Caballero v. Healthtech Resources Incorporated, 2:17-cv-02321

Background

Plaintiff Jessica Caballero, a Florida resident, worked for Arizona-based Healthtech Resources, Inc. as an IT consultant at a Pennsylvania client site from Aug 20, 2014 to Sept 21, 2014. She was paid an hourly rate.
Caballero alleges IT consultants routinely worked 7 days/week, ~10–12 hours/day, without overtime pay. She sued for unpaid overtime under the FLSA and the Pennsylvania Minimum Wage Act (PMWA).
Case was originally filed in the Western District of Pennsylvania (Feb 20, 2017) and later transferred to the District of Arizona pursuant to a forum-selection clause pointing to Maricopa County, Arizona.
Defendant moved to dismiss, arguing (1) FLSA claims are time-barred and alternatively (2) Caballero is exempt as a computer employee; and that (3) the contract’s Arizona choice-of-law clause bars her PMWA claim.
The court denied dismissal as to the FLSA claim (applied three-year statute because willfulness was plausibly pleaded and exemption not evident on the face of the complaint) and granted dismissal as to the PMWA claim (Arizona choice-of-law enforced).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Statute of limitations for FLSA claim	Caballero alleged facts showing willful violations, so a 3-year statute applies and her claim is timely	Two-year statute expired; FLSA claim time-barred	Court applied 3-year limitations because willfulness plausibly pleaded; FLSA claim timely
Applicability of FLSA computer-employee exemption	Caballero says factual allegations do not show she performed exempt duties; exemption not apparent on face of complaint	Healthtech contends complaint shows Caballero is an exempt computer employee paid hourly above threshold	Court held exemption not clearly shown on the complaint’s face; cannot dismiss on that ground at pleading stage
Choice-of-law effect on PMWA claim	Caballero argues Arizona choice-of-law clause is unenforceable because Arizona lacks substantial relation and application would defeat Pennsylvania’s fundamental employee-protective policy	Healthtech argues Arizona has substantial relation (incorporation/headquarters) and clause is enforceable, barring PMWA claims	Court enforced the Arizona choice-of-law clause because defendant is an Arizona corporation; dismissed PMWA claim
Pleading standard at motion-to-dismiss	Caballero relies on liberal pleading rules for willfulness and that affirmative defenses need not be pleaded	Healthtech relies on Rivera and other authority to push resolution of exemption at dismissal	Court followed pleading standards (Twombly/Iqbal); denied dismissal on exemption and accepted general pleading of willfulness

Key Cases Cited

Bell Atl. Corp. v. Twombly, 550 U.S. 554 (pleading must be plausible)
Ashcroft v. Iqbal, 556 U.S. 662 (facial plausibility standard for complaints)
McLaughlin v. Richland Shoe Co., 486 U.S. 128 (willfulness extends FLSA limitation period)
Rivera v. Peri & Sons Farms, Inc., 735 F.3d 892 (plaintiffs need not plead anticipated affirmative defenses)
Webster v. Pub. Sch. Emps. of Wash., 247 F.3d 910 (FLSA exemptions construed narrowly)
McKeen-Chaplin v. Provident Sav. Bank, FSB, 862 F.3d 847 (FLSA overtime requirement explained)
Adair v. City of Kirkland, 185 F.3d 1055 (FLSA exemptions are affirmative defenses)
Klem v. County of Santa Clara, 208 F.3d 1085 (narrow construction of exemptions)
ABF Capital Corp. v. Osley, 414 F.3d 1061 (substantial relationship for choice-of-law by incorporation)
Flores v. Am. Seafoods Co., 335 F.3d 904 (only one §187(2) requirement needed to uphold choice-of-law)