Villegas-Rivas et al v. Odebrecht Construction, Inc. et al

Filing 38

MEMORANDUM AND ORDER granting in part denying in part 8 MOTION to Dismiss 1 Complaint, (Signed by Judge Keith P Ellison) Parties notified.(arrivera, 4)

United States District Court
Southern District of Texas

ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION

October 10, 2018
David J. Bradley, Clerk

FEDERICO VILLEGAS-RIVAS, et al,

§
§
§
Plaintiffs,
§ CIVIL ACTION NO. 4:18-CV-1181
VS.
§
ODEBRECHT CONSTRUCTION, INC., et §
al,
§
§
Defendants.
§
ORDER
Before the Court is Defendants’ Partial Motion to Dismiss Under Federal Rule of
Civil Procedure 12(b)(6). (Doc. No. 8). Defendants Odebrecht Construction, Inc. and
Zachry Construction Corporation (“Defendants”) argue that Federico Villegas-Rivas,
Fernando Angel, Daniel Cardenas, and Gerardo Hernandez (“Plaintiffs”) have not
adequately pleaded their collective action and willfulness claims. Defendants’ Motion is
GRANTED in part and DENIED in part.
I.

BACKGROUND
Plaintiffs describe themselves as a group of “working Foremen” who were

employed by Defendants on the “SH99 Grand Parkway” project. (Doc. No. 1 ¶ 16). Their
jobs included “working side-by-side with other laborers while performing manual tasks—
for example, laying concrete foundation, driving concrete trucks and performing all task
[sic] as instructed and necessary for the construction of the freeway project.” (Doc. No. 1
¶ 16). According to Plaintiffs, they and other similarly situated employees regularly
1

worked in excess of forty hours a week. (Doc. No. 1 ¶ 18). Defendants were responsible
for setting Plaintiffs’ schedules and supervising their work. (Doc. No. 1 ¶ 20).
Plaintiffs allege that they were “entitled to overtime at one-and-one-half times
their regular rates of pay for all hours worked in excess of forty (40) in a workweek.”
(Doc. No. 1 ¶ 22). However, they allege that Defendants did not pay them correctly in
violation of the Fair Labor Standards Act (FLSA):
Defendants required Plaintiffs and similarly situated
employees to manually record their time daily, then would
pay them a ‘fixed salary’ for the first forty (40) hours of
work. To ‘incentivize’ Plaintiffs and similarly situated
employees to work over fifty (50) hours a week, Plaintiffs
received no pay for hours worked between forty (40) and fifty
(50) hours. Then, once Plaintiffs’ [sic] worked over fifty (50)
hours, they were paid straight time for hours worked over
fifty (50) hours a week. Notably, after Defendants terminated
their ‘incentive program,’ Defendants required Plaintiffs, and
similarly situated employees, to only record eight (8) hours of
work per day on their time cards, although they were each
working an excess of twelve (12) hours per day.
(Doc. No. 1 ¶ 21). According to Plaintiffs, Defendants “manipulated payroll records” to
make it appear that Plaintiffs were paid properly, but actually paid them a “flat ‘salary’
for working the first fifty (50) hours of work; and ‘straight time’ for hours worked over
fifty (50) hours a week.” (Doc. No. 1 ¶ 23). Plaintiffs allege that this manipulation of
records “demonstrates Defendant’s willful and intentional conduct designed to evade the
requirements of the FLSA.” (Doc. No. 1 ¶ 24).
Plaintiffs also allege that they are “aware of other employees who perform similar
work for Defendants” and that “many other similarly situated employees employed by
2

Defendants over the last three (3) years have been victimized by Defendants’ violations
of the FLSA.” (Doc. No. 1 ¶¶ 36-37). In their Complaint, Plaintiffs define their proposed
class as:
All persons who, at any time during the three (3) years
immediately preceding the filing of this lawsuit, worked at
any business that was owned, operated, and/or acquired by
Defendant, who were not paid overtime at a rate of one and
one-half times their regular rate of hours worked in excess of
forty (40) per week.
(Doc. No. 1 ¶ 38).
Defendants move to dismiss Plaintiffs’ collective action and willfulness
allegations for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6).
(Doc. No. 8). After Defendants filed this Motion, Plaintiffs filed a motion for conditional
class certification that redefines the class. (Doc. No. 21). This Order concerns only
Defendants’ Motion to Dismiss.
II.

LEGAL STANDARD
Under Federal Rule of Civil Procedure 8(a), a complaint must contain “a short and

plain statement of the claim showing that the pleader is entitled to relief.” To survive a
Rule 12(b)(6) motion, the plaintiff must plead “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). “A claim
has facial plausibility when the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
III.

ANALYSIS
3

A.

Collective Action Allegations
The FLSA requires employers to pay nonexempt employees who work more than

forty hours a week one and one-half times that employee’s regular rate of pay. 29 U.S.C.
§ 207(a)(1). Under the FLSA, an action “may be maintained against any employer
(including a public agency) in any Federal or State court of competent jurisdiction by any
one or more employees for and in behalf of himself or themselves and other employees
similarly situated. No employee shall be a party plaintiff to any such action unless he
gives his consent in writing to become such a party and such consent is filed in the court
in which such action is brought.” 29 U.S.C. § 216(b).
Defendants argue that Plaintiffs’ collective action allegations are inadequate under
Federal Rule of Civil Procedure 8. In particular, Defendants argue that although Plaintiffs
provided specific allegations for their individual FLSA claims, Plaintiffs’ defined class is
too broad and “is not based or limited, in any way, on those factual allegations.” (Doc.
No. 8 at 4). Plaintiffs respond that their Complaint “gives fair notice of their collective
action claims.” (Doc. No. 22). In their response, Plaintiffs rely heavily on Hoffman v.
Cemex, Inc., No. H-09-3144, 2009 WL 4825224 (S.D. Tex. Dec. 8, 2009). In that case,
the court decided that conclusory allegations are adequate at the motion to dismiss stage
in a collective action FLSA case: “With respect to the collective action issue, the
plaintiffs need not plead facts to support the propriety of a collective action to survive a
Rule 12(b)(6) motion. Whether proceeding collectively is appropriate will be addressed
when the plaintiffs move for conditional certification.” Id. at *4; see also Lang v.
4

DirecTV, Inc., 735 F. Supp. 2d 421, 436 (E.D. La. 2010) (“This case has not yet reached
the first, conditional certification stage of the process outlined in Lusardi. Plaintiffs have
not moved for certification . . . . The Court finds that defendants’ motion to dismiss is
premature because plaintiffs have not moved for certification and have had no
opportunity to develop a record.”).
However, “a majority of courts have found that a 12(b)(6) analysis of class
allegations is appropriate” because “Rule 12(b)(6) requires that a plaintiff give the
defendant fair notice of the putative class, which is a much different inquiry than that at
the conditional class certification stage.” Huchingson v. Rao, No. 5:14-cv-1118, 2015
WL 1655113, at *3 (W.D. Tex. April 14, 2015); see also Flores v. Act Event Servs., Inc.,
55 F. Supp. 3d 928, 934 (N.D. Tex. 2014). The Court agrees with the weight of these
other authorities; Plaintiffs’ collective action allegations are subject to Rule 12(b)(6)
analysis here.
Plaintiffs have provided very few details about their proposed class. In particular,
Plaintiffs have not made any allegations whatsoever about the job duties or titles of the
members of the class so that the Court can evaluate whether the members of the class are
indeed similarly situated to Plaintiffs. Although Plaintiffs provide some information
about their own job duties in the Complaint, they do not refer to these jobs in their class
definition. (Doc. No. 1 ¶ 16). Plaintiffs merely state that the class is “[a]ll persons who at
any time during the three (3) years immediately preceding the filing of this lawsuit,
worked at any business that was owned, operated, and/or acquired by Defendant.” (Doc.
5

No. 1 ¶ 38). Nor do Plaintiffs provide any information about the way in which the
proposed class members were paid. There are no allegations about whether they were
hourly or salaried workers or whether they were subjected to the pay practices that
Plaintiffs describe elsewhere in their Complaint.
Plaintiffs’ failure to allege facts explaining how the proposed class members are
similarly situated to them means that they have failed to state a collective action claim.
Many other courts have reached the same conclusion. Indeed, the court in Flores v. Act
Event Services, Inc., 55 F. Supp. 3d 928, 940 (N.D. Tex. 2014) granted a motion to
dismiss a complaint with a very similar class definition. In that case, the plaintiffs’ class
definition was “a nationwide class of all persons who worked or work for Defendants and
who were/are subject to Defendants’ unlawful pay practices and policies.” Id. The court
found that this definition did not give the defendant adequate notice of the putative class:
This allegation provides the defendants with notice that any
employee from the past three years, regardless of job
description, is a potential collective action plaintiff. . . [T]he
court concludes this broadly defined class fails to provide the
defendants with fair notice. . . . The plaintiffs should have
used [their own job duties as described in their complaint] to
assist in defining a more specific putative class. It is not
defendants’ responsibility to define the putative class by
piecing together factual allegations strewn throughout a
complaint; rather, fair notice requires the plaintiffs to clearly
define the putative collective class. Moreover, in this case, if
the defendants crafted a narrower class by referencing factual
allegations in the complaint, this class would directly conflict
with the broad putative class specifically defined in the text of
the complaint. Thus, the court concludes such inexact and
broad notice is insufficient to withstand a Rule 12(b)(6)
motion.
6

Id; see also Tillman v. Louisiana Children’s Med. Ctr., No. 16-14291, 2017 WL
1399619, at *2 (E.D. La. Apr. 19, 2017) (deciding that the plaintiff’s defined class of
people who worked for the defendant and whose hourly wage was reduced for a meal
break was inadequate because the complaint “does not specifically identify any potential
class members, describe the positions they held or work they performed, or identify how
they are similarly situated to Plaintiff.”); Dyer v. Lara’s Trucks, Inc., No. 1:12-cv-1785TWT, 2013 WL 609307, at *4 (N.D. Ga. Feb. 19, 2013) (finding the plaintiff’s class of
employees “similarly situated in terms of job duties, pay, and compensation” inadequate);
Pickering v. Lorillard Tobacco Co., Inc., No. 2:10-cv-633-WKW[WO], 2011 WL
111730, at *2-*3 (M.D. Ala. Jan. 13, 2011) (“[T]here is no description of the job duties
(or even the job titles) of the proposed similarly situated employees in the Complaint. . . .
Nor are there any allegations concerning the similarly situated employees’ pay
provisions. . . . [T]he Complaint contains no factual basis by which to assess whether
Plaintiff and the other employees are similarly situated.”). Therefore, because Plaintiffs’
Complaint fails to give Defendants fair notice of their putative class, the Court GRANTS
Defendants’ motion to dismiss Plaintiffs’ collective action allegations.
B.

Willfulness Allegations
An employer acts willfully under the FLSA if it “either knew or showed reckless

disregard for the matter of whether its conduct was prohibited by the statute.”
McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133 (1988). Defendants argue that
Plaintiffs have not pleaded adequate facts to support their willfulness claim because the
7

Complaint “does not provide any specific facts to support their claim that Defendants’
actions were ‘knowingly, willfully, and/or with reckless disregard’ to the putative class
members’ rights.” (Doc. No. 8 at 18).
Defendants correctly argue that allegations of willfulness under the FLSA are
subject to Rule 12(b)(6) motions and that mere allegations that an employer acted
willfully without any additional information are inadequate. See, e.g., Irvin v. Masters
Advanced Remediation Servs., Inc., No. H-16-2488, 2016 WL 7406750, at *3 (S.D. Tex.
2016) (“Irvin has not pleaded any facts that give rise to an inference of, or show, a willful
violation of the FLSA. He merely states that Masters Advanced Remediation acted
willfully.”).
However, unlike the plaintiffs in the cases that Defendants cite, here Plaintiffs
have not made only a bare allegation or conclusory statement that Defendants acted
willfully. In Plaintiffs’ Complaint, they allege that “Defendants’ manipulation of time
and payroll records . . . demonstrates Defendant’s [sic] willful and intentional conduct
designed to evade the requirements of the FLSA.” (Doc. No. 1 ¶ 24). According to
Plaintiffs, “after Defendants terminated their ‘incentive program’ Defendants required
Plaintiffs, and similarly situated employees, to only record eight (8) hours of work per
day on their time cards, although they were each working an [sic] excess of twelve (12)
hours per day.” (Doc. No. 1 ¶ 21).
This allegation supports an inference that Defendants acted willfully. If
Defendants did not correctly pay overtime and then attempted to hide it by altering their
8

records of Plaintiffs’ hours and pay rates, one could reasonably infer that Defendants
“knew [their] pay structure violated the FLSA” and sought to avoid liability. Zannikos v.
Oil Inspections (U.S.A.), Inc., 605 F. App’x 349, 360 (5th Cir. 2015); see, e.g., Elwell v.
Univ. Hospitals Home Care Servs., 276 F.3d 382, 844 (6th Cir. 2002) (“[A]n employer’s
recordkeeping practices may . . . corroborate an employee’s claims that the employer
acted willfully in failing to compensate for overtime. For example, the fact that an
employer knowingly under-reported its employee’s work hours could suggest to a jury
that the employer was attempting to conceal its failure to pay overtime from regulators,
or was acting to eliminate evidence that might be later used against it in a suit by one of
its employees.” (internal citation omitted)); Solano v. Ali Baba Mediterranean Grill, Inc.,
No. 3:15-cv-0555-G, 2016 WL 808815, at *5-*6 (N.D. Tex. March 2, 2016) (noting that
“failure to keep accurate or complete records of employment” can give rise to an
inference of willfulness and citing cases). At the motion to dismiss stage, this allegation
is adequate to support Plaintiffs’ willfulness claim. Defendants’ motion to dismiss
Plaintiffs’ willfulness claim is therefore DENIED.
IV.

CONCLUSION
For the foregoing reasons, the Court GRANTS Defendants’ Motion to Dismiss as

to Plaintiffs’ collective action claim and DENIES the Motion as to Plaintiffs’ willfulness
claim.
IT IS SO ORDERED.
SIGNED at Houston, Texas, on this the 10th day of October, 2018.
9

________________________________
HON. KEITH P. ELLISON
UNITED STATES DISTRICT COURT JUDGE

10