SILFEE v. AUTOMATIC DATA PROCESSING, INC.

Filing 23

MEMORANDUM (Order to follow as separate docket entry) re 8 MOTION to Dismiss filed by Automatic Data Processing, Inc. Signed by Honorable A. Richard Caputo on 3/12/15. (jam)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
JOSHUA SILFEE, individually and on
behalf of all others similarly situated,
Plaintiff,

CIVIL ACTION NO. 3:CV-15-23
(JUDGE CAPUTO)

v.
AUTOMATED DATA PROCESSING,
INC.,
Defendant.
MEMORANDUM
Presently before me is Defendant Automated Data Processing, Inc.’s (“ADP”) Motion
to Dismiss, or, in the Alternative, Compel Individual Arbitration and Stay Proceedings. (Doc.
8.) For the reasons that follow, the motion to dismiss will be granted.
I. Background
The facts alleged in the Class Action Complaint are as follows:
Plaintiff Joshua Silfee (“Silfee”) is a citizen of Pennsylvania and resident of Luzerne
County, Pennsylvania. (Compl., ¶ 3.) Defendant ADP is “a provider of business processing
and cloud-based solutions, including payroll, talent management, human resource
management, benefits administration, and time and attendance, to employers and
automotive dealerships around the world.” (Id. at ¶ 4.) As part of its payroll products and
services offered to clients, ADP provides employers the option of paying their employees
through a paycard system, known as TotalPay or ALINE. (Id. at ¶ 6.) This paycard system
is issued and administered by ADP, and each employee is provided with a VISA brand
paycard that is loaded each pay period with the employee’s net earnings. (Id.)
Until approximately July 2013, Silfee was employed by ERG Staffing Service, LLC
(“ERG”). (Id. at ¶ 7.) During this time, ERG contracted with ADP for the provision of various
payroll services, including the use of the TotalPay paycard system. (Id. at ¶ 8.)

Through the use of the TotalPay paycard system, ADP paid wages to ERG
employees, including Silfee. (Id. at ¶ 9.) Each pay period, ADP processed payroll for all
ERG employees and automatically loaded the employees’ wages onto the TotalPay
paycard. (Id. at ¶ 10.) Employees who are paid wages through the paycard are charged an
enrollment fee, account maintenance fees, ATM withdrawal fees, balance inquiry fees, point
of sale purchase fees, and an account closure fee. (Id. at ¶ 11.) These fees were deducted
by ADP from the balance of funds loaded onto employees’ TotalPay paycards. (Id. at ¶ 12.)
ADP was actively involved in the policy and decision making on matters of pay and
compensation for ERG. (Id. at ¶¶ 15, 39.) ADP directly made the decision and implemented
the policy regarding the wage deductions and fees associated with the TotalPay paycard
system. (Id. at ¶ 16.) Additionally, “Plaintiff and members of the proposed class have
entered into an unwritten agreement with ADP to which Plaintiff and members of the
proposed class are to receive the full amount of wages owed to them in compensation of
their work.” (Id. at ¶ 41.)
In view of the foregoing, Silfee, on behalf of himself and all others similarly situated,
commenced this action against ADP in the United States District Court for the Eastern
District of Pennsylvania on August 22, 2014. The action was subsequently transferred to
this Court by agreement of the parties. (Doc. 14.) In his one-count Complaint, Silfee alleges
that ADP violated the Pennsylvania Wage Payment and Collection Law (“WPCL”), 43 P.S.
§ 260.1 et seq., as a result of the fees associated with the use of the TotalPay paycard
system. (Compl.)
On November 21, 2014, ADP filed the instant motion to dismiss or to compel
arbitration. (Doc. 8.) Silfee filed his brief in opposition to ADP’s motion on December 19,
2014, (Doc. 12), and ADP filed a reply brief in further support of its motion on January 16,
2015. (Doc. 20.) ADP’s motion to dismiss or compel arbitration is thus fully briefed and ripe

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for disposition.
II. Discussion
A.

Legal Standard
Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint,

in whole or in part, for failure to state a claim upon which relief can be granted. See Fed.
R. Civ. P. 12(b)(6). When considering a Rule 12(b)(6) motion, the Court's role is limited to
determining if a plaintiff is entitled to offer evidence in support of their claims. See
Semerenko v. Cendant Corp., 223 F.3d 165, 173 (3d Cir. 2000). The Court does not
consider whether a plaintiff will ultimately prevail. See id. A defendant bears the burden of
establishing that a plaintiff's complaint fails to state a claim. See Gould Elecs. v. United
States, 220 F.3d 169, 178 (3d Cir. 2000).
“A pleading that states a claim for relief must contain . . . a short and plain statement
of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). The
statement required by Rule 8(a)(2) must “‘give the defendant fair notice of what the . . .
claim is and the grounds upon which it rests.’” Erickson v. Pardus, 551 U.S. 89, 93, 127 S.
Ct. 2197, 167 L. Ed. 2d 1081 (2007) (per curiam) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007)). Detailed factual allegations are
not required. Twombly, 550 U.S. at 555, 127 S. Ct. 1955. However, mere conclusory
statements will not do; “a complaint must do more than allege the plaintiff's entitlement to
relief.” Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). Instead, a complaint
must “show” this entitlement by alleging sufficient facts. Id. “While legal conclusions can
provide the framework of a complaint, they must be supported by factual allegations.”
Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1950, 173 L. Ed. 2d 868 (2009). As such,
“[t]he touchstone of the pleading standard is plausibility.” Bistrian v. Levi, 696 F.3d 352, 365
(3d Cir. 2012).

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The inquiry at the motion to dismiss stage is “normally broken into three parts: (1)
identifying the elements of the claim, (2) reviewing the complaint to strike conclusory
allegations, and then (3) looking at the well-pleaded components of the complaint and
evaluating whether all of the elements identified in part one of the inquiry are sufficiently
alleged.” Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011).
Dismissal is appropriate only if, accepting as true all the facts alleged in the
complaint, a plaintiff has not pleaded “enough facts to state a claim to relief that is plausible
on its face,” Twombly, 550 U.S. at 570, 127 S. Ct. 1955, meaning enough factual
allegations “‘to raise a reasonable expectation that discovery will reveal evidence of’” each
necessary element. Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008)
(quoting Twombly, 550 U.S. at 556, 127 S. Ct. 1955). “The plausibility standard is not akin
to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant
has acted unlawfully.” Iqbal, 556 U.S. at 678, 129 S. Ct. 1937. “When there are wellpleaded factual allegations, a court should assume their veracity and then determine
whether they plausibly give rise to an entitlement to relief.” Id. at 679, 129 S. Ct. 1937.
In deciding a motion to dismiss, the Court should consider the complaint, exhibits
attached to the complaint, and matters of public record. Mayer v. Belichick, 605 F.3d 223,
230 (3d Cir. 2010) (citing Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998
F.2d 1192, 1196 (3d Cir. 1993)). The Court may also consider “undisputedly authentic”
documents when the plaintiff's claims are based on the documents and the defendant has
attached copies of the documents to the motion to dismiss. Pension Benefit Guar., 998 F.2d
at 1196. The Court need not assume the plaintiff can prove facts that were not alleged in
the complaint, see City of Pittsburgh v. W. Penn Power Co., 147 F.3d 256, 263 & n.13 (3d
Cir. 1998), or credit a complaint's “‘bald assertions’” or “‘legal conclusions.’” Morse v. Lower
Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997) (quoting In re Burlington Coat Factory

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Sec. Litig., 114 F.3d 1410, 1429–30 (3d Cir. 1997)).
B.

The WPCL
ADP seeks dismissal of Silfee’s claim that it violated the WPCL with respect to the

fees associated with the use of the TotalPay paycard system. Among other arguments,
ADP contends that it does not qualify as an “employer” under the terms of the statute.1 As
a result, ADP concludes that Silfee fails to state a claim upon which relief can be granted.
The WPCL states, in pertinent part:
(a) Wages other than fringe benefits and wage supplements. Every employer
shall pay all wages, other than fringe benefits and supplements, due to his
employes on regular paydays designated in advance by the employer. . . .
The wages shall be paid in lawful money of the United States or check, except
that deductions provided by the law, or as authorized by regulation of the
Department of Labor and Industry for the convenience of the employe, may be
made including deductions of contributions to employe benefits plans, which
are subject to the Employee Retirement Income Security Act of 1974, 29
U.S.C. § 1001 et seq.
43 P.S. § 260.3.2 The purpose of the WPCL has been explained by the Pennsylvania
Superior Court as follows:
Pennsylvania enacted the WPCL to provide a vehicle for employees to enforce
payment of their wages and compensation held by their employers. The
underlying purpose of the WPCL is to remove some of the obstacles
employees face in litigation by providing them with a statutory remedy when

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ADP also asserts that Silfee fails to provide any factual support for the naked
assertion that he entered into an “unwritten agreement” with ADP for the payment
of his wages. I agree, and also note that Silfee failed to respond to ADP’s
argument raising this issue in his opposition to the motion to dismiss. See Dale v.
Abeshaus, No. 06-4747, 2013 WL 5379384, at *14 n.76 (E.D. Pa. Sept. 26, 2013)
(“if a plaintiff fails to respond to all of the arguments raised in a motion to
dismiss, the court may grant the motion to dismiss as uncontested with respect to
those arguments.”).

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In accordance with § 260.3, 34 Pa. Code § 9.1 lists twelve deductions from wages
authorized by the Department of Labor and Industry. 34 Pa. Code. § 9.1(1-12).
Additionally, § 9.1 permits “[s]uch other deductions authorized in writing by
employees as in the discretion of the Department is proper and in conformity with
the intent and purpose of the Wage Payment and Collection Law. . . .” Id. at § 9.1
(13).
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an employer breaches its contractual obligation to pay wages. The WPCL
does not create an employee's substantive right to compensation; rather, it
only establishes an employee's right to enforce payment of wages and
compensation to which an employee is otherwise entitled by the terms of an
agreement.
Thomas Jefferson Univ. v. Wapner, 903 A.2d 565, 574 (Pa. Super. Ct. 2006) (citing
Hartman v. Baker, 766 A.2d 347, 352 (Pa. Super. Ct. 2000)).
“Employer” is a defined term in the WPCL, and it includes “every person, firm,
partnership, association, corporation, receiver or other officer of a court of this
Commonwealth and any agent or officer of any of the above-mentioned classes employing
any person in this Commonwealth.” Id. at § 260.2a (emphasis added). At issue here is
whether ADP qualifies as an “agent” of ERG for purposes of the WPCL.
Although the phrase “agent or officer” is not defined in the statute or its
corresponding regulations, the Pennsylvania Superior Court has explained that the
Pennsylvania Legislature’s stated purpose behind holding officers or agents liable under the
WPCL:
[W]as to subject these persons to liability in the event that a corporation or
similar entity failed to make wage payments. Its reason for doing so is
obvious. Decisions dealing with personnel matters and the expenditure of
corporate funds are made by corporate officers and it is far more likely that the
limited funds of an insolvent corporation will be used to pay wages and that a
work force will be reduced while the corporation is still capable of meeting its
obligations to its employees if personal liability is imposed on the persons who
make these decisions.
Int’l Ass’n of Theatrical Stage Employees, Local Union No. 3 v. Mid-Atlantic Promotions,
Inc., 856 A.2d 102, 105 (Pa. Super. Ct. 2004) (quotation omitted); accord Belcufine v. Aloe,
112 F.3d 633, 634 (3d Cir. 1997) (“[t]he purpose of this rule is to give top corporate
managers an incentive to use available corporate funds for the payment of wages and
benefits rather than for some other purpose.”). “To hold an ‘agent or officer’ personally
liable for unpaid wages, ‘evidence of an active role in decision making is required.’” Int'l
Ass'n of Theatrical Stage Employees, 856 A.2d at 105 (citing Mohney v. McClure, 568 A.2d

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682 (Pa. Super. Ct. 1990), affirmed per curiam 604 A.2d 1021 (Pa. 1992)). Restated,
“[u]nder the WPCL, an agent or officer will be held liable as an employer if it can be
established that he or she was actively involved in corporate policy-making, such as
corporate decision-making or corporate advisement on matters of pay or compensation.
Patterson v. Olivet Int’l, Inc., No. 9-1089, 2009 WL 4722807, at *5 (W.D. Pa. Dec. 2, 2009)
(citing Tyler v. O'Neill, 994 F. Supp. 603, 616 (E.D. Pa. 1998)). Moreover, the Third Circuit
in Belcufine emphasized that the “liability of corporate managers under the WPCL” as
agents or officers of a corporation is “a ‘contingent liability, i.e., it is contingent on the
corporation’s failure to pay debts that it owes.” Belcufine, 112 F.3d at 639.
ADP’s motion to dismiss Silfee’s WPCL claim will be granted. First, Siflee fails to
allege any facts to support his contention that ADP, an entity distinct from his employer that
was contracted with for the provision of payroll services, had an active role in decisionmaking on issues relating to wage and compensation decisions at ERG. While Silfee
alleges in conclusory fashion that ADP was involved in the policy and decision making on
matters of pay and compensation for ERG, he fails to support this “naked assertion” with
any “factual enhancement” as required under Iqbal and Twombly. See Iqbal, 556 U.S. at
678, 129 S. Ct. 1937.
Second, consistent with case law analyzing the “agent or officer” language in §
260.2a of the WPCL, in particular the Third Circuit’s decision in Belcufine, an employee’s
primary recourse for recovery of unpaid wages is from his actual employer. See Belcufine,
112 F.3d at 639-40. Indeed, an agent or officer’s liability under the WPCL is a “contingent
liability.” Id. at 639 (the purpose of the Pennsylvania Legislature was to hold an agent or
officer liable under the WPCL “in the event that a corporation failed to make wage
payments.”); see also Panetta v. SAP Am., Inc., No. 05-4511, 2006 WL 924996, at *4 (E.D.
Pa. Apr. 6, 2006) (“an officer’s liability under the PWPCL is contingent on liability of the

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company to the employee.”). Here, Silfee does not assert that his actual employer, ERG,
is liable for the alleged unlawful deductions, nor has he included ERG as a defendant in this
action. Cf. Panetta, 2006 WL 924996, at *4 (“the Complaint, read broadly, alleges a cause
of action for unpaid wages under a compensation agreement, both against the corporation
and therefore against senior officers in the company.”).
Third, although the parties have cited case law discussing the “agent or officer”
language, this authority does not define the term “agent” for purposes of the WPCL or
involve a claim that a corporation acted as an “agent” for the plaintiff’s employer. Thus,
whether ADP qualifies as “agent” of ERG under the WPCL implicates “[t]he interpretation
of [a] Pennsylvania statute[ ] [which] is governed by the state’s Statutory construction Act
of 1972, 1 Pa. Cons. Stat. Ann. §§ 1501-1991 (1995 Supp.).” Hofkin v. Provident Life & Acc.
Ins. Co., 81 F.3d 365, 371 (3d Cir. 1996). The Pennsylvania Statutory Construction Act
provides that technical words are to be construed according to their “peculiar and
appropriate meaning.” 1 Pa. Cons. Stat. Ann. § 1903(a); accord Scungio Borst & Assocs.
v. 410 Shurs Lane Developers, LLC, 106 A.3d 103, 109-10 n.6 (Pa. Super. Ct. 2014)
(noting that “agent,” an undefined term in the Contractor and Subcontractor Payment Act,
was to be construed according to its peculiar and appropriate meaning).
An “agent” is defined as “one who is authorized to act for or in place of another.” Vine
v. Commonwealth, 9 A.3d 1150, 1158 (Pa. 2010) (quoting Black’s Law Dictionary 26-27 (3d.
pocket ed. 2006)). “A principal and agent can be in the relationship of a master and
servant, or simply in the status of two independent contractors.” Juarbe v. City of Phila., 431
A.2d 1073, 1075-76 (Pa. Super. Ct. 1981) (citations omitted). While a party “may stand as
both independent contractor and agent to another,” Tax Review Bd. v. Slater Sys., Inc., 398
Pa. 477, 482, 158 A.2d 561, 563 (Pa. 1960) (citing Commonwealth v. Minds Coal Mining
Corp., 360 Pa. 7, 60 A.2d 14 (Pa. 1948); Restatement (Second) of Agency § 2), “[u]nder

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Pennsylvania law, it has been expressly stated that not all independent contractors are
agents.” Cohen v. Salick Health Care, Inc., 772 F. Supp. 1521, 1528 (E.D. Pa. 1991) (citing
Minds Coal, 360 Pa. 7, 17, 60 A.2d 14, cited with approval by Moon Area School District v.
Garzony, 522 Pa. 178, 189, n. 8, 560 A.2d 1361, 1367 n.8 (Pa. 1989)).
Here, Silfee fails to allege facts indicating the existence of an agency relationship
between ADP and ERG. Stripping the Complaint of its legal conclusion that ADP was an
“agent” of ERG, the extent of Silfee’s factual allegations regarding the relationship between
the two is that ERG contracted with ADP for the provision of payroll services and that it was
ADP that decided to make the allegedly unlawful deductions. Although he pleads the
existence of a contractual relationship between ADP and ERG, Silfee has not set forth any
facts suggesting that ADP was an “agent” of ERG as opposed to an independent contractor.
And, although discovery is often “necessary when an agency relationship is alleged,”
Jurimex Kommerz Transit G.M.B.H. v. Case Corp., 65 F. App’x 803, 808 (3d Cir. 2003),
Silfee has not alleged “enough facts to raise a reasonable expectation that discovery will
reveal evidence” that ADP was ERG’s “agent.” See Phillips v. County of Allegheny, 515
F.3d 224, 234 (3d Cir. 2008).
Therefore, as Silfee has not adequately pled that ADP was an “agent” of ERG, ADP
is not alleged to be Silfee’s “employer” for purposes of the WPCL. As such, Silfee fails to
state a claim upon which relief can be granted, and the motion to dismiss the Complaint will
be granted.
C.

Leave to Amend
Although the motion to dismiss will be granted, Silfee will be given leave to amend

his Complaint. Rule 15 of the Federal Rules of Civil Procedure permits a court to grant a
party leave to amend its pleadings. See Fed. R. Civ. P. 15(a)(2). “The court should freely
give leave when justice so requires.” Id. As such, “if a complaint is subject to a Rule
12(b)(6) dismissal, a district court must permit a curative amendment unless such an
amendment would be inequitable or futile.” Phillips, 515 F.3d at 245 (citing Alston v. Parker,

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363 F.3d 229, 235 (3d Cir. 2004)). In this context, “‘futility’ means that the complaint, as
amended, would still fail to state a claim upon which relief could be granted.” Shave v.
Fauver, 213 F.3d 113, 115 (3d Cir. 2000) (citing In re Burlington Coat Factory Sec. Litig.,
114 F.3d 1410, 1434 (3d Cir.1997)). Because it is not apparent at this time whether Silfee
can cure the deficiencies identified with respect to his WPCL claim, he will be given the
opportunity to file an amended pleading.
III. Conclusion
For the above stated reasons, ADP’s motion to dismiss will be granted, but Silfee will
be granted twenty-one (21) days to file an amended complaint.
An appropriate order follows.

March 12, 2015
Date

/s/ A. Richard Caputo
A. Richard Caputo
United States District Judge

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