Barajas v. Carriage Services, Inc.

          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 ...