United States District Court, S.D. Ohio, Eastern Division
OPINION AND ORDER
C. SMITH, JUDGE UNITED STATES DISTRICT COURT
matter is before the Court on the Motion to Dismiss of
WalkerHealthCareIT, LLC, WalkerSearchGroup, LLC,
Tifiany Walker, and Gregory Walker (collectively,
“Walker Defendants”) (Doc. 51) and the Motion to
Dismiss of Encore Health Resources, LLC
(“Encore”) (Doc. 52). The Walker Defendants have
also filed a Motion to Strike consent forms filed by
Plaintiff Debra Bey on behalf of other individuals seeking to
opt in to Bey's proposed collective action under the Fair
Labor Standards Act (Doc. 64). The motions are fully briefed
and ripe for disposition. For the following reasons, the
Walker Defendants' Motion to Dismiss is GRANTED
IN PART and DENIED IN PART;
Encore's Motion to Dismiss is DENIED;
and the Walker Defendants' Motion to Strike is
purpose of the motions to dismiss, the Court accepts the
following facts alleged by Bey as true. Bey was employed by
the Walker Defendants and Encore as an ATE Go-Live Support
Consultant (“ATE”), stationed at OhioHealth in
the state of Ohio, for some period of time “during the
applicable statute of limitations period.” (Doc. 49,
Am. Compl. ¶ 6). Although Bey's employment contract
(attached to her Amended Complaint) references
WalkerHealthCareIT as her employer and refers to Encore as a
“client” (Doc. 49-2, Employment Contract), Bey
alleges that all defendants, in a “joint business
effort, ” recruited, placed and managed ATEs at various
healthcare entities across the country, including OhioHealth,
for limited periods of time, to assist with the
implementation and administration of integrated health
computer systems. Projects varied in length but, on average,
lasted a few weeks at a time. (Id. ¶ 7).
Bey's primary duty as an ATE was to provide first line
troubleshooting relating to the implementation of
Defendants' software system, and other duties were to
reinforce training for software programs and provide
“at-the-elbow” IT support. (Id.
¶¶ 22, 23).
Bey alleges she was jointly employed by all defendants, she
describes the WalkerHealthCareIT as being responsible for
recruiting and hiring ATEs, arranging their travel and
expense reimbursement, and issuing their paychecks; and
Encore would manage the day-today duties of ATEs, such as
conducting orientation and training sessions, setting ATE
work schedules, approving and maintaining ATEs' time and
expense reports, and evaluating the ATE's performance.
(Id. ¶¶ 8-9, 15-16). Each ATE was assigned
to a specific Encore Team Manager or Project Manager who
served as the first point of management contact for the ATE.
(Id. ¶ 17).
alleges that ATEs were assigned a schedule of at least 45
hours per week. (Id. ¶ 21). However, ATEs were
allegedly not paid in compliance with state and federal labor
laws in two ways: (1) ATEs were paid only for hours worked
that were also billed to Defendants' clients. ATEs were
not compensated for hours worked that were not billed to
clients (id. ¶ 25, Doc. 49-2, Employment
Contract at 1); and (2) for all hours for which ATEs were
paid, they were compensated at the standard “straight
time” hourly rate of pay, including all hours over 40
per workweek, which should have been compensated at the 1.5
overtime premium rate. (Doc. 49, Am. Compl. ¶ 26; Doc.
49-2, Employment Contract at 1). Bey also alleges that
Defendants did not keep accurate records of the hours ATEs
actually worked; rather, ATEs were required to record only
the hours they had been scheduled to work. (Doc. 49, Am.
Compl. ¶ 28). All of these actions are alleged by Bey to
violate both the Fair Labor Standards Act, 29 U.S.C.
§§ 201 et seq. (the “FLSA”),
and the Ohio Fair Minimum Wage Standards Act, R.C. §
4111.01 et seq. (the “OMFWSA”).
that Defendants may argue that ATEs qualify for one or more
exemptions from the FLSA and OMFWSA, Bey also alleges that
ATEs do not so qualify inasmuch as they did not have
management as their primary duty; did not have a primary duty
that required use of discretion or independent judgment; did
not perform work requiring advanced knowledge in a field of
science or learning; did not perform work requiring
invention, imagination, originality, or talent in a
recognized field of artistic or creative endeavor; and were
not employed as computer systems analysts, computer
programmers, software engineers, or similarly skilled
computer employees. (Id. ¶¶ 29-33).
commenced this action on December 13, 2016, asserting
individual claims on her own behalf, and also seeking to act
as representative plaintiff for a collective action under the
FLSA and a Rule 23 class action under the OFMWSA. (Doc. 1,
Compl.) The Walker Defendants and Encore filed motions to
dismiss (Docs. 14, 32), but in opposing those motions, Bey
also sought leave to amend the Complaint. (Docs. 21, 37). To
further the Court's preference to allow cases to reach
the merits rather than through early dismissal, the Court
granted leave for Bey to amend her Complaint to cure whatever
deficiencies Plaintiff believed existed. (Doc. 48). Bey filed
her Amended Complaint on September 9, 2017, which mooted the
previous motions to dismiss. (Docs. 49, 50). The Walker
Defendants and Encore now move again to dismiss Bey's
Amended Complaint for failure to state a claim upon which
relief can be granted under Federal Rule of Civil Procedure
12(b)(6). (Docs. 51-52).
after Bey filed her Amended Complaint, she also began
periodically filing consent forms executed by other ATEs who
wished to join Bey's proposed FLSA collective action.
(Docs. 59-60, 65-66, 68-70, 73-74, 78-80). Bey has not at
this time filed a motion under 29 U.S.C. § 216 seeking
conditional certification of the proposed collective action.
The Walker Defendants have moved to strike the consent forms
as premature prior to the Court's conditional
certification of the collective action, and to enjoin Bey
from filing any further consent forms until the Court grants
conditional certification. (Doc. 64).
MOTIONS TO DISMISS
Standard for dismissal under Rule 12(b)(6)
the Federal Rules, any pleading that states a claim for
relief must contain a “short and plain statement of the
claim” showing that the pleader is entitled to such
relief. Fed.R.Civ.P. 8(a)(2). To meet this standard, a party
must allege sufficient facts to state a claim that is
“plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). A claim will be
considered “plausible on its face” when a
plaintiff sets forth “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).
12(b)(6) allows parties to challenge the sufficiency of a
complaint under the foregoing standards. In considering
whether a complaint fails to state a claim upon which relief
can be granted, the Court must “construe the complaint
in the light most favorable to the plaintiff, accept its
allegations as true, and draw all reasonable inferences in
favor of the plaintiff.” Ohio Police & Fire
Pension Fund v. Standard & Poor's Fin. Servs.
LLC, 700 F.3d 829, 835 (6th Cir. 2012) (quoting
Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir.
2007)). However, “the tenet that a court must accept a
complaint's allegations as true is inapplicable to
threadbare recitals of a cause of action's elements,
supported by mere conclusory statements.”
Iqbal, 556 U.S. at 663. Thus, while a court is to
afford plaintiff every inference, the pleading must still
contain facts sufficient to “provide a plausible basis
for the claims in the complaint”; a recitation of facts
intimating the “mere possibility of misconduct”
will not suffice. Flex Homes, Inc. v. Ritz-Craft Corp of
Mich., Inc., 491 Fed.Appx. 628, 632 (6th Cir. 2012);
Iqbal, 556 U.S. at 679.
Walker Defendants' Motion to Dismiss
Walker Defendants argue that Bey's Amended Complaint
remains deficient for several reasons, which the Court will
address in turn.
Bey's Amended Complaint is not deficient for making
allegations on “information and belief.”
factual allegations of Bey's Amended Complaint are
prefaced with a general statement that her claims are brought
“upon personal belief as to herself and her own acts,
and as for all other matters, upon information and belief,
and based upon the investigation made by her counsel.”
(Doc. 49, Am. Compl. at 1). The Walker Defendants argue that,
as a result of this statement, Bey's Amended Complaint
must be dismissed because “it is impossible to
delineate which of her seventy-nine (79) paragraph
allegations are based upon (1) her own personal knowledge,
(2) her personal belief, (3) some other information and
belief, or (4) investigation by her counsel.” (Doc. 51,
Walker Mot. at 8). According to the Walker Defendants, this
constitutes an “utter failure to differentiate between
fact and speculation” and “precludes any
opportunity to infer sufficient facts that ‘raise a
right to relief above the speculative level.'”
(Id., quoting Twombly, 550 U.S. at 555-56).
Court disagrees. Allegations made on information and belief
have been held permissible, even after the Twombly
and Iqbal decisions. Cassidy v. Teaching Co.,
LLC, No. 2:13-CV-884, 2014 WL 1599518, at *3 (S.D. Ohio
Apr. 21, 2014) (Graham, J.) (quoting Charles A. Wright and
Arthur R. Miller, 5 Fed. Prac. & Proc. Civ. § 1224
(3d ed. 2013)). Whether allegations are
“speculative” depends on whether the plaintiff
sets forth sufficient factual content, rather than mere
conclusory statements, that demonstrate a plausible right to
relief. Allegations do not become “speculative”
merely because they are made on information and belief rather
than personal knowledge. Antioch Litig. Trust v.
McDermott Will & Emery LLP, 738 F.Supp.2d 758, 765
(S.D. Ohio 2010).
have the Walker Defendants offered any authority requiring
that defendants or the Court need to be able to delineate
specifically which allegations are based on knowledge versus
belief. The purpose of a complaint is to provide defendants
with “a short and plain statement of the claim showing
that the pleader is entitled to relief, ” not to
provide a detailed outline of the evidence plaintiffs have in
their possession at the outset of an action. Fed.R.Civ.P.
8(a). As explained above, the Court's task at this early
stage is to evaluate whether Bey has set forth “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. Thus, the
Court will evaluate Bey's allegations based on their
substantive factual content.
Bey has sufficiently alleged enterprise coverage under the
employees are governed by the FLSA's minimum wage and
overtime provisions; rather, only those who are engaged in
interstate commerce as defined by 29 U.S.C. §§
206(a) and 207(a) are protected. Employees can meet these
requirements in one of two ways: “First, employees may
be employed in an enterprise engaged in commerce or the
production of goods for commerce and thus enjoy
‘enterprise coverage.' Second, employees may
themselves be engaged in commerce or in the production of
goods for commerce, enjoying ‘individual
coverage.'” Kowalski v. Kowalski Heat Treating,
Co., 920 F.Supp. 799, 802-03 (N.D. Ohio 1996); see
also Usery v. Yates, 565 F.2d 93, 96 (6th Cir. 1977).
Walker Defendants argue, and Bey does not dispute, that she
has not alleged individual coverage. Bey argues, however,
that she has sufficiently alleged enterprise coverage. An
enterprise is “engaged in commerce or in the production
of goods for commerce” sufficient to provide coverage
for its employees if it (1) has “employees engaged in
commerce or in the production of goods for commerce, or that
has employees handling, selling, or otherwise working on
goods or materials that have been moved in or produced for
commerce by any person, ” and (2) “is an
enterprise whose annual gross volume of sales made or
business done is not less than $500, 000.” 29 U.S.C.
§ 203(s)(1)(A)(i)-(ii). “Commerce” is
further defined by the FLSA as “trade, commerce,
transportation, transmission, or communication among the
several States or between any State and any place outside
thereof.” 29 U.S.C. § 203(b).
have consistently construed the FLSA liberally to apply to
the farthest reaches consistent with congressional
direction.” Kowalski, 920 F.Supp. at 803
(citing Tony & Susan Alamo Foundation v. Secretary of
Labor, 471 U.S. 290, 296 (1985)). As a result,
“[c]ourts in this circuit have not required plaintiffs
to allege [the enterprise coverage] element of a FLSA claim
in detail.” Simpson v. Baskin, No.
3:17-CV-01077, 2018 WL 1070897, at *6 n.6 (M.D. Tenn. Feb.
26, 2018), report and recommendation adopted, 2018
WL 1288908 (M.D. Tenn. Mar. 13, 2018). See Burman v.
Everkept, Inc., No. 1:15-CV-596, 2017 WL 1150664, at *3,
5 (W.D. Mich. Mar. 27, 2017) (holding that plaintiffs had
adequately pleaded enterprise coverage where they alleged
that defendant was an enterprise engaged in interstate
commerce with annual sales of not less than $500, 000, and
described their role as “residential pick-up
drivers' for defendant's “garbage, recycling,
and yard waste collection business”); Duby v.
Shirley May's Place, LLC, No. 16-11443, 2017 WL
1021062, at *5 (E.D. Mich. Mar. 16, 2017) (plaintiff's
allegations that he handled and sold goods “moved in or
produced for interstate commerce” as a retail clerk in
a convenience store were sufficient to establish that his
employer was engaged in commerce at the motion to dismiss
stage); Gulden v. Menages, Inc., No. 3:14-cv-1041,
2014 WL 4232791, at *3 (M.D. Tenn. Aug. 25, 2014) (concluding
plaintiff had sufficiently alleged enterprise coverage by
claiming that he “handled and unloaded goods from
outside the state to be sold to club patrons”).
factual allegations meet this standard. She alleged that
WalkerHealthCareIT, LLC's “main function was to
recruit and hire individuals to assist hospitals and
healthcare organizations with their implementation and
administration of an integrated health computer system”
and that, from its principal place of business in Michigan,
WalkerHealthCareIT provides services to customers nationwide.
(Doc. 49, Am. Compl. ¶ 8). Further, all Defendants
placed Bey and other ATEs at various healthcare entities
across the country to assist with the implementation and
administration of integrated health computer systems.
(Id. ¶ 7). These facts, if true, are sufficient
to establish that WalkerHealthCareIT has “employees
engaged in commerce.”
true, as pointed out by the Walker Defendants, that Bey did
not explicitly allege the second prong of the enterprise
coverage definition: that WalkerHealthCareIT has an annual
gross volume of sales made or business done of at least $500,
000 as required by 29 U.S.C. § 203(s)(1)(A)(ii).
However, Bey did allege that Defendants “are engaged in
commerce within the meaning of [ ] 29 U.S.C. §
203(s)(1)(A).” (Doc. 49, Am. Compl. ¶ 60). And at
least one district court in this Circuit has held that
incorporating 29 U.S.C. § 203(s)(1)(A) into a complaint
is sufficient to allege the annual gross sales criterion.
Gulden, Inc., 2014 ...