contend that “[a]lthough the standard for pleading under Federal Rule of Civil Procedure Rule 8 is not high, Plaintiff has not met it with respect to his meal and rest break claims or his allegations that the corporate veil should be pierced so that Hal Brandel and Walter Wright can be held individually liable.” Id. at 2. They assert that “[w]ith respect to these two issues, [Plaintiff] has failed to state any plausible claim for relief because he simply has not alleged any non-conclusory facts supporting these claimed legal violations.” Id. (citations omitted). Defendants thus ask the Court to dismiss Plaintiff's alter ego allegations against Hal Brandel and Walter Wright and dismiss Plaintiff's meal and rest break claim (third cause of action) for failure to state a claim on which relief can be granted. Id.

         LEGAL STANDARD

         Rule 8(a) requires that a complaint contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). A complaint must therefore provide a defendant with “fair notice” of the claims against it and the grounds for relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations and citation omitted).

         A court may dismiss a complaint under Rule 12(b)(6) when it does not contain enough facts to state a claim to relief that is plausible on its face. Id. at 570. “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, 556 U.S. 662, 678 (2009). “The plausibility standard is not akin to a „probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 557). “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 „entitle[ment] to relief' requires more than labels and conclusions, and a ...