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Thibodeau v. ADT Security Services

United States District Court, S.D. California

February 28, 2017



          Hon. Gonzalo P. Curiel United States District Judge.

         On January 12, 2017, Defendant ADT LLC, d/b/a ADT Security Services (“Defendant”) filed a motion to dismiss count one of Plaintiff Clayton Del Thibodeau's (“Plaintiffs”) Amended Complaint pursuant to Rules 8(a), 12(b)(1), and 12(b)(6) of the Federal Rules of Civil Procedure. (Dkt. No. 17.) Plaintiff filed a response on January 26, 2017. (Dkt. No. 21.) Defendant filed a reply on February 10, 2017. (Dkt. No. 23.)

         The Court deems this motion suitable for disposition without oral argument pursuant to Civil Local Rule 7.1(d)(1). Having reviewed Defendant's motion and the applicable law, and for the reasons set forth below, the Court DENIES Defendant's motion to dismiss the First Cause of Action of Plaintiff s Amended Complaint.


         Defendant is a corporation that provides electronic security monitoring and dispatch services to residential and small business clients. (Dkt. No. 14, Am. Compl. at 3 ¶ 1.[1]) Plaintiff worked for Defendant as an outside sales representative in San Diego and Imperial County from September 9, 2014 through October 2, 2015. (Id. ¶ 2.) Plaintiff received a base salary of $480 per week, as well as any commissions earned from selling security systems and monitoring contracts. (Id.) Defendant made no promise or guarantee regarding any commissions Plaintiff would earn. (Id.)

         Plaintiff asserts that Defendant's misconduct began from the moment he was hired. (Id. ¶ 3.) Plaintiff alleges that Defendant frequently distributed misleading advertisements that obscured or omitted vital pricing information (id. at 7 ¶¶ 5-6, 8 ¶ 1, Ex. 1); used unethical and unlawful soliciting practices by offering potential customers a “free” security system with few features, without informing those customers they must also sign a two-year contract for monitoring services to qualify for that system (id. at 8 ¶¶ 3-4); constantly harassed prospective customers through phone solicitation by having multiple sales representatives call the same prospects every night (id. at 9 ¶¶ 1-2); trained employees to intentionally obscure the Defendant's trade name by crumpling paper near the mouthpiece of the phone when stating the company name (id. at 10 ¶ 2, Ex. 8); and used “bait-and-switch” tactics that would bait prospective customers to make an appointment by offering low-priced systems, which allowed employees the opportunity to switch those customers to a higher-priced system during the sales appointment (id. at 11 ¶¶ 2-4).

         Plaintiff alleges that his refusal to participate in these practices resulted in Defendant refusing to set appointments for Plaintiff or inundating Plaintiff with “low quality leads exclusive to areas on the far outskirts of San Diego County and Imperial County.” (Id. at 8 ¶ 5.) Defendant's alleged retaliation also included burdening “Plaintiff with work assignments . . . that were not ‘sales' related, ” requiring Plaintiff to spend more than half of the working day on non-sales related work. (Id. at 27 ¶ 3.)

         Additionally, Plaintiff alleges that Defendant committed a range of labor violations, including failing to: pay him a minimum wage (id. at 26 ¶ 2-5); properly classify him as non-exempt for overtime (id. at 26 ¶ 7-27 ¶ 3); compensate him for overtime hours worked (id. at 27 ¶ 3); and adequately reimburse him for expenses he necessarily incurred as an employee (id. at 23 ¶ 3-24 ¶ 3.)

         On October 2, 2015, Plaintiff voluntarily resigned via an e-mail message sent to a sales manager in San Diego. (Id. at Ex. 23.) Additionally, Plaintiff e-mailed Peter Beatty, the Director of Employee Relations within Defendant's headquarters, to inform him that his decision to quit was predicated on the alleged harassment, abuse, and continuing misconduct of Defendant. (Id. at Ex. 25.)

         Plaintiff's Amended Complaint alleges nine causes of action: (1) violation of California's Unfair Competition Law; (2) whistleblower retaliation; (3) violation of Defendant's fiduciary duty to Plaintiff through the unauthorized distribution of information related to Plaintiff's customers; (4) failure to adequately reimburse Plaintiff for expenses he incurred while using his personal vehicle for work; (5) failure to pay overtime; (6) failure to provide rest days; (7) failure to provide wage statements; (8) denial of timely access to employee file; and (9) failure to display a list of employees' rights and responsibilities.

         On January 12, 2017, Defendant brought the instant motion to dismiss Plaintiff's first cause of action, arguing Plaintiff lacks standing to sue under California's Unfair Competition Law. (Dkt. No. 17.) The motion has been fully briefed. (Dkt. Nos. 21, 23.)

         LEGAL STANDARD[2]

         A. Rule 12(b)(6)

         Every complaint must 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 motion to dismiss brought under Federal Rule of Civil Procedure 12(b)(6) tests “the legal sufficiency of a complaint's allegations.” Clark v. Zeiger, 210 F. App'x 612, 612 (9th Cir. 2006). “A complaint may fail to show a right to relief either by lacking a cognizable legal theory or by lacking sufficient facts alleged under a cognizable legal theory.” Woods v. United States, 831 F.3d 1159, 1162 (9th Cir. 2016).

         Complaints do “not require ‘detailed factual allegations, '” but, in order “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Further, a legally sufficient complaint must contain more than “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” Iqbal, 556 U.S. at 678. In other words, “the non-conclusory ‘factual content, ' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret Service, 572 F.3d 962, 969 (9th Cir. 2009).

         In reviewing a motion to dismiss under Rule 12(b)(6), “all allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party.” Gant v. Cty. Of L.A, 772 F.3d 608, 614 (9th Cir. 2014). “Pro se complaints are construed ‘liberally' and may only be dismissed ‘if it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'” Nordstrom v. Ryan, 762 F.3d 903, 908 (9th Cir. 2014) (quoting Iqbal, 556 U.S. at 678).


         I. California's Unfair Competition Law (“UCL”)

         Plaintiffs Amended Complaint asserts that Plaintiff has standing to sue under the UCL, as Plaintiffs prior employee-employer relationship with Defendant satisfies the “business dealings” requirement allegedly prescribed by Proposition 64. (Am. Compl. at 5 ¶ 5.) Plaintiff further alleges he has suffered injury, as Defendant committed numerous anticompetitive acts, all of which reduced his wages and bonuses and required him to invest a significant amount of time into unproductive work. (Id. at 5 ¶ 4, 7 ¶ 2.)

         Defendant argues that Plaintiff lacks standing to sue under California's Unfair Competition Law, as (1) Plaintiff has no prior business dealings with Defendant and (2) cannot allege he parted with or lost any money or property as a result ...

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