IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA
August 7, 2012
COLLETTE DAVIS, ET AL., PLAINTIFFS,
ABINGTON MEMORIAL HOSPITAL, ET AL., DEFENDANTS.
SUSAN FRATTAROLA, ET AL., PLAINTIFFS,
MERCY HEALTH SYSTEM OF SOUTHEASTERN PENNSYLVANIA, ET AL., DEFENDANTS.
KENNETH LYNN, ET AL., PLAINTIFFS,
ARIA HEALTH SYSTEM, ET AL., DEFENDANTS.
KENNETH LYNN, ET AL., PLAINTIFFS,
JEFFERSON HEALTH SYSTEM, INC., ET AL., DEFENDANTS.
CASSANDRA RUFF, ET AL., PLAINTIFFS,
ALBERT EINSTEIN HEALTHCARE NETWORK, ET AL., DEFENDANTS.
JOHN DUNCHESKIE, ET AL., PLAINTIFFS,
TEMPLE UNIVERSITY HEALTH SYSTEM, ET AL., DEFENDANTS.
The opinion of the court was delivered by: Rufe, J.
In these six related putative collective and class actions, Plaintiffs allege that their employers, various medical centers and their affiliates, violated the Fair Labor Standards Act ("FLSA"), *fn1 and various state laws by failing to pay them for all hours they worked. By Opinion and Order dated September 8, 2011, this Court dismissed the Amended Complaint in each case, but granted Plaintiffs leave to file amended complaints consistent with the Opinion. *fn2 Plaintiffs did so, filing a Third Amended Complaint in each case. Defendants have again moved to dismiss these complaints. For the reasons that follow the Motions will be granted. *fn3
I. B ACKGROUND
A. P ROCEDURAL B ACKGROUND
In November 2009, Plaintiffs filed parallel complaints in each of these six cases against six sets of Defendants, each representing a network of health-care providers: "Mercy Health Defendants" *fn4 ; "Abington Memorial Health Defendants" *fn5 ; "Aria Health Defendants" *fn6 ; "Jefferson Health Defendants" *fn7 ; "Albert Einstein Healthcare Network Defendants" *fn8 ; "Temple University Health Center Defendants." *fn9 The initial federal complaints contained only federal claims. At the same time these federal civil actions were filed, Plaintiffs filed six related actions in the Philadelphia Court of Common Pleas; these state complaints contained solely state-law claims. While maintained as separate actions, the allegations in the state and federal complaints were essentially identical.
In December 2009, Defendants removed the state court actions to
this Court (the "Removed Actions"), *fn10
asserting that the state-law claims fell within the scope of Section
502(a)(1) of the Employee Retirement Income Security Act
("ERISA"). *fn11 In three of the Removed
actions, Defendants also asserted that Plaintiffs' Pennsylvania Wage
Payment and Collection Law ("WPCL") *fn12 and
breach of contract claims were preempted by, and removable under,
Section 301 of the Labor Management Relations Act ("LMRA").
*fn13 Plaintiffs moved to remand the Removed
Actions. The Court denied Plaintiffs' motions, holding that ERISA
preempted the state-law claims in their entirety, and that, in the
three cases in which Defendants raised the issue, *fn14
Section 301 of LMRA preempted the WPCL and
breach-of-contract claims. *fn15
At the same time it denied Plaintiffs' Motions to Remand, the
Court ordered that the
Removed Actions be consolidated with the pending federal actions,
directed that Plaintiffs file a consolidated complaint in each federal
action incorporating both state and federal claims, and closed the
Removed Actions. *fn16 On October 15, 2010,
Plaintiffs filed an Amended Complaint in each case. Again, Plaintiffs
averred that Defendants denied them premium pay and overtime in
violation of the Fair Labor Standards Act ("FLSA"), *fn17
that Defendants failed to keep accurate records of hours
worked by their employees and breached their fiduciary duties in
violation of ERISA, and that in doing so, Defendants violated the
Racketeer Influenced and Corrupt Organizations Act ("RICO").
*fn18 Despite the Court's findings regarding the
preemptive effect of ERISA and the LMRA in its Opinion on the Motion
to Remand, Plaintiffs reasserted all state-law claims.
Defendants responded by jointly moving to dismiss the Amended Complaints. By Opinion and Order dated September 8, 2011, the Court granted the motions, holding that the allegations were an "aggregation of conclusory statements and general allegations." *fn19
Specifically, the Court held that the Amended Complaints lacked factual support for the conclusory assertions that all Defendants were Plaintiffs' employers, and that, in failing to establish this employer-employee relationship, Plaintiffs had not stated a claim under the FLSA. The Court further held that Plaintiffs' failure in this regard also defeated their ERISA claims.
The Court dismissed the RICO claims because Plaintiffs failed to adequately allege the predicate act of mail fraud, and declined to exercise supplemental jurisdiction over the state-law claims. The Court granted Plaintiffs leave to amend.
After being granted an extension of time in which to file,
Plaintiffs filed a Second Amended Complaint in each case. The Parties
thereafter stipulated to the filing of Third Amended Complaints and to
a joint briefing schedule. Plaintiffs filed their Third Amended
Complaints on February 10, 2012. *fn20
Defendants then filed the Motions to Dismiss now before the Court.
Defendants submitted one joint brief in support of their motions,
which addresses the issues common to all Defendants. *fn21
Additionally, Defendants in two cases filed individual
motions to address issues unique to their cases. *fn22
For purposes of the joint motion, the Parties rely upon
and refer to the Third Amended Complaint in Frattarola, et al. v.
Mercy Health System of Southeastern Pennsylvania, et al., Civ. A. No.
09-5533, as representative of all the Third Amended Complaints filed
in these actions. *fn23 The Court will do so
B. F ACTUAL B ACKGROUND
Plaintiffs Susan Frattarola, Cassandra Ruff, and Pamela Kimble-Armstrong worked as Registered Nurses ("RNs") at Defendant Mercy Philadelphia Hospital; Ms. Frattarola was employed at Mercy Philadelphia Hospital from May 2007 to July 2009, Ms. Ruff from October 2008 to October 2009, and Ms. Kimble-Armstrong from December 2004 to November 2008. *fn24
Plaintiff Anna May Lampart was employed as a Licensed Practical Nurse ("LPN") at Mercy Health System's Gray's Ferry Life Center ("Gray's") from August 2007 to September 2009. *fn25
Plaintiffs allege that Defendant Mercy Health System of Southeastern Pennsylvania controls Defendants Mercy Catholic Medical Center of Southeastern Pennsylvania, Mercy Fitzgerald Hospital, Mercy Philadelphia Hospital, Mercy Suburban Hospital, Nazareth Hospital, St. Agnes Continuing Care Center, and various other "Health Care Facilities." *fn26
Plaintiffs contend that Defendants maintained three illegal work and pay policies: (1) the "Meal Break Deduction Policy," pursuant to which Defendants automatically took a daily half-hour deduction from Plaintiffs' paychecks for a meal break, even though Plaintiffs often had to work through those breaks; *fn27 (2) the "Unpaid Pre- and Post- Schedule Work Policy," pursuant to which Defendants did not pay Plaintiffs for work performed before and after their shifts; *fn28 and (3) the "Unpaid Training Policy" pursuant to which Defendants did not pay Plaintiffs for time spent at compensable training sessions. *fn29
II. S TANDARD OF R REVIEW
To determine the sufficiency of a complaint under Rule 12(b)(6), court must take three steps:
First, the court must "tak[e] note of the elements a plaintiff must plead to state a claim." Second, the court should identify allegations that, "because they are no more than conclusions, are not entitled to the assumption of truth." Finally, "where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief." *fn30
In reviewing a Rule 12(b)(6) motion to dismiss for failure to
state a claim upon which relief may be granted, the Court must accept
a plaintiff's factual allegations as true and construe the complaint
in the light most favorable to the plaintiff. *fn31
Courts are not, however, bound to accept as true legal
conclusions couched as factual allegations, *fn32
or "accept as true unsupported conclusions and
unwarranted inferences." *fn33 The Complaint
must set forth "direct or inferential allegations [for] all the
material elements necessary to sustain recovery under some viable
legal theory." *fn34 And it
must allege "enough facts to state a claim to relief that is
plausible on its face." *fn35 "The
standard is not akin to a 'probability requirement,' but it asks
for more than a sheer possibility that a defendant acted unlawfully." *fn36
III. D ISCUSSION
A. FLSA C LAIMS
"Congress enacted the FLSA in 1938 with the goal of 'protect[ing]
all covered workers from substandard wages and oppressive working
hours.'" *fn37 Among other requirements
enacted to further this goal, § 207(a) requires "employers to
compensate employees for hours in excess of 40 per week at a rate of 1
1/2 times the employees' regular wages." *fn38
Section 216(b) provides a private right of action for
violations of the FLSA, including a suit by one or more employees
filed on behalf of themselves and other similarly situated
Here, Plaintiffs FLSA claims are two-fold-they allege they are entitled to compensation for both overtime hours under 29 U.S.C. § 207(a), and "gap-time" hours, citing 29 C.F.R. § 778.315. Defendants have moved to dismiss the FLSA claims, asserting that Plaintiffs have failed to remedy the defects identified by the Court in its September 8, 2011 Opinion, and that Plaintiffs' FLSA claims fail as a matter of law.
1. The Allegations Are Sufficient To Support A Finding That There Exists An Employer-Employee Relationship Between Plaintiffs And Some Of The Defendants
For a defendant to be liable as an employer under the FLSA, the defendant must be an "employer" as defined under the Act, in that the defendant must be alleged to have had an employer-employee relationship with the plaintiff. *fn40 Here, Defendants assert that Plaintiffs have failed to correct the deficiencies identified by the Court in its September 8, 2011 Opinion. According to Defendants, Plaintiffs have failed to state a claim under the FLSA because they have not alleged that each Defendant was an employer of one or more of the named Plaintiffs. The Court agrees, in part.
Under the FLSA, an employer "includes any person acting directly or indirectly in the interest of an employer in relation to an employee;" *fn41 a "person" includes "an individual, partnership, association, corporation, business trust, legal representative, or any organized group of persons." *fn42 A "single individual may stand in the relation of an employee to two or more employers at the same time under the [FLSA]." *fn43 A "joint employment relationship" is generally considered to exist:
(1) Where there is an arrangement between the employers to share the employee's services . . . ; or (2) Where one employer is acting directly or indirectly in the interest of the other employer (or employers) in relation to the employee; or (3) Where the employers are not completely disassociated with respect to the employment of a particular employee and may be deemed to share control of the employee, directly or indirectly, by reason of the fact that one employer controls, is controlled by, or is under common control with the other employer . *fn44
"A determination of whether the employment by the employers is to be considered joint employment or separate and distinct employment for purposes of the act depends upon all the facts in the particular case." *fn45 As the Third Circuit has explained:
When determining whether someone is an employee under the FLSA, "economic reality rather than technical concepts is to be the test of employment." Under this theory, the FLSA defines employer "expansively," and with "striking breadth." The Supreme Court has even gone so far as to acknowledge that the FLSA's definition of an employer is "the broadest definition that has ever been included in any one act." *fn46
In its September 8, 2011 Opinion, the Court found that despite Plaintiffs' voluminous averments, they failed to allege an employer-employee relationship because such averments were merely an "aggregation of conclusory statements and general allegations," and did not identify a single specific employer-employee relationship which could provide a basis for liability. The Amended Complaint lacked any factual support to substantiate Plaintiffs' conclusory assertion that all Defendants were their employers; Plaintiffs failed to allege to whom they reported each day; from whom they received their paychecks; information about who set their rate of pay and other conditions of their employment; or who directly supervised their work. While the Third Amended Complaint includes much of this information, it falls short of establishing that every Defendant was an employer.
The Third Amended Complaint alleges that Plaintiffs Susan
Frattarola, Cassandra Ruff, and Pamela Kimble-Armstrong worked as RNs
at Defendant Mercy Philadelphia Hospital, and that Plaintiffs' direct
supervisors at Mercy Philadelphia Hospital supervised their work and
were the individuals to whom they reported each day . It
further alleges that Defendant Mercy Catholic Medical Center is the
entity from whom Plaintiffs receive their paychecks, *fn47
and that Defendant Mercy Health System of Southeastern
Pennsylvania's CEO, H. Ray Welch, has operational control over several
"Mercy Health System" entities, including Mercy Philadelphia Hospital
and Mercy Catholic Medical Center, and has the authority to make
decisions related to employment, training, and payroll.
*fn48 These allegations are sufficient to state a
claim that Defendants Mercy Health System of Southeastern
Pennsylvania, Mercy Catholic Medical Center, and Mercy Philadelphia
Hospital were Plaintiffs' employers. *fn49
However, Plaintiffs have failed to establish an employer-employee
relationship between named Plaintiffs and Defendants Mercy Fitzgerald
Hospital, Mercy Suburban Hospital, Nazareth
Hospital, and St. Agnes Continuing Care Center. *fn50
Each paragraph pertaining to these Defendants contains
generalized assertions about the relationship these medical centers
have with Defendant Mercy Health System of South Eastern Pennsylvania.
To establish that these medical centers are employers under the FLSA,
however, Plaintiffs must also connect these Defendants to the
allegations of wrongdoing or show that these medical centers exert
significant control over the employment of the named Plaintiffs.
*fn51 Plaintiffs have failed to do so. These
Defendants cannot be held liable merely because they have common
ownership or are otherwise part of a common enterprise wherein some
entities are employers of the named Plaintiffs. *fn52
The allegations fail to connect these Defendants to the
factual averments of wrongdoing and accordingly, fail to state a claim
against these Defendants.
2. Plaintiffs' "Gap Time" Claims Are Not Within the Purview Of The FLSA
The FLSA requires that employers pay employees minimum wage, and that, for hours worked beyond the 40-hour weekly threshold, an employer compensate an employee at a rate of at least one and a half times the employee's regular rate. *fn53 An employer who violates the minimum wage provision of § 206, or the overtime provision of § 207, "shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation." *fn54 "[T]he FLSA does not create liability for unpaid non-overtime compensation for an employee who was paid at least the minimum wage." *fn55
"'Gap time' refers to time that is not covered by the overtime provisions because it does not exceed the overtime limit, and to time that is not covered by the minimum wage provisions because, even though it is uncompensated, the employees are still being paid a minimum wage when their salaries are averaged across their actual time worked." *fn56 "Gap time" claims therefore do not fall within the purview of the FLSA. *fn57
Here, Plaintiffs do not assert a claim pursuant to the minimum wage provision of the FLSA, § 206. Rather, they assert their FLSA claims pursuant to the overtime provision in § 207. Plaintiffs therefore must allege that they worked in excess of 40 hours a week and were not compensated for those excess hours. To the extent Plaintiffs seek recovery under the FLSA for hours worked but not compensated below the 40-hour weekly threshold, such claims will be dismissed. Although Plaintiffs may be entitled to payment based on a different theory of liability, the FLSA does not provide Plaintiffs the remedy they seek. *fn58
3. The Sufficiency Of Plaintiffs' Remaining FLSA Claims
Having determined that the FLSA does not provide a remedy for the alleged "gap-time" claims, the Court now considers whether the FLSA claims that remain-the claims that Plaintiffs were not paid for overtime hours-are sufficiently alleged. Plaintiffs claim that they should be compensated for time spent working during meal breaks, for hours spent attending training programs, and for work accomplished before and after their scheduled shifts. To state a claim that this time is compensable, Plaintiffs must allege that these hours are recoverable under the FLSA as "overtime hours"- i.e., during a week in which Plaintiffs completed these tasks, they worked more than 40 hours total. Plaintiffs have failed to do so.
The abundance of allegations notwithstanding, it is not clear from the Third Amended Complaints whether any of the named Plaintiffs worked overtime within the meaning of the statute. Plaintiffs have failed to allege a single specific instance in which a named Plaintiff worked overtime and was not compensated for this time. This deficiency is fatal to Plaintiffs' claims.
While the Third Amended Complaint contains 488 paragraphs, only 24 of those paragraphs allege facts specific to Plaintiffs in the case. *fn59 Most of the remaining 464 paragraphs contain either irrelevant verbiage ("Across the United States, pay practices throughout the health care industry are being investigated for failure to properly pay hourly employees for all time worked.") *fn60 , immaterial background information ("The Sisters of Mercy, founded in Dublin, Ireland in 1831, founded Mercy Hospital (then called Misericordia Hospital) in 1918.") *fn61 , or legal assertions regarding potential theories of liability. *fn62
Of those 24 paragraphs which do contain facts specific to
Plaintiffs, none contain any specific instances where a named
Plaintiff worked overtime and was not paid for it. Although these
paragraphs contain phrases such as "frequently" and "occasionally" to
describe hours worked, they appear to contain internal inconsistencies
which prevent the Court from determining whether it is alleged that a
single named Plaintiff ever worked more than 40 hours a week and was
not compensated for that time at an overtime rate. *fn63
In fact, Plaintiff Cassandra Ruff specifically alleges
that she worked only 24 hours per week. *fn64
The Court has reviewed the Third Amended Complaint in each case and finds that they suffer from the same defects. *fn65 Plaintiffs have simply failed to allege facts to support their FLSA claims, despite being afforded several opportunities to do so. Accordingly, the Court will dismiss these claims. *fn66
B. S TATE L AW C LAIMS
Having dismissed the only claims over which it has original jurisdiction, the Court declines to exercise supplemental jurisdiction over the remaining state law claims given that, despite its age, this case is in the early stages of the litigation process and no federal claims survive. *fn67 Accordingly, the Court will dismiss all claims contained in the Third Amended Complaints.
C. L EAVE TO A MEND
In dismissing these actions, the Court does not grant leave to amend. While Federal Rule of Civil Procedure 15(a) "requires that leave to amend the pleadings be granted freely 'when justice so requires,'" repeated failure to cure deficiencies by amendments previously allowed is just grounds for denying an amendment. *fn68 Here, Plaintiffs have failed to remedy the defects of their Complaints despite being afforded ample opportunity to do so.
In dismissing the Amended Complaints in these cases on September 8, 2011, the Court noted that in light of the Court's explicit instructions in the Opinion and the decisions of at least six other district courts that have dismissed substantially similar complaints, *fn69 Plaintiffs' counsel, who represent the plaintiffs in those actions in other courts as well, "are on sufficient notice that '[i]t is not enough to simply parrot, word-for-word, the 'vague and conclusory allegations' used 'in more than a dozen actions.'" *fn70 Notwithstanding the Court's unambiguous direction that conclusory statements and general allegations would not suffice, the Third Amended Complaints, yet again, contain a multitude of conclusory allegations without specific facts to support them. While Plaintiffs clearly have developed a theory of liability, they have failed to support that theory with concrete facts and specific instances of wrongdoing.
Plaintiffs have repeatedly been granted leave to amend, both by the Court and through stipulation. Because Plaintiffs have failed to remedy the defects of their Complaints, the Court finds that justice does not require that leave to amend be again granted in these cases.
IV. C ONCLUSION
For the foregoing reasons, the Third Amended Complaints in each of the six related actions at issue shall be dismissed.
An appropriate Order for each case follows.