McHUGH, Circuit Judge.
Current and former employees (Employees) of the Jefferson County Sheriff's Office (County) brought a collective action under the Fair Labor Standards Act (FLSA), alleging they were paid overtime at a lower rate than required by the statute during 2010, 2011, and 2012. The district court granted the County's motion to dismiss the Employees' Third Amended Complaint and the Employees filed a timely appeal. Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we affirm.
This wage dispute between the Employees and the County stems from their disagreement about the proper calculation of overtime pay rates.
The County moved to dismiss the Second Amended Complaint, arguing the Employees had failed to allege it had approved a budget incorporating the Promised Rates or facts demonstrating the existence of an enforceable promise to pay those rates. Rather than responding to the County's First Motion to Dismiss, the Employees conducted limited discovery and then filed a Third Amended Complaint. Except for the addition of factual allegations designed to address concerns raised in the First Motion to Dismiss, the Third Amended Complaint is essentially identical to the Second Amended Complaint. Upon the filing of the Third Amended Complaint, the district court dismissed the County's First Motion to Dismiss as moot. The County subsequently filed a Second Motion to Dismiss, arguing the Employees had failed to allege their "regular rates" of pay for the purposes of the FLSA were the Promised Rates (the regular rates argument), and reasserting the arguments raised in the First Motion to Dismiss.
The district court dismissed the Employees' Third Amended Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. The court held the Employees had failed to allege their "regular rates" of pay were the Promised Rates and therefore, they had not stated a claim
On appeal, the Employees allege four grounds of error. First, they contend Rule 12(g)(2) of the Federal Rules of Civil Procedure barred the district court's consideration of the County's regular rates argument because the argument was not raised in the County's First Motion to Dismiss.
For the reasons discussed below, we decline to decide whether the district court's consideration of the County's regular rates argument was in technical violation of Rule 12(g)(2), because any presumed procedural error was harmless. We therefore proceed to the merits and hold the Employees failed to state a claim upon which relief can be granted for unpaid overtime because, as a matter of law, their regular wage rate under the FLSA is the Actual Rate they received in their paychecks and not the Promised Rate. Because we affirm the district court's dismissal of the complaint on the ground the regular rate under the FLSA is the Actual Rate, we do not consider whether the Employees' actions in continuing to work for the Actual Rates would have modified any alleged agreement to pay the Promised Rates. Finally, we hold the district court did not abuse its discretion when it denied the Employees leave to amend their Third Amended Complaint. Accordingly, we affirm.
"We review de novo the district court's granting of a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6)." Slater v. A.G. Edwards & Sons, Inc., 719 F.3d 1190, 1196 (10th Cir.2013). To survive a motion to dismiss, a plaintiff "must plead facts sufficient `to state a claim to relief that is plausible on its face.'" Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)). "At the motion-to-dismiss stage, we must accept all the well-pleaded allegations of the complaint as true and must construe them in the light most favorable to the plaintiff." Cressman v. Thompson, 719 F.3d 1139, 1152 (10th Cir. 2013) (internal quotation marks omitted). We review a district court's denial of a
According to the Employees, Rule 12(g)(2) precluded the district court from considering the County's regular rates argument.
However, district courts have struggled with the question of whether a party may raise a previously available argument in a successive motion to dismiss for failure to state a claim under Rule 12(b)(6) before first filing a responsive pleading. Rule 12(g)(2) is designed to avoid unnecessary delay at the pleading stage by encouraging "the presentation of an omnibus pre-answer motion in which the defendant advances every available Rule 12 defense and objection he may have that is assertable by motion." Charles Alan Wright & Arthur R. Miller, 5C Federal Practice & Procedure § 1384 (3d ed.2014). Some courts strictly construe the rule's requirements and do not allow new arguments in successive motions to dismiss.
We are aware of only two federal circuit courts that have addressed the issue. The United States Court of Appeals for the Seventh Circuit did so in Ennenga v. Starns, 677 F.3d 766, 772-73 (7th Cir. 2012). There, the plaintiff brought claims of legal malpractice against the attorneys who drafted his late parents' trust agreement, initially premised upon a conflict-of-interest theory. Id. at 771. The defendants moved for dismissal, arguing the plaintiff had failed to state a claim for malpractice because neither the Illinois nor the Minnesota Rules of Professional Conduct prohibited the representation. Id. The district court granted the motion to dismiss, but with leave to amend. Id. In his amended complaint, the plaintiff alleged the attorneys had negligently drafted the trust agreement, thereby failing to effectuate his parents' testamentary intent. Id. The defendants again moved to dismiss, this time arguing the claim was untimely. Id. The plaintiff claimed Rule 12(g)(2) barred the defendants' successive motion to dismiss because the statute-of-limitations argument was available at the time of the first motion. Id. The district court disagreed and dismissed the amended complaint as untimely under the applicable statute of limitations. Id.
On appeal, the Seventh Circuit acknowledged that Rule 12(g)(2) requires consolidation
The Seventh Circuit's approach has the advantage of allowing district courts to consider meritorious arguments in successive pre-pleading motions to dismiss. This in turn, allows district courts to resolve cases on their merits at the pleading stage in the interest of efficiency. But the court's reasoning fails to address the language from Rule 12(h)(2) that arguably limits a party to presenting those arguments in a pleading, a motion for judgment on the pleadings, or at trial. For that reason, we find the Seventh Circuit's approach problematic.
But we are persuaded by the reasoning of the United States Court of Appeals for the Third Circuit that we need not decide whether the district court here acted in technical compliance with Rule 12. In Walzer v. Muriel Siebert & Co., the plaintiff brought claims of breach of contract, breach of fiduciary duty, and fraud against his brokerage firm in state court. 447 Fed.Appx. 377, 379 (3d Cir.2011) (unpublished).
The Third Circuit declined to decide whether the district court "entertained defendants' motions in technical violation" of Rule 12(g)(2) because "any error in that regard would be harmless." Id. The court noted that even if the arguments could not be raised in a successive 12(b)(6) motion, they could have been brought as a motion for judgment on the pleadings pursuant to Rule 12(c), or at trial. Id. And because the district court had accepted the plaintiff's factual allegations as true, the Third Circuit reasoned "it is as though defendants had filed answers admitting those allegations and then filed their motions under Rule 12(c) rather than Rule 12(b)(6)." Id. According to the Third Circuit, requiring defendants "to take those additional steps would have served no practical purpose under the circumstances." Id. Therefore, it concluded any
Applying that reasoning here, we decline to decide whether the district court's consideration of the County's regular rates argument was in error because any technical violation of Rule 12 did not affect the substantive rights of the parties. See 28 U.S.C. § 2111 ("On the hearing of any appeal ..., the court shall give judgment after an examination of the record without regard to errors or defects which do not affect the substantive rights of the parties." (emphasis added)); see also Shinseki v. Sanders, 556 U.S. 396, 407, 129 S.Ct. 1696, 173 L.Ed.2d 532 (2009) (explaining that 28 U.S.C. § 2111 "seeks to prevent appellate courts from becoming impregnable citadels of technicality" (internal quotation marks omitted)). As discussed, despite the County's failure to raise its regular rates argument in its First Motion to Dismiss, it could have presented the argument in a motion for judgment on the pleadings under Rule 12(c). See Fed.R.Civ.P. 12(h)(2). Furthermore, when considering the County's regular rates argument, the district court properly accepted all facts alleged in the Third Amended Complaint as true. Thus, as the Third Circuit noted in Walzer, it is as if the County had filed an answer admitting all of the Employees' factual allegations and then filed its motion pursuant to Rule 12(c), instead of Rule 12(b)(6). And whether the district court dismissed the complaint based on a motion under Rule 12(b)(6) or Rule 12(c) makes no difference for purposes of our review. Therefore, any procedural error that may have been committed would be harmless and does not prevent us from reaching the merits of the district court's decision.
Having determined the district court's consideration of the County's successive 12(b)(6) motion was harmless even if erroneous, we turn our attention to the correctness of its decision dismissing the Third Amended Complaint. According to the Employees, "an employee's `regular rate' [under the FLSA] is determined based upon the amount of wages decided upon by the parties." Aplt. Br. at 16 (emphasis in original). They further assert the County's posted salary schedules constituted an enforceable promise to pay the Employees at the higher Promised Rates. As such, they claim their "regular rates" for the purposes of the FLSA were the Promised Rates, not the Actual Rates they received in their paychecks. Based on that analysis, they contend the Third Amended Complaint adequately states a claim for unpaid overtime wages because it alleges the County calculated their overtime payments based on the lower Actual Rates, rather than the higher Promised Rates. The Employees' argument fails as a matter of law.
The purpose of the FLSA's overtime provisions is "to compensate those who labored in excess of the statutory maximum number of hours for the wear and tear of extra work and to spread employment through inducing employers to shorten hours because of the pressure of extra cost." Bay Ridge Operating Co. v. Aaron, 334 U.S. 446, 460, 68 S.Ct. 1186, 92 L.Ed. 1502 (1948). As such, the FLSA generally mandates that covered employers compensate their employees at overtime rates for work in excess of forty hours per week. 29 U.S.C. § 207(a)(1). As discussed, overtime work must be compensated "at a rate not less than one and one-half times the regular rate at which [the employee] is employed." Id. (emphasis added). "The proper determination of that [regular] rate is therefore of prime
The Employees rely heavily on our decision in Chavez for the proposition that an employee's regular rate can be based on a bargained-for rate of pay, even when it was never paid to the employee. But the Employees' reliance on Chavez is misplaced. There, we considered the interaction between the terms of a collective bargaining agreement and the FLSA's overtime provisions. 630 F.3d at 1305. The collective bargaining agreement set forth a base pay rate and also provided for certain add-on payments such as hazard, shift differential, and firearms qualification pay. Id. These add-on payments were made as lump sum payments on a bi-weekly basis. Id. Because these add-on payments were actually received by the employees, we held they should be included in the calculation of the employees' regular rates. Id. at 1305-07. In doing so, we explained an employee's "regular rate may include more than just an employee's contractually-designated hourly wage if the employee is, in fact, paid more than that hourly wage." Id. at 1305 (emphasis added). We see nothing in Chavez to support the Employees' assertion that parties can contractually designate which payments will be counted toward an employee's regular rate for the purposes of the FLSA's overtime provisions, even if those payments are not actually made to the employee.
In this case, the Employees allege they are entitled under the FLSA to overtime pay calculated from the higher Promised Rate they never received. As discussed, this position is contrary to law. Whatever other claims the Employees may have against the County, the facts alleged do not state an FLSA claim for unpaid overtime. The FLSA is not an all-purpose vehicle to resolve wage disputes between employers and their employees. Rather, it provides a specific remedy based on the failure to pay overtime calculated from the employee's regular rate — the amount the employer actually paid the employee for non-overtime work. The allegations of the Third Amended Complaint do not set forth
Finally, the Employees claim the district court abused its discretion when it denied them leave to amend their Third Amended Complaint. Under Rule 15, courts "should freely give leave [to amend] when justice so requires." Fed.R.Civ.P. 15(a)(2). "The liberal granting of motions for leave to amend reflects the basic policy that pleadings should enable a claim to be heard on its merits." Calderon v. Kan. Dept. of Soc. & Rehab. Servs., 181 F.3d 1180, 1186 (10th Cir.1999). But this liberal policy is not without limits. Rule 7 requires a request for relief to be made by a motion that (1) is in writing, (2) "states with particularity the grounds for seeking the order," and (3) specifies the relief sought. Fed.R.Civ.P. 7(b)(1). "We have recognized the importance of Fed.R.Civ.P. 7(b) and have held that normally a court need not grant leave to amend when a party fails to file a formal motion." Calderon, 181 F.3d at 1186. For example, a bare request to amend in response to a motion to dismiss is insufficient to place the court and opposing parties on notice of the plaintiff's request to amend and the particular grounds upon which such a request would be based. Glenn v. First Nat'l Bank in Grand Junction, 868 F.2d 368, 371 (10th Cir.1989); Calderon, 181 F.3d at 1185-87.
In the district court, the Employees did not formally move to amend their Third Amended Complaint. Rather, in a single sentence in their Response to the County's Second Motion to Dismiss, the Employees asserted, "Even assuming the Court determines that [the Employees] failed to set forth a plausible FLSA claim, the Court should grant [Employees] leave to file an amended complaint to cure any such deficiency." This request, unsupported by argument or a proposed Fourth Amended Complaint, was insufficient to notify the court and opposing counsel of the grounds for amendment. On appeal, the Employees assert the district court should have granted them leave to amend. But they again fail to specify the new factual allegations that would correct the defects in their Third Amended Complaint. Under these circumstances, the district court did not abuse its discretion in denying leave to amend.
Irrespective of whether the district court committed a technical violation of Rule 12(g)(2) when it considered the County's successive 12(b)(6), it did not affect the substantial rights of the parties. Therefore, any presumed error was harmless. The Third Amended Complaint fails to state a claim upon which relief can be granted because the facts alleged indicate the County calculated overtime rates consistent with the requirements of the FLSA. Finally, the district court did not abuse its discretion when it denied leave to amend the Third Amended Complaint. We therefore AFFIRM the decision of the district court.
(b)
A motion asserting any of these defenses must be made before pleading if a responsive pleading is allowed. If a pleading sets out a claim for relief that does not require a responsive pleading, an opposing party may assert at trial any defense to that claim. No defense or objection is waived by joining it with one or more other defenses or objections in a responsive pleading or motion.