Xue et al v. J&B Spartanburg LLC et al

Filing 32

ORDER denying 22 Motion to Dismiss for Failure to State a Claim. Signed by Honorable Mary Geiger Lewis on 5/26/2016.(abuc)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
SPARTANBURG DIVISION
YONG LE XUE, XING LONG LUO, and
YONG JUN FU, Individually, And On
Behalf Of All Other Employees Similarly
Situated,
Plaintiffs,
vs.
J&B SPARTANBURG LLC d/b/a/ RED
BOWL ASIAN BISTRO; WAI LEUNG
SIM; ZHI JIE SHAO; JIN HUA ZHENG;
HONG GANG BAI; BI YUN ZHENG;
JOHN DOE; and JANE DOE # 1-10,
Defendants.

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§ CIVIL ACTION NO. 7:16-00340-MGL
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MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
I.

INTRODUCTION
This case was filed pursuant to the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201, and

the South Carolina Payment of Wages Act (SCPWA), S.C. Code Ann. § 41-10-10. The Court has
jurisdiction over the matter under 28 U.S.C. § 1331 and 28 U.S.C. § 1367. Pending before the Court
is Defendants J&B Spartanburg LLC, Wai Leung Sim, Zhi Jie Shao, Hong Gang Bai, and Bi Yun
Zheng’s motion to dismiss Plaintiffs’ claims under the SCPWA seeking overtime compensation
and/or minimum wage by way of Federal Rule of Civil Procedure 12(b)(6). ECF No. 22. Having
carefully considered the motion, the response, the reply, the record, and the applicable law, it is the
judgment of the Court that Defendants’ motion to dismiss will be denied.

II.

FACTUAL AND PROCEDURAL HISTORY
Plaintiffs filed this case on February 4, 2016, as a Collective Action under the FLSA and as

a Rule 23 class action for violations of the SCPWA. ECF No. 25 at 1; ECF No. 19 ¶¶ 73-77, 79-89.
On April 15, 2016, Defendants filed their motion to dismiss Plaintiffs’ SCPWA claims. ECF No.
22. Plaintiffs filed a response in opposition on May 2, 2016, ECF No. 25, and Defendants filed a
reply on May 12, 2016, ECF No. 30. The Court, having been fully briefed on the relevant issues,
is now prepared to discuss the merits of the motion.

III.

CONTENTIONS OF THE PARTIES
In their motion to dismiss, Defendants contend that the damages underlying both Plaintiffs’

FLSA and SCPWA claims “are based exclusively on allegations of unpaid overtime compensation.”
ECF No. 22 at 2 (internal quotation marks omitted). Citing a number of cases from this District,
Defendants propound that Plaintiffs’ SCPWA claims are entirely preempted by the FLSA because
the basis for the SCPWA claims is allegedly a failure to pay overtime compensation. Id. Stated
differently according to Defendants, because “all of the alleged damages Plaintiffs are seeking in
this action stem from allegations that Plaintiffs were entitled to overtime pay for hours worked in
excess of 40 per workweek,” Plaintiffs’ SCPWA claims should be dismissed because they are
preempted by the FLSA. Id. at 3.
Plaintiffs respond by advancing that the SCPWA claims are not subject to preemption
because the SCPWA “both creates rights and means of enforcing the rights that are distinctive and
unique and provides additional relief not available under the” FLSA. ECF No. 25 at 1. Plaintiffs
aver that they are “seeking redress for Defendants’ failure to honor their agreement to pay wages

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based on an agreed up[o]n rate of pay that is in excess of federal minimum wage, as well as
Defendants’ failure to pay all wages when due.” Id. at 3. Plaintiffs further declare that the SCPWA
provides different remedies than the FLSA for an employer’s failure to pay wages, such as the
employee’s recovery for three times the amount owed, plus costs and reasonable attorney’s fees.
Id. at 5. As to Plaintiffs’ assertion that the SCPWA “provides additional relief not available under
the” FLSA, id. at 1, Plaintiffs note that they are seeking relief for Defendants’ failure to provide
Plaintiffs with the proper notice at the time of hiring, a timely written notice of any changes in their
terms of employment, and wage statements for each pay period, id. at 5-6. Plaintiffs posit that these
additional SCPWA claims cannot be preempted by the FLSA because they are not contained therein.
Id. at 6.

IV.

DISCUSSION AND ANALYSIS
In considering a motion to dismiss, a plaintiff’s well-pled allegations are taken as true, and

the complaint and all reasonable inferences are liberally construed in the plaintiff’s favor. Mylan
Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). The Court may consider only the facts
alleged in the complaint, which may include any documents either attached to or incorporated in the
complaint, and matters of which the Court may take judicial notice. Tellabs, Inc. v. Makor Issues
& Rights, Ltd., 551 U.S. 308, 322 (2007). Although the Court must accept the plaintiff’s factual
allegations as true, any conclusory allegations are not entitled to an assumption of truth, and even
those allegations pled with factual support need be accepted only to the extent that “they plausibly
give rise to an entitlement to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). In sum, factual
allegations must be enough to raise a right to relief above the speculative level, on the assumption

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that all the allegations in the complaint are true, even if doubtful in fact. Bell Atl. Corp. v. Twombly,
550 U.S. 544, 555 (2007).
Here, Defendants avouch that Plaintiffs “leave[] no doubt that the only damages they are
seeking in connection with their claim under the SCPWA are tied to Defendants’ alleged failure to
pay overtime.” ECF No. 30 at 2. Consequently, Defendants urge that Plaintiffs’ SCPWA claims
are preempted entirely by the FLSA because allegedly all the damages Plaintiffs seek under the
SCPWA arise from the payment of overtime issue. Id. at 3.
Nevertheless, Defendants are mistaken. The Fourth Circuit Court of Appeals has held that
“Congress prescribed exclusive remedies in the FLSA for violations of its mandates,” and state law
claims are “preempted by the FLSA where those claims . . . merely duplicate[] FLSA claims.”
Anderson v. Sara Lee Corp., 508 F.3d 181, 194 (4th Cir. 2007). However, the FLSA provides a
floor for minimum wage and overtime and contains a savings clause stating that
[n]o provision of this chapter or of any order thereunder shall excuse noncompliance
with any Federal or State law or municipal ordinance establishing a minimum wage
higher than the minimum wage established under this chapter or a maximum work
week lower than the maximum work week established under this chapter.
29 U.S.C. § 218(a). Accordingly, the FLSA does not prevent states from creating a parallel
regulatory scheme that provides additional protections for employees. See id. Moreover, claims that
are “separate and distinct” from a plaintiff’s FLSA claims are not preempted by the FLSA. See, e.g.,
Martinez-Hernandez v. Butterball, LLC, 578 F. Supp. 2d 816, 820 (E.D.N.C. 2008) (applying this
analysis to a claim alleging violation of the North Carolina Wage and Hour Act); Anderson, 508
F.3d at 194 (preempting state law claims only where they state a claim under the FLSA).
Here, the SCPWA both creates a right and a means of enforcing that right that provides
additional remedies not available under the FLSA, such as the employee’s recovery for three times
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the amount owed, plus costs and reasonable attorney’s fees. S.C. Code Ann. § 41-10-80.
Furthermore, Plaintiffs’ SCPWA claims are separate and distinct from their FLSA claim because
they are seeking unpaid overtime wage payments that are based upon an agreed-upon hourly rate,
pursuant to their fixed monthly salary, which is higher than the federal minimum wage rate. ECF
No. 25 at 4; ECF No. 19 ¶¶ 31-33, 38, 43. Moreover, several of Plaintiffs’ SCPWA claims are
unrelated to their overtime wage claims, specifically their allegations of Defendants’ failure to
provide Plaintiffs with the proper notice at the time of hiring, a timely written notice of any changes
in their terms of employment, and wage statements for each pay period. ECF No. 19 ¶¶ 46-48; see
S.C. Code Ann. § 41-10-30.
Ultimately, Plaintiffs will be unable to recover twice for the same injury, but they may be
entitled to the additional types of relief afforded by the SCPWA. See, e.g., Butler v. DirectSat USA,
LLC, 800 F. Supp. 2d 662, 672 (D. Md. 2011) (conducting a similar analysis under the Maryland
Wage and Hour Law). Because the SCPWA is broader than the FLSA in that it is not limited to
controversies involving minimum wage and overtime but applies to all wages due, and because
Plaintiffs’ SCPWA claims are separate and distinct from Plaintiffs’ FLSA claims, they are not
preempted by the FLSA. Consequently, the Court concludes that Defendants’ motion to dismiss will
be denied.

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V.

CONCLUSION
Wherefore, based on the foregoing discussion and analysis, it is the judgment of this

Court that Defendants’ motion to dismiss is DENIED.
IT IS SO ORDERED.
Signed this 26th day of May, 2016, in Columbia, South Carolina.
s/ Mary Geiger Lewis
MARY GEIGER LEWIS
UNITED STATES DISTRICT JUDGE

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