A. RICHARD CAPUTO, District Judge.
Presently before the Court is the Defendants' Motion to Dismiss (In Part) the Amended Complaint. (Doc. 25.) In their Amended Collective Action Complaint, Plaintiffs allege two categorical violations of the Fair Labor Standards Act of 1938 ("FLSA"), 29 U.S.C. §§ 201 et seq. Defendants allege: (1) that Defendant Community Health Systems, Inc. should be dismissed as its employer status has not been properly plead; and (2) that off-the-clock uniform maintenance work cannot support a FLSA claim. Since a uniform maintenance can support a FLSA claim, Defendants' Motion will be denied in that respect. However, because the Plaintiffs have not properly pleaded that Community Health Systems is an employer under the FLSA, that Defendant will be dismissed and Plaintiffs will be afforded one further opportunity to amend their Complaint.
Plaintiffs Carmen Attanasio, Lynn Marie Potoski, and Denise Gaiteri ("Plaintiffs") bring this Amended Collective Action Complaint
At all pertinent times, all three of the named Plaintiffs worked as registered nurses at the Wilkes-Barre General Hospital. (Id. at ¶¶ 5, 6, 7.) All three specifically allege that between March 28, 2008 and April 30, 2009, they worked for Wilkes-Barre Hospital Co., LLC ("WBHC") and the Wyoming Valley Health Care System ("WVHCS"). (Id.) WVHCS is alleged to have been "Northeastern Pennsylvania's leading health care delivery network, employing more than 3,000 people" (Id. at ¶ 9), and WBHC was apparently "a wholly-owned subsidiary or affiliate of WVHCS that shared responsibility for the operation and management of Wilkes-Barre General Hospital ... with more than 2,000 employees" (Id. at ¶ 10). On April 30, 2009, WVHCS was acquired by Community Health Systems, Inc. ("CHS") and its wholly-owned subsidiary or affiliate, Wilkes-Barre Holdings, LLC. (Id. at ¶ 9.) Therefore, from that date on,
In their Amended Collective Action Complaint, Plaintiffs are seeking to assemble two subclasses to address two distinct violations by their employers. The first proposed class is the "meal break work sub-class."
The second class, styled as the "uniform maintenance work sub-class,"
Plaintiffs' Amended Complaint further seeks a list of names of potential Class members and the authorization to issue notice to those individuals. Moreover, Plaintiffs are seeking compensatory damages, pre-judgment interest, liquidated damages, attorney's fees and costs as well as equitable and injunctive relief. Plaintiffs claim that all named parties are members of both subclasses, and that all Plaintiffs and class members were subjected to the same meal break and uniform maintenance policies and systems. Plaintiffs believe the Class, "including both current and ex-employees over the relevant period, will include more than 5,000 people." (Id. at ¶ 23.)
Defendants have collectively moved to dismiss portions of the Amended Complaint as it fails to allege: (1) that CHS is an employer for purposes of the FLSA; (2) that WVHCS and WBHC are joint employers as to class members working outside the Wyoming Valley Health Care System;
Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint, in whole or in part, for failure to state a
"A pleading that states a claim for relief must contain ... a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a). "The statement required by Rule 8(a)(2) must give the defendant fair notice of what the ... claim is and the grounds upon which it rests." Erickson v. Pardus, 551 U.S. 89, 93, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (per curiam) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Detailed factual allegations are not required. Twombly, 550 U.S. at 555, 127 S.Ct. 1955. However, mere conclusory statements will not do; "a complaint must do more than allege the plaintiff's entitlement to relief." Fowler v. UPMC Shadyside, 578 F.3d 203, 211 (3d Cir. 2009). Instead, a complaint must "show" this entitlement by alleging sufficient facts. Id. "While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009).
As such, the inquiry at the motion to dismiss stage is "normally broken into three parts: (1) identifying the elements of the claim, (2) reviewing the complaint to strike conclusory allegations, and then (3) looking at the well-pleaded components of the complaint and evaluating whether all of the elements identified in part one of the inquiry are sufficiently alleged." Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011).
Dismissal is appropriate only if, accepting as true all the facts alleged in the complaint, a plaintiff has not pleaded "enough facts to state a claim to relief that is plausible on its face," Twombly, 550 U.S. at 570, 127 S.Ct. 1955, meaning enough factual allegations "`to raise a reasonable expectation that discovery will reveal evidence of'" each necessary element, Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir.2008) (quoting Twombly, 550 U.S. at 556, 127 S.Ct. 1955). "The plausibility standard is not akin to a `probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). "When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id. at 1950.
In deciding a motion to dismiss, the Court should consider the allegations in the complaint, exhibits attached to the complaint, and matters of public record. See Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir.1993). The Court may also consider "undisputedly authentic" documents when the plaintiff's claims are based on the documents and the defendant has attached copies of the documents to the motion to dismiss. Id. The Court need not assume the plaintiff can prove facts that were not alleged in the complaint, see City of Pittsburgh v. W. Penn Power Co., 147 F.3d 256, 263 & n. 13 (3d Cir.1998), or credit a complaint's "`bald assertions'" or "`legal conclusions,'" Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir.1997) (quoting In re Burlington Coat
Plaintiffs allege that from the day CHS acquired WVHCS it has "owned and operated" WVHCS and WBHC and therefore "has been an `employer' of Plaintiffs and the Class members as defined by the FLSA, 29 U.S.C. § 203(d)." (Am. Compl. at ¶ 8, Doc. 24.) The Defendants retort that CHS has been implicated with "boilerplate allegations" that are "nothing more than `a formulaic recitation of the elements of a cause of action.'" (Def.s' Br. at 14, Doc. 26) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).) In particular, Defendants find it insufficiently plausible from the allegations in the Amended Complaint that CHS, as a Tennessee corporation, oversaw the "daily working conditions of more than 11,000 employees at thirteen health care facilities scattered throughout the Commonwealth." (Id. at 16.)
The FLSA defines an "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 an "employee" as "any individual employed by an employer," 29 U.S.C. § 203(e)(1). Courts have afforded these definitions a broad reading, in part to "further[] the remedial purposes of the FLSA." Cavallaro v. UMass Memorial Health Care Inc., No. 09-40152, 2011 WL 2295023 at *3 (D.Mass. June 8, 2011) (citations omitted). An employee may have multiple employers for FLSA purposes, and depending on the particular facts, those employers may be jointly responsible for compliance with the Act's provisions. 29 C.F.R. § 791.2(a); Davis v. Abington Memorial Hosp., 817 F.Supp.2d 556, 563 (E.D.Pa.2011) ("A joint employment relationship can exist when employers are not "completely associated" with respect to the employment of individuals, or where one employer is controlled by another, or the employers are under common control."). Similarly, individual companies can also be grouped together as a single-employer for the purposes of the Act where they are "so interrelated that they constitute a single employer." Id. at 565 (citing Torres-Negron v. Merck & Co., Inc., 488 F.3d 34, 41 (1st Cir.2007)). In any event, determining the existence of such a joint employment relationship considers the "`real economic relationship' between the employee, employer, and putative joint employer." Lepkowski v. Telatron Mktg. Group, 766 F.Supp.2d 572, 577 (W.D.Pa.2011) (citation omitted).
In certain instances, FLSA liability can be shared between a parent corporation and its subsidiary — "[l]iability for violating an employee's rights under FLSA has attached to a parent corporation for the acts of a subsidiary when the parent substantially controls the terms and conditions of employment at its subsidiary on a regular basis." Lehman v. Legg Mason, Inc., 532 F.Supp.2d 726, 733 (M.D.Pa.2007) (citing Falk v. Brennan, 414 U.S. 190, 195, 94 S.Ct. 427, 38 L.Ed.2d 406 (1973)). However, "`[t]he doctrine of limited liability creates a strong presumption that a parent corporation is not the employer of its subsidiary's employees,' and `[o]nly evidence of control suggesting a significant departure from the ordinary relationship between a parent and its subsidiary' is sufficient to establish a joint employer relationship." Enter. Rent-A-Car Wage & Hour Empl. Practices Litig., 735 F.Supp.2d 277, 338 (W.D.Pa.2010); Lowenstein v. Catholic Health East, 820 F.Supp.2d 639 (E.D.Pa.2011) ("It is well settled that a parent corporation, like any
The Third Circuit has not specified the determinative factors in this analysis, Enterprise, 735 F.Supp.2d at 338, although courts in other circuits
The economic realities of the instant matter direct the Court to analyze CHS as a parent corporation under the FLSA. In particular, the Amended Complaint pleads that "[d]uring the Class Period, through an array of wholly-owned subsidiaries or affiliates, CHS has owned and operated at least 13 hospitals or health systems in Pennsylvania." (Am. Compl. at ¶ 8, Doc. 24.) In the same apparent fashion, on April 30, 2009, "through its wholly-owned subsidiary or affiliate, Wilkes-Barre Holdings, LLC, CHS acquired the assets of [WVHCS], including [WBHC]." (Id.) By virtue of this ownership, the Plaintiffs state that CHS is "an `employer' of Plaintiffs and the Class members as defined by the FLSA, 29 U.S.C. § 203(d)." (Id. at ¶ 8.) This, however, is not automatically dispositive in the parent-subsidiary corporate arrangement, and a more detailed analysis of the employer-employee relationship is warranted. Of course, the pleadings relied on must present a "a `showing' rather than a blanket assertion of an entitlement to relief." Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir.2008). And, "mere boilerplate allegations... without any supporting details essentially `a formulaic recitation of the elements of a cause of action'-are insufficient to raise plaintiffs' right to relief `above a speculative level' with respect to that individual's liability as an employer." Tracy v. NVR, Inc., 667 F.Supp.2d 244, 247 (W.D.N.Y.2009) (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955).
Resolving between formulaic recitations and factual showings is a detailed analysis.
Such details are the backbone of a well-pleaded allegation. Specific averments, showing that a defendant has actually been involved in the conduct being used to implicate the employer-employee relationship, are necessary. For example, Tracy v. NVR, Inc. found that statements alleging the "general authority to hire and/or fire" and past maintenance of employee records were insufficient to implicate a company vice president as a FLSA defendants. 667 F.Supp.2d 244, 247 (W.D.N.Y. 2009). These assertions lacked any "supporting details to substantiate their belief," namely any "facts concerning the extent of [vice president's] alleged involvement in [the company's] hiring and/or firing processes or record-keeping policies." Id. To the extent those plaintiffs argued that the alleged defendant had generally influenced control over their work schedules, conditions of employment, and compensation, this was also deemed inadequate "to raise plaintiffs' right to relief `above a speculative level.'" Id. (citing Twombly, 550 U.S. at 555, 127 S.Ct. 1955). Finally, in the related context of employment discrimination, McGehean v. AF & L Ins. Co. held an assertion that a parent corporation "owned and operated [the subsidiary] or otherwise had direct control over [its] business" as factually devoid to support the requirement of "functional integration of the operations of the parent and subsidiary, central control of labor relations, common management and common financial control." 2009 WL 3172763 at *4 (E.D.Pa. Oct. 02 2009). In particular, congruent with the matter sub judice, McGehean found it unclear "how AF & L, a Warminster, Pennsylvania based long-term care insurance policy provider, and CIVC, a Chicago, Illinois-based equity firm, would integrate their operations, centrally control their labor
In the Amended Complaint, the Plaintiffs argue that CHS and WBHC are together an integrated enterprise since CHS has the ability to:
(Am. Compl. at ¶ 18, Doc. 24.) As to the period prior to CHS's acquisition, the Amended Complaint alleges that WVHCS and WBHC had the exact same rights. (Id. at ¶ 17.) The Amended Complaint then also alleges that the Class members were "required to follow and abide by common work, time, pay, overtime, appearance and uniform maintenance policies and procedures in the performance of their jobs" (Id. at ¶¶ 14-15), and that "regardless of the hospital facility in which they worked, Plaintiffs and the Class members received wages from Defendants that were determined by common systems and methods that Defendants selected and controlled." (Id. at ¶ 16.)
As an initial matter, the above allegations from the Amended Complaint focus heavily on the first and third Enterprise factors-CHS's authority to dictate the terms of employment and the administration of employee records. 735 F.Supp.2d at 339. They do not, however, acknowledge the second factor, the "day-to-day supervision of employees." Id. Although not alone dispositive, it is notable that no daily control is alleged. However, even assuming that these allegations are sufficiently broad to upset the presumption that the parent corporation is not the employer of its subsidiary's employees, these particular recitations are conclusory and implausible. First, Plaintiffs' allegations establishing employer control by WVHCS and later CHS are effectively identical. This forecloses the possibility that these pleadings are particularized and demonstrates that these allegations are devoid of any actual factual support. Yet, even beyond that these pleadings are boilerplate, is that there are no operative details suggesting exactly how CHS exercised authority over the particular employees, how these employees were supervised by a Delaware corporation headquartered in Tennessee acting through a holding company, and how they oversaw the administration of the business records. As in the aforementioned cases, the Amended Complaint omits particularized assertions explaining the specific role CHS played in regard to the Plaintiffs within this administrative structure. There are no supporting details as to the mechanics of CHS's actual involvement
Plaintiffs have not sufficiently pleaded that CHS is an employer for the purposes of the FLSA.
The Defendants argue that uniform maintenance work cannot, as a legal matter, support a claim under the FLSA.
While the FLSA requires overtime compensation "for a workweek longer than forty hours," 29 U.S.C. § 207, it does not define the terms `work' or `workweek.' IBP, Inc. v. Alvarez, 546 U.S. 21, 25, 126 S.Ct. 514, 163 L.Ed.2d 288 (2005). Following the enactment of the FLSA, expansive judicial interpretations arose to fill in these terms, which Congress then deemed to be in "disregard of long-established customs, practices, and contracts between employer and employees, thereby creating wholly unexpected liabilities, immense in amount and retroactive in operation." Id. at 26, 126 S.Ct. 514 (citing 61 Stat. 84). As such, Congress amended the relevant portions of the FLSA with the Portal-to-Portal Act of
29 U.S.C. § 254(a)(2). The Supreme Court has held that this Act does not except activities that "are an integral part of and are essential to the principal activities of the employees." Steiner v. Mitchell, 350 U.S. 247, 254, 76 S.Ct. 330, 100 L.Ed. 267 (1956). To the extent the Act was enacted to protect employers from the unintended liability imposed by the courts, it was not designed to upset the more traditional interpretations of the term "work." De Asencio v. Tyson Foods, Inc., 500 F.3d 361, 367 (3d Cir.2007) (citing Alvarez, 546 U.S. at 28, 126 S.Ct. 514). Thus, as the Plaintiffs point out, the Act does not insulate employers from work they have reason to believe an employee is performing, so long as that work is an integral part of and is essential to the principal activities of the employee.
In 1956, the Supreme Court held that butchers were entitled to compensation under the FLSA for knife-sharpening as that task comprised "an integral part of and indispensable to the various butchering activities for which they were principally employed." Mitchell v. King Packing Co., 350 U.S. 260, 263, 76 S.Ct. 337, 100 L.Ed. 282 (1956). More recently, Schwartz v. Victory Security Agency, LP,
Defendants also rely on Musticchi v. City of Little Rock, which held at summary judgment that time spent by police officers "polishing shoes, boots and duty belts, cleaning radios and traffic vests and oiling handcuffs are preliminary and postliminary activities and not compensable under the Portal-to-Portal Act." 734 F.Supp.2d 621, 631 (E.D.Ark.2010). In particular, that court reasoned that "[w]hile polishing and cleaning may be a necessary or an indispensable component of being a [police] officer, unlike a butcher sharpening a knife or an x-ray technician powering and testing an x-ray machine, [police] officers can successfully perform their jobs without polishing and cleaning their uniform and equipment." Id. Musticchi thus determined that "compensating Plaintiff for such activity would be contrary to Congress' intent pursuant to the Portal-to-Portal Act." Id. at 632. However, other cases have gone the opposite way on similar facts. See Albanese v. Bergen County, N.J., 991 F.Supp. 410, 420-21 (D.N.J.1997) (finding compensable and denying a motion to dismiss as to police officers' claims for "removing and polishing brass, washing uniforms, polishing shoes and other leather gear, and maintaining guns."); Hellmers v. Town of Vestal, 969 F.Supp. 837, 844 (N.D.N.Y.1997) (denying summary judgment in holding that off duty cleaning of a police vehicle and firearm were compensable under the FLSA as "an integral and indispensable part of the principal work activity").
The relevant cases cited by Defendants are generally inapposite to the instant matter. In Valladon v. City of Oakland, the analysis focused on whether time spent cleaning and maintaining police gear was de minimis, No. C 06-07478 SI, 2009 WL 2591346 at *5-7, 2009 U.S. Dist. LEXIS 74439 at *16-20 (N.D.Cal. Aug. 21, 2009), and Mory v. City of Chula Vista considered whether police academy attendees were "not considered to be on duty" pursuant to 29 C.F.R. § 553.226 while they were preparing their uniforms, No. 07-cv-462 JLS (WVG), 2010 WL 3748813 at *7, 2010 U.S. Dist. LEXIS 100777 at *21-25 (S.D.Cal. Sept. 24, 2010). Moreover, although the plaintiffs in Howard v. Securitas Security Services alleged that "they spent time off-the-clock maintaining their uniforms to comply with Securitas's appearance requirements," that court only addressed whether those plaintiffs were similarly situated for the purposes of class certification. No. 08 C 2746, 2009 WL 140126 at *7, 2009 U.S. Dist. LEXIS 3913
The above cases do not indicate that a uniform maintenance subclass would be inappropriate per se. Instead, they are limited to their own facts and are not resolvable to any singular proposition. Even the very recent and highly analogous precedent cited by the Defendants in Schwartz and Musticchi do not hold that uniform maintenance is inherently non-compensable, but that in those specific instances, the uniforms were not essential to the Plaintiffs' stated duties and were therefore not compensable under the FLSA as preliminary or postliminary activity. Here, the Plaintiffs' principal work activities include "providing patient care and monitoring, administering medicine to patients, interacting with other hospital employees and visitors, monitoring blood-work and patient test results and responding to emergency situations." (Am. Compl. at ¶¶ 5-7, Doc. 24.) Further, Plaintiffs aver that they were required to maintain a professional appearance for ends including: "clearly identifying themselves as hospital personnel; differentiating among different types of hospital staff and care providers; conveying their professionalism and competence; fostering the appearance of safety and security in their assigned work locations; and fostering morale and camaraderie among its employees." (Id. at ¶ 45.) Whether these uniforms are truly integral to these ends will ultimately dictate whether preliminary or postliminary
Since the Amended Complaint fails to plausibly allege Defendant Community Health Systems as an employer under the Fair Labor Standards Act, that Defendant will be dismissed from this action. Plaintiffs, however, will be given leave to amend the Amended Complaint to allege further facts as to Community Health System's employer status. Further, because uniform maintenance is potentially a compensable preliminary or postliminary activity under the Fair Labor Standards Act, the Defendants' Motion to Dismiss as to this
Fed.R.Civ.P. 19(a)(1). Plaintiffs offer little argument on this point, but insist that "CHS is a necessary party to Plaintiffs' suit given its direct, obvious and extensive ties to the conduct alleged in Plaintiffs' Amended Complaint, as well as its direct financial interest in the claims pending against its healthcare facilities." (Pl.'s Br. at 7, Doc. 28.) This is not sufficient. There is no direct assertion that complete relief cannot be accorded without the inclusion of CHS. Janney Montgomery Scott, Inc. v. Shepard Niles, Inc., 11 F.3d 399, 405 (3d Cir.1993). Nor, where CHS is affirmatively attempting to extricate itself from the case, is there any need to "protect[] the person whose joinder is in question against the practical prejudice to him which may arise through a disposition of the action in his absence." Fed.R.Civ.P. 19, Advisory Committee Notes, 1966 Amendment. Finally, if a "direct financial interest" were sufficient to retain the parent corporation as a necessary party, the joint employment tests outlined above would be pointless, which cannot be the case.