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Porteous v. Capital One Services II, LLC

United States District Court, D. Nevada

July 17, 2018

NATASHA PORTEOUS, Plaintiffs,
v.
CAPITAL ONE SERVICES II, LLC, Defendants.

          ORDER

         Presently before the court is defendant Capital One Servs., II, LLC's motion to dismiss plaintiff's first amended collective and class action complaint. (ECF No. 12). Plaintiff Natasha Porteous filed a response (ECF No. 15), to which defendant replied (ECF No. 16).

         Also before the court is plaintiff's motion for circulation of notice. (ECF No. 17). Defendant responded (ECF No. 28), to which plaintiff replied (ECF No. 39).

         Also before the court is defendant's motion to strike declarations offered in support of plaintiff's motion for circulation of notice. (ECF No. 38). Plaintiff filed a response (ECF No. 40), to which defendant replied (ECF No. 41).

         I. Facts

         This is a collective and class action brought by plaintiff and on behalf of all similarly situated individuals. (ECF No. 6). Plaintiff was employed by defendant as a non-exempt, hourly, full-time, personal banker/customer service representative at defendant's Las Vegas call center location from November 30, 2015, until April 11, 2017. Id. at 3.

         For each eight-hour shift, plaintiff was entitled to two fifteen-minute paid rest breaks and one thirty-minute unpaid lunch period. (ECF No. 6). Plaintiff alleges that, although she took her thirty-minute lunch daily, she was “rarely” able to take her two allotted fifteen-minute breaks. Id. at 3-4. According to plaintiff, she was not paid for the breaks she was unable to take despite working during that time. Id. In addition, plaintiff claims that defendant did not include her “non-discretionary” monthly incentive payment-a form of compensation paid to call center employees for meeting defendant's production standards-when defendant calculated plaintiff's regular hourly rate of pay. Id. at 4. Plaintiff asserts that this omission meant that defendant failed to properly calculate her hourly wage, resulting in defendant's subsequent failure to properly calculate plaintiff's overtime pay. Id. at 4-5.

         Plaintiff alleges that all call center employees, including plaintiff, were required to perform daily pre-shift activities and post-shift activities “off-the-clock, ” without compensation. Id. at 4. Plaintiff asserts that the FLSA class consists of all hourly paid call center employees for the “relevant” time period.[1] Id. at 5.

         Plaintiff simultaneously asserts both federal and state claims. Plaintiff's federal claims implicate the Fair Labor Standards Act (“FLSA”). Id. Plaintiff makes similar allegations with respect to the Nevada class under Nevada's constitution and Nevada's Revised Statutes (“NRS”). Id. at 5-8. Like the FLSA class, plaintiff asserts that the Nevada class consists of all hourly paid call center employees employed in the state of Nevada during the “relevant” time period, as well as a Nevada sub-class consisting of “wages due and owing” to all members of the Nevada class that are former employees of defendant. Id. at 5. In total, plaintiff alleges that there are approximately 700 former and current call center employees who are class members, over 500 of whom are in the Nevada class. Id. at 6.

         Plaintiff filed the original complaint in state court on October 5, 2017. (ECF No. 1). Defendant removed the action to federal court on November 15, 2017, based upon federal question jurisdiction. Id. On December 6, 2017, plaintiff filed a first amended complaint. (ECF No. 6). In the instant motion, defendant move to dismiss plaintiff's complaint for failure to state a claim pursuant to Rule 12(b)(6).

         Plaintiff's first amended complaint alleges seven causes of action: (1) failure to pay overtime in violation of the FLSA, 29 U.S.C. § 207; (2) failure to pay the correct overtime rate in violation of the FLSA, 29 U.S.C. § 207(e); (3) failure to compensate for all hours worked in violation of NRS 608.140 and 608.016; (4) failure to pay minimum wages in violation of the Nevada constitution; (5) failure to pay overtime in violation of NRS 608.140 and 608.018; (6) failure to timely pay all wages “due and owing” in violation of NRS 608.140 and 608.020-050; and (7) breach of contract. (ECF No. 6).

         Plaintiff asserts these claims on behalf of herself and the following proposed classes: (i) FLSA class consisting of all hourly paid call center employees employed by defendant in the United States at any time during the relevant time period herein; (ii) Nevada class consisting of all hourly paid call center employees employed by defendant in the United States at any time during the relevant time period herein; and (iii) wages due and owing class consisting of all members of the Nevada class who are former employees of defendant. Id. at 5.

         Defendant filed a motion to dismiss plaintiff's complaint on November 22, 2017. (ECF No. 12).

         II. Legal standard

         When considering a Rule 12(b)(6) motion for failure to state a claim, the court must accept as true all factual allegations in the complaint as well as all reasonable inferences that may be drawn from such allegations. LSO, Ltd. v. Stroh, 205 F.3d 1146, 1150, n.2 (9th Cir. 2000). Such allegations must be construed in the light most favorable to the moving party. Shwarz v. U.S., 234 F.3d 428, 435 (9th Cir. 2000). Generally, the court should only look to the contents of the complaint during its review of a 12(b)(6) motion to dismiss; however, the court may consider documents attached to the complaint or referred to in the complaint whose authenticity no party questions. Id.; see also Durning v. First Bos. Corp., 815 F.2d 1265, 1267 (9th Cir. 1987).

         The purpose of a Rule 12(b)(6) motion to dismiss for failure to state a claim is to test the legal sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). The issue is whether a claimant is entitled to offer evidence to support the claims, not whether the claimant will ultimately prevail. Gilligan v. Jamco Dev. Corp., 108 F.3d 246, 249 (9th Cir. 1997) (quotations omitted).

         A properly pled complaint must provide “[a] short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While Rule 8 does not require detailed factual allegations, it demands “more than labels and conclusions” or a “formulaic recitation of the elements of a cause of action.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted). “Nor does a complaint suffice if it tenders ‘naked assertion[s]' devoid of ‘further factual enhancements.'” Id. (quoting Twombly, 550 U.S. at 557).

         “Factual allegations must be enough to rise above the speculative level.” Twombly, 550 U.S. at 555. Thus, to survive a motion to dismiss, a complaint must contain sufficient factual matter to “state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678 (citation omitted).

         In Iqbal, the Supreme Court clarified the two-step approach district courts are to apply when considering motions to dismiss. First, the court must accept as true all well-pled factual allegations in the complaint; however, legal conclusions are not entitled to the assumption of truth. Id. at 678-79. Mere recitals of the elements of a cause of action, supported only by conclusory statements, do not suffice. Id. at 678.

         Second, the court must consider whether the factual allegations in the complaint allege a plausible claim for relief. Id. at 679. A claim is facially plausible when the plaintiff's complaint alleges facts that allow the court to draw a reasonable inference that the defendant is liable for the alleged misconduct. Id. at 678.

         Where the complaint does not permit the court to infer more than the mere possibility of misconduct, the complaint has “alleged-but not shown-that the pleader is entitled to relief.” Id. (internal quotation marks omitted). When the allegations in a complaint have not crossed the line from conceivable to plausible, plaintiff's claim must be dismissed. See Twombly, 550 U.S. at 570.

         The Ninth Circuit addressed post-Iqbal pleading standards in Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). The Starr court stated, in relevant part:

First, to be entitled to the presumption of truth, allegations in a complaint or counterclaim may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively. Second, the factual allegations that are taken as true must plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.

Id.

         If the court grants a motion to dismiss a complaint, it must then decide whether to grant plaintiff leave to amend. Lucatelli v. Texas De Brazil (Las Vegas) Corp., No. 2:11-CV-01829-RCJ, 2012 WL 1681394, at *2 (D. Nev., May 11, 2012). The court should “freely give” leave to amend where there is no “undue delay, bad faith or dilatory motive on the part of the movant . . . undue prejudice to the opposing party by virtue of allowance of the amendment, [or] futility of the amendment.” Fed.R.Civ.P. 15(a)(2); Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222 (1962). Generally, leave to amend is only denied when it is clear that the deficiencies of the complaint cannot be cured by amendment. See DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992).

         III. Discussion

         Defendant moves to dismiss all seven of plaintiff's claims. Plaintiff's claims will be addressed in turn to determine whether dismissal is appropriate.

         A. The Fair Labor Standards Act

         The Fair Labor Standards Act (“FLSA”) was created to provide a uniform national policy of guaranteeing compensation for all work or employment covered by the Act.[2] Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 741 (1981). The FLSA sets minimum wage and overtime standards for employment. 29 U.S.C. § 201 et seq. Specifically, the FLSA requires employers to pay employees not less than $7.25 per hour (minimum wage). 29 U.S.C. § 206(a)(C). The FLSA also requires employers to pay employees who work in excess of forty hours per week “at a rate not less than one and one-half times” their normal wages (maximum hours). 29 U.S.C. § 207(a)(1).

         The FLSA grants individual employees broad access to the courts and permits an action to recover minimum wages, overtime compensation, liquidated damages, or to gain injunctive relief. Barrentine, 450 U.S. at 740.

         While the FLSA does not mandate paid break time, it allows for consideration of work during these periods in calculating potential failure to pay minimum wage or overtime. Nelson v. Waste Mgmt. of Alameda City., Inc., 33 Fed. App'x 273, 274 (9th Cir. 2002) (holding that while FLSA does not require compensation for work during break times, it “requires that both hours worked and meal periods treated as hours worked be included in wage and overtime calculations”).

         However, plaintiff's claims do not “arise under or relate to” the FLSA unless they implicate the statute's overtime or minimum wage requirements. See 29 U.S.C. § 215(a)(3).

         In order to bring a claim for failure to pay minimum wage in violation of 29 U.S.C. § 207 (maximum hours), plaintiff must first show that her hourly pay fell below the statutory minimum wage of $7.25 per hour worked. 29 U.S.C. § 206(a); Sargent v. HG Staffing, LLC, 171 F.Supp.3d 1063, 1077 (D. Nev. 2016) (quoting Adair v. City of Kirkland, 185 F.3d 1055, 1063 (9th Cir. 1999) (“The district court properly rejected any minimum wage claim the officers might have brought by finding that their salary, when averaged across their total time worked, still payed them above minimum wage.”); Sullivan v. Riviera Holdings Corp., No. 2:14-cv-165-APG-VCF, 2014 WL 2960303, at *2 (dismissing FLSA claim because plaintiffs' allegations did not meet this standard). In other words, before plaintiff can bring FLSA minimum wage claims on behalf of herself and similarly situated employees, plaintiff must show that her compensation, when averaged across all hours worked, dropped her pay below the $7.25 statutory threshold. Id.

         The FLSA's overtime compensation provision entitles covered employees to time-and-a-half wages for hours worked in excess of forty hours in a workweek. 29 U.S.C. § 207(a)(1). “Accordingly, to state a claim the plaintiff must allege that she worked more than 40 hours per workweek and did not receive the correct overtime pay for that week (or weeks).” Sullivan, 2014 WL 2960303, at *2. Here, plaintiff must show that she was not paid for all hours worked in excess of forty hours in a work week before she can bring a claim of failure to pay overtime under the FLSA.

         a. Plaintiff's FLSA claims

         Plaintiff was an hourly, full-time, personal banker/customer service representative at defendant's Las Vegas call center location from November 30, 2015, until April 11, 2017. (ECF No. 6 at 3).

         Plaintiff generally alleges that defendant violated the FLSA because defendant failed to pay overtime to her and other hourly call center employees for working through their fifteen minute breaks and for performing pre- and post-shift work. (ECF Nos. 6, 15, 17, 19, 39, 40). Plaintiff also alleges that defendant violated the FLSA when defendant failed to consider her non-discretionary incentive bonuses when calculating her wages, ultimately resulting in defendant's failure to properly calculate plaintiff's and other call center employees' overtime pay. Id.

         i. Defendant's alleged failure to pay overtime for pre- and post-shift activities in violation of the FLSA, 29 U.S.C. § 207

         Plaintiff alleges that defendant failed to pay her overtime for pre- and post-shift activities in violation of the FLSA. (ECF No. 6).

         Defendant asserts that plaintiff's allegations are not sustainable. (ECF No. 12). Defendant contends that plaintiff is trying to bring a “gap time” claim under the guise of unpaid overtime in order to trigger the FLSA, but that the FLSA does not apply where “uncompensated work fails to trigger a minimum wage claim.” Id. at 8. Defendant thus maintains that plaintiff's complaint fails to meet the pleading standard set forth in Landers v. Quality Commc'ns, Inc., 771 F.3d 638 (9th Cir. 2014), as amended (Jan. 26, 2015). (ECF No. 16 at 4).

         “[T]o 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.” Landers, 771 F.3d at 644-45. However, 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.” Id. at 645.

         Nevertheless, even under Landers, “[e]entitlement to relief requires more than labels and conclusions . . . Factual allegations must be enough to raise a right to relief above a speculative level.” Eclectic Prop. E., LLC v. Marcus & Millchap, Co., 751 F.3d 990, 995 (9th Cir. 2014) (quoting Twombly, 550 U.S. at 555) (where plaintiff's complaint did not contain adequate factual allegations to plausibly infer that defendants intended to defraud and, therefore, plaintiff could not show a plausible entitlement to relief).

         “When considering plausibility, courts must also consider an ‘obvious alternative explanation' for defendant's behavior.” Id. (quoting Twombly, 550 U.S. at 567). It would be unfair to require defendant to be subjected to the expense of discovery and continued litigation where defendant's plausible alternative explanation is “so convincing that plaintiff's explanation is implausible.” Id. (emphasis in original); In re Century Aluminum Co. Secs. Litig.,729 F.3d 1104, 1105 (9th Cir. 2013) (where plaintiff alleged facts that were “merely ...


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