MINIELLY v. ACME CRYOGENICS, INC. et al

Filing 37

MEMORANDUM AND/OR OPINION SIGNED BY HONORABLE LAWRENCE F. STENGEL ON 6/21/17. 6/21/17 ENTERED AND COPIES E-MAILED.(ti, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
RICHARD MATTHEW MINIELLY,
Plaintiff
vs.
ACME CRYOGENICS, et al.,
Defendants

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CIVIL ACTION

NO. 15-6164

MEMORANDUM

STENGEL, J.

June 21, 2017

Richard Matthew Minielly brings this action against his former employer Acme
Cryogenics and some of its officers, alleging a violation of the Pennsylvania Wage
Payment and Collection Act, aiding and abetting under the Pennsylvania Wage Payment
and Collection Act, a violation of the Fair Labor Standards Act,1 and common law unjust
enrichment. The defendants have filed a motion to dismiss under Rule 12(b)(6) of the
Federal Rules of Civil Procedure. Mr. Minielly has responded. For the following
reasons, I will grant the motion to dismiss the Fair Labor Standards Act, and decline to
exercise supplemental jurisdiction over the remaining state law claims.

The Fair Labor Standards Act was intended to address existing “labor conditions [that were]
detrimental to the maintenance of the minimum standard of living necessary for health,
efficiency, and general well-being of workers . . .” 29 U.S.C. § 202. Its purposes are to protect
workers from substandard wages and oppressive working hours. See Cruz v. Chesapeake
Shipping, Inc., 932 F.2d 218, 226 (3d Cir. 1991).
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I. BACKGROUND2
This case arises out of the allegedly wrongful termination of Mr. Minielly by his
former employer, Acme Cryogenics, Inc., and its various officers. The second amended
complaint alleges that Mr. Minielly began working for Acme as a Chief Financial Officer
and Vice President on July 15, 2013. The defendant employs approximately onehundred-twenty employees with multiple locations in the United States, with
headquarters in Allentown, Pennsylvania. Upon his hire, Mr. Minielly invested an equity
interest of one and one quarter percent into the corporate defendant. Mr. Minielly and the
defendants agreed upon an annual salary plus a guaranteed calculated bonus based on
productivity as a wage benefit. Mr. Minielly also received stock interest in Acme. Mr.
Minielly requested repayment on the wage benefit as well as on the shares and equity
investment. The alleged understanding was that the investment was to be repaid to Mr.
Minielly if the relationship between Mr. Minielly and Acme were to terminate, that is,
Acme would repurchase Mr. Minielly’s stock if the relationship ended. Acme was
allegedly able to use Mr. Minielly’s equity to improve profits for the company, and the
company grew more profitable.
Mr. Minielly’s job duties included: (1) financing grounds and materials; (2)
reporting on cost-generating situations (including safety hazards); and (3) fulfilling all of
his fiduciary obligations as Vice President and Shareholder to the organization’s labor

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The facts are gleaned from the amended complaint and the extrinsic documents upon which it
is based. See GSC Partners, CDO Fund v. Washington, 368 F.3d 228, 236 (3d Cir. 2004). For
the purposes of this motion, they are presented in the light most favorable to the plaintiff, as the
non-moving party, and are accepted as true with all reasonable inferences drawn in his favor.

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force, in addition to the interests of the organization and its stakeholders, which included
both safety and legality of operation. Mr. Minielly reported to Mike Brown, the then
Chief Executive Officer, and the Board of Directors, which had a total of five people at
the time, including Mr. Brown. On October 15, 2014, the Board announced the hiring of
Joel Hansen, the new Chief Executive Officer.
The workers complained to Mr. Minielly about the dangerous conditions at work,
their wages, and the lack of empathy of management. For example, their take-home pay
had decreased, yet layoffs and workload had increased. The workers also explained that
reportable incident rates had gone up due to unsafe working conditions. Mr. Minielly
wanted to mitigate the dangerous working condition by purchasing a larger, more secure,
and more appropriately organized building for the plant workers. He also sought to bring
in new management who would be more sympathetic to the workers, but the Board
rejected his efforts.
Mr. Minielly challenged the Defendant Board and Defendant Joel Hansen about
not reporting health and safety violations to the appropriate authorities, about failing to
purchase a new building for the workers, and about bringing in new management to
improve safety. Mr. Minielly also caught Mr. Hansen misrepresenting his intentions to
the Board, which resulted in ongoing harassment and assault by Mr. Hansen. Mr.
Minielly reported Mr. Hansen’s actions to the Board, but it refused to redress the issue
with Mr. Hansen. Instead, Mr. Hansen and the Board terminated Mr. Minielly, and
refused to give him his belongings, or to permit him to meet with Human Resources.
They also refused to pay him his wages due.
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Mr. Minielly alleges that his actions directly benefited Acme’s overall financial
picture. His investment in the company, in the form of equity, directly benefited Acme.
Mr. Minielly had accrued and earned his non-discretionary benefit up until his
termination in November 2014. Mr. Minielly was terminated just prior to payout on his
wage benefit, which equaled more than fifty thousand dollars as of November, and just
prior to the vesting of his stock interests in Acme. He further alleges that he was
terminated wrongfully for complaining about unsafe working conditions created by Mr.
Hansen and the Board.
Acme and its individual co-defendants have refused to repay and/or compensate
Mr. Minielly for any and all of the monies owed him. Mr. Hansen and the Board, as
decision-makers, allegedly terminated Mr. Minielly for complaining about unsafe work
environments, both for the workers and for him. They refused to compensate Mr.
Minielly for his earned and owed wages in the form of a defined annual bonus. They also
allegedly refused to return Mr. Minielly’s signature stamp, which had his hand-signed
signature printed on it. Mr. Minielly believes that this was done in an effort to misuse his
signature. Mr. Hansen and the Board, as decision-makers, further refused to give Mr.
Minielly access to his personnel file, which was addressed only after he filed an agency
complaint against them for noncompliance with the law. Between the loss of his equity,
his shares of interest, and his lost bonus, Mr. Minielly claims to have lost more than three
hundred fifty thousand dollars in addition to other losses.

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II. LEGAL STANDARD
A motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure
for failure to state a claim upon which relief can be granted examines the sufficiency of
the complaint. Conley v. Gibson, 355 U.S. 41, 45-46 (1957). Following the Supreme
Court decisions in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) and
Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009), pleadings standards in federal actions have
shifted from simple notice pleading to a more heightened form of pleading, requiring a
plaintiff to plead more than the possibility of relief to survive a motion to dismiss under
Fed. R. Civ. P.12(b)(6). Fowler v. UPMC Shadyside, 578 F.3d 203, 210-211 (3d Cir.
2009); see also Phillips v. County of Allegheny, 515 F. 3d 224, 230 (3d Cir. 2008).
Therefore, when presented with a motion to dismiss for failure to state a claim,
district courts should conduct a two-part analysis. First, the factual and legal elements of
a claim should be separated. The court must accept all of the complaint’s well-pleaded
facts as true but may disregard legal conclusions. Iqbal, 556 U.S. at 679. Second, a
district court must determine whether the facts alleged in the complaint are sufficient to
show that the plaintiff has a “plausible claim for relief.” Id. In other words, a complaint
must do more than allege the plaintiff’s entitlement to relief. A complaint has to “show”
such an entitlement with its facts. Id.; see also Phillips, 515 F.3d at 234-235. “Where the
well-pleaded facts do not permit the court to infer more than the mere possibility of
misconduct, the complaint has alleged — but it has not ‘show[n]’ — ‘that the pleader is
entitled to relief.’” Iqbal, 556 U.S. at 679.

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Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a “short
and plain statement of the claim showing that the pleader is entitled to relief.” As the
Court held in Twombly, the pleading standard Rule 8 announces does not require
“detailed factual allegations,” but it demands more than an unadorned, the-defendantunlawfully-harmed-me accusation. Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S.
at 555). A pleading that offers “labels and conclusions” or “a formulaic recitation of the
elements of a cause of action will not do.” Twombly, 550 U.S. at 555. Nor does a
complaint suffice if it tenders “naked assertion[s]” devoid of “further factual
enhancement.” Id. at 557.
III. DISCUSSION
The second amended complaint alleges that the “defendants knowingly and
intentionally violated the Fair Labor Standards Act in failing to pay [Mr. Minielly] his
earned wages in the form of a defined annual bonus as well as other fringe benefits. See
2nd Am.Compl. ¶ 88.
I must agree with the defendants that Mr. Minielly has no basis for alleging his
entitlement to any payment under the bonus program because he was not working for the
defendant at the time the bonus would have been paid. Private plaintiffs may bring a
claim for violation of the FLSA for failure to include bonuses in overtime compensation
under 29 U.S.C. §207(e). Mr. Minielly is an exempt employee, however, by the terms of
his offer letter. He had no right to any other form of payment other than a wage meeting
the statutory white collar exemption under the FLSA. Mr. Minielly has not alleged that
he was not paid the required wage save the allegation for failure to pay a bonus and other
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fringe benefits. I note that Mr. Minielly has not alleged that he is subject to the minimum
wage and maximum hours requirements of the FLSA. The terms of Mr. Minielly’s offer
letter make it clear that none of his fringe benefits would survive his termination.
Mr. Minielly admits that he was terminated “... just prior to the vesting of his stock
interests.” The fact is that the defendants should not have to guess the basis for Mr.
Minielly’s claims. He must allege facts sufficient to show that he is entitled to relief in
order to give the defendants fair notice of what the claim is and the grounds on which it
rests. Mr. Minielly’s allegations of entitlement to an unspecified annual bonus are
wholly insufficient to put the defendants on notice of the claims against them. Claims for
nonpayment of a bonus by exempt employees are a matter of contract rather than a
violation of the Fair Labor Standards Act. Mr. Minielly was an exempt employee under
29 C.F.R. § 541, and thus, he is not entitled to FLSA protection for non-payment of a
bonus. Accordingly, I will dismiss the claim for a violation of the Fair Labor Standards
Act.
Finally, Mr. Minielly has also brought several state law claims against the
defendants, including a violation of the Pennsylvania Wage Payment and Collection Act,
aiding and abetting under the Pennsylvania Wage Payment and Collection Act, and
common law unjust enrichment. Having dismissed Mr. Minielly’s federal claim, I
decline to exercise supplemental jurisdiction over these remaining state law claims. See
28 U.S.C. § 1367(c)(3) (stating that a federal district court may decline to exercise
supplemental jurisdiction over state law claims when the district court has dismissed all

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claims over which it has original jurisdiction). Accordingly, I will dismiss those claims
without prejudice.
An appropriate Order follows.

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