Friday, August 9, 2013

The Court of Appeals puts it foot down on FLSA pleading

The Court of Appeals is taking a hard look at FLSA cases, reminding us once again that plaintiffs who allege that they were illegally denied overtime pay have to clarify what exactly happened to them. Otherwise, the case is dismissed under Rule 12.

The case is Dejesus v. HF Management Services, LLC, decided on August 5. Here is how the Second Circuit (Sack. Jacobs and Rakoff [D.J.]) starts off the decision:

This is the third in a series of recent decisions by this Court addressing the question of the adequacy of pleadings alleging that defendant health-care companies failed to pay their employees for overtime work as required by the Fair Labor Standards Act. ... They each reflect a tension among, inter alia, (1) the frequent difficulty for plaintiffs in such cases to determine, without first having access to the defendant's records, the particulars of their hours and pay in any given time period; (2) the possible use by lawyers representing plaintiffs in such cases of standardized, bare bones complaints against any number of possible defendants about whom they have little or no evidence of FLSA violations for the purpose of identifying a few of them who might make suitable defendants -- which is to say, the ability to engage in "fishing expeditions"; and (3) the modern rules of pleading established by the Supreme Court in Ashcroft v. Iqbal, 556 U.S. 662 (2009), and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007).
My guess is that the Court is most troubled by boilerplate FLSA complaints that do not provide enough information to know if the plaintiff really has an overtime claim. In this case, "her complaint does not estimate her hours in any or all weeks or provide any other factual context or content. Indeed, her complaint was devoid of any numbers to consider beyond those plucked from the statute. She alleged only that in 'some or all weeks' she worked more than 'forty hours' a week without being paid '1.5' times her rate of compensation, no more than rephrasing the FSLA's formulation specification set forth in [the Act]." While the district court threw out the case, it gave plaintiff a chance to amend the complaint. Counsel instead filed a notice of appeal. Big mistake.

Next time the district court gives you a chance to amend the complaint on a Rule 12 motion, take advantage of the offer. The Second Circuit says that "we would be less than candid if we did not register our concern about the failure of the plaintiff, through counsel, at least to attempt to amend her complaint to add specifics while the district court kept the door open for her to do so. We would like to believe that the decision not to amend was made for some reason that benefitted Dejesus, rather than as an effort on counsel's part to obtain a judicial blessing for plaintiffs' counsel in these cases to employ this sort of bare-bones complaint." As is, the complaint is not detailed enough about plaintiff's hours and her entitlement to overtime pay to survive Rule 12 dismissal.

The Circuit knows that plaintiffs do not usually have precise details about their employment in pleading their FLSA cases. They have to rely on their memory in drafting their lawsuits. "While this Court has not required plaintiffs to keep careful records and plead their hours with mathematical precision, we have recognized that it is employees' memory and experience that lead them to claim in federal court that they have been denied overtime in violation of the FLSA in the first place. Our standard requires that plaintiffs draw on those resources in providing complaints with sufficiently developed factual allegations."

While it does not have to do so, the Second Circuit provides guidance on what it takes to survive Rule 12 dismissal where the defendant argues that the plaintiff is not an "employee" under the FLSA. The Act broadly defines "employee." The Court of Appeals notes that "in the context of a motion to dismiss, district courts in this Circuit have therefore found that complaints sufficiently allege employment when they state where the plaintiffs worked, outline their positions, and provide their dates of employment." Plaintiff satisfies this requirement because she "detailed where she worked, providing Healthfirst's address and its corporate purposes. She outlined what her position as a 'promoter' generally entailed, described her responsibilities and the pay structure. And she provided her dates of employment. In addition, she alleged that she was an hourly employee 'within the meaning of the FLSA." But, since the complaint does not satisfy Rule 12's requirements in failing to allege the other specifics of her overtime claim, her compliance with the FLSA's other pleading requirements (as to "employee") is not enough, and the case is gone.

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