Lopez v. Next Generation Construction & Environmental, LLC et al

Filing 168

ORDER Rejecting the Recommendations of United States Magistrate Judge Kristen L. Mix. Magistrate Judge Mix's Recommendations (Doc. ## 145 , 155 ) are REJECTED. Defendant's Motion to Dismiss (Doc. # 111 ) is DENIED. Plaintiff's Motion to Amend the Complaint (Doc. # 132 ) is DENIED AS MOOT. By Judge Christine M. Arguello on 08/29/2018. (athom, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Christine M. Arguello
Civil Action No. 16-cv-00076-CMA-KLM
RICARDO LOPEZ, on behalf of himself and all similarly situated persons,
Plaintiff,
v.
NEXT GENERATION CONSTRUCTION & ENVIRONMENTAL, LLC, a Colorado limited
liability company,
Defendant.
ORDER REJECTING THE RECOMMENDATIONS OF
UNITED STATES MAGISTRATE JUDGE KRISTEN L. MIX
Before the Court are two Recommendations of United States Magistrate Judge
Kristin L. Mix (Doc. ## 145, 155), wherein she recommends that this Court deny Plaintiff
Ricardo Lopez’s Motion to Amend Class and Collective Action Complaint (Doc. # 132)
and grant Defendant Next Generation Construction and Environmental, LLC’s Motion to
Dismiss (Doc. # 111). Plaintiff timely objected to each Recommendation, essentially
challenging each in its entirety. 1 The Court must therefore review the issues de novo

In its Response to Plaintiff’s Objection to the Recommendation on Defendant’s Motion to
Dismiss (Doc. # 166), Defendant urges this Court not to consider Plaintiff’s Objection because
Plaintiff did not previously raise his arguments in response to the underlying Motion to Dismiss.
Defendant argues that the Court should therefore deem Plaintiff’s arguments waived. The Court
disagrees that Plaintiff waived these arguments. Plaintiff raised the same arguments in his
Motion to Amend the Complaint that he presently raises in his Objection to the
Recommendation on the Motion to Dismiss. Plaintiff’s arguments were therefore before the
Magistrate Judge and Defendant had ample opportunity to address them. The Court, therefore,
sees no reason to deem those arguments waived or the Objection forfeited.

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and, in so doing, “may accept, reject, or modify the recommended disposition[s.]” Fed.
R. Civ. P. 72(b)(3). Having conducted the required de novo review, the Court rejects
both Recommendations, grants in part Plaintiff’s Motion to Amend, and denies
Defendant’s Motion to Dismiss.
I.

BACKGROUND

Plaintiff is a former employee of Defendant who claims that he, and others
similarly situated, were not properly compensated for overtime hours or for meal and
rest breaks. (Doc. # 18, ¶¶ 10–11; Doc. # 44 at 2.) Plaintiff therefore initiated this lawsuit
against Defendant on January 1, 2016, alleging violations of the Fair Labor Standards
Act (FLSA), 29 U.S.C. § 201, et seq., the Colorado Minimum Wage Act, Colo. Rev. Stat.
§ 8-6-101, et seq., and the Colorado Wage Claim Act, Colo. Rev. Stat. § 8-4-101, et
seq. (Doc. # 1.)
On March 30, 2016, Defendant filed a Motion for More Definite Statement
pursuant to Federal Rule of Civil Procedure 12(e). (Doc. # 15.) Plaintiff then timely filed
a First Amended Complaint on April 19, 2016, attempting to address Defendant’s
claimed deficiencies. (Doc. # 18.) Several weeks later, Defendant filed a Reply to the
Motion for a More Definite Statement, arguing that Plaintiff’s amendments failed to
address the alleged deficiencies. (Doc. # 21.) Magistrate Judge Mix nonetheless denied
Defendant’s Motion for More Definite Statement as moot because it was based on an
inoperative complaint. (Doc. # 22.)

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In February 2017, this Court granted Plaintiff’s request for class certification
under Federal Rule of Civil Procedure 23 and approved the parties request to send
notice to all class members. (Doc. # 71.)
On August 29, 2017, based on information provided by various class members
during the notice process, Plaintiff sought leave to amend the First Amended Complaint
to add a time-shaving claim. (Doc. ## 87; 92.) The Court granted Plaintiff’s request
(Doc. # 104), and he filed a Second Amended Complaint. (Doc. # 105).
Thereafter, Defendant filed the instant Motion to Dismiss Plaintiff’s Second
Amended Complaint. (Doc. # 111.) Defendant’s Motion alleges that Plaintiff’s Second
Amended Complaint fails to state a claim under the FLSA because it alleges insufficient
facts to (1) show that he or Defendant is engaged in commerce, (2) support his claim
that he was not paid for overtime or missed breaks, and (3) support his claim that
Defendant did not comply with the FLSA record-keeping requirements. (Id.) For the
same reasons, the Motion also asserts that the Second Amended Complaint is deficient
with respect to Plaintiff’s state law claims under the Colorado Wage Claim Act or the
Colorado Minimum Wage Act. (Id.)
In response to the Motion to Dismiss, Plaintiff filed a Third Amended Complaint,
attempting to address the alleged inadequacies. (Doc. # 121.) The deadline to amend,
however, had passed. The Court struck that filing for failure to comply with Federal Rule
of Civil Procedure 15(a)(2), which states that, once the deadline has passed, “a party
may amend its pleading only with the opposing party’s written consent or with the
court’s leave.” (Doc. # 131.)
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Consequently, Plaintiff now seeks leave to amend his Complaint for a third time,
primarily arguing that a Third Amended Complaint would provide more detail in
response to Defendant’s pending Motion to Dismiss. (Doc. # 132.) Plaintiff specifically
wishes to add facts supporting that (1) Defendant is an enterprise engaged in
commerce and/or in the production of goods for commerce within the meaning of the
FLSA; (2) Defendant failed to pay overtime as required under the FLSA; and (3)
Defendant failed to keep proper payroll records. (Doc. # 121-1.)
In consideration of Plaintiff’s Motion to Amend (Doc. # 132) and Defendant’s
Motion to Dismiss (Doc. # 111), Magistrate Judge Mix recommended that the Court (1)
deny Plaintiff’s entire request to amend and (2) subsequently grant Defendant’s Motion
to Dismiss on grounds that Plaintiff failed to adequately plead the enterprise element of
his FLSA claim. (Doc. ## 145, 155.) The Court disagrees with those recommendations
for the following reasons.
II.

LAW

The purpose of a motion to dismiss under Federal Rule of Civil Procedure
12(b)(6) is to test “the sufficiency of the allegations within the four corners of the
complaint.” Mobley v. McCormick, 40 F.3d 337, 340 (10th Cir. 1994). A complaint will
survive such a motion only if it contains “enough facts to state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “The
question is whether, if the allegations are true, it is plausible and not merely possible
that the plaintiff is entitled to relief under the relevant law.” Christy Sports, LLC v. Deer
Valley Resort Co., Ltd., 555 F.3d 1188, 1192 (10th Cir. 2009).
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In reviewing a Rule 12(b)(6) motion, a court must accept all the well-pleaded
allegations of the complaint as true and must construe them in the light most favorable
to the plaintiff. Williams v. Meese, 926 F.2d 994, 997 (10th Cir. 1991). Nevertheless, a
complaint does not “suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual
enhancement.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S.
at 557). “The court’s function on a Rule 12(b)(6) motion is not to weigh potential
evidence that the parties might present at trial, but to assess whether the plaintiff’s
complaint alone is legally sufficient to state a claim for which relief may be granted.”
Miller v. Glanz, 948 F.2d 1562, 1565 (10th Cir. 1991).
III.

ANALYSIS

A. ENTERPRISE ALLEGATIONS
To fall within the FLSA’s protection, Plaintiff must allege “sufficient facts to
plausibly state a claim either (1) that [h]e, individually, was engaged in commerce or (2)
that [Next Generation] is an enterprise engaged in commerce.” Reagor v. Okmulgee
County Family Resource Center, 501 Fed. Appx. 805, 808, 2012 WL 5507181, at *2
(10th Cir. 2012).
Defendant argues that Plaintiff’s FLSA claim should be dismissed because his
Second Amended Complaint fails to plausibly allege either that he was engaged in
commerce or that Defendant is an enterprise engaged in commerce. In response to
Defendant’s argument, Plaintiff points out that Defendant twice stipulated to this
element; Plaintiff therefore argues that dismissal would be unjust and requests
permission to instead amend the complaint to substantiate his allegations. Having
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thoroughly consider the issue, the Court agrees with Plaintiff that dismissal is
unwarranted for the following reasons.
Long before filing its motion to dismiss, Defendant twice expressly stipulated to
the “enterprise” element of Plaintiff’s FLSA claim. Specifically, Defendant agreed, in
both the original Scheduling Order on May 24, 2016 and the Modified Order on
September 5, 2017, to the following undisputed facts: that (1) Defendant “has been an
enterprise engaged in commerce or in the production of goods for commerce within the
meaning of the FLSA” and (2) “[w]hile working for [Defendant], Plaintiff was engaged in
commerce or in the production of foods for commerce within the meaning of the FLSA.”
(Doc. ## 36; 92 at 5–6.) It would hardly be just to hold Plaintiff accountable for alleged
pleading deficiencies that are based on Defendant’s own concessions.
Defendant contends that this Court should not give any weight to the undisputed
facts in the Scheduling Orders because (1) Defendant disputed these facts on May 20,
2016 in its Answer to the Complaint (Doc. # 30), and (2) those facts may not be
considered admissions pursuant to Smith v. Argent Mortg. Co., 331 Fed. Appx. 549,
556, 2009 WL 1391550, at *5 (10th Cir. 2009). Neither argument has merit. First,
Defendant’s Answer was filed before both Scheduling Orders were issued,
demonstrating that although Defendant may have disputed the facts on May 20, 2016,
Defendant did not later dispute those same facts on May 24, 2016 and September 5,
2017. Second, although the Tenth Circuit in Smith upheld a district court’s decision not
to give weight to the undisputed facts in a scheduling order, it did so because, unlike
here, the facts were subsequently disputed in the parties’ final pretrial order, the
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determinative document for purposes of setting forth the disputed fact issues to be
decided at trial. See Wilson v. Muckala, 303 F.3d 1207, 1215 (10th Cir. 2002) (“[T]he
pretrial order is the controlling document for trial.” (quotation marks omitted)). Smith did
not, however, prohibit a district court from giving weight to undisputed facts in a
scheduling order that have not been superseded by a final pretrial order. Nor does
Smith caution against denying a Rule 12(b)(6) motion to dismiss for an inadequately
plead element on account of a Defendant’s prior stipulation to that element.
Moreover, to the extent Defendant still disputes that it is an enterprise engaged in
commerce, this order does not prevent Defendant from so challenging at trial; the Court
simply denies Defendant’s request to dismiss Plaintiff’s FLSA claim as inadequately
pled under Rule 12(b)(6). Based on this denial, the Court also denies as moot and
unnecessary Plaintiff’s request to amend his enterprise allegations.
B. UNPAID OVERTIME AND MISSED BREAK ALLEGATIONS
Next, Defendant requests dismissal of Plaintiff’s FLSA claim on grounds that
Plaintiff has inadequately “show[n] the amount and extent” of his and others’ unpaid
overtime hours and missed breaks. (Doc. # 111 at 7.) Defendant contends that
Plaintiff’s complaint must specifically identify the specific workweeks during which he or
any other person was not paid overtime, an estimate of the number of extra hours they
worked per week, and the types of tasks they performed during their overtime hours.
(Id. at 7–11.) The Court disagrees that more specificity is required, finding instead that
the allegations in Plaintiff’s Second Amended Complaint are sufficient under Rule
12(b)(6).
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Contrary to Defendant’s contentions, the Tenth Circuit has not yet imposed that
exacting standard on FLSA Plaintiffs. Indeed, the general rule governing pleadings
states that “specific facts are not necessary; the statement need only give the defendant
fair notice of what the . . . claim is and the grounds upon which it rests.” Khalik v. United
Air Lines, 671 F.3d 1188, 1192 (10th Cir. 2012) (citing to Fed. R. Civ. P. 8 and Erickson
v. Pardus, 551 U.S. 89 (2007)). The issue on a motion to dismiss is not whether plaintiff
will prevail, but whether he is entitled to offer evidence to support his claims. Beedle v.
Wilson, 422 F.3d 1059, 1063 (10th Cir. 2005).
The Court recognizes that some courts have required pleadings close to the
specificity Defendant requests, including one in this district. See, e.g., Perkins v. 199
SEIU United Healthcare Workers East, 73 F. Supp. 3d 278, 290 (S.D.N.Y. 2014);
Martinez v. Xclusive Mgmt., LLC, No. 15-CV-00047-MSK-MEH, 2015 WL 12734809, at
*6 (D. Colo. Aug. 12, 2015). However, under the circumstances of this case, the Court
elects to follow the long line of cases declining to require such a factually detailed
pleading. See, e.g., Renteria-Camacho v. DIRECTV, Inc., No. 14-2529, 2015 WL
1399707, at *3 (D. Kan. Mar. 26, 2015); Spears v. Mid–Am. Waffles, Inc., No. 11-2273CM, 2011 WL 6304126, at *3 (D. Kan. Dec. 16, 2011); Harris v. Ground Zero Shelters,
Co., No. CIV-16-190-F, 2016 WL 9526448, at *1 (W.D. Okla. Apr. 22, 2016); Sec’y of
Labor v. Labbe, 319 F. App’x 761, 763–64 (11th Cir. 2008); Chao v. Rivendell Woods,
Inc., 415 F.3d 342 (4th Cir. 2005); Nicholson v. UTi Worldwide, Inc., No. 09-772-JPG,
2010 WL 551551, at *4 (S.D.Ill. Feb. 12, 2010)).

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Instead, all that is required for a plaintiff asserting a claim of unpaid overtime
under the FLSA is a statement that he worked more than forty hours in a given work
week (or weeks) without being compensated for overtime. See Rayfield v. Sandbox
Logistics, LLC, 217 F. Supp. 3d 1299, 1300 (D. Colo. 2016) (“The requirements to state
a claim of a FLSA violation are quite straightforward, requiring plaintiff to show a failure
to pay overtime compensation and/or minimum wages to covered employees—no
more.”) (internal quotation marks omitted); Contra Landers v. Quality Commc’ns, Inc.,
771 F.3d 638, 644–45 (9th Cir. 2014), as amended (Jan. 26, 2015) (holding that a
plaintiff “may establish” a plausible claim by including, among other things, the “amount
of overtime wages she believes she is owed” but declining to make the “approximation
of overtime hours the sine qua non of plausibililty for claims brought under the FLSA”).
The Plaintiff in this case has so plead. In addition to generally stating that Plaintiff
was not compensated for his hours worked over forty in a given workweek or over
twelve in a given workday, Plaintiff’s Second Amended Complaint contains the dates of
his employment, his hourly rate of pay, his overtime rate of pay, and a formula for
calculating his and others’ unpaid hours. (Doc. # 105 at 3–4.) The Complaint also states
that Plaintiff and others “frequently” worked more than twelve hours per day or more
than forty hours per week but was not appropriately compensated for overtime. (Id. at
2–3.) Plaintiff’s Second Amended Complaint also puts forth sufficient allegations to
support the inference that missed rest and meal breaks applied to all non-exempt
employees and were a daily occurrence. (Id. at 2–9.) The Second Amended Complaint
also acknowledges that certain records needed to further approximate Plaintiff’s and
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others’ improperly withheld wages “remain in the possession of Defendant” and that a
“precise damage figure” will be provided once discovery is complete. (Id.)
Based on these assertions, the Court finds that these allegations are sufficient to
survive dismissal under Rule 12(b)(6). To conclude otherwise would elevate the
pleading burden of an FLSA plaintiff above the pleading burden of other plaintiffs. See
McDonald v. Kellogg Co., No. 08–2473–JWL, 2009 WL 1125830, at *1 (D. Kan. Apr. 27,
2009); see also Zhong v. August August Corp., 498 F.Supp.2d 625, 629–30 (S.D.N.Y.
2007) (holding that where plaintiff indicated the number of hours worked per week, the
wage plaintiff was earning, and the total number of weeks plaintiff worked sufficiently
alleged damages in an FLSA claim).
The Court accordingly denies Defendant’s request for dismissal of Plaintiff’s
FLSA claim on grounds that his overtime and missed break allegations are inadequately
plead. 2 Because the Court has found that the allegations in Plaintiff’s Second Amended
Complaint are sufficient, the Court denies as moot Plaintiff’s request to amend. (Doc. #
132 at 3.)

Defendant also makes the brief argument that Plaintiff’s short allegations related to
uncompensated “drive time” and “downtime” are not compensable and should therefore be
dismissed. (Doc. # 111 at 11–12.) The Court rejects this argument as misplaced under Rule
12(b)(6). Defendant’s contentions are more suited for a motion for summary judgment since it
would require this Court to look beyond the truth of Plaintiff’s well-plead allegations to determine
whether the “drive time” or “downtime” are “an integral and indispensable part of [Plaintiff’s]
principal activities.” Smith v. Aztec Well Servicing Co., 462 F.3d 1274, 1288 (10th Cir. 2006).
Defendant’s conclusory argument hardly supports such a finding at this stage in the
proceedings.

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C. RECORD KEEPING ALLEGATIONS
Next, Defendant argues that Plaintiff’s FLSA claim should be dismissed to the
extent it is based on Defendant’s failure to keep accurate payroll records. The Court
disagrees.
The FLSA requires that covered employers “make, keep, and preserve such
records of the persons employed by him and of the wages, hours, and other conditions
and practices of employment maintained by him.” 29 U.S.C. § 211(c). Employers are
generally required to keep these records for a period of two or three years, depending
on the information in question. See generally 29 C.F.R. §§ 516.5, 516.6. Failure to keep
appropriate records constitutes an independent violation of the FLSA. See 29 U.S.C. §
215; see also Solis v. SCA Rest. Corp., 938 F.Supp.2d 380, 398 (E.D.N.Y. 2013). The
FLSA’s implementing regulations require that employers account for, among other
things, the hours worked each workday and workweek, the total premium pay for
overtime hours, any additions or deductions from wages paid each pay period, and the
total wages paid. 29 C.F.R. §§ 516.2.
At this stage in the litigation, Plaintiff’s Second Amended Complaint is sufficient.
The Complaint states:
•

“Although it was Defendant’s burden to keep sufficient records to demonstrate
that its employees were paid in accordance with state and federal wage and
hour law, Defendant failed to do so and, in particular, failed to properly track
breaks.” (Doc. # 105 at 4.)

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•

“Defendant . . . fail[ed] to maintain true and accurate time records for all hours
worked by Class Members.” (Id. at 6.)

Moreover, from the remainder of the well-pleaded allegations in Plaintiff’s
Complaint, which this Court must accept as true, Plaintiff challenges Defendant’s payroll
policy of automatically deducting pay from its employee’s wages without ensuring that
those breaks were provided—and its corresponding insufficient and inaccurate
timesheets. (Id. at 4.)
Although, as Defendant points out, 29 C.F.R. §§ 516.2 does not expressly
require an employer to specifically track breaks, it does require an employer to record
“deductions from wages paid each pay period” as well as an employee’s overtime rate
of pay and hours worked. At this point, Plaintiff’s allegations in his Second Amended
Complaint support that Defendant may not have kept legally sufficient records with
respect to overtime pay and break deductions for Plaintiff and others.
The Court accordingly denies Defendant’s request for dismissal of Plaintiff’s
FLSA claim on grounds that his time-keeping allegations are inadequately pleaded.
The Court likewise denies as moot Plaintiff’s request to amend such time-keeping
allegations to provide more specificity.
D. STATE CLAIMS
Defendant’s arguments for dismissal of Plaintiff’s state law claims mirror its
arguments for dismissal of Plaintiff’s FLSA claim. Thus, for the same reasons set forth
above, the Court denies Defendant’s request for dismissal of Plaintiff’s state law claims.

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IV.

CONCLUSION

For the foregoing reasons, the Court ORDERS as follows:
1. Magistrate Judge Mix’s Recommendations (Doc. ## 145, 155) are
REJECTED;
2. Defendant’s Motion to Dismiss (Doc. # 111) is DENIED; and
3. Plaintiff’s Motion to Amend the Complaint (Doc. # 132) is DENIED AS MOOT.

DATED: August 29, 2018

BY THE COURT:
_______________________________
CHRISTINE M. ARGUELLO
United States District Judge

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