955 F. Supp. 2d 50
D.D.C.2013Background
- Plaintiff Nicole Malloy worked for defendant Association of State and Territorial Solid Waste Management Officials (a D.C. nonprofit trade association) from 1991 until her termination in December 2011 and alleges she was not paid overtime.
- She sued under the Fair Labor Standards Act (FLSA), claiming enterprise coverage because the association charged members, lobbied, and ran conferences.
- Defendant moved to dismiss the FLSA claim arguing it is not an FLSA-covered enterprise and thus the court lacks jurisdiction; the court rejected the characterization of coverage as jurisdictional.
- The court treated the motion under Rule 12(b)(6), excluding extra-pleading materials because conversion to summary judgment would be premature without discovery.
- The complaint failed to plausibly allege (1) that the nonprofit operated with a business purpose competing in the commercial marketplace and (2) that the enterprise’s annual gross volume met the $500,000 statutory threshold.
- The FLSA claim was dismissed without prejudice to permit amendment if plaintiff can plead facts plausibly establishing enterprise coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether enterprise coverage under the FLSA is jurisdictional | Malloy did not contest that enterprise coverage is required for her claim | ASTSWMO contended enterprise coverage is a jurisdictional prerequisite and moved under Rule 12(b)(1) | Court held enterprise coverage is not jurisdictional; it is an element of the claim (analyzed under Rule 12(b)(6)) |
| Whether defendant is an "enterprise" under §203(r)(1) | Malloy alleged the association charged members, lobbied, and ran conferences, implying a business purpose | ASTSWMO argued it is a nonprofit that does not compete with commercial enterprises and thus lacks a business purpose | Court held allegations insufficient to plausibly show the nonprofit engaged in ordinary commercial competition or had a business purpose; claim fails on this element |
| Whether the enterprise "engaged in commerce" under §203(s) (including $500,000 threshold) | Malloy offered no allegation in the complaint about annual gross volume | ASTSWMO noted absence of any pleaded $500,000 annual gross volume and challenged coverage | Court held plaintiff failed to plead the $500,000 annual gross volume required for enterprise coverage; claim also fails on this ground |
| Whether pleadings or outside materials govern at this stage | Malloy attempted to rely on materials in opposition to the motion | ASTSWMO submitted extrinsic materials to support its motion | Court excluded extra-pleading materials and declined to convert the motion to summary judgment because discovery had not occurred |
Key Cases Cited
- Arbaugh v. Y & H Corp., 546 U.S. 500 (statutory limitations on coverage are nonjurisdictional absent clear congressional statement)
- Tony & Susan Alamo Found. v. Sec'y of Labor, 471 U.S. 290 (nonprofits engaging in ordinary commercial activities are treated as businesses under the FLSA)
- Chao v. Hotel Oasis, Inc., 493 F.3d 26 (FLSA coverage requirements in definitions are nonjurisdictional)
- Jacobs v. New York Foundling Hosp., 577 F.3d 93 (two-step test for enterprise coverage under the FLSA)
- Ashcroft v. Iqbal, 556 U.S. 662 (plausibility standard for pleading)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (plausibility pleading framework)