JOSEPH H. McKINLEY, Jr., Chief District Judge.
This matter is before the Court on motions by Defendants, DIRECTV, LLC, and Multiband Corp., to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(6) [DN 17, DN 18] and on a motion by Plaintiffs, Marvin Mabry, Richard Maybury, Michael Stone, Chris Atkins, Clentin Cox, and James Lockhart, for leave to amend the complaint should the Court grant Defendants' motions to dismiss [DN 29]. Fully briefed, these matters are ripe for decision.
Upon a motion to dismiss for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6), a court "must construe the complaint in the light most favorable to plaintiff,"
On October 21, 2014, Plaintiffs, Marvin Mabry, Richard Maybury, Michael Stone, Chris Atkins, Clentin Cox, and James Lockhart, filed suit against DIRECTV and/or Multiband Corp. (collectively "Defendants") alleging overtime and minimum wage claims under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 206, 207. Plaintiffs allege that DIRECTV is the largest provider of satellite television services in the United States. To install and repair the satellite systems, DIRECTV uses a network of providers who supply it with technicians ("Provider Network" or "providers"). Plaintiffs are six former technicians who installed DIRECTV satellite television equipment in the State of Kentucky. Five of the Plaintiffs worked for Multiband, a member of DIRECTV's provider network, and the remaining Plaintiff worked for other providers such as DirectSat or Skylink. Only three of the six Plaintiffs brought suit against Multiband.
Plaintiffs maintain that DIRECTV conceived of, formed, and manages the Provider Network. DIRECTV operates its Provider Network nationwide from its headquarters in El Segundo, California. Plaintiffs contend that at all relevant times, DIRECTV was the primary, if not the only, client of the providers and was the source of substantially all of each provider's income.
DIRECTV controls the Provider Network through detailed agreements known as Home Services Provider Agreements, Services Provider Agreements, and Secondary Provider Agreement of Equipment Installation and Service (collectively "Provider Agreements") that establish policies, procedures, performance standards, and payment method requirements. The Provider Agreements establish almost identical business relationships between DIRECTV and each provider. The Provider Agreements require technicians to wear DIRECTV shirts and show customers DIRECTV identification cards. Plaintiffs typically start their workday by receiving daily work schedules assigned through DIRECTV's dispatching systems. DIRECTV utilizes a database known as SIEBEL to coordinate the assignment of particular work orders. DIRECTV delivers the assignment of work orders to technicians using a technician's unique "Tech ID Number." Upon receiving the daily work schedules, Plaintiffs generally called each customer to confirm the timeframe within which the technician is expected to arrive. Upon arriving at the job site, Plaintiffs were required to check-in by telephone with DIRECTV via its dispatching system. Upon completion of the assigned job, Plaintiffs were required to report to DIRECTV that the installation was complete and then worked with DIRECTV employees to activate the customer's service. (
Plaintiffs were paid pursuant to a "piece-rate" payment method for satisfactorily completing a DIRECTV-approved satellite installation. This system paid technicians for certain enumerated productive tasks, but did not compensate the technicians for all necessary work they performed such as:
(Complaint ¶ 53.) Additionally, Plaintiffs were subject to "chargebacks" by Defendants for the following reasons: faulty equipment, improper installation, customer calls regarding how to operate their remote control, or customers' failure to give greater than a 95 percent satisfaction rating for the services provided by the technician. Several of the Plaintiffs were classified as independent contractors and were required to purchase supplies necessary to perform installations, such as screws, poles, concrete, and cables. Plaintiffs contend that Defendants' "practice of imposing `chargebacks,' failing to compensate Plaintiffs for all hours worked, and failing to reimburse Plaintiffs' necessary business expenses resulted in Plaintiffs routinely working more than forty hours in a work week while being denied overtime pay and being subjected to an effective wage rate below that required by applicable law." (Complaint ¶ 60).
The Defendants argue three bases upon which the complaint should be dismissed. First, DIRECTV moves to dismiss Plaintiffs' complaint on the basis that Plaintiffs fail to allege the existence of an employment relationship between the technicians and DIRECTV. Second, both DIRECTV and Multiband move to dismiss Plaintiffs' complaint arguing that Plaintiffs have not alleged facts stating a plausible claim under the FLSA. And third, both DIRECTV and Multiband argue that the two-year FLSA statute of limitations bars Plaintiffs' claims in whole or in part.
DIRECTV argues that Plaintiffs failed to pled sufficient facts to establish that they had an employment relationship with DIRECTV and, therefore, do not have a valid claim under the FLSA. The FLSA defines "employer" as "any person acting directly or indirectly in the interest of an employer in relation to an employee," 29 U.S.C. § 203(d), and "employee" as "any individual employed by an employer."
"The FLSA's definition of `employee' is strikingly broad and `stretches the meaning of `employee' to cover some parties who might not qualify as such under a strict application of traditional agency law principles.'"
Examining the allegations in Plaintiffs' complaint in light of these above factors, the Court finds that Plaintiffs allege sufficient facts demonstrating an employment relationship between DIRECTV and Plaintiffs under the FLSA. Plaintiffs assert that DIRECTV was the primary, if not the sole, client of the providers for which Plaintiffs worked demonstrating a continuous and indefinite relationship between the parties. Further, Plaintiffs claim DIRECTV issued training manuals to technicians and required technicians to obtain certification from the Satellite Broadcasting & Communications Association reflecting control by DIRECTV over the skills required to render services for DIRECTV. Significantly, as discussed in detail above, Plaintiffs allege that DIRECTV had complete control over the Plaintiffs' work, including Plaintiffs' specific job assignments, the workers' daily schedule, and the work performed. DIRECTV required the technicians to wear DIRECTV shirts, to wear identification badges, and to place car decals on their vehicles. Additionally, the Provider Agreements between DIRECTV and the provider specified the methods by which the technicians must install DIRECTV's products, the standards of operation, and the pay for providers and technicians. DIRECTV also utilized a network of quality control personnel to oversee and review the work performed by Plaintiffs. Given the degree of control DIRECTV had over Plaintiffs, the Plaintiffs could not choose which jobs to perform or increase their profits by technical skill. Finally, DIRECTV "could not provide its satellite-television services without technicians to install its products;" thus, the services rendered by Plaintiffs are an integral part of DIRECTV's business.
Given these facts, the Court finds that Plaintiffs have provided "detailed allegations as to the control DIRECTV had over them and their dependent relationship with DIRECTV" sufficient to withstand the motion by DIRECTV to dismiss.
Defendants move to dismiss Plaintiffs' complaint arguing that (1) Plaintiffs have failed to plead any facts that would support an inference that the alleged off-the-clock work, charge backs, and failure to reimburse business expenses caused any of them to receive an effective wage below the applicable minimum wage in any workweek and (2) Plaintiffs' overtime claim fails because Plaintiffs do not identify any single workweek in which they worked over 40 hours and did not receive overtime for the hours worked over 40 hours.
"Federal courts across the country diverge on the application of Twombly and Iqbal to claims brought under the FLSA."
Contrary to Defendants' assertion, the Court finds that
In the present case, Plaintiffs allege detailed facts which support a plausible claim under the FLSA and provide Defendants with sufficient notice of the allegations to form a response. Plaintiffs have provided more than a formulaic recitation of their claims. Each Plaintiff details his respective employment dates, i.e. from September 2008 and May 2010. Each Plaintiff also estimates the length of his average workweek during the employment period (i.e. 50 to 60 hours a week), the amount of overtime Plaintiff worked per week, and the source of alleged unlawful deductions from his pay by Defendants including chargebacks and failure to reimburse business expenses. Further, Plaintiffs allege that in addition to certain tasks DIRECTV designated as compensable, the Plaintiffs performed "other work each week during the relevant time period" that DIRECTV and/or Multiband classified as non-compensable work including "assembling satellite dishes, driving to and between job assignments, reviewing and receiving schedules, calling customers to confirm installations, obtaining required supplies, assisting other technicians with installations, performing required customer educations, contacting DIRECTV to report in or activate service, working on installations that were not completed, and working on `rollback' installations where Plaintiffs had to return and perform additional work on installations previously completed." (Complaint ¶ 53.) According to Plaintiffs, these activities led to both a wage rate below the required minimum wage and uncompensated overtime. Based on these allegations, the Court finds that the complaint sufficiently pleads that the employees were denied minimum wages and overtime wages.
Furthermore, it would appear to the Court that under the facts alleged in the complaint, Plaintiffs have also satisfied the standard for a FLSA claim outlined in
Accordingly, the Defendants' motions to dismiss for failure to state a claim on these bases are denied.
Both DIRECTV and Multiband move to dismiss Plaintiffs' claims as barred by the FLSA's two-year statute of limitations. In response, Plaintiffs argue that the FLSA's three-year limitations period applies because the Defendants' acted willfully. "Under the FLSA, a lawsuit to recover unpaid compensation must `be commenced within two years after the cause of action accrued,' unless the cause of action arose `out of a willful violation,' in which case the lawsuit must `be commenced within three years after the cause of action accrued.'"
"An FLSA violation is willful if `the employer either knew or showed reckless disregard for the matter of whether its conduct was prohibited by the statute.'"
Considering the complaint in the light most favorable to the Plaintiffs, the Court concludes that the Plaintiffs have pled facts which make the allegation of willfulness plausible. Plaintiffs extensively outline the employment policies and practices of DIRECTV and its providers, as well as DIRECTV's exercise of control over the technicians via the Provider Agreements. Plaintiffs contend that the Defendants' misclassification of technicians as independent contractors despite the technicians meeting the definition of an employee under the FLSA was a willful attempt to avoid compliance with the FLSA. (Complaint ¶¶ 1, 2 n.2, 17, 29, 48, 61, 99.) In fact, Plaintiffs specifically allege that "[t]he net effect of Defendants' policies and practices . . . is that the Defendants willfully fail to pay minimum wage and overtime compensation to Plaintiffs, and willfully fail to keep accurate time records in order to save payroll costs." (
For the reasons set forth above,