Sivetts v. Board of County CommissionersSivetts v. Board of County Commissioners
Case Information
*3 Before HOLMES, BACHARACH, and McHUGH, Circuit Judges.
McHUGH , Circuit Judge.
Current and former employees (Employees) of the Jefferson County Sheriff’s
Office (County) brought a collective action under the Fair Labor Standards Act (FLSA),
alleging they were paid overtime at a lower rate than required by the statute during 2010,
2011, and 2012. The district court granted the County’s motion to dismiss the
Employees’ Third Amended Complaint and the Employees filed a timely appeal.
Exercising jurisdiction pursuant to
I. BACKGROUND
This wage dispute between the Employees and the County stems from their
disagreement about the proper calculation of overtime pay rates.
[1]
The FLSA provides
that overtime work must be compensated at “one and one-half times” the employee’s
“regular rate” of pay.
See
*5 The County moved to dismiss the Second Amended Complaint, arguing the Employees had failed to allege it had approved a budget incorporating the Promised Rates or facts demonstrating the existence of an enforceable promise to pay those rates. Rather than responding to the County’s First Motion to Dismiss, the Employees conducted limited discovery and then filed a Third Amended Complaint. Except for the addition of factual allegations designed to address concerns raised in the First Motion to Dismiss, the Third Amended Complaint is essentially identical to the Second Amended Complaint. Upon the filing of the Third Amended Complaint, the district court dismissed the County’s First Motion to Dismiss as moot. The County subsequently filed a Second Motion to Dismiss, arguing the Employees had failed to allege their “regular rates” of pay for the purposes of the FLSA were the Promised Rates (the regular rates argument), and reasserting the arguments raised in the First Motion to Dismiss.
The district court dismissed the Employees’ Third Amended Complaint pursuant
to
II. DISCUSSION
On appeal, the Employees allege four grounds of error. First, they contend
For the reasons discussed below, we decline to decide whether the district court’s
consideration of the County’s regular rates argument was in technical violation of
A. Standard of Review
“We review de novo the district court's granting of a motion to dismiss under
B. Any Error in Considering the County’s Regular
Rates Argument Was Harmless
According to the Employees,
However, district courts have struggled with the question of whether a party may
raise a previously available argument in a successive motion to dismiss for failure to state
a claim under
We are aware of only two federal circuit courts that have addressed the issue. The
United States Court of Appeals for the Seventh Circuit did so in
Ennenga v. Starns
, 677
F.3d 766, 772–73 (7th Cir. 2012). There, the plaintiff brought claims of legal malpractice
against the attorneys who drafted his late parents’ trust agreement, initially premised
upon a conflict-of-interest theory.
Id.
at 771. The defendants moved for dismissal,
arguing the plaintiff had failed to state a claim for malpractice because neither the Illinois
nor the Minnesota Rules of Professional Conduct prohibited the representation.
Id.
The
district court granted the motion to dismiss, but with leave to amend.
Id.
In his amended
complaint, the plaintiff alleged the attorneys had negligently drafted the trust agreement,
thereby failing to effectuate his parents’ testamentary intent.
Id.
The defendants again
moved to dismiss, this time arguing the claim was untimely.
Id.
The plaintiff claimed
On appeal, the Seventh Circuit acknowledged that
The Seventh Circuit’s approach has the advantage of allowing district courts to
consider meritorious arguments in successive pre-pleading motions to dismiss. This in
turn, allows district courts to resolve cases on their merits at the pleading stage in the
interest of efficiency. But the court’s reasoning fails to address the language from
But we are persuaded by the reasoning of the United States Court of Appeals for
the Third Circuit that we need not decide whether the district court here acted in technical
compliance with
The Third Circuit declined to decide whether the district court “entertained
defendants’ motions in technical violation” of
Applying that reasoning here, we decline to decide whether the district court’s
consideration of the County’s regular rates argument was in error because any technical
violation of
C. The Employees’ Regular Rates Were Those Actually Paid Having determined the district court’s consideration of the County’s successive 12(b)(6) motion was harmless even if erroneous, we turn our attention to the correctness of its decision dismissing the Third Amended Complaint. According to the Employees, “an employee’s ‘regular rate’ [under the FLSA] is determined based upon the amount of wages decided upon by the parties .” Aplt. Br. at 16 (emphasis in original). They further assert the County’s posted salary schedules constituted an enforceable promise to pay the Employees at the higher Promised Rates. As such, they claim their “regular rates” for the purposes of the FLSA were the Promised Rates, not the Actual Rates they received in their paychecks. Based on that analysis, they contend the Third Amended Complaint adequately states a claim for unpaid overtime wages because it alleges the County calculated their overtime payments based on the lower Actual Rates, rather than the higher Promised Rates. The Employees’ argument fails as a matter of law.
The purpose of the FLSA’s overtime provisions is “to compensate those who
labored in excess of the statutory maximum number of hours for the wear and tear of
extra work and to spread employment through inducing employers to shorten hours
because of the pressure of extra cost.”
Bay Ridge Operating Co. v. Aaron
,
The Employees rely heavily on our decision in
Chavez
for the proposition that an
employee’s regular rate can be based on a bargained-for rate of pay, even when it was
never paid to the employee. But the Employees’ reliance on
Chavez
is misplaced. There,
*17
we considered the interaction between the terms of a collective bargaining agreement and
the FLSA’s overtime provisions.
In this case, the Employees allege they are entitled under the FLSA to overtime pay calculated from the higher Promised Rate they never received. As discussed, this position is contrary to law. Whatever other claims the Employees may have against the *18 County, the facts alleged do not state an FLSA claim for unpaid overtime. The FLSA is not an all-purpose vehicle to resolve wage disputes between employers and their employees. Rather, it provides a specific remedy based on the failure to pay overtime calculated from the employee’s regular rate—the amount the employer actually paid the employee for non-overtime work. The allegations of the Third Amended Complaint do not set forth a violation of the FLSA. Accordingly, we hold the district court did not err when it dismissed the Third Amended Complaint for failure to state a claim upon which relief can be granted.
D. The District Court Did Not Abuse Its Discretion when It Denied
the Employees Permission to Amend Their Complaint
Finally, the Employees claim the district court abused its discretion when it denied
them leave to amend their Third Amended Complaint. Under Rule 15, courts “should
freely give leave [to amend] when justice so requires.”
In the district court, the Employees did not formally move to amend their Third Amended Complaint. Rather, in a single sentence in their Response to the County’s Second Motion to Dismiss, the Employees asserted, “Even assuming the Court determines that [the Employees] failed to set forth a plausible FLSA claim, the Court should grant [Employees] leave to file an amended complaint to cure any such deficiency.” This request, unsupported by argument or a proposed Fourth Amended Complaint, was insufficient to notify the court and opposing counsel of the grounds for amendment. On appeal, the Employees assert the district court should have granted them leave to amend. But they again fail to specify the new factual allegations that would correct the defects in their Third Amended Complaint. Under these circumstances, the district court did not abuse its discretion in denying leave to amend.
III. CONCLUSION
Irrespective of whether the district court committed a technical violation of
Notes
[1] Because this appeal is from a motion to dismiss, we recite the facts as alleged in
the Employees’ complaint and in the light most favorable to them.
Cressman v.
Thompson
,
[2] For clarity, throughout this opinion, we refer to the normal, non-overtime hourly pay rate the Employees actually received in their paycheck using the phrase “Actual Rate.” In contrast, we use the phrase “Promised Rate” to refer to the non-overtime hourly pay rates contained in the posted salary schedules.
[3] The Employees also asserted various state-law claims, but voluntarily dismissed those claims.
[4] We reject the County’s claim that it included its regular rate argument in its First Motion to Dismiss. The focus of the First Motion to Dismiss is on whether the Sheriff’s alleged promise to pay the Promised Rates was enforceable. The County never cites to any provision of the FLSA in this section, and provides no legal argument as to the meaning of the statute’s “regular rates” provision. In contrast, the County’s Second Motion to Dismiss relies on the text of the FLSA, as well as case law interpreting that text, to argue an employee’s “regular rate” constitutes the “hourly rate actually paid for the normal, non-overtime workweek.” This regular rates argument was not raised in the First Motion to Dismiss.
[5] The district court rejected the Employees’
[6]
[7]
[8]
[9]
See, e.g.
,
Oliver v. Roquet
, No. 2:13-1881,
[10] Although
Walzer v. Muriel Siebert & Co.
,
[11] The statute carves out eight categories of remuneration that are excluded from
the regular rate calculation.
[12] To the contrary,
Chavez
stands for the principle that not all payments actually
received by the employee are necessarily part of the regular rate. The employees in
Chavez
also disputed the employer’s decision not to include buy-back payments for paid
sick and vacation time in the calculation of the regular rate.
Chavez v. City of
Albuquerque
,