LANCASTER et al v. PJM INTERCONNECTION, LLC

Filing 15

MEMORANDUM RE DEFENDANTS MOTION TO DISMISS, SIGNED BY HONORABLE MICHAEL M. BAYLSON ON 8/16/16. 8/17/16 ENTERED AND COPIES E-MAILED. (va, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
JAMES LANCASTER et al.

CIVIL ACTION

v.

NO. 16-842

PJM INTERCONNECTION, LLC

MEMORANDUM RE DEFENDANT’S MOTION TO DISMISS
I. INTRODUCTION
In this employment dispute, defendant PJM Interconnection, LLC (“PJM” or
“Defendant”) moves to dismiss plaintiffs’ James Lancaster (“Mr. Lancaster”) and William Lebus
(“Mr. Lebus” and together with Mr. Lancaster, “Plaintiffs”) Amended Complaint, in which Mr.
Lancaster and Mr. Lebus each assert, respectively, that PJM violated the Fair Labor Standards
Act of 1938 (“FLSA” or the “Act”)), 29 U.S.C. § 201 et seq., by retaliating against Messrs.
Lancaster and Lebus for filing a complaint seeking adequate compensation for “time on call.”
For the following reasons, PJM’s motion to dismiss is denied.
II. FACTUAL ALLEGATIONS & PROCEDURAL HISTORY
For the purposes of resolving Defendant’s motion to dismiss, the Court assumes all facts
pleaded in Plaintiffs’ Amended Complaint to be true. In addition, the Court relies on two
writings annexed to Defendant’s Memorandum of Law in Support of its Motion to Dismiss
Plaintiffs’ Amended Complaint (ECF 12). The Third Circuit has recognized that a district court
ruling on a motion to dismiss may consider “a ‘document integral to or explicitly relied upon in
the complaint . . . without converting the motion [to dismiss] into one for summary judgment.’”
In re Burlington Coat Factory Secs. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997) (alteration in
original) (quoting Shaw v. Digital Equip. Corp., 82 F.3d 1194, 1220 (1st Cir. 1996)). Thus, it is
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proper to consider these materials to the extent they are incorporated by reference in, and are
integral to, Plaintiffs’ Amended Complaint.
A.

Plaintiffs’ Employment and Work Schedule History with PJM
Mr. Lancaster was employed by PJM as a Senior Engineering Technician (“SET”) in its

Facilities Services Department from October 1, 1994 to December 2, 2014. (Am. Compl. ¶¶ 1011). Mr. Lancaster’s responsibilities at PJM included “providing engineering and technical
support for voice communications,” and “ensur[ing] the safe and reliable operation of” a “highvoltage electricity grid” managed by PJM for approximately 61 million people (the “Power
Grid”). (Am. Compl. ¶¶ 4, 11). Mr. Lancaster received positive performance reviews and
ratings throughout his decades-long employment with PJM. (Am. Compl. ¶¶ 13-16). Mr. Lebus
was also employed by PJM as an SET in the Facilities Services Department from July 20, 1998
until December 2, 2014. (Am. Compl. ¶¶ 17-18). And, like Mr. Lancaster, Mr. Lebus received
positive performance reviews while employed by PJM. (Am. Compl. ¶¶ 21-23).
Mr. Lebus, together with Mr. Lancaster and non-party Jay Stauffer (“Mr. Stauffer”),
comprised a three-person team of SETs assigned to the Facilities Services Department (the “FSD
Team”). (Am. Compl. ¶ 25). Before 2014, the FSD Team reported to David Spangler, PJM’s
Facilities Manager. (Am. Compl. ¶ 52). When Mr. Spangler was promoted to Director of
Facilities Services at PJM, William Franks succeeded Mr. Spangler as Facilities Manager, and
thus became the FSD Team’s supervisor. (Am. Compl. ¶¶ 53-54). Mr. Franks, in turn, reported
to Mr. Spangler. (Am. Compl. ¶ 56).
The FSD Team was scheduled to work forty (40) hours per week at their regular pay rate.
(Am. Compl. ¶ 26). In addition to this compensation, members of the FSD team, including
Plaintiffs, were each eligible for overtime compensation pursuant to the FLSA for time worked

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in excess of forty hours per week, at the rate of not less than one and one-half times their regular
pay rate. (Am. Compl. ¶ 27). Pursuant to guidelines and standards adopted by the North
American Electric Reliability Corporation (“NERC”), PJM maintained a written policy requiring
the FSD Team to be available at any time of the day or night in case there was a loss of critical
telecommunications. (Am. Compl. ¶ 33). According to NERC guidelines and because the FSD
Team was essential to maintaining the safety and reliability of the Power Grid, PJM called and
contacted Plaintiffs at all hours of the day and night, including on weekends and holidays. (Am.
Compl. ¶ 30). The tasks Plaintiffs completed in overtime included traveling to job sites,
“troubleshooting” time-sensitive issues via telephone, and logging into PJM’s Virtual Private
Network (“VPN”). (Am. Compl. ¶ 32). PJM compensated Plaintiffs for this overtime work
according to the appropriate overtime pay rate. (Am. Compl. ¶ 29).
In order to be available to complete this overtime work, the FSD Team needed to spend a
substantial amount of “time on call” waiting to be called to perform required tasks. (Am. Compl.
¶ 34). PJM instructed the FSD Team to rotate their time on call so that one FSD Team member
was available at all times to handle and respond to emergencies affecting the Power Grid. (Am.
Compl. ¶ 35). Whenever an FSD Team member was on call, the requirement proved so
restrictive that Plaintiffs could not “go[] away on vacation, travel[] by air or boat, attend[]
religious and church services . . . consum[e] alcoholic beverages (even socially),” and prevented
both “Plaintiffs and their family members from sleeping soundly and without interruption.”
(Am. Compl. ¶ 38). In order to best facilitate the on-call requirement, Plaintiffs provided PJM
with their personal cellular and home telephone numbers. (Am. Compl. ¶ 40).

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B.

PJM’s “On-Call” Policy
PJM has implemented a formal, written on-call policy since 2003. (Am. Compl. ¶ 41).

In 2008, PJM’s on-call policy was superseded by a policy styled “On-Call and Overtime,” which
was updated and revised in January 2013 (the “On-Call Policy”). (Am. Compl. ¶¶ 42-43).
PJM’s On-Call Policy provided employees subject to the policy with a “standard on-call
premium [of] $300 per week” during the weeks on which members of the FSD Team were
designated as “on-call.” (Am. Compl. ¶ 45). In addition to the $300 premium, the On-Call
Policy mandated that a PJM employee designated “on-call” was also “eligible for
overtime . . . when they respond[ed] to an after-hours call.” (Am. Compl. ¶ 46).
On March 17, 2014, PJM and Mr. Franks determined that the FSD Team would receive
compensation in accordance with the On-Call Policy during weeks FSD Team members were
designated as “on-call.” (Am. Compl. ¶ 57). Therefore, from March 2014 to Plaintiffs’
termination on December 2, 2014, Plaintiffs received the $300 premium during weeks they were
designated “on-call” according to their rotating schedule. (Am. Compl. ¶¶ 58-59). The FSD
Team members’ on-call responsibilities and workload did not change, but the compensation they
received during weeks spent “on-call” did change with this decision. (Am. Compl. ¶ 60).
C.

Plaintiffs’ Letter of Complaint
Recognizing that PJM’s decision to compensate the FSD Team according to the On-Call

Policy was prospective only, on May 27, 2014 Plaintiffs delivered to Mr. Franks a letter
protesting and complaining about PJM’s failure to provide such compensation for Plaintiffs’ time
spent on call before March 2014 (the “Letter of Complaint” or “Letter”). (Am. Compl. ¶¶ 6466). In September 2014, Mr. Franks delivered the Letter of Complaint to Maureen McCormick,

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PJM’s Manager of Compensation & Benefits, who then forwarded the Letter to Mr. Spangler.
(Am. Compl. ¶¶ 67-68).
In their Letter of Complaint, Plaintiffs made the following claims: first, that the FSD
Team only started receiving on-call availability compensation March 17, 2014; second, that the
FSD Team had been delivering on-call service for “quite some time”; and therefore third, that
this change in compensation policy did not address the issue of “[n]on-compensation for services
provided [by the FSD Team] in prior years.” (ECF 12, Def.’s Mot. to Dismiss Pls.’ Am. Compl.
(“Defs.’ Br.”), Ex. B (“Compl. Lttr.”), at 1). Plaintiffs each provided personal anecdotes
regarding their time on-call experiences. Mr. Lancaster described that “[w]hen home computers
were implemented for employee’s access to PJM’s systems . . . the [SETs] were one of the first
to have them installed in their home” so that SETs could have “another tool to communicate with
[d]ispatch for any operational issues.” (Compl. Lttr. at 4). Mr. Lancaster recounted how, after
the terrorist attack on September 11, 2001, PJM management informed SETs that “answering
their cell phones for company calls was no longer a courtesy, but a necessity.” (Compl. Lttr. at
4). Mr. Lebus noted that “[h]e clearly understood that the new PJM job required responding to
emergency call-outs to support [d]ispatch operaters.” (Compl. Lttr. at 5).
In addition to providing anecdotal evidence of the intrusiveness of PJM’s On-Call Policy,
the Letter of Complaint stated that “[t]he [s]hift [s]upervisors do not hesitate to call any or all the
[SETs] at any hour on any weekend or holiday if a situation arises on a piece of equipment that
can compromise in any way the safe and reliable operation of the power grid,” and that “OnCall’ compensation helps to make up to [SETs] for some of their inconvenience and patience.”
(Compl. Lttr. at 3, 4). Finally, recognizing that on-call compensation had been part of PJM’s
On-Call Policy for some time, the Letter of Complaint found it “puzzling that the PJM security

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personnel received ‘On-Call’ compensation while the on-site responders from the Facilities
Department did not.” (Compl. Lttr. at 2).
PJM scheduled a meeting to discuss the Letter of Complaint with Plaintiffs. (Am.
Compl. ¶ 75). Messrs. Spangler, Franks, Stauffer, and Plaintiffs attended the meeting, held in
October 2014. (Am. Compl. ¶ 76). At this meeting, Mr. Spangler informed Plaintiffs that PJM
was denying the request, made in the Letter of Complaint, for retroactive application of the OnCall Policy. (Am. Compl. ¶ 77). In addition, Mr. Spangler informed Plaintiffs that PJM would
be investigating Plaintiffs’ claimed hours of overtime, as indicated on Plaintiffs’ weekly time
records. (Am. Compl. ¶ 79). Also at this meeting, Plaintiffs reiterated—orally to Mr.
Spangler—that they were entitled to compensation for their time on call, prior to March 17,
2014. (Am. Compl. ¶ 80). Finally, at the meeting Mr. Spangler directed that Plaintiffs prepare
and submit a written description of an SETs job responsibilities. (Am. Compl. ¶ 83). After
pressure from Messrs. Spangler and Franks to submit this description, Plaintiffs submitted the
position description to PJM on December 1, 2014 (the “Position Statement” and together with
the Letter, the “FLSA Letters”). (Am. Compl. ¶¶ 87-88). The Position Statement provides that
PJM engineer technicians “[a]lways have provided 24x7 emergency callout services,” with “over
200 documented callout/emergencies so far this year” and exhibit a “[w]illingness to be ‘OnCall’ per company policy.” (Def.’s Br., Ex. B (“Position Statement”) at 1).
D.

PJM Terminates Plaintiffs
On December 2, 2014, one day after Plaintiffs submitted their Position Statement, PJM

required Plaintiffs to attend a meeting to discuss the Position Statement. (Am. Compl. ¶ 94). At
this meeting, PJM told Plaintiffs that Plaintiffs would also be meeting with Human Resources
(“HR”) to discuss Plaintiffs’ time records. (Am. Compl. ¶ 95). Plaintiffs then met separately

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with Mr. Spangler, Mr. Franks, and Teo Diaz (“Mr. Diaz”), who worked in PJM’s HR
department (collectively, the “Termination Meetings”). (Am. Compl. ¶ 96). At these
Termination Meetings, PJM accused Plaintiffs of padding and/or inflating their time records to
get overtime Plaintiffs were not entitled to, and informed Plaintiffs that their employment with
PJM was being terminated. (Am. Compl. ¶¶ 97-98). Mr. Lancaster, upon learning that he was
being terminated, told Mr. Spangler “you got me good,” to which Mr. Spangler responded, “you
got yourself good when you wrote that letter.” (Am. Compl. ¶ 104).
E.

Procedural History
Plaintiffs commenced this action by filing a complaint in this Court on February 22, 2016

(the “Complaint”). (ECF 1). PJM moved to dismiss the Complaint on April 21, 2016 (ECF 6),
to which Plaintiffs responded on May 5, 2016 (ECF 9). Because Plaintiffs filed an Amended
Complaint as of right on May 5, 2016 (ECF 10, the “Amended Complaint”), this Court denied
PJM’s motion to dismiss the Complaint as moot on May 9, 2016 (ECF 11). PJM then moved to
dismiss Plaintiffs’ Amended Complaint on May 20, 2016. (ECF 12). On June 6, 2016, Plaintiffs
opposed PJM’s Second Motion to Dismiss. (ECF 13, Pls.’ Opp’n to Def.’s Second Mot. to
Dismiss (“Pls.’ Opp’n”)). PJM replied in further support of its motion to dismiss on June 16,
2016. (ECF 14, Def.’s Reply in Supp. of Second Mot. to Dismiss (“Def.’s Reply”)).
III. JURISDICTION & VENUE
This Court has jurisdiction over Plaintiffs’ federal statutory claims pursuant to 28 U.S.C.
§ 1331. Venue is proper under 28 U.S.C. § 1391(b).
IV. STANDARD OF REVIEW
In considering a motion to dismiss under Rule 12(b)(6), “we accept all factual allegations
as true [and] construe the complaint in the light most favorable to the plaintiff.” Warren Gen.

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Hosp. v. Amgen, Inc., 643 F.3d 77, 84 (3d Cir. 2011) (internal quotation marks omitted). “To
survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true,
to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
V. DISCUSSION
Under the FLSA, it is unlawful for any person “to discharge or in any other manner
discriminate against any employee because such employee has filed any complaint or instituted
or caused to be instituted any proceeding under or related to” the Act. 29 U.S.C. § 215(a)(3). In
order to state a claim for retaliatory discharge under the FLSA, a plaintiff must plead (1) that she
engaged in protected activity; (2) the employer took an adverse employment action against her;
and (3) there was a causal link between the plaintiff’s protected action and the employer’s
adverse action. Preobrazhenskaya v. Mercy Hall Infirmary, 71 Fed. App’x 936, 939 (3d Cir.
2003).

In analyzing unlawful retaliation under the FLSA, the Court applies the McDonnell-

Douglas burden-shifting framework. Cononie v. Allegheny Gen. Hosp., 29 Fed. App’x 94, 95
(3d Cir. 2002).
In its motion, PJM argues that Plaintiffs have insufficiently pleaded the first element of a
claim for FLSA retaliatory discharge because Plaintiffs’ requests to be retroactively paid
overtime for “time waiting on call” do not constitute “protected activity” under the FLSA.
Therefore, the sole issue before the Court is whether Plaintiffs’ oral and written complaints,
taken together, were sufficient to notify PJM that Plaintiffs were complaining of rights protected
under the FLSA.
For an employee’s complaint to be protected, it “must be sufficiently clear and detailed
for a reasonable employer to understand it . . . as an assertion of rights protected by the statute

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and a call for their protection.” Kasten v. Saint-Gobain Performance Plastics Corp., 563 U.S. 1,
14 (2011). Furthermore, the Third Circuit has held that the language of § 215(a)(3) of the FLSA
should be interpreted liberally. Brock v. Richardson, 812 F.2d 121, 123 (3d Cir. 1987). In so
holding, the Third Circuit explained that, the FLSA “is part of the large body of humanitarian
and remedial legislation enacted during the Great Depression, and has been liberally interpreted.”
Id. District courts in this Circuit, in accordance with a majority of circuits, have concluded “that
an informal assertion of rights under FLSA to an employer triggers protection under the language
of § 215(a)(3).” Coyle v. Madden, No. 03-4433, 2003 WL 22999222, at *3 (E.D. Pa. Dec. 17,
2003) (collecting cases); accord Jones v. Amerihealth Caritas, 95 F. Supp. 3d 807, 814 (E.D. Pa.
2015) (finding “sufficiently pleading an informal complaint to an employer may qualify as
protected activity under § 215(a)(3).”). The plaintiff need not directly invoke the FLSA in the
complaint. Childs v. Universal Cos., No. 15-3507, 2016 WL 1623159, at *4-5 (E.D. Pa. Apr. 22,
2016) (Baylson, J.).
In arguing for dismissal of Plaintiffs’ action, PJM cites a body of law developed in the
Second Circuit which stands for the proposition that “the FLSA neither converts an employer’s
contract breach into a violation of federal law, nor generally federalizes disputes between
employers and employees.” Dunn v. Sederakis, 143 F. Supp. 3d 102, 111 (S.D.N.Y. 2015)
(collecting cases). In Dunn, the district court considered the plaintiff employee’s written and
oral complaints. Id. at 110. While the plaintiff’s written complaints did not concern wages or
compensation, her oral complaints alleged an unpaid retroactive pay increase pursuant to a
contract between her union and her employer. Id. As to these oral complaints, the court
determined that the plaintiff had only put her employer on notice that she “believed she had not

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been paid what her employer had promised,” but did not complaint about what the FLSA
protects against. Id.
The Dunn plaintiff also complained to her employer “about unpaid overtime, docked
wages, or both.” Id. at 111. As to the plaintiff’s complaints about unpaid overtime, the court
determined that such complaints have “the potential to satisfy the [Greathouse v. JHS Sec. Inc.,
784 F.3d 105 (2d Cir. 2015)] standard, because the FLSA does convey a right to overtime pay.”
Id. In dismissing the plaintiff’s FLSA retaliation claim, the court stated “[i]t is significant that
[the plaintiff] was contemporaneously complaining about [her employer’s] docking of her wages
and its refusal to grant a retroactive pay increase, both of which appear to have implicated
internal issues of discipline and contract, rather than statutory violations.” Id. at 113.
The Court is unpersuaded by this reasoning, as it conflicts not only with the Third
Circuit’s mandate for a “liberal interpretation” of FLSA complaints, but also Supreme Court
precedent. In Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728, 740, the Supreme
Court stated:
This Court’s decisions interpreting the FLSA have frequently
emphasized the nonwaivable nature of an individual employee’s
right to a minimum wage and to overtime pay under the Act.
Thus, we have held that FLSA rights cannot be abridged by
contract or otherwise waived because this would ‘nullify the
purposes’ of the statute and thwart the legislative policies it was
designed to effectuate.
Barrentine, 450 U.S. at 740.
Here, Plaintiffs’ Letter pinpoints two possible ways in which PJM’s compensation policy
for SETs violated, or continues to violate, the FLSA. Only one such complaint is of relevance
here, namely the Letter’s explicit allegation that, even though SETs were subject to an extremely
intrusive “time on call” requirement, they were not compensated for this “time on call.” (Compl.

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Lttr. at 1). The Third Circuit has recognized that “[t]he Department of Labor promulgated
regulations stating that on-call time is compensable . . . if the employee, although not required to
remain on the employer’s premises, find that his time on-call away from the employer’s premises
is so restricted that it interferes with personal pursuits.” Ingram v. County of Bucks, 144 F.3d
265, 268 (3d Cir. 1998) (citing 29 C.F.R. § 553.221(c), (d) and stating that “[t]he Department of
Labor’s regulation of the [FLSA] is entitled to substantial deference.”). In their FLSA Letters,
Plaintiffs provided enough information to put PJM on notice that they were complaining of
inadequate overtime compensation for time spent on call because the on-call requirement so
interfered with their personal lives.
In their Letter of Complaint, Plaintiffs provided anecdotal evidence of the ways in which
PJM’s on-call requirement interfered with their personal lives. (See, e.g., Compl. Lttr. at 3, 4).
Indeed, the Complaint Letter indicates that the on-call requirement prevented Plaintiffs from
“engag[ing] in personal activities,” Ingram, 144 F.3d at 268, such as family get-togethers,
religious observances, and vacations (Compl. Lttr. at 4). Further, Plaintiffs’ Position Statement
noted PJM’s “inadequate” response to its Letter of Complaint, and cited the need to address
“PJM’s family/work balance values.” (Position Statement at 28).
Finally, Plaintiffs also allege that, when Mr. Lancaster delivered Plaintiffs’ Letter to Mr.
Franks, Mr. Lancaster orally1 informed Mr. Franks that PJM’s failure to retroactively
compensate Plaintiffs for time on call “was a violation of the wage laws.” (Am. Compl. ¶ 66)
(internal quotation marks omitted). Plaintiffs further allege that, when PJM told them that their

1

Complaints regarding FLSA wage violations can be oral as well as written. Kasten, 563 U.S. at 14.

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request for retroactive compensation was being denied, Messrs. Lancaster and Lebus “reiterated
that they were entitled to the Overtime for Time On-Call.” (Am. Compl. ¶ 80). 2
Taken together, these oral and written complaints were sufficiently clear and detailed for
PJM to understand, in both content and context, that Plaintiffs were asserting rights protected by
the FLSA.
VI. CONCLUSION
In the Third Circuit, “the key to interpreting the anti-retaliation provision is the need to
prevent employees’ ‘fear of economic retaliation’ for voicing grievances about substandard
conditions.” Brock, 812 F.2d at 124 (quoting Mitchell v. Robert DeMario Jewelry, Inc., 361
U.S. 288, 292 (1960)). The Court, hewing close to this guidance, concludes that Plaintiffs FLSA
Letters constitute a “complaint” as understood by the FLSA. Accordingly, Defendant’s motion
to dismiss is denied.
An appropriate Order follows.

O:\CIVIL 16\16-842 Lancaster v PJM Interconnection, LLC\Memo Denying Motion to Dismiss Amended
Complaint.docx

2

Even according to Dunn, in which the district court dismissed the plaintiff’s FLSA retaliation claim where
she did not expressly voice violations of the FLSA, Plaintiffs’ alleged oral complaints are sufficient to withstand a
motion to dismiss as they specifically mention violations of the “wage laws.” Cf. Dunn, 143 F. Supp. 3d at 113
(finding plaintiff’s oral complaints were insufficient because complaint did not allege the oral complaints “ever
invoked the FLSA or accused [the employer] or its employees of illegality.”).

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