43 F. Supp. 3d 1322
S.D. Fla.2014Background
- Plaintiffs allege unpaid wages under the FLSA for work as adult entertainers at the King of Diamonds club.
- Fly Low contends Plaintiffs were independent contractors and that service charges were handled in a manner affecting wage calculations.
- Plaintiffs previously represented they were independent contractors and would be compensated accordingly; Fly Low kept certain service charges and deductions.
- Fly Low filed an amended counterclaim with four counts: money had and received, unjust enrichment, breach of contract, and breach of contract on an indemnification theory.
- Fly Low moves to dismiss the amended counterclaim for failure to state a claim and lack of subject matter jurisdiction over the breach counts.
- The court applies Rule 12(b)(6) and 12(b)(1) standards and analyzes supplemental jurisdiction under 28 U.S.C. § 1367(a).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Counts I and II may be set off against FLSA wages | Brennan rule prohibits set-offs that reduce wages below minimum. | Payments were not overpayments; set-off seeks return of cash already paid. | Counts I and II may proceed; Brennan does not bar them given factual context. |
| Whether Counts III and IV are barred by Brennan and lack sufficient facts | Counts III & IV involve breach and indemnity; Brennan should bar improper set-offs. | Counts III & IV address cash and non-cash set-offs and contract terms; some counts may be barred. | Count IV dismissed; Count III survives to the extent it seeks non-cash set-offs consistent with FLSA minimum. |
| Whether Count III is sufficiently pled as breach of contract | Agreements create independent contractor relationship; filing does not automatically breach. | Plaintiffs’ classification actions breach the agreements; contract interpretation warranted. | Plaintiffs stated a plausible breach of contract claim; contract interpretation deferred to summary judgment. |
| Whether supplemental jurisdiction over Count III is proper | Count III not related to original federal claims. | Count III shares common factual nucleus with FLSA claims. | Court has supplemental jurisdiction under 28 U.S.C. § 1367(a). |
Key Cases Cited
- Brennan v. Heard, 491 F.2d 1 (5th Cir. 1974) (set-off against wages to avoid below-minimum wagepayments)
- Lucero v. Trosch, 121 F.3d 591 (11th Cir. 1997) (supplemental jurisdiction standard)
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (1994) (subject-matter jurisdiction must be established; dismissal if lacking)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading plausibility standard)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility standard for pleading; no bare assertions)