Summary
noting that the plaintiff filed a putative class action alleging violations of the FLSA and Oregon law and seeking to “obtain monetary, injunctive, and declaratory relief resulting from [d]efendant's misclassification of [p]laintiff and other installer-trainers as independent contractors”
Summary of this case from Wright v. Violet Energy, Inc.Opinion
6:21-cv-00842-MK
07-12-2022
JORDAN BOGGS, on behalf of himself and all others similarly situated, Plaintiff, v. ONITY, INC., Defendant.
FINDINGS AND RECOMMENDATION
MUSTAFA T. KASUBHAI (HE / HIM) UNITED STATES MAGISTRATE JUDGE
Plaintiff Jordan Boggs filed this putative class action against Defendant Onity alleging violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 652.610, et seq.; Oregon's wage-and-hour laws, Or. Rev. Stat. (“ORS”) §§ 652.140, 652.610, et seq., and 653.010, et seq.; a claim for unjust enrichment under state law; and for declaratory relief. See First Am. Compl., ECF No. 16 (“FAC”). Defendant moves to dismiss the FAC under Federal Rule of Civil Procedure 12(b)(6), which Plaintiff opposes. Def.'s Mot. Dismiss, ECF No. 20 (“Def.'s Mot.”); Pl.'s Resp. Mot. Dismiss, ECF No. 22 (“Pl.'s Opp'n”). For the reasons that follow, Defendant's motion to dismiss should be GRANTED in part and DENIED in part.
The following allegations are taken from the FAC and presumed true at this early stage of the proceedings. Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005) (“When ruling on a motion to dismiss, we accept all factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party.”).
Plaintiff brought this putative class action to obtain monetary, injunctive, and declaratory relief resulting from Defendant's misclassification of Plaintiff and other installer-trainers as independent contractors. FAC ¶ 1, ECF 16.
Plaintiff is an Oregon resident and worked for Defendant for seven years as an installertrainer. Id. ¶ 5. Defendant categorized Plaintiff, and members of the putative class, as independent contractors. Id.; see also ¶ 61. Installers install lock systems for customers; trainers train customers in the usage of those products. Id. Some installers also work as trainers. Id. Plaintiff alleges that the putative class members were misclassified as independent contractors when in fact they performed the work of an employee. Id.
Defendant is a Delaware corporation whose current principal place of business is located in Salem, Oregon. Id. ¶ 6. Defendant installs and maintains locks and automatic lock systems in commercial and public buildings. Id. ¶ 1. Defendant relies on installers to install lock systems, such as remote locks. Id.
Plaintiff challenges both the classification of installers as independent contractors and Defendant's denial to Plaintiff and those similarly situated of the rights, obligations, privileges, and benefits, including overtime compensation, owed to them as employees under state and federal law. Id. ¶ 4. A substantial part of the events or omissions giving rise to Plaintiff's and the putative class members' claims occurred in Oregon. Id. ¶ 8.
In February 2013, Plaintiff began working for Defendant in Montana. Id. ¶ 9. Defendant classified Plaintiff as an independent contractor. Id. Plaintiff worked with his father, Kevin Boggs-who was classified as a full-time employee (“FTE”) by Defendant-and performed substantially the same tasks. Id. Kevin Boggs trained Plaintiff. Id. ¶ 11. Plaintiff otherwise worked alone and did not have any helpers or employees. Id. ¶ 10.
On March 4, 2013, Plaintiff traveled to Cabazon, California to shadow Kevin Boggs and assisted him in the performance of duties on behalf of Defendant at The Morongo Casino and Spa Resort. Id. ¶ 12. On March 11, 2013, Plaintiff traveled to Billings, Montana, to complete work on Defendant's behalf. Id. ¶ 13.
In 2014, Defendant was acquired by United Technologies. Id. ¶ 14. Following the acquisition, Defendant relocated their corporate headquarters from Atlanta, Georgia, to Salem, Oregon. Id. Defendant instituted various changes after the acquisition. Id.
For each year from 2014 to 2020, Plaintiff traveled to various worksites to complete his job duties for Defendant. Id. ¶ 15. Plaintiff performed a portion of his work in Oregon, including trainings and certification classes at Defendant's headquarters in Salem, Oregon. Id. Plaintiff also worked at other sites for Defendant in Oregon, including, but not limited to, a job that he performed in Ontario, Oregon, on September 4-5, 2019. Id.
Before Plaintiff's arrival at sites to complete a training or installation, Defendant delivered the equipment necessary for completing the assigned task. Id. ¶ 16. For trainings, Defendant also determined the presentation and information that Plaintiff would give to customer and provided checklists. Id.
Both trainers and installers were subject to the same contractual terms pursuant to Defendant's Installer and Trainer Agreement. Id. Defendant exercised control over the day-to-day performance of their job's, paid them in the same fashion, and were otherwise treated the same by Defendant through its policies. Id.
On February 8, 2015, Defendant revised its Environmental Health and Safety Policy. Id. ¶ 17. The policies were mandatory for installers and covered safety requirements and standards, including type of designated work clothing, footwear, equipment, and the authority to prohibit music while working. Id. That same day, Defendant also revised its Hotel Reimbursement and Reservation Policy. Id. ¶ 18. The policy required itemized expenses, limited expenses to $100.00/night, and required prior approval for any exceptions. Id.
On March 5, 2015, Defendant revised its Pre-Site Procedure Requirements. Id. at ¶ 19. The policy mandated communication timeframes, the method and manner of site preparation, and the method and manner of work upon arrival at the jobsite. Id.
On March 9, 2015, Defendant revised its Billing Policies. Id.¶ 20. The policy prescribed the protocols for billing customers and outlined what installer and trainers could bill Defendant as reimbursement. Id. That same day, Defendant also revised its Daily Update Policy. Id. ¶ 21. Defendant mandated daily updates while on jobsites, including mandatory status updates throughout the work process at each jobsite. Id. Defendant controlled all scheduling changes and required updates to be sent at an approved time of day. Id. Defendant also prohibited leaving jobsites without obtaining prior approval. Id.
On March 16, 2015, Defendant revised its Crew Leader Policies. Id. ¶ 22. The policy required attendance at Defendant's biennial re-certification classes, including Plaintiff's attendance at a class at Defendant's headquarters in Salem, Oregon, on March 19, 2015. Id. ¶¶ 22-23. At this class, a PowerPoint slideshow listed Defendant's administrative policies. Id. ¶ 23. In the presentation, Defendant increased restrictions over dress code and piercings, and prohibited alcohol on site property even when not working. Id.
On October 26, 2017, Ashley Burger, who worked as scheduler for Defendant, instructed Plaintiff to sign a new contract by November 1, 2017. Id. at ¶ 24. The contract permitted Defendant access to Plaintiff's operating sites, personnel files, books, and records. Id. The next day, Burger sent Plaintiff an email with updated policies. Id. ¶ 25. The email included instructions that required Plaintiff to wear a Defendant-supplied certification badge at all times and prohibited the use of tobacco while on jobsites. Id.
On February 28, 2018, Burger emailed Plaintiff about providing him with supply kits of items to take with him on the jobsite. Id. ¶ 26. In June 2018, Defendant shipped Plaintiff equipment to carry with him to each jobsite. Id. at ¶ 29.
On August 22, 2018, Plaintiff met with Nicholas Ladwig, who worked as an installations manager for Defendant, about a bounced check from Defendant. Id. ¶ 27. Ladwig and Plaintiff discussed Defendant's continuing failure to pay on time. Id. In September 2018, Defendant began paying Plaintiff through direct deposit. Id. ¶ 28.
On July 24, 2019, Marianne Holgate, who worked as an installations manager for Defendant, emailed Plaintiff a newly revised air travel policy. Id. ¶ 30. The policy outlined the timeframe for booking flights-within one week of a “Notice of Confirmation Date from Onity”-and required purchasing roundtrip tickets. Id.
In August 2019, Holgate called Plaintiff regarding a recent job. Id. ¶ 31. On the call she told Plaintiff that he was prohibited from giving his business card for photography services to the staff at hotels. Id.
On September 14, 2020, Holgate emailed Plaintiff with further revised “policies and procedures.” Id. ¶ 32. These policies included a forty-eight-hour deadline to submit invoices, a requirement for immediate communication when scheduling, control over start time, and additional control over scheduling. Id. Two days later, Gregory Stevenson, who worked as a field service representative for Defendant, emailed Plaintiff additional communication protocols and approval requirements for performing work functions. Id. ¶ 33.
On October 5, Defendant scheduled Plaintiff to work at a Homewood Suites located in Livermore, California, to begin on October 18, 2020. Id. ¶ 34. On October 9, Stevenson emailed Plaintiff reminding him of company policies. Id. at ¶ 35. In the email, Holgate explained that Plaintiff was required to provide daily updates while on site. Id. Defendant also required Plaintiff to complete surveys after leaving each jobsite. Id.
On October 12, Plaintiff received an email that changed the Homewood Suites Project's work dates to October 22 and 23. Id. ¶ 36. Defendant typically kept the same trainer assigned to the work when schedule changes occurred. Id.
On October 19, Plaintiff emailed Holgate and demanded reclassification as an employee. Id. ¶ 37. Plaintiff also demanded backpay, payroll benefits, and other benefits that employees received. Id. Plaintiff calculated the approximate value of each lost wage and benefit and demanded payment for the estimated total. Id.
The next day, Plaintiff emailed Kriss Fincher, who worked as a scheduler for Defendant, as well as Anna Beseda, Casey Heitz and Johnna Hillier, who worked as project coordinators for Defendant, about the Homewood Suites Project, scheduled for October 22 and 23. Id. ¶ 38. In the email, Plaintiff informed them that he had followed up with a representative from the Homewood Suites and that he had been informed that the hotel's open date had been moved to October 27, 2020. Id. Plaintiff asked Defendant to provide notice when or if a job he is expected to work is rescheduled. Id. Plaintiff also called Hillier to follow-up on his email and inquire on the workdays for the Homewood Suites Project. Id. ¶ 39. Hillier explained that she had checked their records and confirmed that the hotel's open date had been pushed back to October 27. Id. She further explained that she had sent the new request to Fincher earlier that day and that Fincher had been busy training someone. Id.
On October 21, Plaintiff received a response from Renee Stark, who worked in human resources for Defendant. Id. ¶ 40. Stark explained that they were looking into Plaintiff's concerns and would get back to him in due course. Id.
On October 22, Plaintiff emailed Fincher and Hillier and said that he never received a new date request for the Homewood Suites Project. Id. ¶ 41. Plaintiff asked that the request be sent so that he could plan accordingly as the date was arriving soon. Id.
On October 23, Plaintiff emailed Fincher and Hillier again, and informed them that he still had not received any information regarding the Homewood Suites Project. Id. ¶ 42.
On October 23, Holgate emailed Plaintiff informing him that a different trainer was scheduled for the work at the Homewood Suites Project. Id. ¶ 43.
On October 27, Stark emailed Plaintiff and said that they had reviewed his claim and determined that he was correctly classified as an independent contractor. Id. ¶ 44.
On December 30, Plaintiff resigned his position. Id. ¶ 45. Plaintiff was not paid all wages due and owed to him at that time and has not received all wages due and owed. Id.
From 2014 to 2020, Plaintiff routinely worked in excess of 40 hours a week, including but not limited to the following weeks, August 18-24, 2019, September 22-28, 2019, and November 10-16, 2019. Id. ¶ 46.
Plaintiff also seeks to bring a class action claim for violations of the FLSA and state law on behalf of himself and all similarly situated individuals. Id. ¶ 49. The putative class is defined as:
All persons who are or have performed work as “installers” or “trainers” for Onity and who are or were misclassified as independent contractors during the period commencing three years prior to the filing of this Complaint through the trial in this action.Id. Plaintiff further alleges that he and “and members of the FLSA Collective Class routinely worked in excess of forty (40) hours in a week without overtime compensation during the Class Period.” Id. ¶ 52.
STANDARD OF REVIEW
A motion to dismiss under Rule 12(b)(6) for failure to state a claim may be granted only when there is no cognizable legal theory to support the claim or when the complaint lacks sufficient factual allegations to state a facially plausible claim for relief. Shroyer v. New CingularWireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a complaint's factual allegations, the court must accept as true all well-pleaded material facts alleged in the complaint and construe them in the light most favorable to the non-moving party. Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012); Daniels-Hall v. Nat'lEduc. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). To be entitled to a presumption of truth, allegations in a complaint “may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). All reasonable inferences from the factual allegations must be drawn in favor of the plaintiff. NewcalIndus. v. Ikon Office Solution, 513 F.3d 1038, 1043 n.2 (9th Cir. 2008). The court need not, however, credit the plaintiff's legal conclusions that are couched as factual allegations. Ashcroftv. Iqbal, 556 U.S. 662, 678-79 (2009).
A complaint must contain sufficient factual allegations to “plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.” Starr, 652 F.3d at 1216. “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.” Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)). “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.” Mashiri v. Epstein Grinnell & Howell, 845 F.3d 984, 988 (9th Cir. 2017) (quotation marks omitted).
DISCUSSION
Plaintiff's FAC asserts three claims. Plaintiff's first claim is a putative class action for overtime violations under the FLSA. FAC ¶¶ 67-75. Plaintiff's second claim is a putative class action for violations of Oregon's wage and hour laws. Id. ¶¶ 76-84. Plaintiff's third claim is an additional putative class action for unjust enrichment. Id. ¶¶ 85-88.
Defendant moves to dismiss the FAC arguing that (1) Plaintiff has not plead a plausible claim that he was misclassified and (2) even if Plaintiff had properly plead that he was an employee, he fails to state a claim under the FLSA, Oregon state law, or for unjust enrichment. Def.'s Mot. 4-13. Finally, Defendant asserts that Plaintiff's class and collective action allegations fail as a matter of law. Id. at 14-20.
I. Preliminary Matter
The Court must resolve one preliminary issue before reaching the substantive merits of Defendant's motion to dismiss: whether the Court should consider Exhibit 1 to Defendant's motion, which is a purported independent contractor agreement executed between Plaintiff and Defendant. Healy Decl., Ex. 1, ECF No. 21 (the “Agreement”).
The incorporation by reference “doctrine permits a court to consider a document if the plaintiff refers extensively to the document or the document forms the basis of the plaintiff's claim.” Steinle v. City & Cnty. of San Francisco, 919 F.3d 1154, 1162-63 (9th Cir. 2019) (citation and quotation marks omitted).
Plaintiff objects to the Agreement asserting that the document was not incorporated as part of the FAC and that it is not essential to Plaintiff's claims. Pl.'s Opp'n 12-13. Further, Plaintiff asserts, the document “is undated and unsigned by either party.” Id. at 13. The Court disagrees for two reasons. First, the Agreement is in fact referenced throughout the FAC. See, e.g., FAC ¶¶ 9, 24, 51; Campbell v. FAF, Inc., 2019 WL 2574119, at *3 (S.D. Cal. June 20, 2019) (finding consideration of an independent contractor agreement appropriate where the plaintiff referenced the agreement in the complaint). Second, Plaintiff directly relies on the Agreement in response to Defendant's motion to dismiss. See Pl.'s Opp'n. 15 (relying on the language of the Agreement in arguing Defendant had the right to control the manner in which Plaintiff worked); Steinle, 919 F.3d at 1163 (affirming the district court's consideration of a document under the incorporation by reference doctrine where the Plaintiff's opposition to the defendant's motion to dismiss “actually cited and relied upon” the document). As such, Plaintiff's evidentiary objection is OVERRULED.
The Court notes that to the extent the Agreement conflicts with allegations in the FAC, the Court will treat the factual allegations in the FAC as true as it must at this stage of litigation. See Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 1003 (9th Cir. 2018).
II. Plaintiff's Individual Claims
A. Classification
Defendant asserts that Plaintiff has not plead a plausible claim that he was misclassified. Def.'s Mot. 4-7. “[B]ecause the FLSA is a remedial statute, it must be interpreted broadly.” Rosenfield v. GlobalTranz Enterprises, Inc., 811 F.3d 282, 285 (9th Cir. 2015). “[N]either the common law concepts of ‘employee' and ‘independent contractor' nor contractual provisions purporting to describe the relationship are determinative of employment status.” Perez v. OakGrove Cinemas, Inc., 68 F.Supp.3d 1234, 1242 (D. Or. 2014) (citation and quotation marks omitted); see also Real v. Driscoll Strawberry Assocs., Inc., 603 F.2d 748, 754 (9th Cir. 1979) (explaining that courts use an expansive interpretation of the definitions of “employer” and “employee” under the FLSA; common law concepts of “employee” and “independent contractor” are “not conclusive determinants of the FLSA's coverage”).
“[T]o determine employment status [under] the FLSA, the ‘economic realities test' is the applicable standard.” Perez, 68 F.Supp.3d at 1242 (citing Boucher v. Shaw, 572 F.3d 1087, 1091 (9th Cir. 2009)). Courts rely on six factors to analyze the economic realities of the relationship:
1) The degree of the alleged employer's right to control the manner in which the work is to be performed; 2) the alleged employee's opportunity for profit or loss depending upon his managerial skill; 3) the alleged employee's investment in equipment or materials required for his task, or his employment of helpers; 4) whether the
service rendered requires a special skill; 5) the degree of permanence of the working relationship; and 6) whether the service rendered is an integral part of the alleged employer's business.Id. (citation omitted).
The factors are aids used to determine the degree of dependence by the individual on the entity. See Tony & Susan Alamo Found. v. Sec'y of Lab., 471 U.S. 290, 301 (finding that workers entirely dependent on an employer for long periods suggests an employment relationship); Useryv. Pilgrim Equip. Co., 527 F.2d 1308, 1311 (5th Cir. 1976) (explaining that the factors are “tools to be used to gauge the degree of dependence of alleged employees on the business with which they are connected” and that “[i]t is dependence that indicates employee status”).
Regarding Plaintiff's Oregon state law claims, courts apply the same “economic realities” test for claims arising under ORS chapter 653. See, e.g., Moholt v. Dooney & Bourke, Inc., 63 F.Supp.3d 1289, 1302 (D. Or. 2014). For claims arising under ORS chapter 652, “the applicable test for deciding whether a worker is an employee or an independent contractor is the ‘right-of-control' test.” Id. (citing Slayman v. FedEx Ground Package Sys., Inc., 765 F.3d 1033, 1042 (9th Cir. 2014)) (noting that “Oregon's right-to-control test requires courts to weigh four factors: ‘(1) direct evidence of the right to, or exercise of, control; (2) the furnishing of tools and equipment; (3) the method of payment; and (4) the right to fire,'” with “[d]irect evidence of the right to control” being the most important factor (quoting Slayman, 765 F.3d at 1042)).
Taking the allegations in the FAC as true as this Court must at this stage of the proceedings, Plaintiff has sufficiently plead facts that, if true, satisfy misclassification under the relevant Federal and state tests. Although the allegations in the FAC do not squarely address each factor, the allegations do address the most important factor-the right to control the manner in which Plaintiff worked. For example, Defendant regulated the type of clothing and safety equipment Plaintiff could wear on jobsites. FAC ¶ 17. Defendant controlled all scheduling changes and required updates to be sent at an approved time of day. Id. ¶ 21. Defendant prohibited leaving worksites without first obtaining Defendant's approval. Id. Defendant prohibited music while working. Id. ¶ 17. Defendant controlled the presentations and information that Plaintiff supplied to customers. Id. ¶ 16. Defendant provided trainers and installers, like Plaintiff, with a checklist that directed presentations. Id. Defendant also required trainers and installers to provide Defendant with daily updates. Id. ¶¶ 21, 35 (instructing Plaintiff to provide daily updates and complete a survey after leaving jobsites).
The final two factors also weigh in favor of finding that Plaintiff was an employee. Plaintiff worked for Defendant for seven years. Id. ¶¶ 5, 28. And Plaintiff's work was an integral part of Defendant's business: Defendant's principal business is installing and maintaining locks in commercial and public buildings and Plaintiff worked as an installer-trainer for those lock systems. Id. ¶ 1.
Defendant asserts that Plaintiff was an independent contractor and not an employee, relying heavily on language from the Agreement. However, as noted, at this stage of the proceedings, the Court must accept as true the allegations in the FAC to the extent they conflict with the Agreement. Khoja, 899 F.3d at 1003 (noting that the “inferences a court may draw from an incorporated document should also be approached with caution” and that “it is improper to assume the truth of an incorporated document if such assumptions only serve to dispute facts stated in a well-pleaded complaint”); see also Sgro v. Danone Waters of N. Am., Inc., 532 F.3d 940, 942, n.1 (9th Cir. 2008) (finding it proper to consider a disability benefits plan referenced in the complaint, but declining to accept truth of the plan's contents where the parties disputed whether defendant actually implemented the plan according to its terms). As such, Plaintiff has sufficiently plead a plausible claim that he was misclassified.
B. Failure to State a Claim
1. FLSA
Defendant next asserts that “[P]laintiff's sole allegation concerning his overtime claim is the conclusory assertion that ‘[h]e and members of the FLSA Collective Class worked in excess of forty (40) hours a week without overtime compensation.'” Def.'s Mot. 8 (quoting FAC ¶ 46). Defendant argues that Plaintiff's claim for overtime under the FLSA fails under the Ninth Circuit's decision in Landers v. Quality Commc'ns, Inc., 771 F.3d 638, 645 (9th Cir. 2014), as amended (Jan. 26, 2015). Landers held that a plaintiff asserting claims under the FLSA “must allege that [they] worked more than forty hours in a given workweek without being compensated for the hours worked in excess of forty during that week.” Id. (emphasis added).
In the FAC, Plaintiff alleges that he worked more than 40 hours for three weeks in 2019 and did not receive overtime pay. See FAC ¶ 46 (“Boggs routinely worked in excess of 40 hours a week, including but not limited to the following weeks, August 18-24, 2019, September 2228, 2019, and November 10-16, 2019.”); ¶ 71 (“Boggs and the other members of the FLSA Collective Class, either regularly or from time to time, worked more than 40 hours per week, but did not receive overtime pay.”).
Defendant contends that the FAC is deficient because the “FAC fails to provide any detail concerning a given workweek, and provides only ‘labels and conclusions, . . . a formulaic recitation of the elements of a cause of action,' and a ‘naked assertion' devoid of ‘further factual enhancement' that cannot survive a motion to dismiss.” Def.'s Mot. 8-9 (citing Landers, 771 F.3d at 641).
The Court disagrees and concludes that this case is distinguishable from Landers in at least one critical respect. Unlike the complaint in Landers, which only “presented generalized allegations asserting violations of the minimum wage and overtime provisions of the FLSA by the defendants,” 771 F.3d at 646, Defendants here have notice of at least three specific weeks in which Plaintiff worked in excess of 40 hours and that Plaintiff did not receive overtime pay. FAC ¶¶ 46, 71. That is sufficient under Landers. 771 F.3d at 646 (“Although plaintiffs in these types of cases cannot be expected to allege ‘with mathematical precision,' the amount of overtime compensation owed by the employer, they should be able to allege facts demonstrating there was at least one workweek in which they worked in excess of forty hours and were not paid overtime wages.”) (citation omitted) (emphasis added).
2. Oregon Wage-and-Hour Claims
Defendant asserts that Plaintiff's state law claims should be dismissed because Plaintiff “does not allege that he worked in Oregon, beyond attending a recertification class in March 2015 (outside the six-year statute of limitations for Oregon wage claims) and working a single day in Ontario, Oregon, in September 2019.” Def.'s Mot. 9 (citation omitted). Thus, argues Defendant, the FAC is deficient because Plaintiff failed to plead that his “employment contract was entered into, or payments thereunder are ordinarily made or to be made, within the state of Oregon.” Def.'s Reply 5-6, ECF No. 26 (citing ORS § 652.310).
The relevant statutory definition for “employee” provides in relevant part:
(2) “Employee” means any individual who otherwise than as copartner of the employer or as an independent contractor renders personal services wholly or partly in this state to an employer who pays or agrees to pay such individual at a fixed rate, based on the time spent in the performance of such services or on the number of operations accomplished, or quantity produced or handled.
However:
(a) Where services are rendered by an independent contractor, an individual shall not be an employee under this section unless the individual is a musician or supporting technical person.
(b) Where services are rendered only partly in this state, an individual shall not be an employee under this section unless the contract of employment of the employee has been entered into, or payments thereunder are ordinarily made or to be made, within this state.ORS § 652.310(2) (emphasis added).
Here, the allegations described in the FAC fall squarely into subsection (2)(b)-i.e., the services Plaintiff rendered occurred only partly in the state of Oregon. See FAC ¶ 15 (alleging
Plaintiff performed some portion of his work in Oregon); Id. ¶ 34 (alleging Plaintiff performed work in California); Id. ¶ 13 (alleging Plaintiff performed work in Montana). Plaintiff was therefore required to plead that he entered into a contract, or received payments pursuant to that contract, within the state of Oregon to qualify as an employee for purposes of Oregon's wage and hour laws. Because the FAC contains no such allegations, Plaintiff's state law claims should be dismissed. However, because the FAC's deficiencies may be curable through amendment, the Court should allow Plaintiff leave to amend.
The FAC also asserts claims under ORS § 653.025 for failure to pay minimum wages and ORS § 653.045 for failure to keep time records. See FAC ¶ 80. However, Plaintiff concedes that he is not bringing claims under ORS § 653.025 and ORS § 653.045. See Pl.'s Opp'n at 20 (conceding that plaintiff has not asserted a minimum wage claim); Id. at 21 (“[Plaintiff] is not seeking damages . . . for failing to keep accurate time records.”). The Court should therefore GRANT Defendant's motion as to those claims. Plaintiff also failed to respond to Defendant's argument that his claim for unlawful deductions should be dismissed. Compare Def.'s Mot. 12 with Pl.'s Opp'n. As such, the Court should treat the argument as waived and Defendant's motion as to that claim should be GRANTED. See Greenwood v. FAA, 28 F.3d 971, 977 (9th Cir. 1994) (explaining that courts “will not manufacture arguments” for a party to a lawsuit).
Although the Court concludes that dismissal of Plaintiff's state law claims are appropriate given the FAC's failure to allege that Plaintiff was an employee, because the Court will permit amendment and in the interest of judicial economy, the Court will address Defendant's argument that Plaintiff cannot bring a claim under ORS § 652.140, for failure to pay wages due upon termination, because he is already requesting the same penalty under ORS § 653.261, for failure to pay overtime. Def.'s Mot. 11.
The Oregon Court of Appeals has addressed whether a plaintiff may seek dual penalties under Oregon's wage-and-hour statutes in two cases. In Hurger v. Hyatt Lake Resort, the plaintiffs, who worked as minimum-wage workers, received their final post-termination wages after the time required by ORS § 652.140. 170 Or.App. 320, 322 (2000). The plaintiffs sought one penalty under ORS § 652.150 for late payment of wages upon termination in violation of ORS § 652.140 and a second penalty under ORS § 652.150 for failure to pay minimum wages in violation of ORS § 653.261. Id. The court held the late payment of the final wages did not violate minimum-wage laws and the late payment was not separately sanctionable as a failure to pay minimum wage because the argument was a “tail-wagging-the-dog exercise” that was unsupported by the statute's text. Id. at 325.
In Cornier v. Paul Tulacz, DVM PC, the plaintiff alleged the defendant violated ORS § 653.261 when the defendant failed to pay overtime wages during her employment, and violated ORS § 652.140 when the defendant failed to pay her accumulated vacation pay after leaving her job. 176 Or.App. 245, 247 (2001). The plaintiff sought two statutory penalties under ORS § 652.150-one for each violation. Id. The court found the defendant's failures to pay the plaintiff constituted violations of two distinct parts of the wage statutes that arose out of different factual contexts and occurred at different times. Id. at 248. Significantly, the Court explained, that the “if this case did present two claims for two penalties based on the same employer misconduct, one of those claims would probably fail under Hurger[.]” Id. at 250.
Under Hurger and Cornier, Plaintiff cannot recover penalties under both ORS § 652.140 and ORS § 653.261 for the same conduct by Defendant. However, Federal Rule of Civil Procedure 8(d)(2) provides: “A party may set out 2 or more statements of a claim or defense alternatively or hypothetically, either in a single count or defense or in separate ones. If a party makes alternative statements, the pleading is sufficient if any one of them is sufficient.” Accordingly, should Plaintiff be able to cure the defects in the FAC discussed above, he should be permitted to plead these claims in the alternative.
3. Unjust Enrichment
Defendant next argues that Plaintiff failed to plead the elements for a claim of unjust enrichment. See Def.'s Mot. 13. To establish unjust enrichment, a plaintiff must show that (1) the plaintiff conferred a benefit on the defendant; (2) the defendant was aware that it had received a benefit; and (3) under the circumstances, it would be unjust for the defendant to retain the benefit without paying for it. Winters v. Cty. of Clatsop, 210 Or.App. 417, 421 (2007).
The allegations in the FAC are sufficient at the pleading stage to withstand Defendant's motion to dismiss. The FAC alleges that Plaintiff was misclassified as an independent contractor and performed work for Defendant without being paid overtime and other benefits-i.e., conferred a benefit on Defendant in the form of uncompensated labor. See FAC ¶¶ 46, 71. Defendant became aware of Plaintiff's purported misclassification by at least October 2020 when Plaintiff emailed Holgate and demanded to be reclassified as an employee and backpay. Id. ¶ 37. As such, the FAC properly alleges a claim for unjust enrichment under Oregon law.
III. Plaintiff's Class and Collective Action Claims
A. Oregon Wage-and-Hour Claims
Defendant moves to dismiss Plaintiff's Oregon class claims. Def.'s Mot. 14-15. Because the Court concludes that Plaintiff's individual claims under Oregon's wage and hour laws should be dismissed, for the reasons explained in section II.B.2 supra, Plaintiff's putative class claims based on those statutes should also be dismissed.
B. FLSA Class Claims
Finally, Defendant moves to dismiss Plaintiff's FLSA collective class claim arguing that, “[e]ven under the more lenient standard applicable to collective actions under the FLSA, the Amended Complaint is devoid of allegations sufficient to ‘nudge[] the[] claims across the line from conceivable to plausible.'” Def.'s Mot. 17 (citing Twombly, 550 U.S. at 570) (bracketing in original).
The FLSA allows an employee to bring a collective action on behalf of other “similarly situated” employees. 29 U.S.C. § 216(b). The Ninth Circuit has explained that “there is no established definition of the FLSA's ‘similarly situated' requirement, nor is there an established test for enforcing it.” Senne v. Kansas City Royals Baseball Corp., 934 F.3d 918, 947-48 (9th Cir. 2019) (citation omitted) disapproved of on other grounds by Olean Wholesale GroceryCoop., Inc. v. Bumble Bee Foods LLC, 31 F.4th 651 (9th Cir. 2022). The court explained:
In Campbell[ v. City of Los Angeles, 903 F.3d 1090 (9th Cir. 2018)] we rejected both the minority approach to FLSA collective certification-which treats a FLSA collective as analogous to a Rule 23(b)(3) class-and the majority “ad hoc” approach.
***
Because of the flaws in the two predominant approaches to FLSA collective certification, we instead developed our own standard: “[p]arty plaintiffs are similarly situated, and may proceed in a
collective, to the extent they share a similar issue of law or fact material to the disposition of their FLSA claims.” Significantly, as long as the proposed collective's “factual or legal similarities are material to the resolution of their case, dissimilarities in other respects should not defeat collective treatment.”Senne, 934 F.3d at 947-48 (citations omitted).
Significantly, here, Plaintiff is not asking the Court for preliminary certification of the putative FLSA class. Rather, Defendant seems to assert that the Court should conduct stage one of the two stage analysis sua sponte and dismiss Plaintiff's claim. As one district court has explained the process:
“First, at or around the pleading stage, plaintiffs will typically move for preliminary certification,” which “refers to the dissemination of notice to putative collective members, conditioned on a preliminary determination that the collective as defined in the complaint satisfies the ‘similarly situated' requirement of section 216(b).” [Campbell, 903 F.3d] at 1109. At this early stage, the Court's analysis is “typically focused on a review of the pleadings but may sometimes be supplemented by declarations or limited other evidence.” Id.(citation omitted). The level of consideration at this stage is “lenient” and “loosely akin to a plausibility standard, commensurate with the stage of the proceedings.” Id. (citations omitted); see also Rivera v. Saul Chevrolet, Inc., 2017 WL 3267540, at *3 (N.D. Cal. July 31, 2017) (“The standard for certification at this stage is a fairly lenient one that typically results in certification.”) (internal quotation marks and citation omitted). If preliminary certification is granted, then a court-approved notice would be disseminated to the putative collective action members. Campbell, 903 F.3d at 1101. “In contrast to class actions pursuant to Rule 23 of the Federal Rules of Civil Procedure, potential members of a collective action under the FLSA must ‘opt in' to the suit by filing a written consent with the court in order to benefit and be bound by a judgment.” Rivera, 2017 WL 3267540, at *2 (citations omitted).
“[T]he second stage will come at or after the close of relevant discovery,” when “[t]he employer can move for ‘decertification' of the collective action for failure to satisfy the ‘similarly situated' requirement in light of the evidence produced to that point.” Campbell, 903 F.3d at 1109 (citations omitted). It is at this time when “[t]he district court will then take a more exacting look at the plaintiffs' allegations and the record.” Id. “Because of its purpose
and timing, decertification can resemble a motion for partial summary judgment on the ‘similarly situated' question, and may be combined with cross-motions for summary judgment.” Id. at 110910 (citations omitted). At this time, “the plaintiff bears a heavier burden” and is “subject to a stricter standard.” Id. at 1117-18; Rivera, 2017 WL 3267540, at *3 (“It is at this second stage that the Court makes a factual determination about whether the opt-in plaintiffs are actually similarly situated ....”). “[A]s a general rule, [this] two-step process, culminating in a decertification motion on or after the close of relevant discovery, has the advantage of ensuring early notice of plausible collective actions, then eliminating those whose promise is not borne out by the record.” Campbell, 903 F.3d at 1110.Jimenez v. Haxton Masonry, Inc., 2021 WL 1041608, at *3 (N.D. Cal. Feb. 11, 2021).
Defendant's motion to dismiss under Campbell is premature for two reasons. First, Campbell is clear that the decision to move for preliminary certification rests with the plaintiff- not the defendant. Campbell, 903 F.3d at 1109 (“at or around the pleading stage, plaintiffs will typically move for preliminary certification”) (emphasis added). Although such preliminary certifications are “typically focused on a review of the pleadings,” a plaintiff may supplement the record with “declarations or limited other evidence.” Id. (citing Sheffield v. Orius Corp., 211 F.R.D. 411, 413 (D. Or. 2002)). Second, even where denial of preliminary certification is appropriate, a district court may do so “without prejudice and may be revisited by the district court after further discovery.” Id. Moreover, “the extent of discovery before decertification is addressed-is largely a question of ‘case management,' and thus a subject of substantial judicial discretion.” Id. at 1110 (citations omitted).
In the event Plaintiff moves for preliminary certification of the FLSA class, Defendant is free to renew its arguments that Plaintiff's claims fail under Campbell. At this time, however, the Court concludes that outright dismissal of Plaintiff's FLSA claims is premature.
RECOMMENDATION
For the reasons above, Defendant's motion to dismiss (ECF No. 20) should be GRANTED in part and DENIED in part as follows:
Claim
Disposition
FLSA Claim
DENIED.
Oregon Wage-and-Hour Claims ORS § 653.025 (failure to pay minimum wage)
GRANTED with prejudice.
ORS § 653.140 (failure to pay wages upon termination)
GRANTED without prejudice. Plaintiff should be given leave to amend.
ORS § 653.261 (failure to pay overtime)
GRANTED without prejudice. Plaintiff should be given leave to amend.
ORS § 653.610 (illegal deductions from wages)
GRANTED with prejudice.
ORS § 653.045 (failure to make, keep, and preserve accurate time records)
GRANTED with prejudice.
Unjust Enrichment Claim
DENIED.
State Law Class Claims
GRANTED without prejudice.
FLSA Collective Action Claim
DENIED.
Any amended complaint should be filed no later than thirty (30) days after the district court's ruling on this F&R.
This recommendation is not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any notice of appeal pursuant to Federal Rule of Appellate Procedure 4(a)(1) should not be filed until entry of the district court's judgment or appealable order. The Findings and Recommendation will be referred to a district judge. Objections to this Findings and Recommendation, if any, are due fourteen (14) days from today's date. See Fed.R.Civ.P. 72. Failure to file objections within the specified time may waive the right to appeal the District Court's order. Martinez v. Ylst, 951 F.2d 1153, 1157 (9th Cir. 1991).