Burton v. Appriss Inc.
MEMORANDUM OPINION by Senior Judge Charles R. Simpson, III on 11/18/2013; 4 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM, or alternatively, Motion to Dismiss State-Law Claim filed by Appriss Inc. ; a separate order will be entered in accordance with this opinion.cc:counsel (TLB)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
This matter is before the court on the motion of Defendant Appriss, Inc. (“Appriss”) to
dismiss Plaintiff Angela Burton’s (“Burton”) complaint pursuant to Federal Rule of Civil
Procedure 12(b)(6) or, alternatively, to dismiss Burton’s state-law claim. (DN 4). Burton has
filed a response to Appriss’ motion (DN 6), to which Appriss has replied (DN 7). Fully briefed,
the matter is now ripe for adjudication. The court must deny Appriss’ motion to dismiss (DN 4)
at this time because formal discovery may produce evidence supporting Burton’s claims.
Burton was formerly employed as an Account Manager for Appriss’ Information
Services Group in Louisville, Kentucky. Burton alleges that her duties as an Account Manager
included “promoting sales of Defendant’s products, specifically Methcheck, to individual
customers of Defendant.” In addition, Burton alleges that she was responsible for upselling her
assigned customers and managing their accounts. Burton contends that after she terminated her
employment with Appriss, Appriss failed to pay her overtime compensation for time worked in
excess of 40 hours per week, in violation of the provisions of the Fair Labor Standards Act
(“FLSA”), 29 U.S.C. §§ 206 and 207, and the Kentucky Wages and Hours Act (“KWHA”), KRS
§ 337.285.1 In addition to recovery of unpaid overtime compensation, Burton seeks to recover
liquidated damages, prejudgment interest, and attorney’s fees and costs.
Burton purports to bring a collective action under the FLSA, 29 U.S.C. §§ 201, et seq.,
and a Rule 23 class action under the KWHA, KRS §§ 337.010, et seq. The proposed class would
include “[a]ll present and former Account Managers of Appriss, Inc., who were not paid
overtime compensation for time worked in excess of forty (40) hours per week or were not
compensated for time worked” (hereinafter, the “Class Members”). Burton’s complaint requests
that the court certify this action as a class action pursuant to Rule 23 and, in accordance with 29
U.S.C. § 216(b), issue notice to all persons who are presently, or have at any time in the three
years preceding the filing of this action, been employed by Appriss in the position of Account
Burton filed the case in this court, asserting federal subject matter jurisdiction pursuant to
28 U.S.C. § 1331 over the FLSA claims and supplemental jurisdiction pursuant to 28 U.S.C. §
1367(a) over the KWHA claims. The parties have not yet engaged in formal discovery. Appriss
now seeks to dismiss Burton’s complaint pursuant to Rule 12(b)(6) for failure to state a claim or,
in the alternative, to dismiss Burton’s claims arising under the KWHA.
A pleading must contain a “short and plain statement of the claim showing that the
pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). During the pleading stage, the plaintiff
must provide factual allegations that are “enough to raise a right to relief above the speculative
level” and “state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly,
The complaint also alleges that Appriss violated KRS § 337.272, but the Kentucky Revised Statutes contain no
550 U.S. 544, 555, 570 (2007). In ruling on a Rule 12(b)(6) motion to dismiss for failure to state
a claim, a court must “construe the complaint in the light most favorable to plaintiff” and “accept
all well-pled factual allegations as true[.]” Albrecht v. Treon, 617 F.3d 890, 893 (6th Cir. 2010)
(internal marks omitted) (citing Ashcroft v. Iqbal, 556 U.S. 662 (2009); League of United Latin
Am. Citizens v. Bredesen, 500 F.3d 523, 527 (6th Cir. 2007)). Yet, “the tenet that a court must
accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions,”
and “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory
statements, do not suffice.” Ashcroft, 556 U.S. at 678 (citation omitted). “[T]o survive a motion
to dismiss, the complaint must contain either direct or inferential allegations respecting all
material elements” of the offense. In re Travel Agent Comm’n Antitrust Litig., 583 F.3d 896,
903 (6th Cir. 2009) (citation omitted).
As a general rule, a district court may not consider matters outside the pleadings when
ruling on a Rule 12(b)(6) motion to dismiss without converting the motion into one for summary
judgment. J.P. Silverton Indus. L.P. v. Sohm, 243 F. App’x 82, 86–87 (6th Cir. 2007); see Fed.
R. Civ. P. 12(d). However, “when a document is referred to in the complaint and is central to the
plaintiff’s claim,” a defendant “may submit an authentic copy [of the document] to the court to
be considered on a motion to dismiss, and the court’s consideration of the document does not
require conversion of the motion to one for summary judgment.” Greenberg v. Life Ins. Co. of
Virginia, 177 F.3d 507, 514 (6th Cir. 1999) (quotation omitted). If a motion to dismiss is
converted to a motion for summary judgment, “all parties must be given a reasonable
opportunity to present all the material that is pertinent to the motion.” Fed. R. Civ. P. 12(d).
If a defendant asserts an affirmative defense, its Rule 12(b)(6) motion to dismiss should
be granted only where that affirmative defense clearly prevents all conceivable recovery on the
underlying claim. Jones v. Bock, 549 U.S. 199, 215 (2007). Dismissal is only appropriate where
the affirmative defense appears on the face of the complaint, and there is no dispute that the
plaintiff’s action is barred by the defense. See Cataldo v. U.S. Steel Corp., 676 F.3d 542, 547
(6th Cir. 2012) (finding that “a plaintiff generally need not plead the lack of affirmative defenses
to state a valid claim”).
Burton contends that Appriss violated several provisions of the FLSA and the KWHA by
failing to compensate her and the Class Members for overtime hours worked while in its employ.
“The FLSA requires overtime pay for each hour worked in excess of forty hours per week[.]”
Foster v. Nationwide Mut. Ins. Co., 710 F.3d 640, 642 (6th Cir. 2013); 29 U.S.C. § 207(a)(1).
The KWHA imposes this same overtime pay requirement on employers. KRS § 337.285.
Employers who violate these provisions are liable to their employees in the amount of the unpaid
overtime compensation owed, in addition to liquidated damages and reasonable attorney’s fees.
29 U.S.C. § 216(b); KRS § 337.385.
Certain categories of employees are excluded from this overtime compensation
requirement. For example, employers do not have to pay overtime wages to persons employed
in a “bona fide executive, administrative, or professional capacity.” 29 U.S.C. § 213(a)(1); KRS
§ 337.010(2)(a). “An employer may raise a plaintiff’s status as an exempt employee as an
affirmative defense to claims brought under the FLSA.” Orton v. Johnny’s Lunch Franchise,
LLC, 668 F.3d 843, 846–47 (6th Cir. 2012) (citation omitted). However, “exemptions to the
FLSA’s overtime provisions are to be narrowly construed against the employers seeking to assert
them,” and the employer bears the burden of proof as to the applicability of the exemption.
Martin v. Indiana Michigan Power Co., 381 F.3d 574, 578 (6th Cir. 2004) (citations and internal
A. The FLSA Claims
Burton alleges that Appriss willfully and intentionally violated 29 U.S.C. §§ 206 and 207
of the FLSA by depriving her and the Class Members of overtime compensation. Section 216(b)
of the FLSA states that a qualifying employer is liable to its employees if it fails to pay them the
federally mandated minimum wage under Section 206 of the Act and/or one-and-one-half times
the employees’ regular rate of pay for work completed over forty hours per week under Section
207 of the Act. Employees bringing a claim for unpaid overtime compensation under Section
207 of the FLSA must prove, as part of their prima facie case, that: “(1) there exists an
employer-employee relationship; (2) there was an engagement in activities within coverage of
the FLSA; and (3) the defendant failed to pay the plaintiff the overtime pay required by law.”
Noble v. Serco, Inc., 2009 WL 1811550, at *2 (E.D. Ky. June 25, 2009) (citing Kowalski v.
Kowalski Heat Transfer Co., 920 F. Supp. 799, 806 (N.D. Ohio 1996)).
Appriss’ motion comes to the court under Rule 12(b)(6), and thus the court must accept
the complaint’s well-pled factual allegations as true. Albrecht v. Treon, 617 F.3d 890, 893 (6th
Cir. 2010) (citations and internal marks omitted). The complaint alleges that Burton was
employed by Appriss, that Appriss is an enterprise engaged in interstate commerce, and that
Appriss intentionally and willfully failed to pay overtime compensation to Burton and the Class
Members for each hour worked in excess of forty hours per week. After considering the
complaint the court finds that, as to the FLSA claim, Burton has pleaded sufficient factual
content to survive Appriss’ motion to dismiss. “Once the plaintiff has made a prima facie case,
the burden shifts to the employer to show by a preponderance of the evidence that one of the
exemptions afforded by Section 213 of the FLSA applies to the employment in question.”
Kowalski, 920 F. Supp. at 806. In its motion to dismiss, Appriss raises as an affirmative defense
that Burton and the Class Members are administrative employees, as defined in 29 C.F.R. §
541.200(a), and are thus exempt from the FLSA’s overtime compensation requirements. Section
213 of the FLSA states that the overtime pay requirement does not apply to administrative
employees, which are defined as employees:
Compensated on a salary or fee basis at a rate of not less than $455 per
week . . ., exclusive of board, lodging or other facilities;
Whose primary duty is the performance of office or non-manual work
directly related to the management or general business operations of the
employer or the employer’s customers; and
Whose primary duty includes the exercise of discretion and independent
judgment with respect to matters of significance.
29 C.F.R. § 541.200(a) (citing 29 U.S.C. § 213(a)(1)). Appriss has the burden of proving its
affirmative defense by showing that Burton’s and the Class Members’ employment fit within the
three prongs of the administrative employee exemption.
Appriss fails to satisfy the first prong of the exemption because it has not provided the
court with proof that Burton and the Class Members were compensated in an amount that would
meet the requirements of 29 C.F.R. § 541.200(a). Instead, Appriss states that the parties “do not
dispute that the Plaintiff earned more than $455 per week on a salary basis[.]” (DN 4-1, p. 7 n.3).
Burton’s complaint does not state her rate of compensation, and Appriss’ bald assertion is not
sufficient proof that Burton and the Class Members were compensated in a manner that would
satisfy the administrative employee exemption.
Even if Appriss could meet its burden with regard to the compensation requirement,
Appriss would also need to prove the applicability of the second and third prongs of the
administrative employee exemption. Both prongs require Appriss to define the “primary duties”
of Burton and the Class Members. In determining which acts constitute an employee’s primary
duties, courts must “focus on evidence regarding the actual day-to-day activities of the employee
rather than more general job descriptions contained in resumes, position descriptions, and
performance evaluations.” See Schaefer v. Indiana Michigan Power Co., 358 F.3d 394, 400 (6th
Cir. 2004) (citing Ale v. Tenn. Valley Auth., 269 F.3d 680, 688–92 (6th Cir. 2001)). Neither
Appriss nor Burton have provided a description or account of the Class Members’ actual, or dayto-day, duties.2 Thus, Appriss cannot satisfy the second and third prongs of the administrative
Because the availability of the administrative employee exemption is not “unequivocally”
clear from the face of the complaint, Appriss’ affirmative defense “is improperly presented at the
pleading stage.” See Beaulieu v. Vermont, 2010 WL 3632460, at *5–6 (D. Vt. Aug. 5, 2010)
(denying the employer’s motion to dismiss the plaintiff’s FLSA claims and noting that “[t]he
exemption categories delineated by the FLSA are not designed to thwart nascent claims, but
rather, are available affirmative defenses to be fleshed out during the discovery process”). The
court is unable to conclude that no set of facts could be proven wherein Burton and the Class
Members would be entitled to overtime compensation under the FLSA. Accordingly, the court
must deny Appriss’ motion to dismiss Burton’s FLSA claims at this time.
Appriss attaches to its motion a general job description for the position of “Account Manager,” (DN 4-2, p. 3–4),
which the court declines to consider in making its ruling. Though this description was introduced outside of the
pleadings, the court will not convert Appriss’ motion to one for summary judgment.
B. The State Claim
Appriss also seeks to dismiss Burton’s claim arising under the KWHA, in particular,
KRS § 337.285.3 Appriss raises several grounds upon which it requests dismissal of this claim.
Appriss first argues that the court should refuse to invoke its supplemental jurisdiction over this
state law claim because it provides for a different allocation of the burden of proof and presents a
different standard of limitation than does Burton’s FLSA claims. The court has original
jurisdiction over Burton’s claims under the FLSA, as these claims arise under federal law. See
28 U.S.C. § 1331 (“The district courts shall have original jurisdiction of all civil actions arising
under the Constitution, laws, or treaties of the United States.”). In order to consider Burton’s
state law claim, the court must exercise supplemental jurisdiction under 28 U.S.C. § 1367(a). In
doing so, the court looks to whether both claims “derive from a common nucleus of operative
facts,” Harper v. AutoAlliance Int’l, Inc., 392 F.3d 195, 209 (6th Cir. 2004) (citation omitted),
such that Burton “would expect to try them in one judicial proceeding.” Michigan Bell Tel. Co.
v. MCIMetro Access Transmission Servs., Inc., 323 F.3d 348, 362 (6th Cir. 2003).
Burton’s FLSA claims allege that Burton and the Class Members were entitled to
overtime wages, and Appriss failed to pay such wages. (DN 1, ¶ 1). Burton’s claim under the
KWHA also seeks recovery of unpaid overtime wages. (DN 1, ¶ 1). Whether Burton and the
Class Members were entitled to receive overtime compensation is an issue that must be resolved
for both the FLSA claims and the KWHA claim. Moreover, there is no indication that the relief
Burton seeks for the FLSA claims would not also encompass the relief she seeks for the KWHA
claim. These claims derive from a common nucleus of operative facts, and the court may
exercise supplemental jurisdiction over the KWHA claim pursuant to 28 U.S.C. § 1367.
KRS 337.285(1) provides: “No employer shall employ any of his employees for a work week longer than forty
(40) hours, unless such employee receives compensation for his employment in excess of forty (40) hours in a work
week at a rate of not less than one and one-half (1-1/2) times the hourly wage rate at which he is employed.”
Appriss next argues that even if the court decides to exercise supplemental jurisdiction
over the KWHA claim, that claim should nonetheless be dismissed because it is incompatible
with Burton’s FLSA claims. The KWHA differs from the FLSA in several respects. To bring a
claim to recover overtime wages under the KWHA, a plaintiff must—as part of her prima facie
case—provide proof that she is an “employee,” as defined by the KWHA. Fox v. Lovas, 2012
WL 692131, at *4 (W.D. Ky. Mar. 2, 2012) (citing City of Louisville, Div. of Fire v. Fire Serv.
Managers Ass’n ex rel. Kaelin, 212 S.W.3d 89, 94 (Ky. 2006)). The KWHA defines an
“employee” as “any person employed by or suffered or permitted to work for an employer,” but
this definition does not include “[a]ny individual employed in a bona fide executive,
administrative, supervisory, or professional capacity . . ., as the terms are defined by
administrative regulations” of the Department of Labor. KRS § 337.010(2)(a)(2). Thus, Burton
bears the burden of proving that she and the Class Members are “employees,” as defined by the
KWHA. This requires Burton to plead facts which show that she and the Class Members were
not employed in an executive, administrative, supervisory, or professional capacity. Whether
Burton and the Class Members are exempt employees under the KWHA is a question of law for
the court to decide. Puckett v. Automed Techs., Inc., 2009 WL 1530677, at *3 (W.D. Ky. June 1,
The complaint does not state the rate of Burton’s and the Class Members’ compensation,
but it outlines Burton’s job duties as follows: “Plaintiff was primarily responsible for promoting
sales of Defendant’s products . . . to individual customers of Defendant,” and was involved in
“upselling her assigned customers and managing those customer’s [sic] accounts.” (DN 1, ¶ 9).
From these statements alone, this court is unable to conclude at this time whether Burton and the
Class Members are “employees,” as that term is defined in KRS § 337.010(2)(a)(2). In Goodwin
v. Novartis Pharmaceuticals Corp., 2012 WL 1079086 (W.D. Ky. Mar. 30, 2012), a court
reached a similar conclusion in a case involving a senior sales consultant who filed several
claims against her former employer, including a claim for unpaid wages under KRS § 337.385.
In that case, the employer sought to dismiss the plaintiff’s claims pursuant to Rule 12(b)(6).
After considering the relevant provisions of the KWHA, along with the statements contained in
the complaint and the limited pleadings, the court found that it could not conclude whether the
plaintiff fit within the KWHA’s definition of “employee.” Id. at *6. The court held that
“[a]lthough Plaintiff must ultimately establish her right to recover under § 337.385 as a nonexempt employee and the amounts owed, the Court concludes Plaintiff has adequately pleaded
her statutory wage claim.” Id. As the facts in this case are similar to those in Goodwin, this
court also finds that Burton has adequately pleaded her KWHA claim, insofar as she has pled
facts which show that she was a non-exempt employee under Kentucky law.
Appriss next argues that the KWHA claim “cannot co-exist” with Plaintiff’s federal
FLSA claims. Appriss recognizes that “many courts have determined that a Fed. R. Civ. P. 23
opt-out class action is not inherently incompatible with a 29 U.S.C. § 216(b) opt-in collective
action,” yet it requests dismissal of Burton’s KWHA claim because “it presents novel issues of
state law that will predominate over the federal issue.” (DN 4-1, p. 11–12). Appriss expresses
concern that the allegedly inherent incongruities between the two acts will be most apparent at
the class certification phase. In Fox v. Lovas, 2012 WL 692131 (W.D. Ky. Mar. 2, 2012), a
court addressed this issue when a plaintiff brought claims under both the FLSA and the KWHA.
The court noted that there were structural differences between the federal and state acts:
In an overtime wages case under the FLSA, the employer bears the burden of
proving that the employee is exempt because she is a bona fide administrative
employee. If the employer proves that the employee works in such a capacity, it
necessarily means that the plaintiff cannot prove she is an “employee” under the
KWHA. The two are mutually exclusive.
Id. at *5. Though the FLSA and the KWHA place the burden of proving an exemption to the
overtime compensation requirements on different parties, such differences do not prevent Burton
from simultaneously raising both claims in this court. In fact, a determination of Burton’s status
as an administrative employee will be conclusive for both the FLSA and KWHA claims.
Whether these variances between the FLSA and the KWHA present a problem during class
certification is an issue that should be resolved if, and when, that issue is before the court.
Accordingly, the court must reject Appriss’ argument that Burton’s KWHA claim is
incompatible with her FLSA claims.
Appriss’ final contention is that the court should defer Burton’s state law claim to the
state courts because the state law claim will prolong and complicate the resolution of this matter.
Appriss notes that prior to filing this action, Burton also filed a claim against Appriss in
Jefferson Circuit Court. The state court action is currently pending. The court takes judicial
notice of this state court action,4 but notes that the facts and legal issues involved in that action
are distinct from the action pending before this court. In the state court action, Burton
individually seeks to recover unpaid wages for commissions that Appriss allegedly withheld
from her, in violation of KRS § 337.285; in the case at bar, Burton seeks class certification to
recover unpaid wages for overtime compensation that Appriss allegedly withheld from her and
the Class Members, in violation of KRS § 337.285. As these two cases seek different relief and
involve different parties, they are sufficiently distinct and will not prolong or confuse the issues
Under Fed. R. Evid. 201, a district court may take judicial notice of an adjudicative fact, i.e., that which is “not
subject to reasonable dispute because it: (1) is generally known within the trial court’s territorial jurisdiction; or (2)
can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Public
records, such as the pleadings filed in a state court action, are generally considered “not to be subject to reasonable
dispute.” Jackson v. City of Columbus, 194 F.3d 737, 745 (6th Cir. 1999). The court construes Appriss’ motion to
dismiss (DN 4) to include a request to take judicial notice of the fact that an action between the parties is pending in
the Jefferson Circuit Court. In the absence of any objection from Burton, the court will take notice as requested.
raised by Burton’s FLSA claims. Therefore, the resolution of Burton’s class action relief under
KRS § 337.285 is properly before the court.
For the reasons stated above, Defendant’s motion to dismiss Plaintiff’s complaint or,
alternatively, to dismiss Plaintiff’s state-law claim (DN 4) is DENIED. A separate order will be
entered in accordance with this opinion.
November 18, 2013
C al R Smpo I , ei J d e
h r s . i sn I Sno u g
U i dSae Ds i C ut
nt tt ir t o r
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