Spataro v. Government Employers Insurance Company et al

Filing 28

MEMORANDUM & ORDER granting in part and denying in part 22 Motion to Dismiss for Failure to State a Claim; For the foregoing reasons, GEICO's motion to dismiss the Second Amended Complaint (Docket Entry 22) is GRANTED IN PART and DENIED IN P ART. GEICO's motion to dismiss is DENIED insofar as it seeks dismissal of Plaintiff's overtime claims. It is GRANTED insofar as it seeks dismissal of Plaintiffs gap-time claim under the NYLL. So Ordered by Judge Joanna Seybert on 9/22/2015. C/ECF (Valle, Christine)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
----------------------------------------X
CHRISTOPHER SPATARO, individually
and on behalf of all others
similarly situated,
Plaintiff,
MEMORANDUM & ORDER
13-CV-5020(JS)(ARL)

-againstGOVERNMENT EMPLOYERS INSURANCE COMPANY,
GEICO CASUALTY COMPANY, GEICO INDEMNITY
COMPANY, and GEICO GENERAL INSURANCE
COMPANY,

Defendants.
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APPEARANCES
For Plaintiff:
Andrew Bell, Esq.
Locks Law Firm PLLC
747 Third Avenue, 37th Floor
New York, NY 10017
For Defendants:

Barry I. Levy, Esq.
Scott Green, Esq.
Rivkin Radler LLP
926 RXR Plaza
Uniondale, NY 11556
Eric Hemmendinger, Esq.
Shawe & Rosenthal LLP
20 S Charles Street, Suite 1102
Baltimore, MD 21201

SEYBERT, District Judge:
Plaintiff Christopher Spataro (“Plaintiff”) commenced
this

putative

class

and

collective

action

against

Defendants

Government Employers Insurance Company, GEICO Casualty Company,
GEICO

Indemnity

Company,

and

GEICO

General

Insurance

Company

(collectively, “GEICO”), alleging that GEICO failed to pay its

automobile damage adjusters overtime in violation of the Fair Labor
Standards Act (“FLSA”), 29 U.S.C. § 201, et seq., and the New York
Labor Law (“NYLL”) § 650 et seq.

Currently pending before the

Court is GEICO’s motion to dismiss the Second Amended Complaint
for failure to state a claim pursuant to Federal Rule of Civil
Procedure 12(b)(6). (Docket Entry 22.) For the following reasons,
GEICO’s motion to dismiss is GRANTED IN PART and DENIED IN PART.
BACKGROUND

The Court presumes general familiarity with the factual
background

of

this

case,

which

is

set

forth

in

the

Court’s

August 6, 2014 Memorandum and Order dismissing Plaintiff’s Amended
Complaint with leave to replead (the “2014 Dismissal Order”).
Spataro v. Gov’t Emp’rs Ins. Co., No. 13-CV-5020, 2014 WL 3890222
(E.D.N.Y. Aug. 6, 2014).
Between 2007 and 2012, Plaintiff worked for GEICO as an
automobile damage adjuster.
Entry 21, ¶ 16.)

(Second Am. Compl. (“SAC”), Docket

In this action, Plaintiff claims that he and

other adjusters who worked for GEICO received less overtime than
they were legally entitled to under the FLSA and the NYLL as a
result of GEICO’s method of compensating its adjusters.
Plaintiff commenced this action on September 9, 2013.
In the Amended Complaint, which the Court dismissed in its 2014
Dismissal Order, Plaintiff alleged that GEICO’s adjusters were
scheduled to work a five-day, 38.75-hour workweek.
2

(Am. Compl.,

Docket Entry 14, ¶ 31.)

For hours worked in excess of the normal

38.75-hour workweek, the adjusters allegedly received two forms of
“overtime” pay, which depended on the type of work performed. (Am.
Compl. ¶¶ 25-32.)

First, the adjusters received “premium pay” for

time spent working on “supplementals to [ ] regularly scheduled
inspections.”

(Am. Compl. ¶ 29.)

Second, the adjusters received

“regular overtime” for time spent working on “extra inspections.”
(Am. Compl. ¶ 30.)
Plaintiff alleged that he regularly worked approximately
fifty hours per week during the six years that he was an adjuster.
(Am. Compl. ¶ 23.)

Of those fifty hours, he worked 38.75 hours of

regular, non-overtime work; 1.25 hours of “premium pay” work; and
ten hours of “regular overtime” work.

(Am. Compl. ¶ 31.)

He

received a weekly salary of $966, which Plaintiff alleged applied
only to the first 38.75 hours of GEICO’s normal workweek at a
regular hourly rate of $25.70.

(Am. Compl. ¶ 32.)

For each hour

of “regular overtime,” he received time and one-half of his regular
hourly rate.

(Am. Compl. ¶ 26.)

For an hour of “premium pay”

work, he received only one-half of a different hourly rate, which
was calculated by dividing Plaintiff’s weekly salary by the total
number of hours he actually worked in that particular week.
Compl. ¶¶ 27, 33.)

(Am.

Thus, for one hour of “premium pay” work,

Plaintiff received only $9.96 (i.e., one-half of $996/50 hours).
(Am. Compl. ¶ 33.)
3

Plaintiff claimed that GEICO “purportedly” calculated
the “premium pay” rate according to the “fluctuating workweek”
(“FWW”) method of calculating overtime, but that GEICO did not
meet the criteria for using the FWW method.

(Am. Compl. ¶¶ 27,

33.) As explained in the 2014 Dismissal Order, generally speaking,
under the FLSA, employers must pay their employees at least the
governing minimum wage, 29 U.S.C. § 206, and overtime wages at a
rate of time and one-half the regular hourly rate for any hours
worked in excess of forty hours per week, 29 U.S.C. § 207. However,
an employee who works a “fluctuating workweek” may be paid at a
rate of half of his hourly rate for overtime based on the theory
that his weekly salary covers any number of hours worked in a
particular week.

Often referred to as “half-time,” the FWW method

was first recognized by the Supreme Court in Overnight Motor
Transportation Co. v. Missel, 316 U.S. 572, 62 S. Ct. 1216, 86 L.
Ed.

1682

(1942)

and

later

codified

regulations, 29 C.F.R. § 778.114.

in

the

federal

For the FWW method to apply,

the employer must meet the following criteria:
(1)

the employee’s hours must fluctuate from
week to week;

(2)

the employee must receive a fixed weekly
salary that remains the same regardless
of the number of hours worked during that
week;

(3)

the fixed amount must be sufficient to
compensate the employee at a regular rate

4

labor

that is not less than the legal minimum
wage;
(4)

the employer and the employee must have
a ‘clear mutual understanding’ that the
employer will pay the employee the fixed
weekly salary regardless of hours worked;
and

(5)

the employee must receive 50 % overtime
premium in addition to the fixed weekly
salary for all hours worked in excess of
40 during that week.

Seraphin v. TomKats, Inc., No. 11-CV-4382, 2013 WL 940914, at *3
(E.D.N.Y. Mar. 11, 2013) (citing 29 C.F.R. § 778.114).

In the

Amended Complaint, Plaintiff alleged that GEICO failed to meet the
FWW

method

because

the

parties

never

had

a

clear

mutual

understanding that his fixed salary was compensation for all hours
worked in any given week.

(Am. Compl. ¶ 38.)

On January 17, 2014, GEICO moved to dismiss the Amended
Complaint for failure to state a claim pursuant to Federal Rule of
Civil Procedure 12(b)(6), which as noted above, the Court granted
on August 6, 2014.
that

the

Amended

In its first motion to dismiss, GEICO argued
Complaint

should

be

dismissed

because

the

allegations of the Amended Complaint actually established that
GEICO properly used the FWW method to compensate Plaintiff for
time spent on “premium pay” work.

(See GEICO’s First Br., Docket

Entry 17, at 5 (stating that the Amended Complaint “alleges no
facts that would suggest GEICO improperly used the fluctuating
workweek method of computing overtime”).)
5

GEICO also argued that

Plaintiff failed to state a plausible claim that it discouraged
Plaintiff and other adjusters from reporting “premium pay” time.
(GEICO’s First Br. at 7.)
In the 2014 Dismissal Order, the Court disagreed with
GEICO’s contention that the Amended Complaint established that
GEICO properly used the FWW method to compensate Plaintiff for
time spent on “premium pay” work.

Specifically, the Court noted

that the Amended Complaint alleged that Plaintiff did not have an
understanding that his fixed salary was compensation for all hours
worked in any given week.
Nonetheless,

the

Court

Spataro, 2014 WL 3890222, at *3.

dismissed

Plaintiff’s

overtime

claim

because it failed to state a claim that GEICO failed to pay him
the proper amount for overtime, i.e., hours worked in excess of
forty hours per week.

Id. at *4.

In particular, the Amended

Complaint never alleged that Plaintiff performed any “premium pay”
work in excess of forty hours per week and, in his opposition brief
to GEICO’s first motion to dismiss, Plaintiff referred to the 1.25
hours of “premium pay” work as “regular time (i.e., less than 40).”
Id. (quoting Pl.’s First Opp. Br., Docket Entry 18, at 7–8).
Additionally, the Court found that Plaintiff failed to state a
plausible claim that GEICO discouraged him and other adjusters
from reporting overtime because the Amended Complaint proffered no
facts to support that allegation.

6

Id.

However, the Court granted

Plaintiff leave to file a second amended complaint to fix the
deficiencies noted in the Court’s 2014 Dismissal Order.
Plaintiff
September 5, 2014.

filed

his

Second

(Docket Entry 21.)

Amended

Id.1

Complaint

on

The allegations of the

Second Amended Complaint mirror those of the Amended Complaint.
However, this time, Plaintiff alleges that he regularly performed
approximately two hours of “premium pay” work in excess of forty
hours per week, for which he did not receive time and one-half of
his regular hourly rate. (SAC ¶ 42.) The Second Amended Complaint
also supplies additional facts in support of Plaintiff’s claim
that GEICO discouraged him and other adjusters from reporting
overtime.

(SAC ¶¶ 33-35.)
GEICO now moves to dismiss the Second Amended Complaint.

(Docket Entry 22.)

This motion is fully brief and is currently

pending before the Court.
DISCUSSION

The

Court

will

first

address

the

applicable

legal

standard before turning to GEICO’s motion more specifically.

The Court further held that Plaintiff’s overtime claim under
the NYLL did not raise any separate issues because “the NYLL is
‘nearly identical to [the] FLSA’ for the purposes of Plaintiff’s
overtime claim. Spataro, 2014 WL 3890222, at *4 n.3 (quoting
Stein v. Guardsmark, LLC, No. 12–CV–4739, 2013 WL 3809463, at
*12 n. 6 (S.D.N.Y. July 23, 2013)).
1

7

I.

Legal Standard
In deciding Rule 12(b)(6) motions to dismiss, the Court

applies a “plausibility standard,” which is guided by “[t]wo
working principles.”

Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.

Ct. 1937, 173 L. Ed. 2d 868 (2009); accord Harris v. Mills, 572
F.3d 66, 71-72 (2d Cir. 2009).

First, although the Court must

accept all allegations as true, this “tenet” is “inapplicable to
legal conclusions;” thus, “[t]hreadbare recitals of the elements
of a cause of action, supported by mere conclusory statements, do
not suffice.”
72.

Iqbal, 556 U.S. at 678; accord Harris, 572 F.3d at

Second, only complaints that state a “plausible claim for

relief” can survive a Rule 12(b)(6) motion to dismiss.
U.S. at 679.

Iqbal, 556

Determining whether a complaint does so is “a

context-specific task that requires the reviewing court to draw on
its judicial experience and common sense.”

Id.; accord Harris,

572 F.3d at 72.
II.

GEICO’s Motion
A.

Overtime Claims
GEICO again argues that Plaintiff’s overtime claims

should be dismissed because GEICO properly paid Plaintiff overtime
under the FWW method for calculating overtime.2
Br., Docket Entry 23, at 4-7.)

(GEICO’s Second

GEICO’s motion is rejected for the

This time, GEICO does not move to dismiss Plaintiff’s
allegation that he was forced to perform off-the-clock work.
2

8

same reason stated in the 2014 Dismissal Order.

As noted, for the

FWW method to apply, “the employer and the employee must have a
‘clear

mutual

understanding’

that

the

employer

will

pay

the

employee the fixed weekly salary regardless of hours worked,” among
other requirements.

Seraphin, 2013 WL 940914, at *3 (citing 29

C.F.R. § 778.114).

As he alleged in the Amended Complaint,

Plaintiff again alleges that he never had an understanding that
his fixed salary applied to all hours worked in any given week.
(SAC ¶ 48.)

Thus, the Second Amended Complaint adequately alleges

that GEICO improperly applied the FWW method.
GEICO artfully contends that a mutual understanding that
Plaintiff’s fixed salary applied to all hours worked in any given
week is evidenced by the fact that Plaintiff continued to accept
his weekly salary for all hours worked.
at 5-6.)

(See GEICO’s Second Br.

In support, GEICO points to a 2009 Department of Labor

opinion letter stating that “‘[w]here an employee continues to
work and accept payment of a salary for all hours of work, her
acceptance of payment of the salary will validate the fluctuating
workweek method of compensation as to her employment.’”

(GEICO’s

Second Br. at 5 (citing Opinion Letter, 2009 WL 648995 (January 14,
2009)).)

The Court does not disagree with GEICO’s interpretation

of the law.

However, again, Plaintiff specifically pleaded that

he did not understand his salary to be compensation for all hours
of work in any given week.

To the extent there are questions as
9

to whether Plaintiff did or did not accept his salary for all hours
of work, such questions are not appropriate for resolution at the
motion to dismiss stage.
not

reveal

that

Since the Second Amended Complaint does

Plaintiff

and

GEICO

had

a

clear

mutual

understanding regarding his salary, GEICO’s motion to dismiss
Plaintiff’s overtime claims under the FLSA and the NYLL is DENIED.
B.

NYLL Gap-time Claim
In opposing GEICO’s first motion to dismiss the Amended

Complaint, Plaintiff claimed that he “‘ha[d] a separate gaptime
claim [under the NYLL] for the difference in between’ the hourly
rate he received for the 38.75 hours of ‘regular time’ worked and
the 1.25 hours of work for which he was paid at a rate of $9.96.”
Spataro, 2014 WL 3890222, at *4 n.3 (quoting Pl.’s First Opp. Br.
at 8).

In the 2014 Dismissal Order, however, the Court noted that

the Amended Complaint only asserted unpaid overtime claims and
that Plaintiff could not amend his pleading to assert a gap-time
claim “‘by papers filed in response to a dispositive motion to
dismiss.’”

Id. (quoting Caple v. Parman Mortg. Assocs. L.P., No.

11–CV–3268, 2012 WL 4511445, at *4 (E.D.N.Y. Oct. 1, 2012)).

In

his opposition brief to the instant motion to dismiss, Plaintiff
again claims that he has a “supplemental claim” under the NYLL for
gap-time pay, (Pl.’s Second Opp. Br., Docket Entry 26, at 12), but
such

a

claim

is

nowhere

to

be

found

in

the

Second

Amended

Complaint. In fact, the only cause of action under the NYLL states
10

that GEICO failed to pay “the legally required amount of overtime
compensation.”
however:

(SAC ¶ 88.)

A gap-time claim is different,

“A gap-time claim is one in which an employee has not

worked 40 hours in a given week but seeks recovery of unpaid time
worked, or in which an employee has worked over 40 hours in a given
week but seeks recovery for unpaid work under 40 hours.”

Lundy v.

Catholic Health Sys. of Long Island Inc., 711 F.3d 106, 115 (2d
Cir. 2013).

Accordingly, since the Second Amended Complaint does

not assert a gap-time claim, GEICO’s motion to dismiss is GRANTED
insofar as it seeks dismissal of a gap-time claim.

Because the

Court previously notified Plaintiff that a gap-time claim was not
asserted in the Amended Complaint, the Court will not grant
Plaintiff leave to replead this claim for a second time.

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CONCLUSION
For the foregoing reasons, GEICO’s motion to dismiss the
Second Amended Complaint (Docket Entry 22) is GRANTED IN PART and
DENIED IN PART.

GEICO’s motion to dismiss is DENIED insofar as it

seeks dismissal of Plaintiff’s overtime claims.

It is GRANTED

insofar as it seeks dismissal of Plaintiff’s gap-time claim under
the NYLL.

SO ORDERED.
/s/ JOANNA SEYBERT______S
Joanna Seybert, U.S.D.J.
Dated:

September
22 , 2015
Central Islip, New York

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