Macias v. All-Ways, Inc. et al

Filing 16

MEMORANDUM Opinion and Order Signed by the Honorable Amy J. St. Eve on 5/25/2017:Mailed notice(kef, )

Case: 1:16-cv-11630 Document #: 16 Filed: 05/25/17 Page 1 of 7 PageID #:26

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
FIDEL MACIAS,

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Plaintiffs,
v.
ALL-WAYS, INC., and
ANTHONY DE MATTEO,
Defendants.

No. 16-cv-6446
Hon. Amy J. St. Eve

MEMORANDUM OPINION AND ORDER
AMY J. ST. EVE, District Court Judge:
On December 27, 2016, Plaintiff Fidel Macias (“Macias”) filed a Complaint against
Defendants All-Ways, Inc. (“All-Ways”) and Anthony De Matteo (“De Matteo”), collectively
“Defendants,” seeking relief under the Fair Labor Standards Act of 1938, 29 U.S.C. § 201, et
seq. (“FLSA”) and the Illinois Minimum Wage Law, 820 ILCS 105/1 et seq. (“IMWL”). (R. 1,
Compl.) Defendants moved to dismiss the Complaint pursuant to Federal Rule of Civil
Procedure 12(b)(6) for failure to state a claim. For the following reasons, the Court grants
Defendants’ motion without prejudice.
BACKGROUND
Defendant De Matteo is the President of All-Ways, a landscaping company doing
business in the Northern District of Illinois, that Plaintiff alleges is “an enterprise engaged in
commerce or in the production of goods for commerce.” (Compl. ¶¶ 7-9.) Plaintiff is an Illinois
resident who performed landscaping work and drove trucks as Defendants’ employee from 2006
until December 2, 2016. (Id. ¶¶ 4-5, 12.) Plaintiff alleges that De Matteo is involved in the dayto-day business operations of All-Ways and has the authority to hire and fire employees, to direct

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and supervise employees’ work, to sign off on payroll and checking accounts, and to participate
in employee compensation decisions. (Id. ¶ 9.) Accordingly, Plaintiff claims that both De
Matteo and All-Ways were his “employer” as defined by the FLSA. (Id. ¶¶ 8-10.) Plaintiff
alleges that he often worked more than 50 hours per week, but Defendant paid him a set salary of
$592 per week and did not pay him for the hours he worked beyond 40 hours per week. (Id. ¶¶
13-14.) Plaintiff claims that, although he was paid a set salary, Defendants still required him to
punch a time card before and after every shift. (Id. ¶ 15.)
According to Plaintiff, in the course of his employment, he “handled goods that moved in
interstate commerce and performed non-exempt work.” (Id. ¶ 6.) Plaintiff alleges that he was
not exempt from the overtime wage provisions of the FLSA, but he was directed by Defendants
to work, and often did work, in excess of 40 hours per week. (Id. ¶¶ 20-21.) Plaintiff claims that
Defendants’ practice of not paying him overtime wages violated the FLSA and the IMWL. (Id.
¶¶ 24, 32.)
LEGAL STANDARD
A Rule 12(b)(6) motion challenges the sufficiency of the complaint itself. Bell v. City of
Country Club Hills, 841 F.3d 713, 716 (7th Cir. 2016). Under Rule 8(a)(2), a complaint must
include “a short and plain statement of the claim showing that the pleader is entitled to relief.”
Fed. R. Civ. P. 8(a)(2). The short and plain statement under Rule 8(a)(2) must “give the
defendant fair notice of what the claim is and the grounds upon which it rests.” Bell Atlantic v.
Twombly, 550 U.S. 544, 555 (2007) (citation omitted). Under the federal notice pleading
standards, a plaintiff’s “factual allegations must be enough to raise a right to relief above the
speculative level.” Twombly, 550 U.S. at 555. Put differently, a “complaint must contain
sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”

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Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). In determining
the sufficiency of a complaint under the plausibility standard, courts must “accept all wellpleaded facts as true and draw reasonable inferences in the plaintiffs’ favor.” Roberts v. City of
Chicago, 817 F.3d 561, 564 (7th Cir. 2016). In reviewing the complaint, however, courts need
“not accept as true legal conclusions, or threadbare recitals of the elements of a cause of action,
supported by mere conclusory statements.” Alain v. Miller Brewing Co., 709 F.3d 662, 665–66
(7th Cir. 2013) (citations and quotations omitted).
ANALYSIS
The FLSA imposes minimum and hourly overtime wage requirements for employees
who are “engaged in commerce1 or in the production of goods for commerce” (individual-based
coverage) or who are “employed in an enterprise engaged in commerce or in the production of
goods for commerce” (enterprise-based coverage). 29 U.S.C. §§ 206(a), 207(a)(1). Here,
Defendants argue that the Court must dismiss Plaintiff’s Complaint because Plaintiff has failed
to sufficiently allege either individual or enterprise coverage under the FLSA. The Court
addresses each argument in turn.
I.

Individual Coverage
Individual coverage under the FLSA applies when the employee’s work “is so directly

and vitally related to the functioning of an instrumentality or facility of interstate commerce as to
be, in practical effect, a part of it, rather than isolated, local activity.” Martinez v. Manolos
Tamales, Inc., No. 14 C 9686, 2015 WL 5144024, at *1–2 (N.D. Ill. Aug. 31, 2015) (quoting
Mitchell v. C.W. Vollmer & Co., 349 U.S. 427, 429 (1955)). Plaintiff’s Complaint contains a

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“Commerce” under the FLSA, “means trade, commerce, transportation, transmission, or communication
among the several States or between any State and any place outside thereof.” 29 U.S.C. § 203(b). In
other words, “commerce” refers to interstate commerce.

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one-sentence allegation that he “handled goods that moved in interstate commerce” during the
course of his employment at All-Ways, a landscaping company.
Several courts have held that similarly conclusory allegations are insufficient to support
individual coverage under the FLSA. In Rivas v. Marcelo Hand Car Wash Inc., No. 10 C 1396,
2010 WL 4386858, at *1 (N.D. Ill. Oct. 28, 2010), for example, the plaintiff alleged that his
work cleaning cars at a car wash caused him to handle goods and engage in interstate commerce
because the car wash used the internet to market its services and because the vehicles he washed
may have moved through interstate commerce. The court rejected the plaintiff’s theory of
individual FLSA coverage reasoning that the plaintiff himself did not engage in any internet
marketing activities and explaining that the plaintiff’s “local handling of vehicles [was] simply
too far removed from interstate commerce” to bring him within the scope of the FLSA. Id. at *2.
See also Martinez, 2015 WL 5144024, at *2 (finding plaintiff’s work cooking and cleaning at
restaurants insufficient to raise inference that she produced goods for or engaged in interstate
commerce); Urrutia v. Buena Vista Rest. & Bar, No. 14 C 01356, 2014 WL 7403463, at *2
(N.D. Ill. Dec. 29, 2014) (finding restaurant worker’s individual coverage allegations
“conclusory in nature”); Jacoby v. Schimka Auto Wreckers, Inc., No. 10 C 1452, 2010 WL
3171515, at *4 (N.D. Ill. Aug. 11, 2010) (finding that tow truck company employee’s work was
“isolated local activity” that tangentially used tools that may have traveled in interstate
commerce and thus did not qualify for individual coverage).
Here, like in Rivas and the other cited cases, Plaintiff’s allegations relate to work that
plaintiff performed locally and that was far removed from interstate commerce. Plaintiff’s
threadbare recital of the FLSA standard for individual coverage is insufficient to support the
plausible inference that Plaintiff’s work was “directly and vitally related” to interstate commerce.

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Accordingly, Plaintiff has failed to plead that he qualifies for individual coverage under the
FLSA. The Court, therefore, dismisses this aspect of his FLSA claim without prejudice.
II.

Enterprise Coverage
An employer is an “enterprise” covered by the FLSA if it “has employees engaged in

commerce or in the production of goods for commerce, or [ ] has employees handling, selling, or
otherwise working on goods or materials that have been moved in or produced for commerce by
any person” and “is an enterprise whose annual gross volume of sales made or business done is
not less than $500,000.” 29 U.S.C. § 203(s)(1)(A)(i), (ii). With respect to enterprise coverage,
Plaintiff’s Complaint contains a one-sentence allegation that All-Ways “is an enterprise engaged
in commerce or in the production of goods for commerce within the meaning” of the FLSA.
As an initial matter, Plaintiff’s enterprise coverage allegations fail because Plaintiff has
not alleged that Defendants had at least $500,000 in annual gross sales or business. Indeed,
Plaintiff’s complaint does not contain any allegations about the amount of All-Ways’ sales or the
scope of its business, and thus, “the Court cannot accept as true [Plaintiff’s] conclusory
allegation that [All-Way] is a qualifying enterprise for FLSA purposes.” Urrutia, 2014 WL
7403463, at *3 (dismissing complaint for failure to allege restaurant met gross sales requirement
such that it would be qualifying enterprise under FLSA); Jacoby, 2010 WL 3171515, at *2–3
(granting summary judgment for defendant because plaintiff failed to show defendant’s gross
sales reached $500,000).
In addition to failing to allege the sales threshold, Plaintiff’s allegations also fail because
Plaintiff’s conclusory, one-sentence allegation that Defendants “engaged in commerce or in the
production of goods for commerce” is devoid of any of the detail, specific or broad, that would
lead to an inference that Defendants engage in interstate commerce. While Plaintiff is not
required to provide detailed factual allegations regarding enterprise coverage, he must allege
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more than a conclusory allegation of enterprise coverage that lacks any facts about the nature of
Defendants’ work or how it might be connected to interstate commerce. In Ceant v. Aventura
Limousine & Transp. Serv., Inc., 874 F. Supp. 2d 1373, 1377–78 (S.D. Fla. 2012), for example,
the court dismissed the plaintiff’s FLSA claim because he failed to sufficiently allege enterprise
coverage. The court explained that the plaintiff “provide[d] no factual allegations about the
nature of [the plaintiff’s] work or the nature of [the defendant’s] business” and made no
allegations tying the defendant’s business to interstate commerce. Id. See also Hughes v.
Scarlett’s G.P., Inc., No. 15-CV-5546, 2016 WL 454348, at *3 (N.D. Ill. Feb. 5, 2016)
(dismissing complaint in part because plaintiffs “offer[ed] no specific details of interstate
commerce”); Topp v. Lone Tree Athletic Club, Inc., No. 13-CV-01645-WYD-KLM, 2014 WL
3509201, at *7 (D. Colo. July 15, 2014) (dismissing complaint because it “provide[d] no factual
allegations about the nature of [d]efendant’s business” or whether such business was tied to
interstate commerce). Plaintiff has simply alleged no facts about his work for Defendants, the
nature of Defendants’ business, or how that business is tied to interstate commerce.
Accordingly, Plaintiff has failed to adequately plead both individual and enterprise FLSA
coverage, and the Court dismisses his FLSA claims without prejudice. Because the Court grants
Defendants’ motion to dismiss Plaintiff’s FLSA claim, the Court does not have subject matter
jurisdiction, and thus declines to exercise its supplemental jurisdiction over Plaintiff’s state law
claims. 28 U.S.C. § 1367(c)(3).

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CONCLUSION
For the foregoing reasons, the Court grants Defendants’ motion to dismiss without
prejudice. Plaintiff shall have until June 16, 2017 to file an Amended Complaint.

Dated: May 25, 2017
_________________________________
AMY J. ST. EVE
United States District Court Judge

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