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Lehman v. Legg Mason

September 20, 2007


The opinion of the court was delivered by: Sylvia H. Rambo United States District Judge


Before the court are motions to dismiss by Defendants Legg Mason, Inc. ("LMI") and Citigroup Global Markets, Inc. ("Citigroup"). Plaintiff Sheldon Lehman filed an amended complaint in this matter on April 25, 2007, seeking relief against all Defendants by way of a nationwide collective action under the Fair Labor Standards Act ("FLSA") and a statewide class action under Pennsylvania law. Plaintiff alleges that he and other similarly-situated securities brokers have been and continue to be deprived of the proper wage due for the number of hours they have worked. The court will address the motions by LMI and Citigroup in a single opinion, granting in part and denying in part the relief requested.

I. Background

A. Facts

All of the following facts are stated in the amended complaint and are accepted as true for the instant motions to dismiss. The court recounts only those facts necessary to the disposition of the motions. Plaintiff worked as a securities broker at Legg Mason Wood Walker, Inc. ("LMWW"). During his employment, his employer required him to work more than forty hours per week but did not pay overtime wages for the additional time. Further, his employer withheld compensation due to him to cover alleged errors made in conducting trades for clients and to provide discounts for clients.

LMWW operated as the retail division of LMI. On June 24, 2005, LMWW and Citigroup engaged in a financial transaction in which Citigroup exchanged its worldwide asset management business for LMWW's brokerage and capital markets business. LMWW brokerage offices are now branded as Smith Barney, the name of Citigroup's brokerage division. Plaintiff alleges that LMI and Citigroup were his employers at the relevant times and therefore are liable to him and the other securities brokers he proposes to represent for the wage and hour claims. (See Doc. 13 ¶¶ 4, 52-53.)

B. Procedural History

Plaintiff states seven counts in the amended complaint: Counts I and II are brought under the FLSA for failure to pay required overtime compensation to securities brokers and for failure to pay the required minimum wage for hours worked; Counts III and IV are bought under the Pennsylvania Minimum Wage Act ("MWA") for the same reasons. Counts V and VI are brought pursuant to the Pennsylvania Wage Payment and Collection Law ("WPCL") for failure to pay all wages due to the securities brokers and for improperly withholding certain wages. Count VII states a claim under Pennsylvania law for failure to keep accurate records of hours and wages earned and failure to provide a statement of the same to employees.*fn1 LMI filed a motion to dismiss on May 9, 2007. (Doc. 14.) Citigroup filed a motion to dismiss on July 20, 2007. (Doc. 39.) Both motions to dismiss have been fully briefed and are ripe for disposition.

II. Legal Standard -- Motion to Dismiss

Among other requirements, a sound complaint must set forth "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). This statement must "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, - U.S. -, 127 S.Ct. 1955, 1964 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A complaint need not contain detailed factual allegations, but a plaintiff must provide "more than labels and conclusions" or "a formulaic recitation of the elements of a cause of action" to show entitlement to relief as prescribed by Rule 8(a)(2). Id. at 1965; accord, e.g., Evancho v. Fisher, 423 F.3d 347, 350(3d Cir. 2005). A defendant may attack a complaint by a motion under Rule 12(b)(6) for failure to state a claim upon which relief can be granted.

In deciding a motion to dismiss under Rule 12(b)(6), the court is required to accept as true all of the factual allegations in the complaint, Erickson v. Pardus, - U.S. -, 127 S.Ct. 2197, 2200 (2007), and all reasonable inferences permitted by the factual allegations, Watson v. Abington Twp., 478 F.3d 144, 150 (3d Cir. 2007), viewing them in the light most favorable to the plaintiff, Kanter v. Barella, 489 F.3d 170, 177 (3d Cir. 2007). The court is not, however, "compelled to accept unsupported conclusions and unwarranted inferences or a legal conclusion couched as a factual allegation." Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir. 2007) (quotations and citations omitted). If the facts alleged are sufficient to "raise a right to relief above the speculative level" such that the plaintiff's claim is "plausible on its face," a complaint will survive a motion to dismiss.*fn2 Bell Atlantic Corp., 127 S.Ct. at 1965, 1974; Victaulic Co. v. Tieman, - F.3d -, No. 07-2088, 2007 WL 2389795, at *5 (3d Cir. Aug. 23, 2007).

III. Discussion

LMI argues that some or all of the claims in Plaintiff's amended complaint should be dismissed for the following reasons: 1) Plaintiff's state law class action claims may not be joined with claims under the FLSA;*fn3 2) LMI is not an "employer" under the FLSA, WPCL, and the MWA, and therefore may not be sued for violations of those Acts; and 3) ...

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