United States District Court, N.D. California
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANTS' MOTION TO DISMISS, Docket No. 49
EDWARD
M. CHEN UNITED STATES DISTRICT JUDGE
Plaintiffs
are three individuals: Yoshira Barajas, Grant, and Nachae
Williams. They have filed a wage-and-hour class action
against Carriage Services, Inc. (“CSI”).
According to Plaintiffs, CSI is in the business of
“providing funeral and burial related services.”
SAC ¶ 11. Previously, the Court largely granted
CSI's motion to dismiss the first amended complaint
(“FAC”), leaving as the only surviving claim a
cause of action for failure to pay overtime, as asserted by
Ms. Barajas only. The Court gave Plaintiffs leave to amend,
which they have done. Now pending before the Court is
CSI's motion to dismiss the second amended complaint
(“SAC”).
Having
considered the parties' briefs and accompanying
submissions, as well as the oral argument of counsel, the
Court hereby GRANTS in part and
DENIES in part CSI's motion.
I.
DISCUSSION
A.
Legal Standard
Federal
Rule of Civil Procedure 8(a)(2) requires a complaint to
include “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 that fails to meet this
standard may be dismissed pursuant to Federal Rule of Civil
Procedure 12(b)(6). See Fed. R. Civ. P. 12(b)(6). To
overcome a Rule 12(b)(6) motion to dismiss after the Supreme
Court's decisions in Ashcroft v. Iqbal, 556 U.S.
662 (2009), and Bell Atlantic Corp. v. Twombly, 550
U.S. 544 (2007), a plaintiff's “factual allegations
[in the complaint] ‘must . . . suggest that the claim
has at least a plausible chance of success.'”
Levitt v. Yelp! Inc., 765 F.3d 1123, 1135 (9th Cir.
2014). The court “accept[s] factual allegations in the
complaint as true and construe[s] the pleadings in the light
most favorable to the nonmoving party.” Manzarek v.
St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031
(9th Cir. 2008). But “allegations in a complaint . . .
may not simply recite the elements of a cause of action [and]
must contain sufficient allegations of underlying facts to
give fair notice and to enable the opposing party to defend
itself effectively.” Levitt, 765 F.3d at 1135
(internal quotation marks omitted).[1] “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.”
Iqbal, 556 U.S. at 678. “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. (internal quotation
marks omitted).
B.
First Cause of Action: Failure to Pay Minimum Wages
In the
first cause of action, Plaintiffs allege that CSI has
violated California Labor Code § 1197 by failing to pay
them a minimum wage.
According
to Plaintiffs, they “were often required to work more
than 5 days consecutively for an average of 52-80 hours per
day, ” SAC ¶ 56, but CSI did not “pay for
any wages for all hours worked in excess of 40 in a week or 8
hours in a day” and instead “paid Plaintiffs for
40 hours worked per pay period.” SAC ¶ 54. This
resulted in a failure “to pay Plaintiffs the minimum
wage for all hours worked.” SAC ¶ 54. In other
words, if one were to divide the number of hours worked by
the amount Plaintiffs were actually paid, this would result
in an hourly wage less than the minimum wage.
As an
initial matter, the Court notes that, to evaluate
Plaintiffs' claim, it must first have an understanding of
what was the minimum wage requirement in California during
the relevant period. It appears that the minimum wage
requirement was as follows. See
https://www.dir.ca.gov/iwc/minimumwagehistory.htm (last
visited November 1, 2019).
• 2015: $9.00 per hour.
• 2016: $10.00 per hour.
• 2017: $10.50 per hour.
• 2018: $11.00 per hour.
With
this baseline, the Court may now consider each of the three
plaintiffs.
1.
Ms. Barajas
Ms.
Barajas's minimum wage claim actually has two components:
(1) based on her time as a Consultant and (2) based on her
time as a commission-only salesperson.
Ms.
Barajas was hired in 2016. She was first hired as a
Consultant, an hourly position. See SAC ¶¶
14-16. She worked on average about 52-58 hours per week.
However, CSI only paid her $15 an hour for up to 40 hours.
See SAC ¶ 16. Under this scenario, Ms. Barajas
was paid only $600 per week (40 hours x $15/hour). If she
worked 58 hours in a week, this would translate to an hourly
wage of $10.34 ($600/58 hours). An hourly wage of $10.34
exceeds the 2016 minimum wage requirement of $10/hour.
Accordingly, if Ms. Barajas is claiming that she was not paid
a minimum wage as a Consultant, that claim is not plausible.
According
to Ms. Barajas, at some point (perhaps near the end of 2016),
CSI unilaterally changed her position to a commission-only
salesperson, even though the substance of the job was no
different from her earlier position. See SAC
¶¶ 19-20. Ms. Barajas worked an average of 70-80
hours per week but “was not compensated for any hours
worked.” SAC ¶ 22. Under this scenario, Ms.
Barajas did not receive any hourly wage even though she
worked. This would make her hourly wage $0/hour - a clear
violation of the minimum wage requirement no matter what year
is at issue. Thus, to the extent Ms. Barajas is claiming a
minimum wage violation for her time as a commission-only
salesperson, she has viable claim.
2.
Mr. Grant
Similar
to above, Mr. Grant's minimum wage claim actually has two
components: (1) based on his time as an Advanced Planning
Counselor and (2) based on his time as an Outside Sales Rep.
CSI
hired Mr. Grant in 2015 as an Advanced Planning Counselor, an
hourly position. See SAC ¶ 25. Mr. Grant
“regularly worked six (6) days per week including one
weekend day and an excess of 40 hours per week.” SAC
¶ 27. CSI, however, “never paid Mr. Grant for any
hours worked over 40 in a week.” SAC ¶ 27.
Although, under these circumstances, it is not impossible
that a minimum wage violation took place with respect to Mr.
Grant, there is not enough to make a plausible claim because
Mr. Grant has said nothing about what hourly wage he was paid
- and it is very open-ended as to how much Mr. Grant worked
in excess of 40 hours per week. If, for example, Mr. Grant
worked 50 hours per week and was paid $15 per hour for up to
40 hours, then there would be no minimum wage violation for
2015 or even 2016.
• 40 hours x $15/hour = $600/week.
• $600/50 hours = $12/hour.
• $12/hour > $ 9/hour or $10/hour (i.e., the
minimum wage requirements for 2015 and 2016).
According
to Mr. Grant, in 2016, CSI unilaterally made him an Outside
Sales Rep - even though the position was no different in
substance from his prior position - and his compensation was
changed to commission only. See SAC ¶ 28.
“Mr. Grant did not make any sales as an Outside Sales
Rep and thus received no compensation at all.” SAC
¶ 28. It is a reasonable inference that, even though Mr.
Grant did not make any sales, he put in hours in the attempt
to make a sale. See SAC ¶ 29 (alleging that Mr.
Grant left CSI “due [to its] failure to compensate him
for hours worked for nearly a year”). That being the
case, Mr. Grant - like Ms. Barajas - has a minimum wage claim
for his time as an Outside Sales Rep.
3.
Ms. Williams
Like
Ms. Barajas and Mr. Grant's minimum wage claims, Ms.
Williams's minimum wage claim must be considered with
respect to (1) her time as Pre- Planning Counselor and (2)
her time as an Outside Sales Rep.
CSI
hired Ms. Williams in 2015 as a Pre-Planning Counselor. This
was an hourly position and she was paid $17 per hour.
See SAC ¶¶ 31-32. However, CSI only paid
Ms. Williams for 40 hours per week even though she
“worked over 40 hours per week on average.” SAC
¶ 32. Although, under these circumstances, it is not
impossible that a minimum wage violation took place with
respect to Ms. Williams, there is not enough to make a
plausible claim because it is very open-ended as to how much
Ms. Williams worked in excess of 40 hours per week. If, for
example, Ms. Williams worked 50 hours per week and was paid
$17 per hour for up to 40 hours, then there would be no
minimum wage violation for 2015 or even 2016.
• 40 hours x $17/hour = $680/week.
• $600/50 hours = $13.60/hour.
• $13.60/hour > $ 9/hour or $10/hour (i.e.,
the minimum wage requirements for 2015 and 2016).
According
to Ms. Williams, at some point in time (likely 2015), CSI
unilaterally made her an Outside Sales Rep - even though the
position was no different in substance from her prior
position - and her compensation was changed to commission
only. See SAC ¶ 33. “Ms. Williams was
forced to separate employment in 2017 because she was not
paid for all hours worked.” SAC ¶ 33. Even if it
may reasonably be inferred that Ms. Williams incurred hours
as an Outside Sales Rep, it is not possible to say whether a
minimum wage violation occurred because - unlike Ms. Barajas
and Mr. Grant - Ms. Williams does not claim that she was
never paid any money at all for her time as an Outside Sales
Rep. She simply claims that she was not paid for all hours
worked.
Accordingly,
the minimum wage claim brought by Ms. Williams fails with
respect to her time as a Pre-Planning Consultant and her time
as an Outside Sales Rep.
4.
Summary
•
Ms. Barajas's minimum wage claim as pled: not viable with
respect to her time as a Consultant; viable with respect to
her time as a commission-only salesperson.
•
Mr. Grant's minimum wage claim as pled: not viable with
respect to his time as an Advanced Planning Consultant;
viable with respect to his time as an Outside Sales Rep.
•
Ms. Williams's minimum wage claim as pled: not viable,
either with respect to her time as a Pre-Planning Consultant
or as an Outside Sales Rep.
The
only issue remaining is whether the Court should give leave
to amend to the extent that there are deficiencies (as
identified above). Arguably, the Court should not give leave
to amend because CSI moved to dismiss the first amended
complaint based on similar deficiencies and there are still
problems with the second amended complaint. The Court,
however, shall give Plaintiffs one final opportunity to cure
as it is not clear that amendment would be futile.
C.
Second Cause of Action: Failure to Pay Overtime
In the
second cause of action, Plaintiffs allege a failure to pay
overtime in violation of California Labor Code § 510.
See Cal. Lab. Code § 510(a) (“Any work in
excess of eight hours in one workday and any work in excess
of 40 hours in any one workweek and the first eight hours
worked on the seventh day of work in any one workweek shall
be compensated at the rate of no less than one and one-half
times the regular rate of pay for an employee.”).
As the
Court noted in conjunction with the prior motion to dismiss,
Landers v. Quality Communications, Inc., 771 F.3d
638 (9th Cir. 2015), provides guidance as to what must be
pled for an overtime claim. The Ninth Circuit noted in
Landers that, before Twombly and
Iqbal, “a complaint under the FLSA for minimum
wages or overtime wages merely had to allege that the
employer failed to pay the employee minimum wages or overtime
wages.” Landers, 771 F.3d at 641.
Post-Twombly and Iqbal, more was required.
Although we agree . . . that detailed factual allegations
regarding the number of overtime hours worked are not
required to state a plausible claim, we do not agree that
conclusory allegations that merely recite the statutory
language are adequate. . . .
We agree with our sister circuits that in order to survive a
motion to dismiss, a plaintiff asserting a claim to overtime
payments must allege that she worked more than forty hours in
a given workweek without being compensated for the overtime
hours worked during that workweek. We are mindful of the
Supreme Court's admonition that the pleading of detailed
facts is not required under Rule 8, and that pleadings are to
be evaluated in the light of judicial experience. We also
agree that the plausibility of a claim is
“context-specific.” A
plaintiff may establish a plausible claim by estimating the
length of her average workweek during the applicable period
and the average rate at which she was paid, the
amount of overtime wages she believes she is owed, or any
other facts that will permit the court to find plausibility.
Obviously, with the pleading of more specific facts, the
closer the complaint moves toward plausibility. However, like
the other circuit courts that have ruled before us, we
decline to make the approximation of overtime hours the
sine qua non of plausibility for claims brought
under the FLSA. After all, most (if not all) of the detailed
information concerning a plaintiff-employee's
compensation and schedule is in the control of the
defendants.
We further agree with our sister circuits that, at a
minimum, a plaintiff asserting a violation of the
FLSA overtime provisions must allege that she worked more
than forty hours in a given workweek without being
compensated for the hours worked in excess of forty during
that week. . . .
. . . . Although plaintiffs in these types of cases cannot be
expected to allege “with mathematical precision,
” the amount of overtime compensation owed by the
employer, they should be able to allege facts demonstrating
there was at least one workweek in which they worked in
excess of forty hours and were not paid overtime wages.
Id. at 644-46 (emphasis added). The Ninth Circuit
indicated its agreement with the First Circuit that an
allegation that a plaintiff
“‘regularly'” worked more than forty
hours in a week and was not compensated was not sufficient.
Id. at 642. The Ninth Circuit also indicated its
agreement with the Second Circuit that an allegation that a
plaintiff worked more than forty hours per week without being
paid overtime for “‘some or all weeks'”
was not good enough either. Id. at 643 (noting that
Second ...