Patricia Thompson v. Real Estate Mortgage Network
748 F.3d 142
| 3rd Cir. | 2014Background
- Patricia Thompson, NJ resident, was hired as a mortgage underwriter by Security Atlantic Mortgage Co. in June 2009.
- Shortly after, Thompson was assigned to a training class conducted by REMN, described as Security Atlantic’s sister company.
- In Feb 2010 Thompson began receiving pay from REMN; after HUD investigation, she and others filled out new applications to REMN.
- Despite transfers, Thompson and colleagues largely performed the same work at the same location; pay rate, email, and supervisors largely remained the same.
- Thompson alleged overtime violations between June 2009 and Aug 2010, with misclassification as exempt employees; later claimed joint, successor, and individual liability.
- District Court dismissed Thompson’s Amended Complaint without prejudice; Thompson appealed seeking reversal and remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether primary FLSA liabilities against Security Atlantic and REMN were properly dismissed | Thompson claims both entities committed statutory violations. | Defendants contend dismissal was proper due to grouping and insufficient pleading. | Vacate dismissal; allow primary liability claims to proceed. |
| Whether Thompson states a claim for joint employment of Security Atlantic and REMN | Amended Complaint shows shared control and intermingling of operations. | District Court treated entities as separate payors; insufficient facts at this stage. | Vacate and remand to assess joint-employer theory under the Enterprise framework. |
| Whether REMN is liable as successor to Security Atlantic under FLSA and state law | Federal common-law successor liability applies; factors show continuity and notice, making REMN liable. | New Jersey law favors mere continuation or non-assumption of liabilities absent specific facts. | Vacate and remand; apply federal successor-liability standard to FLSA and NJWHL claims. |
| Whether Chapman and Lamparello can be liable in their individual capacities | Allegations show they made policy decisions and supervised work; could be individually liable. | Allegations are too conclusory for individual liability at pleadings stage. | Vacate and remand; pleadings sufficient to infer personal liability; proceed with discovery. |
Key Cases Cited
- In re Enterprise Rent-A-Car Wage & Hour Employment Practices Litig., 683 F.3d 462 (3d Cir. 2012) (established 'Enterprise test' for employer status and joint liability factors)
- Hagan v. Rogers, 570 F.3d 146 (3d Cir. 2009) (dismissals without prejudice review standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (Supreme Court 2009) (plausibility pleading standard)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (Supreme Court 2007) (facilitate pleading of plausible claims)
- Fowler v. UPMC Shadyside, 578 F.3d 203 (3d Cir. 2009) (pleading standards under Rule 8 and Iqbal)
- Teed v. Thomas & Betts Power Solutions, 711 F.3d 763 (7th Cir. 2013) (federal successor liability supports FLSA context)
- Steinbach v. Hubbard, 51 F.3d 843 (9th Cir. 1995) (FLSA successor liability consideration)
- Brzozowski v. Corr. Physician Servs., Inc., 360 F.3d 173 (3d Cir. 2004) (federal common-law standard for successor liability in employment context)
- Einhorn v. M.L. Ruberton Constr. Co., 632 F.3d 89 (3d Cir. 2011) (application of federal common-law successor liability factors)
- Ramirez v. Amsted Indus., Inc., 431 A.2d 811 (NJ 1981) (New Jersey mere continuation/ successor liability framework)