284 F. Supp. 3d 1186
D. Colo.2018Background
- Plaintiff Robert Kenney worked for Helix TCS, Inc. from ~Feb 2016–Apr 2017 as a security guard/"site supervisor," paid a salary and classified as FLSA-exempt.
- Kenney alleges he and similarly situated guards performed routine, non-exempt duties and frequently worked >40 hours/week without overtime pay under 29 U.S.C. § 207(a).
- He filed a collective FLSA action seeking unpaid overtime, liquidated damages, fees, and costs under 29 U.S.C. § 216(b).
- Helix moved to dismiss under Rule 12(b)(1) (lack of subject-matter jurisdiction) and alternatively under Rule 12(b)(6) (failure to state a claim), arguing FLSA protections do not apply because the employer operates in the federally illegal marijuana industry and that Kenney is exempt.
- The District Court treated the jurisdictional argument as a merits challenge and denied the motion, holding the Court has federal-question jurisdiction and that exemption is an affirmative defense for the employer to prove.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Court lacks subject-matter jurisdiction because the employer operates in the marijuana industry | Kenney asserts an FLSA claim, invoking federal-question jurisdiction | Helix contends CSA illegality removes FLSA protection and thus removes federal jurisdiction | Court: Jurisdiction exists; defendant conflates jurisdiction with merit; FLSA claim gives federal-question jurisdiction |
| Whether Kenney adequately pleads he is a non-exempt employee entitled to overtime | Kenney pleaded factual duties showing non-exempt, routine work and alleged overtime | Helix argues complaint merely "cherry picks" duties and Kenney is a bona fide executive/manager exempt from FLSA | Court: Complaint suffices at pleading stage; exemption is an affirmative defense for employer to prove |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (plausibility standard for Rule 12(b)(6) pleading)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (pleading must be plausible, not merely possible)
- Breuer v. Jim's Concrete of Brevard, Inc., 538 U.S. 691 (FLSA actions present federal-question jurisdiction)
- Arbaugh v. Y & H Corp., 546 U.S. 500 (statutory elements are merits issues, not jurisdictional)
- United States v. Sullivan, 274 U.S. 259 (illegal business is not excused from compliance with federal obligations)
- Donovan v. Burgett Greenhouses, Inc., 759 F.2d 1483 (10th Cir.) (FLSA applies even where employer violated other federal law)
- Lederman v. Frontier Fire Protection, Inc., 685 F.3d 1151 (10th Cir.) (employer bears burden to prove FLSA exemption)
- Dejesus v. HF Mgmt. Serv., LLC, 726 F.3d 85 (2d Cir.) (FLSA exemption is affirmative defense)
- Papasan v. Allain, 478 U.S. 265 (in ruling on motion to dismiss, courts must accept well-pled factual allegations as true)