Vernon v. Go Ventures, LLC, et al.

Filing 22

OPINION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS 9 . Signed by District Judge Gershwin A. Drain. (TBan)

2:16-cv-13818-GAD-EAS Doc # 22 Filed 05/12/17 Pg 1 of 20

Pg ID 378

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
KIMBERLY VERNON,
Case No. 16-cv-13818
Plaintiff,
UNITED STATES DISTRICT COURT JUDGE
GERSHWIN A. DRAIN

v.
GO VENTURES, LLC, ET AL.,

UNITED STATES MAGISTRATE JUDGE
ELIZABETH A. STAFFORD

Defendants.
/
OPINION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’
MOTION TO DISMISS [9]
I. INTRODUCTION
Plaintiff Kimberly Vernon initiated this action, on behalf of herself and other
similarly situated employees, against Defendants GO Ventures, LLC, GO
Ventures-Holly, LLC, Tangaroo Creek, Drake Enterprises, LLC, Drake
Enterprises-Holly,

LLC,

Greg

Taylor,

and

Wynn

Taylor

(collectively

“Defendants”) on October 26, 2016. Dkt. No. 1. Plaintiff alleges that Defendants
violated the Fair Labor Standards Act of 1938 (“FLSA”), 29 U.S.C. § 201, et seq.,
the Michigan Workforce Opportunity Wage Act, MICH. COMP. LAWS § 408.411, et
seq., the Michigan Whistleblower Protection Act, MICH. COMP. LAWS § 15.361, et
seq., the Elliot-Larsen Civil Rights Act, MICH. COMP. LAWS § 37.2101, et seq., and
Michigan public policy. Id. Plaintiff’s complaint alleges that Defendants failed to
-1-

2:16-cv-13818-GAD-EAS Doc # 22 Filed 05/12/17 Pg 2 of 20

Pg ID 379

pay her and other similarly situated employees of Defendants’ camping and
lodging facilities the appropriate minimum wages and overtime pay, and that
Defendants retaliated against Plaintiff after she notified them about the violations.
Id.
This matter comes before the Court on Defendants’ Motion to Dismiss,
pursuant to Federal Rule of Civil Procedure 12(b)(6). Dkt. No. 9. Upon review of
the pleadings, the Court finds that oral argument will not aid in the disposition of
this matter. Accordingly, the Court will decide the matter on the pleadings. See
E.D. Mich. LR 7.1(f)(2). For the reasons stated more fully below, this Court will
grant in part and deny in part Defendants’ motion [9].

II. BACKGROUND
Defendants own and operate numerous campgrounds and lodging facilities
in states including Michigan, Tennessee, New York, Alabama, and Missouri. Dkt.
No. 1, p. 5 (Pg. ID 5). Plaintiff asserts that these businesses operate more than
seven months of the year. Id. at 6.
Plaintiff began working for Defendants’ campground in Holly, Michigan in
or about April 2013. Id. In her initial position as Activities Director, Plaintiff’s
starting pay was $7.25 per hour. Id. Plaintiff’s hours exceeded 40 hours per week

-2-

2:16-cv-13818-GAD-EAS Doc # 22 Filed 05/12/17 Pg 3 of 20

Pg ID 380

and would include “off the clock” work that Defendants did not include on her
time records. Id.
Plaintiff states that she became a General Manager for Defendants in or
about December 2015. Id. at 7. In April 2016, Defendants began to pay Plaintiff
$350.00 per week. Id. Plaintiff regularly worked over 40 hours per week,
including, “off the clock” work that Defendants did not record on Plaintiff’s time
records. Id.
Plaintiff reported concerns to Defendants, including concerns that she was
paid lower wages and received fewer benefits than male employees, that
non-immigrant workers were mistreated, that J-1 Visa requirements were violated,
that there were child labor issues, and that employees were not compensated in
accordance with state and federal law. Id. Defendants did not respond to Plaintiff’s
reports and concerns. Id. at 8.
Plaintiff sought legal counsel after growing concerned of possible
retaliation. Id. Plaintiff’s legal counsel sent Defendants a letter on July 25, 2016,
notifying them of his representation of Plaintiff and requesting Defendants direct
all further communications concerning Plaintiff’s employment to him. Id. at 8, 29.
That same day, after receiving the letter, Defendants suspended Plaintiff, directed
her to return all company property, and escorted her off Defendants’ premises. Id.
at 8. On July 27, 2016, Defendants sent Plaintiff a letter informing her that she was
-3-

2:16-cv-13818-GAD-EAS Doc # 22 Filed 05/12/17 Pg 4 of 20

Pg ID 381

being “terminated” from the managerial program, but could be considered for her
prior position. Id. at 8, 35.
On July 28, 2016, Defendants sent a letter to Plaintiff and her counsel. Id. at
8, 38–40. Defendants maintained that Plaintiff could no longer work as a manager,
but could possibly still work as a clerk. Id.
III. LEGAL STANDARD
Federal Rule of Civil Procedure 12(b)(6) authorizes dismissal of a complaint
for “failure to state a claim upon which relief can be granted.” To withstand a
motion to dismiss pursuant to Rule 12(b)(6), a complaint must comply with the
pleading requirements of Federal Rule of Civil Procedure 8(a). See Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). Rule 8(a)(2) requires “a short and plain statement
of the claim showing that the pleader is entitled to relief, in order to give the
defendant fair notice of what the . . . claim is and the grounds upon which it rests.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quotation marks omitted)
(quoting Fed. R. Civ. P. 8(a)(2); Conley v. Gibson, 355 U.S. 41, 47 (1957)). To
meet this standard, a complaint must contain sufficient factual matter, accepted as
true, to “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at
570; see also Iqbal, 556 U.S. at 678–80 (2009) (applying the plausibility standard
articulated in Twombly).

-4-

2:16-cv-13818-GAD-EAS Doc # 22 Filed 05/12/17 Pg 5 of 20

Pg ID 382

When considering a Rule 12(b)(6) motion to dismiss, the Court must
construe the complaint in a light most favorable to the plaintiff and accept all of his
or her factual allegations as true. Lambert v. Hartman, 517 F.3d 433, 439 (6th Cir.
2008). However, the Court need not accept mere conclusory statements or legal
conclusions couched as factual allegations. See Iqbal, 556 U.S. at 678.
In ruling on a motion to dismiss, the Court usually cannot consider matters
outside of the pleadings. Weiner v. Klais & Co., Inc., 108 F.3d 86, 89 (6th Cir.
1997). There are limited exceptions to this general rule. For instance, the Court
may consider “the Complaint and any exhibits attached thereto, public records,
items appearing in the record of the case and exhibits attached to defendant’s
motion to dismiss so long as they are referred to in the Complaint and are central to
the claims contained therein.” Bassett v. Nat’l Collegiate Athletic Ass’n, 528 F.3d
426, 430 (6th Cir. 2008). The Court may also consider “documents incorporated
into the complaint by reference, and matters of which a court may take judicial
notice.” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007).
IV. DISCUSSION
A.

Adequacy of Pleading
Defendants first argue that Plaintiff has not properly pled her wage and hour

claims, relying on cases from district courts outside the Sixth Circuit to contend

-5-

2:16-cv-13818-GAD-EAS Doc # 22 Filed 05/12/17 Pg 6 of 20

Pg ID 383

that wage and overtime claims have strict pleading requirements. The Court did not
find binding precedent in which the Sixth Circuit adopted this approach. See Pope
v. Walgreen Co., No. 3:14-CV-439, 2015 WL 471006, at *2–3 (E.D. Tenn. Feb. 4,
2015) (noting that the “level of detail necessary to plead a FLSA overtime claim
. . . has divided courts around the country” and “district courts within the Sixth
Circuit have applied a less strict approach.”).
The Supreme Court has recognized that “the pleading standard Rule 8
announces does not require ‘detailed factual allegations,’ ” but instead “demands
more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Iqbal,
556 U.S. at 678.
Although the complaint is far from detailed, the Court finds it sufficiently
provides factual allegations and is not merely parroting the relevant statutes. For
instance, Plaintiff provides the dates of her employment, the positions in which she
worked, and the rate at which she was compensated for each position. She alleges
that the relevant statutes apply to the Defendants and that she was employed by
Defendants during the relevant time periods. Plaintiff alleges that in one position,
she was not paid for her work exceeding forty hours per week, and that in another
position, her fixed salary was less than the required minimum. In sum, Plaintiff’s
allegations provides Defendants with sufficient notice of the allegations to form a
response.
-6-

2:16-cv-13818-GAD-EAS Doc # 22 Filed 05/12/17 Pg 7 of 20

Pg ID 384

Thus, because Plaintiff’s allegations serve as a short and plain statement
from which the Court can draw a reasonable inference that the Defendants are
liable for the misconduct alleged, her claims will not be dismissed on this basis.
B.

Fair Labor Standards Act Claims
Plaintiff has brought three claims under the FLSA: Count I, a collective

action claim alleging failure to pay overtime pay, in violation of 29 U.S.C. § 207;
Count II, a collective action claim alleging failure to pay minimum wage, in
violation of 29 U.S.C. § 206; and Count III, an individual claim alleging unlawful
retaliation, in violation of 29 U.S.C. § 215. Dkt. No. 1, pp. 14–17 (Pg. ID 14–17).
The FLSA “has been construed liberally to apply to the furthest reaches
consistent with congressional discretion.” Mitchell v. Lublin, McGaughy &
Assocs., 358 U.S. 207, 211 (1959). Congress specified the limited exemptions to
the FLSA. 29 U.S.C. § 213. The Supreme Court has stated that these exceptions
are to “be narrowly construed, giving due regard to the plain meaning of statutory
language and the intent of Congress.” A.H. Phillips, Inc. v. Walling, 324 U.S. 490,
493 (1945). “To extend an exemption to other than those plainly and unmistakably
within its terms and spirit is to abuse the interpretative process and to frustrate the
announced will of the people.” Id.
In the Sixth Circuit, “an employer who claims to be exempt from the
requirements of the Fair Labor Standards Act has the burden of proving it qualifies
-7-

2:16-cv-13818-GAD-EAS Doc # 22 Filed 05/12/17 Pg 8 of 20

Pg ID 385

under the terms of a specific exemption.” Chao v. Double JJ Resort Ranch, 375
F.3d 393, 396 (6th Cir. 2004) (citing Homemakers Home & Health Care Servs.,
Inc. v. Carden, 538 F.2d 98, 101 (6th Cir. 1976)).
Defendants argue they qualify under the “amusement or recreational
establishment” exception, 29 U.S.C. § 213(a)(3). That exemption covers
any employee employed by an establishment which is an amusement
or recreational establishment, organized camp, or religious or
non-profit educational conference center, if (A) it does not operate for
more than seven months in any calendar year, or (B) during the
preceding calendar year, its average receipts for any six months of
such year were not more than 33 ⅓ per centum of its average receipts
for the other six months of such year, except that the exemption from
sections 206 and 207 of this title provided by this paragraph does not
apply with respect to any employee of a private entity engaged in
providing services or facilities (other than, in the case of the
exemption from section 206 of this title, a private entity engaged in
providing services and facilities directly related to skiing) in a national
park or a national forest, or on land in the National Wildlife Refuge
System, under a contract with the Secretary of the Interior or the
Secretary of Agriculture;
Id. In reviewing this type of exemption, the Sixth Circuit reviewed the legislative
history, noting that, “[t]hese establishments are typically those operated by
concessionaires at amusement parks and beaches for 6 months or less than a year.”
Chao, 375 F.3d at 397.
In holding that a western-themed resort hotel, including campsites and
outdoor recreational activities, did not qualify under the “amusement or
recreational facility” exemption, the Chao panel found that the majority of Double
-8-

2:16-cv-13818-GAD-EAS Doc # 22 Filed 05/12/17 Pg 9 of 20

Pg ID 386

JJ’s earnings came from lodging and food sales, and that its principal activity was
not selling recreational activities. 375 F.3d at 397–98. Therefore, the panel held
that this was not the type of establishment Congress had intended to exempt. Id.
See also Mann v. Falk, 523 F. App’x 549, 553 (11th Cir. 2013) (affirming that an
RV park, where most guests came for recreation, did not transform the business
into a recreational entity and thus did not qualify for exemption).
The Chao panel had the luxury of factual evidence to comb through in
determining if the business was exempt because the case had been appealed after
summary judgment. In a motion to dismiss, the Court must accept Plaintiff’s
allegations as true, and those allegations do not support finding that Defendants’
principal activity was the sale of recreational activities. Plaintiff’s complaint states
that Defendants’ operated campgrounds and lodging facilities, and does not
provide any information that would suggest Defendants’ principal activity is akin
to establishments like “concessionaires at amusement parks and beaches.” Chao,
375 F.3d at 397. Indeed, lodging facilities may include rental rooms and meal
sales—each “a necessity of life,” which has already been recognized in this circuit
not to be exempt as a “recreational activity.” See id.
Accordingly, the Court does not find at this early stage1 in the proceedings

1

Defendants are welcome to present this argument again, after discovery, in a
motion for summary judgment. Should undisputed facts demonstrate that
-9-

2:16-cv-13818-GAD-EAS Doc # 22 Filed 05/12/17 Pg 10 of 20

Pg ID 387

that Defendants’ have adequately proven that they qualify as exempt under section
1303(a)(3).2 The Court denies Defendants’ Motion to Dismiss as to Plaintiff’s
FLSA claims.
C.

Workforce Opportunity Wage Act Claims
Plaintiff has brought two claims under the Workforce Opportunity Wage

Act: Count IV, a class action claim alleging failure to pay overtime pay, in
violation of MICH. COMP. LAWS § 408.414A; and Count V, an individual claim
alleging failure to pay minimum wages, in violation of MICH. COMP. LAWS
§ 408.414. Dkt. No. 1, pp. 17–20 (Pg. ID 17–20). Defendants argue in their motion
that Plaintiff’s Workforce Opportunity Wage Act claims must be dismissed
because the Act exempts employers covered by the FLSA. Dkt. No. 9, p. 24 (Pg.

Defendants only offer short-term campsites, without lodging facilities like rental
rooms or long-term RV lot rentals, a stronger argument may be made for exemption.
See Mann v. Falk, No. 2:11-CV-14432-KMM, 2012 WL 4896726, at *5 (S.D. Fla.
Oct. 15, 2012), aff’d in part, 523 F. App’x 549 (11th Cir. 2013) (citing Dept. of
Labor, Field Operations Handbook § 25j15(b)).
2
Defendants also attached extrinsic evidence to their motion, in an effort to
demonstrate they operate fewer than seven months per year. See Dkt. No. 9-1, p. 2–
8 (Pg. ID No. 135–41). The first exhibit shows that Defendants altered the dates on
their website to reflect a shortened operation period after Plaintiff filed her
complaint. The second exhibit is a spreadsheet of income from an unspecified
location. These documents were not incorporated into Plaintiff’s complaint and they
are not of the nature that would permit the Court to take judicial notice of them.
Because the Court is analyzing this case on a motion to dismiss, rather than one of
summary judgment, the Court does not find that these exhibits may be properly
considered.
-10-

2:16-cv-13818-GAD-EAS Doc # 22 Filed 05/12/17 Pg 11 of 20

Pg ID 388

ID 120).
Both the federal FLSA, 29 U.S.C. § 201 et seq., and the Michigan
Workforce Opportunity Wage Act, MICH. COMP. LAWS § 408.411 et seq., govern
the requirements for overtime compensation in the State of Michigan. These two
statutes largely parallel each other. See Arrington v. Michigan Bell Tel. Co., 746 F.
Supp. 2d 854, 857–58 (E.D. Mich. 2010) (comparing the FLSA and Michigan’s
Minimum Wage Law, which the Workforce Opportunity Wage Act replaced). The
Workforce Opportunity Wage Act exempts from compliance employers subject to
the FLSA’s minimum wage provisions, “unless those federal minimum wage
provisions would result in a lower minimum hourly wage than provided in this
act.” MICH. COMP. LAWS § 408.420(1). However, if an employer is only subject to
both the Workforce Opportunity Wage Act because the state minimum wage
exceeds the federal minimum wage, then “Section 4a does not apply.” MICH.
COMP. LAWS § 408.420(1)(a). Section 4a, MICH. COMP. LAWS § 408.414a, governs
overtime compensation and requires a time-and-a-half premium.
Accordingly, employers subject to the Workforce Opportunity Wage Act
solely because Michigan’s minimum wage exceeds the federal minimum wage are
exempt from the Act’s overtime provisions, except for certain childcare and
domestic service employees. MICH. COMP. LAWS § 408.420. Thus, under the plain
language of the statute, Charter is exempt from the overtime provisions of the
-11-

2:16-cv-13818-GAD-EAS Doc # 22 Filed 05/12/17 Pg 12 of 20

Pg ID 389

Michigan Act, and Count VII must be dismissed as a matter of law. See Davenport
v. Charter Commc’ns, LLC, 35 F. Supp. 3d 1040, 1053 (E.D. Mo. 2014)
(dismissing

a

§ 408.414a

overtime

claim

based

on

the

language

of

§ 408.420(1)(a)). Plaintiff’s Count IV, alleging failure to pay overtime pay in
violation of the Workforce Opportunity Wage Act, MICH. COMP. LAWS § 408.414a,
must be dismissed. The Court will grant Defendants’ motion as to Count IV.
Nevertheless, it does not appear that the minimum pay provision of
Workforce Opportunity Wage Act, MICH. COMP. LAWS § 408.414, has been
exempted in the same manner as the overtime pay provision, MICH. COMP. LAWS
§ 408.414a. The statute only states that the overtime pay provision, Section 4a,
does not apply when an employer is subject to the Workforce Opportunity Wage
Act only because the state’s minimum wage exceeds the federal minimum wage.
MICH. COMP. LAWS § 408.420(1)(a). Based on the statutes’ language, it appears
that Defendants are subject to both the FLSA and the Workforce Opportunity
Wage Act for failures to pay minimum wages. Thus, the Court will deny
Defendants’ motion as to Plaintiff’s Count V, alleging failure to pay minimum
wages in violation of the Workforce Opportunity Wage Act, MICH. COMP. LAWS
§ 408.414.

-12-

2:16-cv-13818-GAD-EAS Doc # 22 Filed 05/12/17 Pg 13 of 20

D.

Pg ID 390

Plaintiff’s Collective and Class Action Claims
Defendants next argue that Plaintiff has failed to prove she is similarly

situated to permit a collective action. 3 Dkt. No. 9, p. 31 (Pg. ID No. 127).
Plaintiff’s Counts I and II allege collective action claims under the FLSA: the first
for failure to pay overtime and the second for failure to pay minimum wages. Dkt.
No. 1, pp. 14–16 (Pg. ID 14–16). Plaintiff’s remaining class action claim, Count V,
alleges class action claims under the Workforce Opportunity Wage Act for failure
to pay minimum wages. Dkt. No. 1, pp. 19–20 (Pg. ID 19–20). The Court will
review her collective action claims first, followed by her class action claim.
a. FLSA Collective Action Claims
Section 216(b) of the FLSA provides that employees may recover unpaid
overtime compensation or unpaid minimum wages by collectively suing an
employer under certain circumstances. 29 U.S.C. § 216(b). Section 216(b) states:
Any employer who violates [the maximum hours and minimum wage
provisions] of this title shall be liable to the employee or employees
affected in the amount of their unpaid minimum wages, or their
unpaid overtime compensation, as the case may be . . . . An action to
recover [such liability] may be maintained . . . by any one or more
employees for and in behalf of himself or themselves and other
employees similarly situated.

3

Although the heading of this argument refers only to collective action claims, it
appears from the content of the argument that Defendants seek to challenge both
Plaintiff’s collective action and class action claims. Dkt. No. 9, pp. 31–34 (Pg. ID
No. 127–30).
-13-

2:16-cv-13818-GAD-EAS Doc # 22 Filed 05/12/17 Pg 14 of 20

Pg ID 391

Id. In a FLSA collective action, employees sue on their own behalf and for other
“similarly situated” persons who may opt into the suit. Comer v. Wal-Mart Stores,
Inc., 454 F.3d 544, 546 (6th Cir. 2006). This is distinguishable from the out-out
approach utilized in class actions under Federal Rule of Civil Procedure 23. Id.
The class-based litigation format authorized by § 216(b) “serves an
important remedial purpose” by allowing “a plaintiff who has suffered only small
monetary harm [to] join a larger pool of similarly situated plaintiffs” in order to
reduce individual litigation costs and employ judicial resources efficiently. Gaffers
v. Kelly Servs., Inc., 203 F. Supp. 3d 829, 842–43 (E.D. Mich. 2016) (quoting
O’Brien v. Ed Donnelly Enters., Inc., 575 F.3d 567, 586 (6th Cir. 2009)). A court
typically considers a plaintiff’s collective action allegations at the time the plaintiff
moves to conditionally certify the collective or notify potential collective members.
See id. (noting two-step procedure involving conditional certification of collective
pre-discovery and potential decertification post-discovery). See, e.g., Bonilla v.
Red Bean Sys., Inc., 61 F. Supp. 3d 145, 148–49 (D.D.C. 2014) (denying a motion
to dismiss based on arguments that the collective action was improperly alleged).
At the notice stage, to which this case has not yet proceeded, “the plaintiff
must show only that [her] position is similar, not identical, to the positions held by
the putative class members.” Comer, 454 F.3d at 546–47. That decision to
authorize notice “need only be based on a modest factual showing” because the
-14-

2:16-cv-13818-GAD-EAS Doc # 22 Filed 05/12/17 Pg 15 of 20

Pg ID 392

“determination is made using a fairly lenient standard,” and the analysis “typically
results in conditional certification of a representative class.” Id. at 547 (internal
citations omitted).
Here, on a motion to dismiss, when the Court must consider only whether
the allegation is plausible, accepting the facts in Plaintiff’s complaint as true, the
burden on Plaintiff is even lower. Plaintiff has met this low burden by identifying
the proposed collective action members as consisting of (1) all current and former
employees, (2) who worked for Defendants, (3) in the past three years, and (4)
were not paid overtime wages or minimum wages as a result of the Defendants’
policy. See Dkt. No. 1, pp. 10–11 (Pg. ID 10–11). This is adequate at the motion to
dismiss stage to identify who the similarly situated employees may be and why
they are similarly situated.
The Court is not ruling today on conditional certification since there is no
motion before it for such a ruling. Defendants are free to dispute any motion for
conditional certification of the proposed collective action members at the
appropriate time, but for the purposes of a motion to dismiss, Plaintiff has met her
burden. The Court will not dismiss Plaintiff’s FLSA collective action claims on
this basis.
b. Workforce Opportunity Wage Act Class Action Claim
Class actions must meet the following requirements prior to certification:
-15-

2:16-cv-13818-GAD-EAS Doc # 22 Filed 05/12/17 Pg 16 of 20

Pg ID 393

(1) the class is so numerous that joinder of all members is
impracticable; (2) there are questions of law or fact common to the
class; (3) the claims or defenses of the representative parties are
typical of the claims or defenses of the class; and (4) the
representative parties will fairly and adequately protect the interests of
the class.
FED. R. CIV. P. 23(a). These requirements are known as numerosity, commonality,
typicality, and adequacy of representation, respectively. Amchem Prod., Inc. v.
Windsor, 521 U.S. 591, 613 (1997). Defendants attack Plaintiff’s role as class
representative, arguing that she does not share common interests with unnamed
class members because she served in a management role from December 2015 to
July 2016. Dkt. No. 9, p. 32 (Pg. ID 128).
“Commonality requires the plaintiff to demonstrate that the class members
have suffered the same injury.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338,
349–50 (2011) (internal quotation omitted). The class’s claims must depend on a
common contention that is of such a nature that it is capable of a classwide
resolution. Id. at 350 (“for example, the assertion of discriminatory bias on the part
of the same supervisor”). “Dissimilarities within the proposed class are what have
the potential to impede the generation of common answers.” Id. (quoting Richard
A. Nagareda, Class Certification in the Age of Aggregate Proof, 84 N.Y.U. L. REV.
97, 132 (2009)).
A court may dismiss a class action claim prior to discovery where factual

-16-

2:16-cv-13818-GAD-EAS Doc # 22 Filed 05/12/17 Pg 17 of 20

Pg ID 394

development would not alter a defective class claim, Pilgrim v. Universal Health
Card, LLC, 660 F.3d 943, 949 (6th Cir. 2011); however, that is not the case here.
As filed, Plaintiff’s class includes (1) all current and former employees (2) who
worked for Defendants (3) at any time during the last three years (4) in the state of
Michigan and (5) were paid less than minimum wage. Dkt. No. 1, p. 11 (Pg. ID
11). Although this claim may need to be more narrowly tailored prior to class
certification, it is readily apparent from Plaintiff’s complaint that she shares a
common interest with her fellow Michigan employees as a result of Defendants
allegedly paying less than the required minimum wages. That her title may differ
from her fellow employees does not change that they were all subject to the same
purportedly unlawful wage policy.
The Court finds that further proceedings may aid Plaintiff in pursuing a
more specifically tailored class membership, the validity of which will be
determined on a motion for class certification. The Court will not dismiss
Plaintiff’s Workforce Opportunity Wage Act claim at this early stage in the
proceedings.
E.

Whistleblower Protection Act and the Elliott-Larsen Civil Rights Act
Claims
In Count VI, Plaintiff alleges unlawful retaliation in violation of Michigan

Whistleblowers’ Protection Act, MICH. COMP. LAWS § 15.31. Dkt. No. 1, pp. 20–
-17-

2:16-cv-13818-GAD-EAS Doc # 22 Filed 05/12/17 Pg 18 of 20

Pg ID 395

21 (Pg. ID 20–21). In Count VII, Plaintiff alleges unlawful retaliation in violation
of the Elliott-Larsen Civil Rights Act, MICH. COMP. LAWS § 37.2101. Id. at 21–22
(Pg. ID 21–22).
Defendants’ motion to dismiss does not address how Plaintiff failed to state
a claim under either the Whistleblowers’ Protection Act or the Elliott-Larsen Civil
Rights Act. The only portion of the brief that the Court found addressing those
claims was in the Statement of Issues Presented, where Defendants stated that they
believed that Plaintiff’s complaint should be dismissed because all claims fail as a
matter of law. Dkt. No. 9, p. 8 (Pg. ID 104). Since this is a legal conclusion
without any authority or argument in support, the Court will not spend any
additional time examining this issue.
The Court will deny Defendants’ motion as to Plaintiff’s Count VI under the
Michigan Whistleblowers’ Protection Act and Count VII under the Elliott-Larsen
Civil Rights Act.
F.

Public Policy Claim
Finally, in Count VIII, Plaintiff alleges that Defendants engaged in

retaliatory discharge in violation of public policy. Dkt. No. 1, pp. 22–23 (Pg. ID
22–23). Defendants argue that this claim must be dismissed because it is
preempted by law. Dkt. No. 9, p. 25 (Pg. ID 121). Plaintiff responds that she

-18-

2:16-cv-13818-GAD-EAS Doc # 22 Filed 05/12/17 Pg 19 of 20

Pg ID 396

intends to plead the public-policy claim in the alternative to her Whistleblower
Protection Act claim. Dkt. No. 17, p. 33 (Pg. ID 270).
Where there is an applicable statutory prohibition against discharge in
retaliation for conduct, a public policy claim is not sustainable. Hilden v. Hurley
Med. Ctr., 831 F. Supp. 2d 1024, 1045–46 (E.D. Mich. 2011), aff’d, 504 F. App’x
408 (6th Cir. 2012) (citing Dudewicz v. Norris–Schmid, Inc., 443 Mich. 68, 80,
(1993), overruled on other grounds by Brown v. Mayor of Detroit, 478 Mich. 589,
734 N.W.2d 514 (2007)). The Whistleblower Protection Act is the exclusive
remedy for situations where an employer discharges an employee in retaliation for
reporting or planning to report suspected legal or regulatory violations to a public
body. Id. at 1046. Conversely, where an “employee does not complain to a public
body and instead refuses a private employer’s direction to violate the law,” the
Whistleblower Protection Act is inapplicable and a public policy claim may
proceed. Id.
Here, the factual record has yet to be developed on whether Plaintiff had
reported or was planning on reporting the alleged violations to a public body.
Defendants have, however, provided precedent that holds a Whistleblower
Protection Act claim and a retaliation in violation of Michigan public policy claim
should not be allowed to continue simultaneously past summary judgment. See
Briggs v. Univ. of Detroit-Mercy, 22 F. Supp. 3d 798 (E.D. Mich. 2014).
-19-

2:16-cv-13818-GAD-EAS Doc # 22 Filed 05/12/17 Pg 20 of 20

Pg ID 397

Nevertheless, since the Court is considering this issue on a motion to
dismiss, it appears that the case of Yurk v. Application Software Tech. Corp., No.
2:15-CV-13962, 2017 WL 661014 (E.D. Mich. Feb. 17, 2017) is most on point. In
Yurk, Judge Michelson held that a public-policy claim was subject to dismissal on
the pleadings in view of a well-pled Whistleblower Protection Act claim, so long
as the public-policy claim could be reinstated should the Whistleblower Protection
Act claim prove inapplicable. Id. at *1–3.
The Court will follow Yurk’s reasoning and dismiss Plaintiff’s public policy
claim, subject to reinstatement should her Whistleblower Protection Act claim be
found to be inapplicable. The Court will grant Defendants’ motion and dismiss
Count VIII without prejudice.
IV. CONCLUSION
For the foregoing reasons, Defendants’ Motion to Dismiss [9] is
GRANTED as to Counts IV and VIII, and DENIED as to Counts I–III and V–VII.
IT IS SO ORDERED.
Dated: May 12, 2017
/s/Gershwin A Drain
HON. GERSHWIN A. DRAIN
United States District Court Judge

-20-