Cangelosi v. Gabriel Bros Inc. et al

Filing 18

MEMORANDUM OPINION AND ORDER re: 11 MOTION to Dismiss Amended Complaint filed by Dominick Gabriel, Gabriel Bros Inc., Jack Gabriel: For the reasons stated above, Defendants' motion to dismiss is GRANTED, and the Ame nded Complaint is dismissed in its entirety. Plaintiff's claims under the FLSA and the NYLL (as well as his withdrawn claim for breach of the covenant of good faith and fair dealing) are dismissed with prejudice. Plaintiff's remaining state-law claims are "dismissed without prejudice and left for resolution to state tribunals." Gibbs, 383 U.S. at 726-27. The Clerk of Court is directed to terminate Docket No. 11 and to close the case. (Signed by Judge Jesse M. Furman on 10/15/2015) (tn)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
FRANK CANGELOSI,
:
:
Plaintiff,
:
:
-v:
:
GABRIEL BROS., INC., d/b/a GABRIEL & CO., et al., :
:
Defendants.
:
:
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10/15/2015

15-CV-3736 (JMF)
MEMORANDUM OPINION
AND ORDER

JESSE M. FURMAN, United States District Judge:
In this case, Plaintiff Frank Cangelosi brings claims against his former employers,
Gabriel Bros., Inc., Jack Gabriel, and Dominick Gabriel, under the Fair Labor Standards Act
(“FLSA”), 29 U.S.C. §§ 201 et seq., the New York State Labor Law (“NYLL”), N.Y. Lab. Law
§§ 650 et seq., and New York common law. Defendants now move to dismiss, pursuant to Rule
12(b)(6) of the Federal Rules of Civil Procedure, arguing — among other things — that Plaintiff
was exempt from FLSA and NYLL protections as an outside salesperson. Based on the
allegations in Plaintiff’s Amended Complaint, the Court agrees and therefore dismisses
Plaintiff’s claims under the FLSA and the NYLL. In addition, the Court declines to exercise
supplemental jurisdiction over the remainder of Plaintiff’s state-law claims. Accordingly, and
for the reasons stated below, the Amended Complaint must be and is dismissed.
The relevant facts, taken from the Amended Complaint and assumed to be true, see
Karmely v. Wertheimer, 737 F.3d 197, 199 (2d Cir. 2013), can be summarized briefly.
Defendants own and operate a wholesale jewelry business, headquartered in New York City,
under the name Gabriel & Co. (Am. Compl. (Docket No. 13) ¶¶ 5, 7-9). Plaintiff, a resident of

Pennsylvania, worked for Defendants as a commissioned salesman from June 30, 2009, until
February 21, 2014, and was assigned an “exclusive territory” that included eastern Pennsylvania,
Delaware, and Baltimore. (Id. ¶¶ 2, 11, 15, 25, 26). Aside from making sales to businesses in
that territory, Plaintiff’s job requirements included completing trainings (id. ¶¶ 39, 26), attending
trade shows and meetings (id. ¶¶ 42, 44, 45, 49-51), submitting reports and other paperwork
following sales visits (id. ¶¶ 30, 35, 40), and making appointments and travel itineraries (id.
¶¶ 31-33). He spent approximately half of his time working from an office in his home. (Id.
¶ 36). He alleges that Defendants violated the FLSA and the NYLL by failing to pay him
minimum wage and overtime and that they breached the parties’ contracts. (See id.). 1
As noted, Defendants move to dismiss. In evaluating a motion to dismiss, the Court must
accept all facts set forth in the complaint as true and draw all reasonable inferences in the
plaintiff’s favor. See, e.g., Burch v. Pioneer Credit Recovery, Inc., 551 F.3d 122, 124 (2d Cir.
2008). A claim will survive a Rule 12(b)(6) motion, however, only if the plaintiff alleges facts
sufficient “to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 570 (2007). A claim is facially plausible “when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at
556). A plaintiff must show “more than a sheer possibility that a defendant acted unlawfully,”
id., and cannot rely on mere “labels and conclusions” to support a claim, Twombly, 550 U.S. at
555. If the plaintiff’s pleadings “have not nudged [his or her] claims across the line from
conceivable to plausible, [the] complaint must be dismissed.” Id. at 570.
1

Although the Amended Complaint also includes a claim for breach of the covenant of
good faith and fair dealing (Am. Compl. ¶¶ 104-07), Plaintiff has withdrawn that claim. (Pl.’s
Mem. Law. (Docket No. 15) (“Pl.’s Mem.”) 1 n. 2). Accordingly, it is dismissed.

2

In this case, Defendants’ motion to dismiss Plaintiff’s claims under the FLSA and the
NYLL turns on application of the “outside salesman” exemptions to those statutes. See 29
U.S.C. § 213(a)(1); 12 N.Y.C.R.R. § 142-2.3.12(c)(13); see also, e.g., Gorey v. Manheim Servs.
Corp., 788 F. Supp. 2d 200, 205 (S.D.N.Y. 2011) (“New York law governing overtime pay is
defined and applied in the same manner as the FLSA.”); Gold v. N.Y. Life Ins. Co., No. 09-CV3210 (WHP), 2011 WL 2421281, at *3 (S.D.N.Y. May 19, 2011) (stating that the NYLL is
“defined and applied in the same manner” as the FLSA and applying the federal definition of
“outside salesmen” to the NYLL). To the extent relevant here, “outside salesman” is defined by
federal regulation to mean “any employee” (1) whose “primary duty is . . . making sales” and (2)
“[w]ho is customarily and regularly engaged away from the employer’s place or places of
business in performing such primary duty.” 29 C.F.R. § 541.500(a). “Primary duty,” as used in
the first prong of the test, is defined as “the principal, main, major or most important duty that
the employee performs” and is to be determined “based on all the facts in a particular case, with
the major emphasis on the character of the employee’s job as a whole.” Id. § 541.700(a).
Further, work “performed incidental to and in conjunction with the employee’s own outside
sales” or “that furthers the employee’s sales efforts” — “including, for example, writing sales
reports, updating or revising the employee’s sales or display catalogue, planning itineraries and
attending sales conferences” — is exempt outside sales work. Id. § 541.500(b). The phrase
“customarily and regularly,” as used in the second prong of the test, “means a frequency that
must be greater than occasional but which, of course, may be less than constant.” Id. § 541.701.
Applying those definitions here, and taking the allegations in the Amended Complaint as
true, Plaintiff qualifies as an exempt outside salesperson under the FLSA and the NYLL. As
alleged in the Amended Complaint, Plaintiff’s primary duty was indisputably selling Defendants’

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jewelry and he was customarily and regularly engaged in that duty away from Defendant’s
places of business, as he spent significant time (indeed, potentially up to fifty percent of his time)
conducting sales to customers at their places of business. (Am. Compl. ¶¶ 25-36). In arguing
otherwise, Plaintiff notes that the Amended Complaint “alleges that he spent more than 50% of
his time working out of his fixed home office” on tasks other than making sales. (Pl.’s Mem. 9;
see also Am. Compl. ¶¶ 29-54). It is true that Plaintiff’s home office qualified as Defendants’
“place of business” for purposes of the “outside salesman” test. See 29 C.F.R. § 541.502. But
the “other” tasks that Plaintiff performed all related to selling Defendant’s jewelry while
traveling to customers’ places of business, and the vast majority of those tasks were plainly
“performed incidental to and in conjunction with” Plaintiff’s sales efforts and thus qualified as
exempt outside sales work as well. 29 C.F.R. § 541.500(b). (In fact, many of the tasks that
Plaintiff alleges that he regularly performed — such as planning itineraries (Am. Compl. ¶¶ 3133), attending conferences (id. ¶¶ 50, 51), and completing reports (id. ¶¶ 30, 40) — are explicitly
listed in the applicable regulations as examples of exempt outside sales work. See 29 C.F.R.
§ 541.500(b).) Moreover, however much time Plaintiff spent working from his home office, the
Amended Complaint makes plain — and there is no dispute — that he conducted sales at
customers’ places of business with “a frequency . . . greater than occasional,” id. § 541.701,
which is to say that he was “customarily and regularly engaged away from” Defendants’ places
of business in performing his primary duty of selling jewelry, id. § 541.500(a); cf. Lint v. Nw.
Mut. Life Ins. Co., No. 09CV1373 DMS (RBB), 2010 WL 4809604, at *3 (S.D. Cal. Nov. 19,
2010) (holding that an employee who spent ten to twenty percent of his time engaged in outside
sales work qualified as an “outside salesman” under the exemption).

4

To be sure, the “outside salesman” exemption is an affirmative defense, and Defendants
thus bear the burden of proving it applies. See, e.g., Chen v. Major League Baseball Props., Inc.,
798 F.3d 72, 81-82 (2d Cir. 2015). But as Plaintiff concedes (Pl.’s Mem. at 7), an affirmative
defense “may be raised in a pre-answer Rule 12(b)(6) motion if the defense appears on the face
of the complaint.” Chen, 798 F.3d at 81 (internal quotation marks omitted). That is the case
here, as Plaintiff’s own allegations in the Amended Complaint “plainly and unmistakably”
establish that he qualified as an exempt outside salesperson under both the FLSA and the NYLL.
Id. at 82. It follows that his claims under those statutes must be and are dismissed.
In light of the dismissal of Plaintiff’s only federal claims, the Court must decide whether
to exercise supplemental jurisdiction over Plaintiff’s remaining state-law claims pursuant to Title
28, United States Code, Section 1367. The “values of judicial economy, convenience, fairness,
and comity” that the Court must consider in deciding whether to exercise supplemental
jurisdiction counsel in favor of doing so with respect to Plaintiff’s claims under the NYLL, as
they are subject to the same analysis as his claims under the FLSA and can be dismissed on that
basis. Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 (1988). But those values do not call
for retaining jurisdiction over Plaintiff’s other state-law claims (to the extent he has not
withdrawn them). See, e.g., In re Merrill Lynch Ltd. P’ships Litig., 154 F.3d 56, 61 (2d Cir.
1998) (noting that, as a general rule, “when the federal claims are dismissed the ‘state claims
should be dismissed as well’” (quoting United Mine Workers v. Gibbs, 383 U.S. 715, 726
(1966))); Purgess v. Sharrock, 33 F.3d 134, 138 (2d Cir. 1994) (recognizing that if the plaintiff’s
federal claims are dismissed before trial and there has not been a substantial expenditure of
resources on the state claims, state claims should generally be dismissed as well).

5

For the reasons stated above, Defendants’ motion to dismiss is GRANTED, and the
Amended Complaint is dismissed in its entirety. Plaintiff’s claims under the FLSA and the
NYLL (as well as his withdrawn claim for breach of the covenant of good faith and fair dealing)
are dismissed with prejudice. Plaintiff’s remaining state-law claims are “dismissed without
prejudice and left for resolution to state tribunals.” Gibbs, 383 U.S. at 726-27. The Clerk of
Court is directed to terminate Docket No. 11 and to close the case.

SO ORDERED.
Date: October 15, 2015
New York, New York

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