REPORT AND RECOMMENDATION

MAUREEN P. KELLY, Chief Magistrate Judge.

I. RECOMMENDATION

Plaintiff R. Alexander Acosta, the United States Secretary of Labor, ("the Secretary") brings this action against SX Management, LLC, Steven Mitnick and Edmond McKean (collectively, "Defendants"). Defendants SX Management, LLC and Steven Mitnick have filed a Motion to Dismiss or, in the alternative, for a More Definite Statement. ECF No. 3. For the reasons set forth herein, it is respectfully recommended that this Motion be denied.

II. REPORT

A. PROCEDURAL HISTORY

The Secretary filed the Complaint in this case on June 30, 2017. ECF No. 1. Therein, the Secretary alleged that Defendants violated multiple provisions of the Fair Labor Standards Act of 1938 (the "FLSA"). Id. Specifically, the Secretary claims that, in violation of Sections 7 and 15(a)(2) of the FLSA, Defendants failed to pay certain employees overtime compensation for hours worked in excess of forty in a work week. Id. ¶ 8. The Secretary further claims that, in violation of Sections 11(c) and 15(a)(5) of the FLSA, Defendants failed to make, keep and preserve adequate and accurate records of hours worked by and wages due to many employees, Id. ¶ 9.

On October 3, 2017, Defendants SX Management, LLC and Steven Mitnick ("Moving Defendants") filed the instant Motion to Dismiss or, in the alternative, for a More Definite Statement, and a Brief in Support. ECF Nos. 3 and 7.1 On October 26, 2017, the Secretary filed a Brief in Opposition to the instant Motion to Dismiss. ECF No. 17. On November 8, 2017, Moving Defendants filed a Reply Brief. ECF No. 19. The instant Motion to Dismiss is now ripe for consideration.

B. FACTUAL BACKGROUND

In the Complaint, the Secretary makes the following allegations. Defendant SX Management ("SX") is a business providing self-storage and related services. ECF No. 1 ¶ 2. Defendant Steven Mitnick ("Mitnick") is the president and sole owner of SX. Id. ¶ 3. Defendant Edmond McKean ("McKean") is an employee of SX, who directly supervised the laborers, welders, painters and other construction and maintenance employees and directly paid wages to them. Id. ¶ 4. SX regulated the employment of all workers it employed, including those performing construction and maintenance work at SX facilities who received their pay from McKean. Id. ¶ 2. The Secretary alleges that Defendants failed to pay overtime wages to these categories of workers from May 10, 2014, through at least April 29, 2017. Id. ¶¶ 7-8.

C. STANDARDS OF REVIEW

1. Motion to Dismiss

a. Rule 12(b)(6)

As the United States Supreme Court explained in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), a complaint may properly be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6) if it does not allege "enough facts to state a claim to relief that is plausible on its face." Id. at 570. In assessing the merits of a claim subject to a motion to dismiss, a court must accept all alleged facts as true and draw all inferences gleaned therefrom in the light most favorable to the non-moving party. Phillips v. County of Allegheny, 515 F.3d 224, 228 (3d Cir. 2008) (citing Worldcom, Inc. v. Graphnet, Inc.. 343 F.3d 651, 653 (3d Cir. 2003)). A pleading party need not establish the elements of a prima facie case at this stage; the party must only "put forth allegations that `raise a reasonable expectation that discovery will reveal evidence of the necessary elements].'" Fowler v. UPMC Shadyside, 578 F.3d 203, 213 (3d Cir. 2009) (quoting Graff v. Subbiah Cardiology Associates. Ltd., 2008 WL 2312671 (W.D. Pa. June 4, 2008)). The scope of review may extend to "matters of public record, orders, exhibits attached to the complaint and items appearing in the record of the case." Qshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1384 n.2 (3d Cir. 1994).

b. Rule 12(b)(7)

Federal Rule of Civil Procedure 12(b)(7), together with Federal Rule of Civil Procedure 19, allow for dismissal for failure to join a party in whose absence the court cannot accord complete relief, or whose interest in the dispute is of such a nature that to proceed without their presence could prejudice that party or others.

In reviewing a Rule 12(b)(7) motion to dismiss, the court must accept all factual allegations in the complaint as true and draw all reasonable inferences therefrom in favor of the non-moving party. Dale v. Abeshaus, Civ. A. No. 06-4747, 2013 U.S. Dist. LEXIS 138634, at *15 (E.D. Pa. Sept. 26, 2013) (citations omitted). The court may consider relevant, extrapleading evidence in deciding a Rule 12(b)(7) motion. Id. The moving party can provide affidavits of persons having knowledge of these interests as well as other relevant extra-pleading evidence. Id. The moving party bears the burden of showing that the absent party should be joined under Rule 19. Id.

2. Motion for a More Definite Statement

Federal Rule of Civil Procedure 12(e) permits a party to "move for a more definite statement of a pleading to which a responsive pleading is allowed but which is so vague or ambiguous that the party cannot reasonably prepare a response." Fed. R. Civ. P. 12(e). Rule 12(e) is part of the "district court's case-management arsenal," Twombly, 550 U.S. at 593 n. 13, that, in conjunction with the rest of Rule 12 and Rule 8, serves "to frame and govern [the] court's assessment of the quality of a pleading." Sony BMG Music Entm't v. Cloud, No. 08-1200, 2008 U.S. Dist. LEXIS 64373, at *4 (E.D. Pa. Aug. 22, 2008). "A motion for a more definite statement under Rule 12(e) is directed to the rare case where because of the vagueness or ambiguity of the pleading the answering party will not be able to frame a responsive pleading." Id. at *5.

D. DISCUSSION

1. Motion to Dismiss

a. Sections 7 and 15(a)(2)

Moving Defendants argue that the Secretary has failed to state a claim under Sections 7 and 15(a)(2) of the FLSA. These provisions prohibit employers, inter alia, from employing employees for a workweek longer than forty hours without compensation of a rate of one and one-half times the regular rate for hours worked in excess of forty. 29 U.S.C. §§ 207(a); 215(a)(2). In support of this Motion to Dismiss, Moving Defendants assert that the Secretary has alleged insufficient details: (1) as to the overtime hours worked without proper compensation; (2) that Moving Defendants were the employers of the affected workers; (3) that Defendants constituted an enterprise; and (4) that the enterprise had a gross volume in sales in excess of $500,000. ECF No. 7 at 8-17.

(1) Hours worked

Moving Defendants first object to the level of detail alleged as to which workers worked in excess of 40 hours, how much of that time was uncompensated and the precise time period of such work. Id. at 8.

In opposition to the Motion to Dismiss, the Secretary points to allegations in the Complaint in which he alleges: "[F]rom at least May 10, 2014 through at lease April 29, 2017: [] SX, Mitnick, and McKean knowingly paid individuals who performed work for SX the same hourly rate for all hours worked in a given work week, even when these hours exceeded forty. Such individuals often worked hours ranging from 49 to 65 hours in a workweek[.]" ECF No. 17 at 11-12 (citing ECF No. 1 ¶ 8). The Secretary also points to Schedule A, attached to the Complaint, which lists employees who worked overtime but were not compensated properly. ECF No. 17 at 11-12 (citing ECF No. 1-2).

In the case principally relied on by Moving Defendants, Davis v. Abington Mem Hosp., 765 F.3d 236, 242, 243 (3d Cir. 2014), the United States Court of Appeals for the Third Circuit explained that a plaintiff is not required to identify the exact dates and time that improperly compensated overtime was worked, but must allege only that the employee worked forty hours in a given workweek as well as some improperly compensated time in excess of the forty hours. At this initial stage in the proceedings, the above-cited allegations in the instant Complaint are sufficient to establish a plausible claim that employees worked overtime hours in certain workweeks for which they were not properly compensated. Additional details may be ascertained through discovery.

(2) Employers

Moving Defendants additionally argue that the Secretary failed to adequately allege that Moving Defendants were employers of the affected workers. ECF No. 7 at 8-14. While acknowledging that, under the FLSA, "employer" is broadly defined as "any person acting directly or indirectly in the interest of an employed in relation to an employee," 29 U.S.C. § 203(d), Moving Defendants argue that the allegations in the Complaint are "bare-bones" and "conclusory," lacking requisite factual detail. Id. at 9-10.

In opposition to the Motion to Dismiss, the Secretary points to allegations in the Complaint in which he alleges: (1) that Defendant SX "regulated the employment of all persons it employed, including workers performing construction and maintenance work at SX's facilities who received their pay through McKean; managed daily operations of all persons it employed; acted directly and indirectly in the company's interest in relation to the employees;" and (2) that Defendant Mitnick "substantially controlled the terms and conditions" of construction and maintenance workers at SX, "including but not limited to imposing certain workplace policies on employees." ECF No. 17 at 7 (citing ECF No. 1 ¶¶ 2, 3).

Moving Defendants seek application of a six-factor test used by the Third Circuit in Donovan v. DialAmerica Marketing, Inc., 757 F.2d 1376, 1382 (3d Cir. 1985) to determine whether a worker is an "employee." ECF No. 7 at 9. The Third Circuit employed that test in reviewing a district court's judgment following a trial. 757 F.2d at 1381-82. Obviously, the procedural posture of this case is much different. At this stage of the case, the above-cited allegations in the instant Complaint are sufficient to establish a plausible claim that Moving Defendants were employers of the affected workers, as that term is defined in the FLSA. Additional facts may be ascertained through discovery.

(3) Enterprise

Moving Defendants additionally argue that the Secretary failed to adequately allege that Defendants constituted an enterprise pursuant to Section 7. ECF No. 7 at 14-16 (citing 29 U.S.C. § 207(a)). The FLSA defines "enterprise," in part, as "the related activities performed (either through unified operation or common control) by any person or persons for a common business purpose, and includes all such activities whether performed in one or more establishments or by one or more corporate or other organizational units including departments of an establishment operated through leasing arrangements, but shall not include the related activities performed for such enterprise by an independent contractor." 29 U.S.C. § 203(r).

In opposition to the Motion to Dismiss, the Secretary asserts that its allegation that "the business activities of Defendants, as described, are and were related and performed through unified operation or common control for a common business purpose of providing storage space and related services and constitute an enterprise," is sufficient to establish an enterprise at this procedural posture. ECF No. 17 at 10 (citing ECF No. 1 ¶ 5).

Moving Defendants argue that the Complaint allegations in this regard are insufficient and "ignore [] the differing purposes of construction work and the provision of storage space and fail[] to explain how EKM Inc., a separate, independent construction company operated by Mr. McKean, and SX/Mr. Mitnick could possibly have a "unified operation" or be under "common control." ECF No. 7 at 15.

First, this argument is based on facts which are not alleged in the Complaint and are beyond this Court's scope of review. Secondly, at this stage of the case, the allegation of a unified operation for the common business purpose of providing storage space is sufficient.

(4) Sales volume

Moving Defendants additionally argue that the Secretary failed to adequately allege that the enterprise had a gross volume of sales made or business done of at least $500,000, as required by the FLSA to qualify as an "enterprise engaged in commerce or in the production of goods for commerce." ECF No. 7 at 16-17 (citing 29 U.S.C. § 203(s)).

In opposition to the Motion to Dismiss, the Secretary points to the allegation in the Complaint in which he alleged that Defendants' enterprise "has had an annual gross volume of sales made or business done in an amount not less than $500,000." ECF No. 17 at 11 (citing ECF No. 1 ¶ 6).

Moving Defendants acknowledge this allegation, but argue that the Secretary provides no detail or support for its averment, such as an estimate of the gross sales of the enterprise or the manner by which such estimate was calculated. ECF No. 7 at 16. Moving Defendants further argue that discovery will reveal that SX did not have a gross sales volume exceeding $500,000 in any year between 2014 and the present. Id. at 17. Again, the specifics of this element are properly to be determined during discovery. At this stage, the Secretary's allegation is sufficient.

Accordingly, it is recommended that the Motion to Dismiss be denied as to this claim,

b. Sections 11(c) and 15(a)(5)

Moving Defendants also argue that the Secretary has failed to provide sufficient facts as to Defendants' failure to comply with recordkeeping requirements, alleging only "general, nebulous statements that S[X] and Mr. Mitnick ``failed to make, keep, and preserve adequate and accurate records of many of their employees and of the wages, hours, and other conditions of employment which they maintained" and "failed to make, keep, and preserve complete time records for their employees working as laborers, welders, painters, and performing other construction and maintenance work.'" ECF No. 7 at 18 (citing ECF No. ¶ 9). Moving Defendants object to the lack of specificity to this claim. ECF No. 7 at 19.

In opposition to the Motion to Dismiss, the Secretary asserts that its allegations, though simple, are sufficient to establish a plausible claim relating to the basic recordkeeping failures of Defendants. ECF No. 17 at 14. The Court agrees.

Accordingly, it is recommended that the Motion to Dismiss be denied as to this claim as well.

c. Required Party

Moving Defendants assert that, pursuant to Federal Rule of Civil Procedure 12(b)(7), the Complaint should be dismissed for failure to join a required party. ECF No. 7 at 19-22. Moving Defendants identify the required party as EKM Inc., a company they allege was run by Defendant McKean which he used to contract with SX and through which invoices and payment for the work at issue in this case were issued. Id. at 19-20.

In opposition to the Motion to Dismiss, the Secretary asserts, inter alia, that Moving Defendants have presented the Court with no evidence to support their argument. ECF No. 17 at 15-16. The Court agrees. Despite having the burden to show that EKM Inc. is a required party, Moving Defendants have presented no evidence on the matter. Their unsupported allegations in support of the Motion to Dismiss are not presumed to be true. Accordingly, they have failed to carry their burden. Thus, it is recommended that the Motion to Dismiss pursuant to Rule 12(b)(7) be denied.

2. Motion for More Definite Statement

Finally, Moving Defendants assert that if their Motion to Dismiss is not granted, the Secretary should be required to re-plead a more definite statement of the claims in the Complaint pursuant to Rule 12(e). ECF No. 7 at 22-23. As set forth above, the claims set forth in the Complaint are sufficient to establish plausible claims for violations of the FLSA. Accordingly, it is recommended that the Motion for More Definite Statement be denied.

E. CONCLUSION

For the foregoing reasons, it is respectfully recommended that the Motion to Dismiss, or, in the alternative, Motion for a More Definite Statement, ECF No. 3, be denied.

In accordance with the Magistrate Judges Act, 28 U.S.C. § 636(b)(1), and Local Rule 72.D.2, the parties are permitted to file written objections in accordance with the schedule established in the docket entry reflecting the filing of this Report and Recommendation. Failure to timely file objections will waive the right to appeal. Brightwell v. Lehman, 637 F.3d 187, 193 n.7 (3d Cir. 2011). Any party opposing objections may file their response to the objections within fourteen (14) days thereafter in accordance with Local Civil Rule 72.D.2.