Opinion
01 Civ. 0785 (BSJ)
September 19, 2003
Opinion
Plaintiff filed this action pursuant to § 215 of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 215, 216, and § 510 of Employment Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1140 et seq. Plaintiff alleges that she was wrongfully demoted from her position as Director of Human Resources and Administration of Horizon Media, Inc. ("Horizon") and was ultimately terminated. Defendant moves to dismiss pursuant to Fed.R.Civ.Pro. 12(b)(6).
Plaintiff's original complaint also included a claim for common law wrongful termination; however, this claim was deleted from Plaintiff's Amended Complaint and is therefore not before this Court.
I. Facts
Plaintiff alleges that on several occasions in 1998 and 1999 she reported a payroll discrepancy to her supervisors. The discrepancy involved the underpayment of overtime wages to all non-exempt employees of the New York and Los Angeles offices and resulted in an underfunding of Horizon's 401(k) plan. Plaintiff notified Jerry Riley, Horizon's Chief Financial Officer, and Stewart Linder, Horizon's Controller, of the payroll discrepancy, but both Mr. Riley and Mr. Linder dismissed her concerns. Plaintiff alleges that she later brought the matter to the attention of Horizon's counsel, Mark Silverman, who verified the existence of the payroll error. In or about November 1999, Mr. Silverman and Plaintiff met with William Koenigsberg, Horizon's President, to discuss the payroll error and the resulting underfunding of the 401(k) plan. Several days after that meeting, Mr. Koenigsberg announced that he was replacing Plaintiff as Director of Human Resources and Administration. Subsequent to her demotion, Plaintiff assumed the title of Office Manager and was terminated on November 7, 2000.
Plaintiff alleges that her demotion and ultimate termination were in retaliation for her actions regarding Horizon's overtime violations and corresponding underfunding of its 401(k) plan. For the purposes of this motion, this court will accept all allegations made in Plaintiff's complaint as true. Barnett v. International Business Machines, 885 F. Supp. 581, 585 (S.D.N.Y. 1995). II. Discussion
Under Fed.R.Civ.P. 12(b)(6), a court may "dismiss a claim on the basis of a dispositive issue of law," Neitzke v. Williams, 490 U.S. 319, 326 (1989), by examining the legal sufficiency of the claim as opposed to the evidence underlying the factual issues. De Jesus v. Sears, Roebuck Co., 87 F.3d 65, 69 (2d Cir. 1996). For the reasons stated below, Plaintiff has failed to state a claim upon which relief can be granted, and this action is therefore dismissed.
A. Plaintiff's Claim Under the FLSA is Dismissed
Plaintiff argues that defendant demoted and ultimately terminated her because of her actions regarding Horizon's overtime violations, namely her complaints to her supervisors and discussions with Mr. Silverman, Horizon's counsel. Plaintiff maintains that her complaints to her supervisors and discussions with Mr. Silverman are protected activities under the FLSA, and she is therefore entitled to lost wages and other damages for her employer's retaliation. However, the Second Circuit's decision in Lambert v. Genesee Hosp., 10 F.3d 46 (2d Cir. 1993), cert. denied, 511 U.S. 1052 (1994), precludes such a claim.
The FLSA's anti-retaliation provision makes it unlawful:
to discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this chapter, or has testified or is about: to testify in any such proceeding, or has served or is about to serve on an industry committee.29 U.S.C. § 215(a)(3). Lambert held that "[t]he plain language of this provision limits the cause of action to retaliation for filing formal complaints, instituting a proceeding, or testifying, but does not encompass complaints made to a supervisor."Lambert, 10 F.3d at 55-56.
Plaintiff argues that this case is not precluded by Lambert because she "initiated a formal investigation into the FLSA violation by meeting with and supplying information to Horizon's attorneys." Pi. Memo at 10-11. Even if Plaintiff's discussions with Horizon's counsel and her superiors can properly be characterized as "a formal investigation," the Second Circuit's decision in Lambert states that; a cause of action under § 215 lies only in three circumstances: (1) when plaintiff has filed a formal complaint; (2) when plaintiff has instituted a proceeding; or (3) when plaintiff has testified in a proceeding. Plaintiff does not allege that any proceeding against Horizon occurred, therefore she can only recover under the FLSA if she filed a formal complaint. She did not.
Although Plaintiff's efforts to bring the payroll errors to the attention of her superiors, both on her own and with counsel, are laudable, Plaintiff's efforts did not include filing a formal complaint. Therefore, even if Plaintiff was demoted and terminated because of her conversations with Mr. Silverman and her supervisors, these discussions were not protected activities, and Plaintiff has no claim under the FLSA. B. Plaintiffs Claim Under ERISA is Dismissed
Plaintiff argues that, as a fiduciary, to have complained to the Department of Labor rather than conducting an official investigation would have breached her fiduciary duties to Horizon. However,Lambert is based upon a strict construction of text of the FLSA, and Plaintiff's fiduciary duty has no bearing on whether her actions included one of the three protected activities enumerated in § 215.
Plaintiff claims that her complaints regarding the underfunding of Horizon's 401(k) fund entitle her to "damages, including but not limited to, lost wages" under § 510 of ERISA. ERISA provides for civil suits "by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this title or the terms of the plan, or (B) to obtain other appropriate equitable relief." 29 U.S.C. § 1132 (a)(3). Plaintiff contends that ERISA also permits the recovery of back and front pay in civil actions. However, the Supreme Court's recent decision in Great-West Life Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002), suggests otherwise.
Although previous Second Circuit precedent was to the contrary,see, e.g., Strom v. Goldman, Sachs Co., 202 F.3d 138 (2d Cir, 1999), "the Supreme Court inGreat-West Life denied that back pay is a form of equitable relief, stating instead that back pay may be "made part of an equitable remedy' that includes the hiring or reinstatement of employees, but is not an equitable remedy in itself."Kishter v. Principal Life Ins. Co., 186 F. Supp.2d 438, 445 (S.D.N.Y. 2002) (quoting Great-West Life, 534 U.S. at 218 n. 4). Here, Plaintiff does not seek reinstatement or any other form of equitable relief, but rather seeks only lost wages and other money damages. Because neither lost wages nor other money damages constitute an equitable remedy, Plaintiff cannot recover under ERISA and this claim must be dismissed.
III. Conclusion
As Plaintiff has failed to state a cause of action under either the FLSA or ERISA, Defendant's 12(b)(6) motion is granted, and Plaintiff's claims are dismissed. The Clerk of the Court is directed to close this case.
SO ORDERED