United States District Court, Eastern District of Pennsylvania
Plaintiff Richard Kaskey brought claims under the Fair Labor Standards Act ("FLSA"), the Pennsylvania Minimum Wage Act ("PMWA"), and the Pennsylvania Wage Payment Collection Law ("WPCL") against his former employer, Osmose Holdings, and a number of his former supervisors. Osmose Holdings, Bill Banholtz, and Kevin Leap (collectively "Osmose" or "Third Party Plaintiffs") filed an Amended Third Party Complaint against Donald Shovlin, also a former Osmose Holdings employee, which asserted that Shovlin is the proper defendant in Kaskey's lawsuit, and that Shovlin must indemnify Osmose if Osmose is found liable. Shovlin filed a motion to dismiss Osmose's Amended Third Party Complaint under Federal Rule of Civil Procedure 12(b)(6). For the following reasons, the Court grants the motion to dismiss.
I. FACTUAL BACKGROUND
Kaskey was employed by Osmose Holdings for various periods of time between January 2006 and June 2013. (Compl. ¶¶ 14-19.) He held the positions of crew member and working foreman, and he was paid an hourly wage during his time as foreman, which involved leading a crew to inspect and repair telephone poles. (Id. ¶¶ 14-22.) As foreman, Kaskey was also responsible for a number of other tasks, including completing paperwork, mapping the crew's route, leading safety meetings, and conducting maintenance checks on the company vehicle. (Id. ¶¶ 23-24.) Kaskey asserts that he recorded the time he spent on these additional tasks on his personal payroll report, but that Defendants refused to compensate him for this time, instead compensating him only for time spent inspecting and repairing telephone poles. (Id. ¶¶ 25-26.) Kaskey also asserts that his supervisors instructed him to complete several other work-related tasks "off the clock." (Id. ¶ 27.) Kaskey brought claims under FLSA, the PMWA, and the WPCL against Osmose Holdings and a number of his supervisors, including Bill Banholtz and Kevin Leap, seeking damages, costs, and backpay.
Defendants/Third Party Plaintiffs Osmose Holdings, Bill Banholtz, and Kevin Leap ("Osmose") denied wrongdoing and filed an Amended Third Party Complaint against Shovlin. Shovlin was employed by Osmose Utilities Services, Inc. from January 2010 through July 2012. (Am. Third Party Compl. ¶ 10.) From May 2011 to March 2012, Shovlin was Kaskey's direct supervisor, and Osmose asserts that Shovlin is one of the "John Does" identified in Kaskey's Complaint. (Id. ¶¶ 11-12.) Osmose claims that Shovlin was exclusively responsible for reporting the hours worked by Kaskey, and that Shovlin previously testified at an unnamed hearing or proceeding that he intentionally under-reported Kaskey's working hours. (Id. ¶¶ 13-15.) Specifically, Osmose asserts that Shovlin's continued employment with Osmose Utilities Services was based on meeting a certain rate of productivity, and that Shovlin claimed that he falsified his team's time records in order to make it appear more productive, so that Shovlin could keep his job and earn a productivity bonus. (Id. ¶¶ 19-23.) However, Osmose disputes the accuracy of this prior testimony and "contend[s] that all time records were entered properly for Plaintiff." (Id. ¶ 17.)
In response, Shovlin filed a motion to dismiss the Amended Third Party Complaint, asserting that neither FLSA nor common law indemnification principles permit Osmose, as an employer, to seek contribution or indemnification from its own employee. Shovlin further asserts that he may not be held liable under FLSA because he does not meet the statute's definition of "employer."
II. STANDARD OF REVIEW
In reviewing a motion to dismiss for failure to state a claim, a district court must accept as true all well-pleaded allegations and draw all reasonable inferences in favor of the non-moving party. See Bd. of Trs. of Bricklayers & Allied Craftsman Local 6 of N.J. Welfare Fund v. Wettlin Assocs., 237 F.3d 270, 272 (3d Cir. 2001). A court should accept the complaint's allegations as true, read those allegations in the light most favorable to the plaintiff, and determine whether a reasonable reading indicates that relief may be warranted. Umland v. PIANCO Fin. Servs., Inc., 542 F.3d 59, 64 (3d Cir. 2008). "But a court need not credit a complaint's bald assertions or legal conclusions when deciding a motion to dismiss." Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997) (citation omitted); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
"Factual allegations [in a complaint] must be enough to raise a right to relief above the speculative level. . . ." Bell Ail. Corp. v. Twombly, 550 U.S. 544, 555 (2007). To survive a motion to dismiss, a complaint must include "enough facts to state a claim to relief that is plausible on its face." Id. at 570. A plaintiff must present "enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary elements]" of a cause of action. Phillips v. Cnty. of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (citation omitted). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678. Simply reciting the elements will not suffice. Id.; see also Phillips, 515 F.3d at 231.
The Third Circuit Court of Appeals has directed district courts to conduct a two-part analysis when faced with a Rule 12(b)(6) motion. First, the legal elements and factual allegations of the claim should be separated, with the well-pleaded facts accepted as true but the legal conclusions disregarded. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009). Second, the court must make a commonsense determination of whether the facts alleged in the complaint are sufficient to show a plausible claim for relief. Id. at 211. If the court can infer only the mere possibility of misconduct, the complaint must be dismissed because it has alleged—but has failed to show—that the pleader is entitled to relief. Id.
When faced with a motion to dismiss for failure to state a claim, courts may consider the allegations in the complaint, exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim. Lum v. Bank of Am., 361 F.3d 217, 222 n.3 (3d Cir. 2004).
Osmose's Amended Third Party Complaint against Shovlin contains two counts. Count II, titled "Common Law Indemnification, " asserts: "To the extent that Third-Party Plaintiffs are liable to Plaintiff for any damages, which liability Third-Party Plaintiffs deny, Third-Party Defendant is liable over to Third-Party Plaintiffs for any and all such damages for indemnification and contribution." (Am. Third Party Compl. ¶ 31.) The legal theory on which Count II is based is not evident from the Amended Third Party Complaint. Specifically, it is unclear whether Osmose believes that Shovlin has a common law duty to indemnify Osmose for the FLSA claim previously mentioned in the Amended Third Party Complaint, or whether Osmose believes that Shovlin has a common law duty to indemnify Osmose for the two Pennsylvania state law claims that were listed in Kaskey's Complaint but were not mentioned in Osmose's Amended Third Party Complaint. Indeed, Shovlin did not address indemnification for the state law claims in his motion to dismiss. In his reply brief, he explains that this was because "the vagueness of Defendant's complaint made it unclear that Defendant was seeking contribution/indemnification for violations of state law[.]" (Third Party Def's Reply Br. at 4.) The Court agrees with Shovlin, but as the issues are now fully briefed, the Court will address the broader argument, that Shovlin owes a common law duty to indemnify Osmose for Kaskey's PMWA and WPCL claims.
Count I of the Amended Third Party Complaint, titled "Fair Labor Standards Act, " asserts that Shovlin is responsible for causing any harm suffered by Kaskey, and that Shovlin should indemnify Osmose for its alleged FLSA violations. Osmose argues that Shovlin qualifies as an "employer" under FLSA, that FLSA allows one employer sued under the law to seek indemnity or contribution from another employer by filing a third party complaint, and that Pennsylvania common law requires Shovlin to indemnify Osmose for any liability under FLSA. (Mem. in Opp'n to Third Party Def's Mot. to Dismiss Am. Third Party Compl. 4-10.) Shovlin contends that FLSA does not explicitly or impliedly allow for an employer to seek indemnity or contribution from a third party, regardless of whether that person is an employer. He also argues that FLSA's carefully crafted remedial scheme intentionally omits a right of action for indemnity and contribution and preempts conflicting state ...