Perez v. Min & Kim, Inc. et al

Filing 27

ORDER denying defendants' Motion for judgment on the pleadings 21 Signed by District Judge George Caram Steeh. (MBea)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
THOMAS E. PEREZ,
Secretary of Labor, United
States Department of Labor,
Plaintiff,
CASE NO. 15-CV-14310
HONORABLE GEORGE CARAM STEEH

v.
MIN & KIM INC., d/b/a
SEOUL GARDEN OF ANN
ARBOR, KOUNWOO HUR,
and SUNG HEE KIM,
Defendants.
/

ORDER DENYING DEFENDANTS’ MOTION FOR
JUDGMENT ON THE PLEADINGS (Doc. 21)
Plaintiff Secretary of Labor Thomas Perez (“Secretary”) brought this action for
alleged violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq.,
against defendant Seoul Garden of Ann Arbor, a Korean and Japanese restaurant, and
its owners Kounwoo Hur and Sung Hee Kim (collectively “defendants”) for failing to pay
their employees overtime and failing to keep adequate records. Now before the court is
defendants’ motion for judgment on the pleadings pursuant to Federal Rule of Civil
Procedure 12(c).1 The court shall decide the motion without oral argument pursuant to
Local Rule 7.1(f)(2). For the reasons set forth below, defendants’ motion shall be
denied.

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Defendants improperly captioned their motion as a motion to dismiss; however,
a motion brought under Rule 12(c) is a motion for judgment on the pleadings.
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A. Background
Because the court is addressing a motion for judgment on the pleadings, the
court must accept the allegations of the complaint as true. Accordingly, the facts
summarized here are those alleged in the complaint only. Defendants allegedly paid
hourly employees a flat day rate or half-day rate for their shifts and did not record hourly
rates for their employees. As a result, defendants allegedly did not compensate their
employees for overtime when they worked more than 40 hours in a week. Through
these allegedly wrongful practices, the Secretary claims defendants violated the FLSA
since at least September 11, 2013. Attached to the complaint, the Secretary named
seventeen individuals who were denied overtime compensation. (Doc. 1, Ex. A). Of
those seventeen individuals, twelve are identified by first and last name, three are
identified by first name only, and two are identified by last name only.
B. Standard of Law
The same standard applies to Rule 12(c) motions as motions to dismiss under
Rule 12(b)(6). Ross, Brovins & Oehmke, P.C. v. Lexis Nexis Group, 463 F.3d 478, 487
(6th Cir. 2006). Rule 12(b)(6) allows the Court to make an assessment as to whether
the plaintiff has stated a claim upon which relief may be granted. Under the Supreme
Court’s articulation of the Rule 12(b)(6) standard in Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 554-56 (2007), the court must construe the complaint in favor of the plaintiff,
accept the allegations of the complaint as true, and determine whether plaintiff’s factual
allegations present plausible claims. “‘[N]aked assertions’ devoid of ‘further factual
enhancement’” are insufficient to “‘state a claim to relief that is plausible on its face.’”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 557, 570).
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To survive a Rule 12(b)(6) motion to dismiss, plaintiff’s pleading for relief must provide
“‘more than labels and conclusions, and a formulaic recitation of the elements of a
cause of action will not do.’” D’Ambrosio v. Marino, 747 F.3d 378, 383 (6th Cir. 2014)
(quoting Twombly, 550 U.S. at 555). Even though the complaint need not contain
“detailed” factual allegations, its “factual allegations must be enough to raise a right to
relief above the speculative level on the assumption that all of the allegations in the
complaint are true.” New Albany Tractor, Inc. v. Louisville Tractor, Inc., 650 F.3d 1046,
1051 (6th Cir. 2011) (quoting Twombly, 550 U.S. at 555).
C. Analysis
Defendants argue dismissal is warranted for two reasons: (1) the Secretary failed
to plead with sufficient factual particularity as required under Iqbal and Twombly; and (2)
the Secretary’s claims are barred by the statute of limitations. Both arguments lack
merit.
1.

The Secretary has Properly Pled its FLSA Claims

Defendants claim that the Secretary has failed to provide factual allegations to
support its claims but merely relies on a formalistic recitation of the elements of an
FLSA claim. Defendants criticize the Secretary for failing to attach investigative reports,
employer records, or other evidence to the complaint. To satisfy the notice pleading
strictures of Rule 8(a)(2) as articulated in Iqbal and Twombly, however, the Secretary is
not required to attach to the complaint the sort of evidence defendants contend is
needed. The complaint alleges that (1) the FLSA applies to defendants, (2) employees,
including those specifically identified in the exhibit attached to the complaint, were not
paid for overtime that was due and owing as they were paid a flat day rate or half-day
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rate for their shifts, and (3) defendants failed to keep hourly records as required under
the FLSA and only recorded whether an employee worked a full-day, half-day, or did not
work. These allegations are not merely a formulaic recital of the elements of an FLSA
claim, but are sufficiently detailed to put defendants on notice of the claims against
them.
District courts within the Sixth Circuit have uniformly held that Iqbal and Twombly
do not impose a heightened pleading requirement in the context of an FLSA claim.
Roberts v. Corr. Corp. of Am., No. 3:14-CV-2009, 2015 WL 3905088, at *4 (M.D. Tenn.
June 25, 2015) (collecting cases). Courts within the Sixth Circuit have consistently held
that “detailed factual pleading is not required in the context of an FLSA claim, so long as
a defendant is given sufficient notice of the prima facie claim that it is being asked to
defend.” Id. at *7. One important reason that detailed factual allegations, of the sort
defendants argue are required, are not necessary in the FLSA context, is that
employment records concerning employees’ compensation and schedules are generally
in the control of the defendant-employer. Id. In their reply brief, defendants state that
the Secretary should be required to identify the employees affected, the exact dates of
the violations, the amount of time worked over 40 hours, and the amount of the wages
owing. This level of specificity is not required to satisfy the strictures of Rule 8. The
Secretary has identified seventeen employees allegedly due overtime compensation. In
addition, the Secretary has articulated that defendants’ procedure of paying employees
a flat rate for either a full-day or a half-day worked, rather than hourly, and improper
record keeping based on this flawed system, amounts to violations under the FLSA.
These allegations are sufficient to put defendants on notice of the cause of action
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against them and easily satisfy the Twombly/Iqbal standards. Accordingly, defendants’
motion for judgment on the pleadings shall be denied.
2.

The Secretary’s Claims are Timely

The Secretary filed the complaint on December 11, 2015. The parties agree and
the law is clear that the limitations period applicable here, for a non-willful violation of
the FLSA, is two years. 29 U.S.C. § 255(a). There also is no dispute that the parties
agreed to toll the limitations period from September 11, 2015 to December 11, 2015.
Applying the tolling agreement to the statute of limitations period, the alleged violations
of the Complaint must have occurred after September 11, 2013 to be timely. The
Complaint alleges that defendants’ violations of the FLSA have been occurring since at
least September 11, 2013. Based on this language, defendants argue that since their
alleged violations may have been taking place prior to September 11, 2013, the action
is time-barred. This argument is specious. When a plaintiff alleges a violation of the
FLSA based on an employer’s failure to pay overtime wages, each paycheck that fails
to include wages for overtime constitutes a separate violation. Consequently, a new
cause of action accrues with the receipt of each paycheck. Archer v. Sullivan Cnty.,
129 F.3d 1263, 1997 WL 720406 at *2 (6th Cir. 1997) (unpublished) (citing Halferty v.
Pulse Drug Co., Inc., 821 F.2d 261, 271 (5th Cir.), modified on other grounds, 826 F.3d
2 (5th Cir. 1987)); Knight v. Columbus, 19 F.3d 579, 581 (11th Cir. 1994). “As such,
even if an employer continuously fails to pay overtime wages during the course of
employment, each paycheck constitutes a separate violation, and claims based on any
paycheck that falls outside the statutory period are barred.” Claeys v. Gandalf, Ltd., 303
F. Supp. 2d 890, 894 (S.D. Ohio 2004). Accordingly, every paycheck that falls within
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the statutory period from September 11, 2013 to the date of filing is properly pled and
falls within the applicable two-year statute of limitations period.
D. Conclusion
For the reasons set forth above, defendants’ motion for judgment on the
pleadings (Doc. 21) is DENIED.
IT IS SO ORDERED.
Dated: May 18, 2016
s/George Caram Steeh
GEORGE CARAM STEEH
UNITED STATES DISTRICT JUDGE

CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys of record on
May 18, 2016, by electronic and/or ordinary mail.
s/Marcia Beauchemin
Deputy Clerk

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