Regan et al v. Hanahan, City of
ORDER AND OPINION denying 39 Defendant's Motion to Dismiss; the Clerk of Court is ordered to STRIKE Plaintiffs' third amended complaint (Dkt No. 41).AND IT IS SO ORDERED. Signed by Honorable Richard M Gergel on 4/3/2017.(sshe, )
IN THE UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH CAROLINA
James Regan and Mason Underwood,
on behalf of themselves and all other
City of Hanahan,
Civil Action No. 2: 16-1077-RMG
ORDER AND OPINION
This matter is before the Court on the City of Hanahan's partial motion to dismiss
Plaintiffs second amended complaint under Rule 12(b)(6) of the Federal Rules of Civil
Procedure. (Dkt. No. 39.) For the reasons set forth below, the Court denies the motion.
Plaintiffs James Regan and Mason Underwood seek to bring a collective action under 29
U.S.C. § 216(b) to recover for wages, including overtime premiums, they allege they were not
paid in accordance with the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. § 201, et
seq. ("FLSA"). Plaintiffs also seek recovery under the South Carolina Payment of Wages Act,
S.C Code Ann. § 41-10-10, et. seq. ("SCPW A"), which they assert qualifies to be treated as a
class action under Rule 23 of the Federal Rules of Civil Procedure. Plaintiff Regan also claims
that the City retaliated against him personally for complaints he made that are protected under
the FLSA The City has moved to dismiss only Plaintiffs' third cause of action for damages
under the SCPWA
In their third cause of action, Plaintiffs allege that the City is liable to them for violations
of the SCPWA, explaining that
55. Defendant owes Plaintiff and the members of the Plaintiff class "wages" as
defined in § 41-10-10(2) of the [SCPWA], to compensate them for labor rendered
to Defendant, as promised to Plaintiff and the members of the Plaintiff class and
as required by law.
56. During Plaintiffs' employment in Defendant's Fire Department, Defendant
promulgated and distributed various Policies and Procedures ... [which] contains
the following provisions regarding Defendant's wage and hour practices for Fire
a. that "Federal law on overtime shall be followed";
b. that "if [an] employee's sleeping period or meal time is interrupted by a
call to duty, the interruption is counted as hours worked";
c. that "Employees working overtime shall be compensated by either
overtime payor the use of compensatory time. Overtime pay and
compensatory time shell be given at a rate of time and one-half for all
hours of overtime worked"; and
d. that "The Employee may determine whether to accept overtime payor
57. Defendant knowingly allowed Plaintiffs to "work off the clock" and failed to
pay Plaintiffs for all labor rendered to Defendant.
58. Defendant has failed to pay Plaintiffs all wages due, as required by § 41-10-40
and -50 of the [SCPWA].
(Dkt. No. 38 at 10-11.)1 For these alleged violations, Plaintiffs seek to recover wages,
liquidated (treble) damages, and fees/costs under the SCPWA, § 41-10-80(C).
1 As the City noted in its reply brief (Dkt. No. 45 at 2, n.2), Plaintiff improperly filed a third
amended complaint (Dkt. No. 41) without the City'S consent or leave of the Court. Under Rule
15, "A party may amend its pleading once as a matter of course within ... 21 days after service
of a responsive pleading or 21 days after service of a motion under Rule 12(b), (e), or (£),
whichever is earlier." Fed. R. Civ. P. 15(a)(l). Defendant filed an answer to Plaintiffs' first
amended complaint on August 2, 2016. (Dkt. No. 22.) Plaintiffs could amend their complaint as
a matter of course within 21 days of that responsive pleading. Defendant's motion to dismiss
filed February 15, 2017 did not trigger a new 21-day period because the "21-day periods to
amend once as a matter of course after service of a responsive pleading or after service of a
designated motion are not cumulative. If a responsive pleading is served after one of the
Rule 12(b)(6) of the Federal Rules of Civil Procedure pennits the dismissal of an action if
the complaint fails "to state a claim upon which relief can be granted." Such a motion tests the
legal sufficiency of the complaint and "does not resolve contests surrounding the facts, the merits
of the claim, or the applicability of defenses. . .. Our inquiry then is limited to whether the
allegations constitute 'a short and plain statement of the claim showing that the pleader is
entitled to relief.'"
Republican Party of NC. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992)
(quotation marks and citation omitted). In a Rule 12(b)(6) motion, the Court is obligated to
"assume the truth of all facts alleged in the complaint and the existence of any fact that can be
proved, consistent with the complaint's allegations." E. Shore Mkts., Inc. v. J.D. Assocs. Ltd.
P'ship, 213 F.3d 175, 180 (4th Cir. 2000). While the Court must accept the facts in a light most
favorable to the non-moving party, it "need not accept as true unwarranted inferences,
unreasonable conclusions, or arguments." Id.
To survive a motion to dismiss, the complaint must state "enough facts to state a claim to
relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
Although the requirement of plausibility does not impose a probability requirement at this stage,
the complaint must show more than a "sheer possibility that a defendant has acted unlawfully."
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A complaint has "facial plausibility" where the
pleading "allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged." Id.
designated motions is served, for example, there is no new 21-day period." Fed. R. Civ. P. 15,
Committee Notes on Rules - 2009 Amendment; see Morris v. Nicholson, No. RWT 09CV2726,
2010 WL 3245404, at *12 (D. Md. Aug. 17,2010). For this reason, the Court will order the clerk
of court to strike Plaintiffs' third amended complaint.
The City of Hanahan relies on the Fourth Circuit's decision in Anderson v. Sara Lee,
Corp., 508 F.3d 181 (4th Cir. 2007) to argue that Plaintiffs' SCPWA claims are preempted by
the FLSA. In Anderson, the Fourth Circuit held that even though the North Carolina state law
provided more generous remedies than the FLSA (e.g. a 3-year instead of a 2-year limitations
period), the state claims were preempted because Plaintiffs would have to rely on proof of an
FLSA violation to prevail on their state law claims. Anderson, 508 F.3d at 192-93. Defendants
argue that Anderson is analogous to the case at bar, so Plaintiffs' SCPWA claims are preempted
even though the SCPWA provides more generous recovery than the FLSA (e.g., the possibility
of a 3-year instead of a 2-year limitations period and treble instead of double damages. (Dkt. No.
39 at 4-5.)
Plaintiffs agree that they may not rely on the SCPWA to seek minimum wages or
overtime pay because such claims are preempted by the FLSA but argue that their SCPWA
claims for "unpaid, prevailing wages, over and above the minimum wage" as well as their claims
connected to the City's "failure to pay these wages when they were due" are not preempted
because these state law claims are not duplicative of their FLSA claims. ((Dkt No. 42 at 3)
(emphasis in original).) This Court agrees.
Since the Fourth Circuit's 2007 decision in Anderson, courts in this circuit have
frequently found that plaintiffs' state law wage claims are not preempted by the FLSA when they
seek redress for unpaid wages they were promised that were above the federal minimum wage.
For example, this Court distinguished Anderson in a 2015 case on allegations similar to
Plaintiffs' state law claims are not "merely duplicative" of their FLSA claims. In their
state claims, Plaintiffs seek (1) payment the prevailing wage, which is higher than the
federal minimum wage, during the first week of work, (2) payment of the prevailing
wage, which is again higher than the federal minimum wage, during other weeks,
where Plaintiffs allege Defendant made improper housing and transportation
deductions, and (3) the higher supplemental prevailing wage issued by the DOL in
2013 in non-overtime weeks. Plaintiffs have no ability to under the FLSA to seek this
compensation. Plaintiffs also seek to enforce notice provisions of the South Carolina
Payment of Wages Act that are not contained in the FLSA.
Moodie v. Kiawah Island Inn Co., 124 F. Supp. 3d 711, 724-25 (D.S.C. 2015); see also Hanson
Kelly v. Weight Watchers Int'l, Inc., No.1 :lOCV65, 2011 WL 2689352, at *5 (M.D.N.C. July
11, 2011) ("In Plaintiffs' NCWHA unpaid wage claim, they assert that Defendants failed to pay
them for all hours worked ... This claim is distinct from the claim under the FLSA, in which
Plaintiffs allege that Defendants have failed to pay them the federal minimum wage"); Martinez-
Hernandez v. Butterball, LLC, 578 F. Supp. 2d 816, 819-20 (E.D.N.C. 2008) (state wage claims
not preempted because Plaintiffs "claim that Butterball violated the North Carolina Wage and
Hour Act by failing to pay its employees (1) wages, when due, for all hours worked at their
regular hourly rate (which exceeded the minimum wage rate under the FLSA)").
Defendant aggressively asserts that the "prevailing wage" referenced in Moodie was a
"term of art for certain additional minimum wage rates guaranteed by federal laws other than the
FLSA relating to pay for employees working pursuant to student visas" and that "[t]here is no
legal basis (nor have Plaintiffs offered one) for extending that treatment to agreed-upon wages in
excess of FLSA minimum wage which are not required by any law." (Dkt. No. 45 at 2, n. 3.)
Counsel for Defendant should temper their zealous advocacy with careful research before boldly
claiming that "there is no legal basis" for Plaintiffs' argument - especially when this Court has
held, in a decision Plaintiffs cited in their Response brief (Dkt. No. 43 at 4), that claims based on
"Defendants' alleged failure to honor agreements to pay wages which may be in excess of
minimum wage and failure to pay wages when due [are] are separate and distinct from Plaintiffs
FLSA claims." McMurray v. LRJ Restaurants, Inc., No. 4:10-CV-01435-JMC, 2011 WL
247906, at *2 (D.S.C. Jan. 26, 2011) (involving promise to pay one plaintiff a $0.50 raise when
he was promoted to shift manager); see also Chaplin v. SSA Cooper, LLC, No. 2:15-CV-01076
DCN, 2015 WL 2127610, at *2 (D.S.C. May 6, 2015) (SCPWA claims arising out of "alleged
failure to pay a 'nondiscretionary bonus' mandated by the employee compensation plan" not
preempted by the FLSA).
Finally, Defendant's argument that amounts for hours worked off the clock are not expressly
guaranteed under the SCPWA because it "does not create any statutory right to be paid any
particular amount of money for any or all hours of work" is misleading. (Dkt No. 45 at 3.) The
SCPWA requires employers to pay all wages due to workers for the hours they have worked. S.C
Code Ann. § 41-1 0-40(D). U~der the SCPWA, "wages" are "all amounts at which labor rendered
is recompensed, whether the amount is fixed or ascertained on a time, task, piece, or commission
basis, or other method of calculating the amount and includes vacation, holiday, and sick leave
payments which are due to an employee under any employer policy or employment contract." Id.
§ 41-10-10(2). Plaintiffs may be entitled to recovery under the SCPW A based on the allegation
that they were not paid the wages they were due. Accordingly, Plaintiffs' SCPWA claims are not
preempted by the FLSA.
For the foregoing reasons, Defendant's motion to dismiss (Dkt No. 39) is DENIED, and
the Clerk of Court is ordered to STRIKE Plaintiffs' third amended complaint (Dkt No. 41).
AND IT IS SO ORDERED.
-United States District Court Judge
Charleston, South Carolina
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