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Davis v. Laurels Medical Services Corp.

United States District Court, D. Oregon

May 7, 2018

ANGELLA DAVIS, et al., Plaintiffs,

          Joshua M. Wolf, Wolf Legal, LLC, Of Attorneys for Plaintiffs.

          Clifford S. Davidson and Kimberlee Petrie Volm, Sussman Shank LLP, Of Attorneys for Defendants.


          Michael H. Simon United States District Judge

         Plaintiffs bring this putative class and collective action against Defendants Laurels Medical Services Corporation (dba Chariot) (“Chariot”), and Shiraz Mir, Sheharyar Mir, and Masooma Mir (collectively, “Individual Defendants”) (all defendants collectively, “Defendants”). In their First Amended Complaint, Plaintiffs allege six claims for relief: (1) violation of the Fair Labor Standards Act[1] (“FLSA”) for failure to pay overtime; (2) violation of FLSA for retaliation against employees for filing complaints alleging violations of FLSA or for making a wage claim, expressing an intention to file a wage claim, or discussing, inquiring about, or consulting an attorney about a wage claim; (3) violation of Oregon Revised Statutes (“ORS”) § 653.261 and Oregon Administrative Rules § 839-020-0030 for failure to pay overtime; (4) violation of ORS § 652.355 for making a wage claim, expressing an intention to file a wage claim, or discussing, inquiring about, or consulting an attorney about a wage claim; (5) violation of ORS § 652.240 for Defendants' failure to pay Plaintiffs' the hourly wage required under the McNamara-O'Hara Service Contract Act of 1965 (“SCA”);[2] and (6) violation of ORS § 652.140 for discharging Plaintiff Lopez and failing timely to pay him overtime and prevailing wages.

         Defendants move to dismiss all of Plaintiffs' claims under Federal Rules of Civil Procedure 12(b)(6) for failing to state a claim upon which relief can be granted. For the reasons discussed below, Defendants' motion is granted in part. Because Chariot has filed for bankruptcy, however, claims against Chariot are stayed. Accordingly, Plaintiffs may elect to stay this case in its entirety or to pursue their claims against the Individual Defendants, including the dismissed claims by filing a Second Amended Complaint, with the understanding that claims against Chariot in any Second Amended Complaint are stayed.


         A motion to dismiss for failure to state a claim may be granted only when there is no cognizable legal theory to support the claim or when the complaint lacks sufficient factual allegations to state a facially plausible claim for relief. Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a complaint's factual allegations, the court must accept as true all well-pleaded material facts alleged in the complaint and construe them in the light most favorable to the non-moving party. Wilson v. Hewlett- Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012); Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). To be entitled to a presumption of truth, allegations in a complaint “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.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). All reasonable inferences from the factual allegations must be drawn in favor of the plaintiff. Newcal Indus. v. Ikon Office Solution, 513 F.3d 1038, 1043 n.2 (9th Cir. 2008). The court need not, however, credit the plaintiff's legal conclusions that are couched as factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009).

         A complaint must contain sufficient factual allegations to “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.” Starr, 652 F.3d at 1216. “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 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)).


         Chariot is a federal contractor providing transportation services to persons in wheelchairs pursuant to a contract with the United States Department of Veterans Affairs. Plaintiffs are either currently employed or were previously employed by Chariot as drivers of Chariot's shuttle buses. Based on the duties performed by Plaintiffs, they should have been categorized as “Shuttle Bus Drivers” under the SCA, which entitled them to a minimum wage of $15.36 per hour during the relevant time period. Instead, Plaintiffs were paid between $11.15 and $13.15 per hour.

         When hired, Plaintiffs were told they would work a minimum of 25 hours per week, but could work more than 40 hours per week, including time “on call.” Plaintiffs allege that they were frequently instructed by Chariot's central dispatcher to arrive early at work, be on call for work, or remain late at work. Plaintiffs also allege that during certain of these times they were advised not to accurately clock-in or clock-out. Chariot's managers also contacted Plaintiffs by telephone and text when Plaintiffs were not at work, and Plaintiffs were not allowed to clock-in for that time. Accordingly, Plaintiffs allege that Chariot had a policy and practice of: (a) failing to pay wages due and owing for hours that Shuttle Bus Drivers were required to report to work, be ready to perform work, or actually perform work, (b) paying wages lower than the wage scale required by law, (c) failing to pay Shuttle Bus Drivers the overtime premium due for overtime worked, and (d) failing to timely pay the full amount of a Shuttle Bus Driver's earned wages, including overtime, upon such driver's termination of employment.


          A. Overtime Claims

         To plead a claim under the FLSA, “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 v. Quality Commc'ns, Inc., 771 F.3d 638, 644-45 (9th Cir. 2014), as amended (Jan. 26, 2015). Although “the pleading of detailed facts is not required, ” a plaintiff must plead sufficient facts to demonstrate the plausibility of his or her claim. Id. at 645; see also Starr, 652 F.3d at 1216. “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.” Landers, 771 F.3d at 645. “[B]ecause most of ORS chapter 653 (Oregon's minimum-wage law) is patterned after the FLSA, federal regulations and case law are ‘instructive' in interpreting that chapter.” Nkrumah v. City of Portland, 261 Or.App. 365, 381 (2014) (emphasis omitted). Accordingly, the Court evaluates both claims under the same legal standards.

         Defendants argue that Plaintiffs assert only general, conclusory allegations that they were entitled to overtime wages for which they were not paid. Defendants contend that Plaintiffs' allegations that Defendants required Plaintiffs to come in early, be on call, or work late and were “advised” not to clock “certain” of that time is vague, particularly in the context of employees who are alleged to work only 25 hours per week.

         Plaintiffs respond that their allegation that they “worked hours in excess of forty (40) hours per week without receiving overtime compensation as required under both federal and Oregon law” and that Defendants repeatedly miscalculated Plaintiffs' paychecks and paid Plaintiffs for fewer hours than they worked are sufficient allegations. The Court disagrees. These allegations are conclusory, merely recite some of the elements of a cause of action under the FLSA, and do not contain the requisite sufficient allegations of underlying facts. Starr, 652 F.3d at 1216.

         Plaintiffs further argue that the general allegations that they had to arrive early, stay late, respond to telephone calls and texts, and remain on call, some of which was off-the-clock, also are sufficient allegations. As the Ninth Circuit in Landers explained, however:

Notably absent from the allegations in Landers's complaint, however, was any detail regarding a given workweek when Landers worked in excess of forty hours and was not paid overtime for that given workweek and/or was not paid minimum wages. 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. Landers's allegations failed to provide “sufficient detail about the length and frequency of [his] unpaid work to support a reasonable inference that [he] worked more than forty hours in a given week.” Instead, as in Nakahata, Landers “merely alleged that [he ...

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