Lombardozzi v. Allscripts Healthcare, LLC

Filing 18

ORDER: Defendant's motion to dismiss [DE 11] is GRANTED. TheNorth Carolina Wage and Hour Act claim is DISMISSED. Plaintiff's Fair Labor Standards Act claim may proceed in its entirety. Signed by US District Judge Terrence W. Boyle on 1/27/2014. (Sawyer, D.)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DIVISION
NO. 5:13-CV-715-BO

BRYAN LOMBARDOZZI, Individually and on
behalf of all other similarly situated persons,
Plaintiffs,
v.

ALLSCRIPTS HEALTHCARE, LLC,
Defendant.

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ORDER

This matter is before the Court on defendant's motion for partial dismissal of the
complaint pursuant to Federal Rules of Civil Procedure 12(b)(6) [DE 11]. The motion is ripe for
adjudication. For the reasons stated herein, defendant's motion to dismiss is GRANTED.

BACKGROUND
Plaintiff, Bryan Lombardozzi, brings this case on behalf of himself and all other similarly
situated persons. Lombardozzi claims that defendant, Allscripts Healthcare, LLC ("Allscripts"),
misclassified its "Database Administrators" and "Senior Database Administrators" as exempt
and failed to pay them overtime compensation in violation of the Fair Labor Standards Act
("FLSA") and the North Carolina Wage and Hour Act ("NCWHA"). Defendant claims that
plaintiffs NCWHA claim fails as a matter of law because the statute's overtime requirement
does not apply to entities covered by the FLSA and Allscripts does not dispute the allegation that
it is covered by the FLSA.

DISCUSSION
A Rule 12(b)(6) motion to dismiss for failure to state a claim for which relief can be
granted challenges the legal sufficiency of a plaintiffs complaint. Francis v. Giacomelli, 588
F.3d 186, 192 (4th Cir. 2009). When ruling on the motion, the court "must accept as true all of
the factual allegations contained in the complaint." Erickson v. Pardus, 551 U.S. 89, 93-94
(2007) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007)). Although complete and
detailed factual allegations are not required, "a plaintiffs obligation to provide the 'grounds' of
his 'entitle[ment] to relief requires more than labels and conclusions." Twombly, 550 U.S. at 555
(citations omitted). "Threadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing

Twombly, 550 U.S. at 555). Similarly, a court need not accept as true a plaintiffs "unwarranted
inferences, unreasonable conclusions, or arguments." Eastern Shore Mkts. v. JD. Assocs. Ltd.,
213 F.3d 175, 180 (4th Cir. 2000). A trial court is "not bound to accept as true a legal conclusion
couched as a factual allegation." Twombly, 550 U.S. at 555.
The NCWHA provides that "[ e]very employer shall pay each employee who works
longer than 40 hours in any workweek at a rate of not less than time and one half of the regular
rate of pay ofthe employee for those hours worked in excess of 40 per week ...."N.C. Gen.
Stat. § 95-25.4. Subject to certain exclusions not applicable in this case, the overtime provision
of the NCWHA does not apply to "[a]ny person employed in an enterprise engaged in commerce
or in the production of goods for commerce as defined in the Fair Labor Standards Act." !d. §
95-25.14(a).
The FLSA defines enterprise as "the related activities performed (either through unified
operations or common control) by any person or persons for a common business purpose, and

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includes all such activities whether performed in one or more establishments or by one or more
corporate or other organizational units including departments of an establishment operated
through leasing arrangements, but shall not include the related activities performed for such
enterprise by an independent contractor." 29 U.S.C. § 203(r)(l). An "[e]nterprise engaged in
commerce or in the production of goods for commerce" includes an "enterprise" that (1) "has
employees engaged in commerce or in the production of goods for commerce, or that has
employees handling, selling, or otherwise working on goods or materials that have been moved
in or produced for commerce by any person," and (2) "whose annual gross volume of sales made
or business done is not less than $500,000 (exclusive of excise taxes at the retail level that are
separately stated)." !d. § 203(s)(l)(A).
Here, Lombardozzi asserts an overtime claim under Section 207 of the FLSA and also
alleges that All scripts employed him and members of the putative class for purposes of the FLSA
and is otherwise an entity covered by the statute. In particular, Lombardozzi claims that he and
others "were employed by defendant within the meaning of the FLSA," contends that he and
others within the putative class "engaged in commerce and/or [that] defendant was engaged in
commerce including interstate commerce, within the meaning of29 U.S.C. §§ 206(a) and
207(a)," and alleges that "defendant transacted commerce and business in excess of $500,000.00
annually or has revenues in excess of $500,000.00 annually, for all applicable periods in
question." [DE 1 ~ 24-26].
Federal courts in North Carolina have routinely rejected NCWHA claims when the
defendant is covered, or allegedly covered by the FLSA. See, e.g. Spencer v. Hyde Cnty., 959 F.
Supp. 721,728 (E.D.N.C. 1997) (citing Amos v. Oakdale Knitting Co., 416 S.E.2d 166 (N.C.
1992)) (explaining that "[t]he North Carolina Supreme Court has indicated that if a defendant is

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covered by the FLSA, it is exempt from the state statute."). The Spencer court granted summary
judgment in favor of defendants on the NCWHA claim at issue after finding that plaintiffs
represented that the defendants "engaged in commerce within the meaning of29 U.S.C. §
203(s)(1)" and noting that "since Hyde County argues that plaintiffs' claim under the NCWHA is
preempted because the FLSA applies, they evidently concede that plaintiffs' entitlement to a
minimum wage and overtime pay for on-call time is governed by the FLSA." Spencer, 959 F.
Supp. at 728. In Bonham v. WolfCreek Academy, the court found that "[a]s a matter of state law,
the NCWHA has by the language of the statute no application where the FLSA governs the
employer-employee relationship" and granted the defendants Rule 12(b)(6) motion rejecting
plaintiffs argument that it could not dismiss the NCWHA claim until the court "definitely
determine[ d) whether the FLSA controls." 767 F. Supp. 2d 558, 565 (W.D.N.C. 2010), adopted,
2011 U.S. Dist. LEXIS 12755 (W.D.N.C. Feb. 8, 2011). Citing the defendants' admission of
enterprise coverage under Section 203(s)(1) and acknowledgment that the FLSA is the
appropriate claim for overtime wages, the Bonham court found that "it appears clear to the court
that any claim plaintiffs have for unpaid overtime will be governed by the FLSA .... " !d.
Here, Allscripts admits that it is an enterprise engaged in commerce or in the production
of goods for commerce as defined by the FLSA. Further All scripts agrees with plaintiff that this
admission binds it for purposes of this litigation while reserving its right to otherwise dispute
liability under the FLSA. Plaintiff concedes that the NCWHA overtime requirement does not
apply where the employer is covered by the FLSA, and does not dispute that the FLSA applies to
All scripts. In light of the parties agreement on this point and considering the legal authorities
cited, this Court agrees that plaintiffs NCWHA claim must be dismissed as it cannot be brought
where the FLSA governs.

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CONCLUSION

For the foregoing reasons, defendant's motion to dismiss [DE 11] is GRANTED. The
North Carolina Wage and Hour Act claim is DISMISSED. Plaintiffs Fair Labor Standards Act
claim may proceed in its entirety.
SO ORDERED.
This the

_H_ day of January, 2014

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