Jones v. Addictive Behavioral Change Health Grp., LLC
364 F. Supp. 3d 1257
| D. Kan. | 2019Background
- Kuri (plaintiff) worked as a dispensing nurse for Addictive Behavioral Change Health Group (defendant) from Nov. 2014–Jan. 2015; her employment contract provided $20.25/hour and time-and-a-half for hours over 40/week.
- Plaintiff sued under the FLSA, KWPA, and state law for unpaid overtime, unpaid wages, breach of contract, and FLSA retaliation. The FLSA collective was decertified; Kuri proceeds individually.
- Defendant audited payroll after the suit and found some employees (including Kuri) had hours miscounted: Kuri allegedly was underpaid overtime for three hours (difference $30.38) but was also allegedly overpaid $486 in holiday pay and owed a $1,500 car-repair loan repayment.
- Defendant asserted counterclaims: unjust enrichment (seeking recovery of alleged overpaid holiday pay) and breach of contract (seeking repayment of the car-loan). Kuri moved to dismiss both counterclaims and moved for partial summary judgment on her FLSA unpaid-overtime and FLSA retaliation claims.
- Court dismissed Defendant’s breach-of-contract counterclaim without prejudice for lack of subject-matter jurisdiction, exercised supplemental jurisdiction over the unjust-enrichment counterclaim, denied dismissal of unjust enrichment, and denied Kuri’s motions for partial summary judgment on both her FLSA unpaid-overtime and retaliation claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal court has supplemental jurisdiction over breach-of-contract counterclaim | Kuri: counterclaim is unrelated to FLSA claim; no common nucleus of operative fact | Employer: loan repayment akin to overpayment of wages tied to payroll dispute | Court: dismisses breach-of-contract counterclaim for lack of supplemental jurisdiction (different facts, would require different proof/witnesses) |
| Whether federal court has supplemental jurisdiction over unjust-enrichment counterclaim | Kuri: counterclaim not related to FLSA wage claim and should be dismissed | Employer: unjust-enrichment (holiday pay) arises from same payroll/wage facts as FLSA claim | Court: exercises supplemental jurisdiction over unjust-enrichment claim (common nucleus; promotes judicial economy) |
| Whether unjust-enrichment counterclaim should be dismissed for failure to state a claim (12(b)(6)) | Kuri: claim is an improper setoff and barred by FLSA precedent (e.g., Donovan) | Employer: counterclaim is permissible here because this is a private FLSA action and would not reduce recovery below minimum wage | Court: denies 12(b)(6) dismissal; distinguishes Donovan and allows unjust-enrichment counterclaim to proceed |
| Whether Kuri is entitled to partial summary judgment on (a) FLSA unpaid-overtime and (b) FLSA retaliation | Kuri: undisputed practice of paying straight time for OT; she was underpaid $30.38; counterclaim is retaliatory | Employer: disputes practice, asserts evidence of Kuri’s overpayment (holiday pay) and legitimate basis for counterclaims | Court: denies partial summary judgment on unpaid-overtime (genuine dispute whether practice existed and whether Kuri was net underpaid) and denies summary judgment on retaliation (factual dispute over Defendant’s motive and whether counterclaim lacked reasonable basis) |
Key Cases Cited
- Marcus v. Kansas Department of Revenue, 170 F.3d 1305 (10th Cir.) (party invoking federal jurisdiction bears burden)
- Basso v. Utah Power & Light Co., 495 F.2d 906 (10th Cir.) (court must dismiss when jurisdiction lacking)
- United Int'l Holdings, Inc. v. Wharf (Holdings) Ltd., 210 F.3d 1207 (10th Cir.) (supplemental jurisdiction requires related claims forming same case or controversy)
- City of Chicago v. International College of Surgeons, 522 U.S. 156 (U.S.) (federal and state claims must derive from common nucleus of operative fact)
- Wittner v. Banner Health, 720 F.3d 770 (10th Cir.) (retain state claims when judicial economy, convenience, and fairness support it)
- Donovan v. Pointon, 717 F.2d 1320 (10th Cir.) (limits on counterclaims/setoffs in FLSA enforcement actions by Secretary of Labor)
- Bill Johnson's Restaurants, Inc. v. NLRB, 461 U.S. 731 (U.S.) (test for retaliatory motive and baseless claims in analogous NLRA context)
- McDonnell Douglas Corp. v. Green, 411 U.S. 792 (U.S.) (burden-shifting framework for discrimination/retaliation claims)
- Pacheco v. Whiting Farms, Inc., 365 F.3d 1199 (10th Cir.) (FLSA retaliation elements and application of McDonnell Douglas)
- Archuleta v. Wal-Mart Stores, Inc., 543 F.3d 1226 (10th Cir.) (FLSA overtime requirement)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S.) (pleading standards for plausibility)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (U.S.) (Twombly pleading plausibility standard)