MEMORANDUM OPINION
Presently pending and ready for review in this Fair Labor Standards Act case is the motion to dismiss filed by Defendants DirectSat USA, LLC, UniTek USA, LLC, and UniTek Global Services, Inc. (ECF No. 19). The issues are fully briefed and the court now rules, no hearing deemed necessary. Local Rule 105.6. For the reasons that follow, Defendants’ motion will be granted in part and denied in part.
I. Background
Plaintiffs Jeffry Butler and Charles N. Dorsey bring this lawsuit, on behalf of themselves and others who were employed or are currently employed by Defendants as service technicians, production technicians, or similar positions, alleging that Defendants failed to pay overtime wages. (ECF No. 1 ¶2). In their complaint, Plaintiffs allege the following. Defendants DirectSat USA, LLC, UniTek USA LLC, and UniTek Global Services, Inc. are businesses headquartered or incorporated in Pennsylvania that install and service satellite dishes throughout Maryland, Virginia, and the District of Columbia. (Id. ¶¶ 19-21).
Plaintiffs were classified by Defendants as non-exempt under federal and state wage and hour laws and paid an hourly rate. The actual rate Plaintiffs were paid varied and was contingent on the number of jobs completed by each technician on a weekly basis. Plaintiffs allege that they were permitted, and routinely required, to work in excess of forty hours per week without overtime compensation.
(Id.
¶¶ 5-6). Plaintiffs state that Defendants trained and directed them to record less time than they actually worked on their handwritten time sheets.
(Id.
¶ 7). In addition, Plaintiffs worked without pay
Plaintiffs filed their complaint on October 4, 2010. In it they seek to bring a Fair Labor Standards Act (“FLSA”) overtime claim as a collective action pursuant to 29 U.S.C. § 216(b) and state overtime and unpaid wage claims as class actions pursuant to Fed.R.Civ.P. 23. (Id. ¶¶ 13-14). In count I of the complaint, Plaintiffs allege that they were not paid for all hours worked in excess of forty hours in a workweek in violation of the maximum hours provision of FLSA, 29 U.S.C. § 207(a). (Id. ¶¶ 42-50). In count II, Plaintiffs allege violations of the Maryland Wage and Hour Law, Md.Code Ann., Lab. & Empl. § 3-401, et seq. (“MWHL”). In count III, Plaintiffs allege violations of the Maryland Wage Payment and Collection Law, Md.Code Ann., Lab. & Empl. § 3-501, et seq. (“MWPCL”). Finally, in count IV Plaintiffs allege violations of the District of Columbia Minimum Wage Law, D.C.Code § 32-1001, et seq.
On December 17, 2010, Defendants moved to dismiss the complaint. (ECF No. 19). Defendants contend that Plaintiff Jeffry Butler’s claims must be dismissed pursuant to the first to file rule because he has already opted-in to a collective action pending in the Western District of Wisconsin that raises the same claims against Defendants. Defendants also argue that the FLSA claims are inadequately pled, and the state law claims are preempted and cannot be pursued in a Rule 23 class action simultaneously with a FLSA collective action pursuant to 29 U.S.C. § 216(b).
II. Representative Plaintiff Jeffry Butler
Defendants first move to dismiss claims by Plaintiff Jeffry Butler pursuant to the first-to-file rule. Prior to initiating this suit, he opted-in to a collective action pending in the Western District of Wisconsin that raises similar claims. (ECF No. 19-1, at 12-13). In response, Plaintiffs attached a copy of the certificate of service Jeffry Butler’s voluntary opt-out from the Wisconsin case (ECF No. 24-3) and argue that Butler has now elected to proceed locally with his FLSA and state law claims. In their reply, however, Defendants argue that Butler’s withdrawal was ineffective because he did not obtain court approval as required by Fed.R.Civ.P. 41(a). The case in Wisconsin has now been decertified and the claims of all opt-in plaintiffs were dismissed without prejudice. (ECF No. 27-1).
The first-to-file rule refers to the doctrine that when the same party or parties have filed similar litigation in separate federal fora, the matter that was filed first should proceed, and the later-filed action should be stayed, transferred, or enjoined.
See, e.g., Nutrition & Fitness, Inc. v. Blue Stuff, Inc.,
Here there is no dispute that the Western District of Wisconsin action was filed first or that Jeffry Butler had opted-in to that action prior to commencing this lawsuit. (See ECF No. 19-2, Jeffry Butler’s Consent to Join Collective Action signed July 28, 2010). The Defendants are the same in both cases, and Jeffry Butler is a plaintiff in both cases. 1 There is also substantial overlap in the claims. In both cases, Defendants’ service technicians are seeking overtimes wages pursuant to FLSA for the same categories of activities. (Compare ECF No. 1 with Espenscheid v. DirectSat USA LLC, No. 3:09-cv-00625-bbc, ECF No. 1 (W.D.Wis. filed October 13, 2009)). Despite these facts, Butler argues that the court should not apply the first-to-file rule because this forum is more convenient for all parties and because dismissing one plaintiff will not relieve this court from its obligation to adjudicate the FLSA and state law claims of the other Plaintiffs. (ECF No. 24, at 19). Butler also notes that he has voluntarily opted-out of the Wisconsin case and is electing to proceed with his claims only in this court. (Id. at 20).
If Jeffry Butler is no longer a plaintiff in the Wisconsin case, the first-to-file rule is not inapplicable. Defendants point out, however, that Butler could not withdraw from the Wisconsin case without court approval and he has not yet obtained that approval. (ECF No. 25, at 2-5). Opt-in plaintiffs are considered party plaintiffs with the same status as the named plaintiffs,
see Prickett v. DeKalb Cnty.,
Defendants’ argument had merit at the time it was filed. Subsequently the Wisconsin class was decertified and all opt-in plaintiffs, including Jeffry Butler, were dismissed without prejudice. The first to file rule no longer operates to preclude Butler from participating in this case and he will not be dismissed. In addition, count IV alleging claims under the District of Columbia Minimum Wage Law will not be dismissed on the basis that no representative plaintiff could state such a claim.
III. Failure to State a Claim
A. Standard of Review
The purpose of a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) is to test the sufficiency of the plaintiffs complaint.
See Edwards v. City of Goldsboro,
In its determination, the court must consider all well-pled allegations in a complaint as true,
Albright v. Oliver,
B. FLSA claims
Defendants argue that Plaintiffs’ complaint fails to state a claim under FLSA because they fail to meet the pleading standards set forth in Iqbal and Twombly. Specifically, Defendants maintain that because Plaintiffs fail to allege any facts concerning the number of hours worked in a given week in excess of forty, their complaint is insufficient to state a claim for overtime compensation. (ECF No. 19-1, at 17-18). Plaintiffs disagree and maintain that their “factual assertions stretch far beyond the basic level necessary.” (ECF No. 24, at 5).
To assert a claim for overtime compensation pursuant to 29 U.S.C. § 207, “a plaintiff must plead (1) that he worked overtime hours without compensation; and (2) that the employer knew or should have known that he worked overtime but failed to compensate him for it.”
Hawkins v. Proctor Auto Serv. Ctr.,
No. RWT-09-1908,
The more lenient approach is appropriate here. There would be little benefit to dismissing this claim and requiring Plaintiffs to amend to provide an estimate of the number of the overtime hours worked. The existing complaint details the types of work activities that occupied Plaintiffs’ alleged overtime hours and provides Defendants with sufficient notice of the basis of the allegations to form a response. Thus, Plaintiffs have stated a plausible claim for their entitlement to overtime wages. While Defendants might appreciate having Plaintiffs’ estimate of the overtime hours worked at this stage of the litigation, it would be subject to change during discovery and ifiwhen the size of the collective action grows and thus of limited value. Accordingly, Plaintiffs have stated a claim for violation of FLSA’s overtime provision and the overtime provisions of the MWHL and the DCMWL.
Defendants also argue that Plaintiffs have not alleged sufficient facts to support their willfulness allegations. (ECF No. 19-1, at 22). Although not ex
Here, in addition to the Plaintiffs’ allegation that Defendants’ conduct was willful in paragraphs 47, 50, and 53 of the complaint, Plaintiffs also alleged facts in support of this allegation. Specifically, Plaintiffs alleged that “Defendants trained and directed their technicians to record less time than they actually worked” (ECF No. 1 ¶ 7), “requirefd] them to work unpaid time” {id. ¶ 8), and “willfully encouraged their technicians to perform tasks and work additional time, including overtime, while off-the-clock.” {Id. ¶ 9). Assuming the truth of these allegations, Plaintiffs have stated a claim for willful violation of FLSA’s overtime provisions.
C. Maryland Wage Payment and Collection Law Claim
Defendants argue that the MWPCL count should be dismissed because the MWPCL only applies to claims that focus on the manner and timing of wage payment and does not apply to suits that focus on the underlying entitlement to overtime wages. (ECF No. 19-1, at 20). Defendants contend that the proper avenue for asserting entitlement to overtime wages under Maryland law is the Maryland Wage and Hour law, uniformly recognized as the state law counterpart to the FLSA.
{Id.).
In support, Defendants cite to several pri- or cases from this district recognizing the distinction between the MWHL and the MWPCL, most notably
McLaughlin v. Murphy,
Plaintiffs argue in response that courts in this district have permitted MWPCL claims for unpaid overtime wages to proceed along side FLSA and MWHL claims, citing
Hoffman v. First Student, Inc.,
The MWPCL provides for treble damages for violations of § 3-502
3
or § 3-
The focus of Plaintiffs’ allegations is that Defendants withheld overtime wages to which they were entitled. Plaintiffs do not allege that Defendants failed to pay them on a regular basis or that they were not paid upon termination. Aside from the vague statement that “Plaintiffs are individuals who were employed or are currently employed by Defendants,” (ECF No. 1 ¶ 2), Plaintiffs’ complaint does not even reference termination, and there is no allegation that either of the representative Plaintiffs has been terminated. On these facts, Plaintiffs have not stated a claim for violation of the MWPCL. Moreover, these facts are readily distinguishable from the
IV. Preemption of State Law Claims
Defendants also argue that Plaintiffs’ state law claims are preempted by FLSA and should be dismissed on that basis. (ECF No. 19, at 25-28). Defendants are correct in noting that courts have found some state law claims preempted by FLSA. Where a state statutory regime creates both a right and mechanism for enforcement, however, even if parallel to the rights and remedies established in FLSA, state law claims are not preempted.
As Plaintiffs note, FLSA contains a “saving clause”, 29 U.S.C. § 218(a), that permits states or municipalities to enact laws that provide additional protections for employees beyond the minimum requirements established by FLSA.
See, e.g., Pac. Merch. Shipping Ass’n v. Aubry,
The cases relied on by Defendants are distinguishable in that they involved FLSA’s preemption of state common law claims,
see Anderson v. Sara Lee Corp.,
Here the Maryland code provisions both create a right and a means of enforcing that right that provides additional remedies not available under FLSA, such as attorney’s fees, interest, costs and “any other relief deemed appropriate by the court.”
Hoffman,
V. Class Action Pursuant to Fed.R.Civ.P. 23
Defendants next argue that FLSA’s collective action provision, 29 U.S.C. § 216(b), precludes Plaintiffs from raising their state law claims in a class action pursuant to Fed.R.Civ.P. 23. (ECF No. 19, at 29). Defendants argue that the opt-out nature of a Rule 23 class action irreconcilably conflicts with the opt-in requirement for FLSA collective actions and that permitting both causes of action to proceed simultaneously would run directly counter to Congress’ intent in enacting § 216(b). (Id. at 29-33). Defendants further contend that permitting Plaintiffs to proceed with their state law class action claims would violate the Rules Enabling Act, 28 U.S.C. § 2072(b), because the application of Fed. R.Civ.P. 23 in these circumstances would have the effect of “abridging, enlarging, or modifying a substantive right.” (Id. at 33). 7
A. Compatibility of Fed.R.CivJP. 23 and 29 U.S.C. § 216(b)
Pursuant to 29 U.S.C. § 216(b), collective actions are permitted under FLSA. Plaintiffs may invoke § 216(b) to raise FLSA claims on behalf of similarly situated employees, but unnamed plaintiffs must affirmatively opt-in using a court approved form in order to join the case.
Id.
(“no employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in court in which such action is brought”);
see also Hoffmann-LaRoche v. Sperling,
Defendants argue that because of this difference allowing class actions to proceed simultaneously with § 216(b) collective actions would nullify Congress’ intent and create an irreconcilable conflict. (ECF No. 19-1, at 23-24). Defendants explain: “individuals who affirmatively choose not to opt in to the FLSA action will nevertheless be included in a Rule 23 action that will adjudicate factual and legal issues relevant to (and dispositive of) the unasserted FLSA claims.” (ECF No. 25, at 17). Additionally, Defendants argue that the “conflict obstructs the protections of § 216(b) and, consequently, serves to preempt a Rule 23 class action.” (Id.).
District courts that have considered this potential incompatibility have reached different conclusions and no consensus has emerged.
8
The Fourth Circuit,
... such a plaintiff is doing no such thing. She will not be entitled to a single FLSA remedy, because she is not part of the FLSA litigating group. The most that one can say is that her state claim has found its way into federal court under the court’s supplemental jurisdiction. But that is a complaint that could be brought in almost every claim that rests on section 1367 jurisdiction. In the case before us, the Rule 23(b)(3) class and the federal collective action are each comprised of a set of employees asserting injuries under either state or federal law. Should either or both groups prevail on the merits, each group member will receive only the relief that is prescribed under the law governing her part of the case. Some may be part of both the FLSA group and the Rule 23 class; some may be in one but not the other. We conclude that there is nothing in the FLSA that forecloses these possibilities.
The Ervin decision persuasively illustrates that a collective action under FLSA can be accompanied by a Rule 23 class action asserting state law based claims.
Defendants also fail to set forth a viable procedural justification for the dismissal of Plaintiffs’ claims in the event there was an irreconcilable conflict. Plaintiffs have alleged that this court has original jurisdiction over these claims pursuant to the Class Action Fairness Act, codified at 28 U.S.C. § 1332(d)(2); they are not before the court pursuant to supplemental jurisdiction. Accordingly, the court cannot decline to exercise supplemental jurisdiction pursuant to 28 U.S.C. § 1367 and thereby dismiss the claims. Defendants also argue that § 216(b) preempts the Rule 23 class actions, but they do not offer any support for their theory that conflict preemption is applicable in this case. Courts invoke preemption to ensure the supremacy of feder
B. Rules Enabling Act
The Rules Enabling Act, 28 U.S.C. § 2072, (“REA”) dictates that rules of practice or procedure “shall not abridge, enlarge or modify any substantive right”. Defendants argue that the application of Rule 23 alongside § 216(b) of FLSA would violate the REA because FLSA’s opt-in collective action provisions confer substantive rights. (ECF No. 19-1, at 34-35). The substantive rights that Defendants identify are: (1) that § 216(b) protects employees from unknowing involvement in an FLSA collective action and (2) that § 216(b) places a strict limitation on employer lawsuits, thereby reducing the number and size of FLSA lawsuits that an employer must face. (ECF No. 19-1, at 34) (citing
Ellis,
Yet again there is little guidance from the circuit courts and the district courts that have considered this issue are divided. As Defendants note, some courts have deemed § 216(b)’s collective action provision to be substantive and thus found that simultaneous application of Fed.R.Civ.P. 23(b)(3) would violate the REA.
See Ellis,
Again Plaintiffs’ position is more persuasive. It makes little sense to classify the opt-out requirement in Fed.R.Civ.P. 23 as procedural but the opt-in requirement of FLSA as substantive. And even if the right to participate in an FLSA collective action were substantive, Plaintiffs have not established that the right would be modified or abridged in any way by permitting a state law opt-out class to proceed simultaneously. On this point, the decision of Judge Crabb in the pending case involving Defendants in the Western District of Wisconsin is instructive:
the right conferred on an employee by the § 216(b) opt-in requirement is the right not to “be a party plaintiff to [an FLSA collective] action unless he gives his consent in writing to become such a party.” 29 U.S.C. § 216(b). The certification of a Rule 23 class does not affect an employee’s ability to opt in or not to an FLSA collective action. Thus, such certification does not “abridge, enlarge or modify” the rights conferred by the FLSA, whether those rights are substantive or procedural. Damassia,250 F.R.D. at 164 ; see also Guzman [v. VLM],2008 WL 597186 , at *10 [E.D.N.Y. Mar. 2, 2008] (rejecting argument that Rules Enabling Act precludes class action for state law wage claim); (Klein [v. Ryan Beck Holdings, Inc.,],2007 WL 2059828 , at *6 [S.D.N.Y. July 20, 2007) ] (same). Similarly, the right conferred on an employer by the opt-in requirement is not the expansive right to be free of the burden of representative actions generally, but rather, theright to be free of the burden of representative actions specifically for violations of the FLSA. Klein [,] 2007 WL 2059828 , at *6 (“The FLSA guarantees merely that all collective actions brought pursuant to it be affirmatively opted into. It does not guarantee that employers will never face traditional class actions pursuant to state employment law.”) (emphasis in original). By its own terms, the FLSA opt-in requirement does not confer rights on employers of employees with respect to the manner of litigation of state law wage claims. Accordingly, the Rules Enabling Act presents no barrier to proceeding with both claims in this action.
Espenscheid v. DirectSat USA LLC,
For these reasons, Plaintiffs’ collective and class actions claims are not incompatible. Plaintiffs must still meet the requirements for collective action and class action certification when the time comes and at that time the court will again face the challenges inherent in maintaining both collective and class actions in one suit.
VI. Conclusion
For the foregoing reasons, Defendants’ motion to dismiss will be granted in part and denied in part. A separate Order will follow.
Notes
. Plaintiffs reference the Western District of Wisconsin case in their complaint but failed to attach it as an exhibit. (See ECF No. 1 ¶ 25; ECF No. 24 n. 5 (stating that "Plaintiffs inadvertently failed to attach the opinions as exhibits to their complaint and plan to rectify that omission in a future pleading”)). Nevertheless, the court may take judicial notice of court records.
. The analogous provisions of the MWHL are Md.Code Ann., Lab. & Empl. §§ 3-415 and 3-420. The analogous provisions of the D.C. Minimum Wage Law are D.C.Code §§ 32-1003(c) and 32-1012.
. Md.Code. Ann., Lab. & Empl. § 3-502 provides:
(a) (1) Each employer:
(i) shall set regular pay periods; and
(ii) except as provided in paragraph (2) of this subsection, shall pay each employee at least once in every 2 weeks or twice in each month.
(2) An employer may pay an administrative, executive, or professional employee less frequently than required under paragraph (l)(ii) of this subsection.
(b) If the regular payday of an employee is a nonworkday, an employer shall pay the employee on the preceding workday.
(c) Each employer shall pay a wage:
(1) in United States currency; or
(2) by a check that, on demand, is convertible at face value into United States currenCy'
(d) (1) In this subsection, "employer” includes a governmental unit.
(2) An employer may not print or cause to be printed an employee's Social Security number on the employee’s wage payment check, an attachment to an employee's wage payment check, a notice of direct deposit of an employee's wage, or a notice of credit of an employee's wage to a debit card or card account.
(e) This section does not prohibit the:
(1) direct deposit of the wage of an employee into a personal bank account of the employee in accordance with an authorization of the employee; or
(2) credit of the wage of an employee to a debit card or card account from which the employee is able to access the funds through withdrawal, purchase, or transfer if:
(i) authorized by the employee; and
(ii) any fees applicable to the debit card or card account are disclosed to the employee in writing in at least 12 point font.
. § 3-505 provides:
Payment on cessation of employment: (a) Except as provided in subsection (b) of this section, each employer shall pay an employee or the authorized representative of an employee all wages due for work that the employee performed before the termination of employment, on or before the day on which the employee would have been paid the wages if the employment had not been terminated.
(b) An employer is not required to pay accrued leave to an employee if:
(1) the employer has a written policy that limits the compensation of accrued leave to employees;
(2) the employer notified the employee of the employer's leave benefits in accordance with § 3-504(a)(l) of this subtitle; and
(3) die employee is not entitled to payment for accrued leave at termination under the terms of the employer’s written policy.
. The cases cited in Defendants’ footnote 6 are also examples where state common law tort claims were preempted.
See Lopez v. Flight Servs. & Sys. Inc.,
No. 07-6186,
. One additional case cited by Defendants,
Kendall v. City of Chesapeake, Va.,
. As Defendants note in footnote 9 of their memorandum in support of the motion to dismiss, the District of Columbia Minimum Wage Law provides for an opt-in collective action analogous to those authorized by the FLSA. (ECF No. 19 n. 9 (citing D.C.Code § 32-1012)). D.C.Code § 32-1012(b) provides:
Action to recover damages sued for under this subchapter may be maintained in any court of competent jurisdiction in the District of Columbia by any 1 or more employees for and on behalf of the employee and other employees who are similarly situated.No employee shall be a party plaintiff to any action brought under this subchapter unless the employee gives written consent to become a party and the written consent is filed in the court in which the action is brought.
. Although not an exhaustive list, in the following cases district courts have prevented plaintiffs from maintaining FLSA collective actions alongside state law based Rule 23 class actions.
See, e.g., Ellis v. Edward D. Jones & Co., L.P.,
A number of the other cases cited by Defendants in support of their position are no longer good law. The decisions from the Northern District of Illinois were overruled in effect by the Seventh Circuit's decision in
Ervin v. OS Rest. Servs., Inc.,
In the following cases, courts have ruled that Rule 23 class actions and § 216(b) collective actions are not incompatible.
Rose v. Wildflower Bread Co.,
No. 09-1348,