Opinion
20-CV-9581 (PGG)(JLC)
07-17-2023
SHAUN THOMPSON and MARCELLA WATT, on behalf of themselves, FLSA collective plaintiffs, and the class, Plaintiffs, v. ELEV8 CENTER NEW YORK, LLC., et al., Defendants.
REPORT & RECOMMENDATION
JAMES L. COTT, UNITED STATES MAGISTRATE JUDGE
To the Honorable Paul G. Gardephe, United States District Judge:
Plaintiffs Shaun Thompson and Marcella Watt (“plaintiffs”), on behalf of themselves and those similarly situated, bring this action against Elev8 Center New York, LLC; Urban Recovery House, LLC; and Donna Mae Depola (collectively, “defendants”), alleging violations of the Fair Labor Standards Act (“FLSA”) and New York Labor Law (“NYLL”). Defendants have moved to dismiss the Second Amended Complaint (“SAC”) for lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons set forth below, the motion should be granted in part and denied in part.
Thompson originally brought additional claims of discrimination and retaliation against defendants pursuant to NYLL, New York State Human Rights Law (“NYSHRL”), and New York City Human Rights Law (“NYCHRL”), over which the Court declined to exercise supplemental jurisdiction. See Thompson v. Urb. Recovery House, LLC, No. 20-CV-9581 (PGG) (JLC), 2022 WL 589957, at *8 (S.D.N.Y. Feb. 28, 2022) (“The Court should decline to exercise supplemental jurisdiction over Thompson's state law retaliation and discrimination claims[.]”), adopted sub nom. Thompson v. Elev8 Ctr. New York, LLC, 2022 WL 4547411 (Sept. 29, 2022). Those claims are not re-alleged in the Second Amended Complaint.
I. BACKGROUND
The Court assumes familiarity with the facts alleged in the First Amended Complaint (“FAC”) and the procedural history set forth in the prior Report and Recommendation issued in this case (“the Report”), Dkt. No. 64, and incorporates them by reference.
A. Newly Alleged Facts
The facts alleged in the SAC are taken as true for purposes of this motion. See, e.g., Ebomwonyi v. Sea Shipping Line, 473 F.Supp.3d 338, 344-45 (S.D.N.Y. 2020), aff'd, 2022 WL 274507 (2d Cir. Jan. 31, 2022). The SAC re-alleges claims against the addiction treatment facilities Elev8 Center New York, LLC and Urban Recovery House, LLC (“corporate defendants”), SAC ¶ 7, and Depola, the president of Elev8 and a principal at Urban Recovery. See id. ¶ 13. The SAC was filed with 24 exhibits, see Dkt. No. 76-1-24, which may be properly considered on a motion to dismiss. See, e.g., Ebomwonyi, 473 F.Supp.3d at 344-45 (on a motion to dismiss under Rule 12(b)(6), “district courts must limit their consideration to,” inter alia, “the factual allegations in the complaint, which are accepted as true,” and “documents attached to the complaint as an exhibit or incorporated in it by reference”).
Plaintiffs named Lee Weiss as an individual defendant in this suit, who they allege is the chief executive officer of the corporate defendants, FAC ¶ 15, and have re-alleged claims against him in the SAC. See SAC ¶ 12. Plaintiffs never served Weiss, however, and he has not otherwise appeared in this action. As such, he should not be considered a party in the case. See Dkt. No. 17 (summons for Weiss returned unexecuted); Dkt. Nos. 22, 24, 25 (Defendants' attorneys' notice of appearance on behalf of all defendants except Weiss); Dkt. Nos. 32, 33 (after Amended Complaint filed, summons executed as to Elev8 Center New York, LLC., but no summons executed as to Weiss).
According to the SAC, Thompson was hired by defendants on April 23, 2018 to work as a counselor, and his work there ended in or around December 2019 “on good terms.” SAC ¶ 30. Thompson was reemployed by defendants from in or around March 2020 until in or around April 2020. Id. ¶ 31. On April 9, 2020, Thompson received an email from Human Resources informing him that
[b]ased on the finding of the investigation, your conduct in the workplace and toward other employees on April 6, 2020, violated the company's employment conduct policy; you displayed inappropriate behavior and language in the workplace, and threatened workplace violence.
Email dated April 9, 2020, Dkt. No. 76-11.
Throughout his employment with defendants, Thompson alleges that although his “hours and schedules fluctuated,” “he frequently worked well over forty (40) hours per week.” SAC ¶ 33. “[A]pproximately two to three times per week,” Thompson “was required to stay past his scheduled shift for approximately one hour” because of “understaffing,” resulting in approximately two to three hours of off-the-clock work per week. Id. ¶ 38.
Watt alleges that she was hired by defendants to work as a “patient care coordinator” at Elev8 in or around September 11, 2018, id. ¶ 42, and “was paid on a bi-weekly basis” at $14 per hour; in 2019, her pay was increased to $15, and in 2020 it was increased to $15.50. Id. ¶ 43. Watt's “hours and schedule fluctuated greatly,” but she “frequently worked well over 40 hours per week.” Id. ¶ 44. Watt alleges that she “was required to arrive at work approximately 30 minutes prior to the start of her scheduled shift every day,” which resulted in “approximately two and a half hours per week [of] off the clock” work. Id. ¶ 50.
As she previously alleged, Watt was forced to work through her unpaid lunch breaks because, “[a]s a patient care coordinator,” she “had a legal duty to supervise the patients on her floor” and was not allowed to “leave . . . unless there was another patient care coordinator to” relieve her. Id. ¶ 47. However, Watt claimed that defendants “knew that there was no other patient care coordinator available to relieve her.” Id. ¶ 48. Watt complained to a supervisor “at one point,” but “but he did nothing to rectify the problem.” Id. ¶ 49.
Watt further alleges that she “frequently worked shifts in excess of ten hours” but “was never compensated with her spread of hours premiums.” Id. ¶ 52. She also alleges that her role as a patient care coordinator involved “transporting patients, moving patients' belongings into and out of patient rooms and units, transporting dirty linens, washing and delivering clean linens, searching patients for contraband, cleaning tables, cleaning the garden, and preparing and serving food for patients.” Id. ¶ 53. She “was consistently required to perform general housekeeping duties in patients['] rooms, including but not limited to tasks such as sanitizing it before and after [and] changing the bed sheets and other linens.” Id.
Plaintiffs newly allege that in 2019, defendants implemented a “policy of rounding down employees' hours to the nearest 15 minute interval,” which was “always performed to the detriment of the employees.” Id. ¶¶ 35, 51. Furthermore, although they “clocked in and out for . . . lunch,” one hour was “automatically deducted” from employees' wages “regardless of how short [the] break was.” Id. ¶¶ 34, 45.
“On April 17, 2019, Defendants circulated an email informing all employees to stop clocking in and out for their breaks,” yet Thompson and other employees continued to “manually clock out for meal breaks” until around May 2019. Id. ¶¶ 36, 46. “Defendants continued to require employees to work through meal breaks” and still “automatically deduct[ed] one hour from their wages.” Id. ¶ 36. Plaintiffs allege that defendants knew this new policy “would result in inaccurate recording of time worked,” as Thompson and other employees “would routinely be required to work through their meal breaks and/or take extremely short breaks.” Id. ¶ 37.
B. Procedural History
On February 28, 2022, I issued the Report, recommending that the FAC be dismissed without prejudice. See Dkt. No. 64. On September 29, 2022, Judge Gardephe adopted the Report in full and granted plaintiffs leave to file a second amended complaint. Dkt. No. 75; Thompson v. Elev8 Ctr. New York, LLC, No. 20-CV-9581 (PGG), 2022 WL 4547411, at *6 (S.D.N.Y. Sept. 29, 2022). Plaintiffs did so on October 6, 2022, re-asserting collective and class-wide claims for (1) unpaid overtime and unpaid wages due to time-shaving under the FLSA and NYLL, and (2) failure to provide proper wage notices and wage statements under NYLL. SAC ¶¶ 69-84, 87-89. The SAC further alleged unpaid overtime and unpaid wages due to impermissible rounding practices, ¶¶ 18, 35, and included new claims of unpaid spread of hours premiums and failure to compensate manual workers on a weekly basis under NYLL. See ¶¶ 85-86.
Plaintiffs defined the collective as “all current and former non-exempt employees, including, but not limited to, the counselors, nurses, housekeepers, janitors, receptionists, intake persons, and patient care coordinators, employed by Defendants on or after the date that is six (6) years before the filing of the Complaint in this case,” id. ¶ 17, and defined the class as “all current and former non-exempt employees, including but not limited to the counselors, nurses, housekeepers, janitors, receptionists, intake persons, and patient care coordinators, who were employed and unjustly compensated by Defendants, throughout New York State, on or after the date that is six (6) years before the filing of the Complaint in this case.” Id. ¶ 20.
On October 14, 2022, defendants requested a pre-motion conference in anticipation of moving to dismiss the SAC. Dkt. No. 77. On November 2, 2022, plaintiffs sought a conference to discuss their anticipated motion for conditional certification. Dkt. No. 79. On November 7, 2022, Judge Gardephe set a briefing schedule for the motion to dismiss, Dkt. No. 81, and I denied the latter request as premature. Dkt. No. 82.
Consistent with Judge Gardephe's individual rules, defendants filed a motion to dismiss the SAC on January 10, 2023, Dkt. No. 89, along with supporting materials and reply papers. See Defendants' Memorandum of Law in Support of the Motion to Dismiss (“Def. Mem.”), Dkt. No. 90; Declaration of Shivani Poddar dated November 21, 2022, Dkt. No. 91; Reply Memorandum of Law (“Reply”), Dkt. No. 92. Plaintiffs filed opposition papers on the same day. Plaintiffs' Memorandum of Law in Opposition to Defendants' Motion to Dismiss (“Pl. Opp.”), Dkt. No. 93. The motion was referred to me for a report and recommendation on January 13, 2023. Dkt. No. 94.
Defendants additionally oppose plaintiffs' expansion of the class in the SAC to include “nurses, housekeepers, janitors, receptionists, and intake persons” because they are roles that plaintiffs “do not hold.” See Def. Mem. at 21. However, litigating the proper scope of a proposed class is premature at the motion to dismiss stage. See, e.g., Sullivan v. Study.com LLC, No. 18-CV-1939 (JPO), 2019 WL 1299966, at *7 (S.D.N.Y. Mar. 21, 2019) (on motion to dismiss, “declin[ing] to entertain” motion to strike class allegations “[b]ecause none of the issues raised . . . are separate and apart from the issues that will be decided on a class certification motion” (citation omitted)).
II. DISCUSSION
A. Plaintiffs Were Not Given Leave to Add New Claims
As a threshold matter, defendants argue that plaintiffs impermissibly added new causes of action in the SAC-namely those for unpaid spread of hours premiums under NYLL and failure to compensate manual workers on a weekly basis under NYLL. See Def. Mem. at 21. Plaintiffs failed to respond to this argument. A district court “may, and generally will, deem a claim abandoned when a plaintiff fails to respond to a defendant's arguments that the claim should be dismissed.” Lipton v. Cnty. of Orange, 315 F.Supp.2d 434, 446 (S.D.N.Y. 2004). For this reason alone, those claims should be deemed abandoned.
Moreover, “a party may amend its pleading only with the opposing party's written consent or the court's leave,” Fed.R.Civ.P. 15(a)(2), and plaintiffs added new causes of action with neither. In his order adopting the Report and granting plaintiffs leave to amend, Judge Gardephe noted that plaintiffs' original request for leave had promised that the amendments “would not be adding new claims or parties that may require new legal strategies or discovery mechanisms” and would “solely [be] supplementing and bolstering [their] current allegations.” Thompson, 2022 WL 4547411, at *5 (quoting plaintiffs' April 14, 2022 letter, Dkt. No. 71)). Thus, leave to amend was granted because plaintiffs “ha[d] shown that their amendments will directly address the issues identified in” the Report. Id. at *6. The Report had recommended “that Thompson and Watt be given an opportunity to allege the requisite facts, if they exist, to make their overtime claims under the FLSA and NYLL cognizable.” Thompson, 2022 WL 589957, at *8. Thus, any additional allegations were pleaded without leave from the Court, which is an “adequate basis to dismiss” plaintiffs' “new claims.” Ong v. Park Manor (Middletown Park) Rehab. & Healthcare Ctr., No. 12-CV-974 (KMK), 2015 WL 5729969, at *22 (S.D.N.Y. Sept. 30, 2015) (citing cases). Plaintiffs' new claims for unpaid spread of hours premiums and failure to compensate manual workers on a weekly basis under NYLL, see SAC ¶¶ 85-86, should therefore be dismissed.
B. Legal Standards
1. Motion to Dismiss for Lack of Subject Matter Jurisdiction
“Dismissal of a case for lack of subject matter jurisdiction under Rule 12(b)(1) is proper when the district court lacks the statutory or constitutional power to adjudicate it.” Gelmart Indus., Inc. v. Everready Battery Co., Inc., 120 F.Supp.3d 327, 329-30 (S.D.N.Y. 2014) (quoting Ford v. D.C. 37 Union Local 1549, 579 F.3d 187, 188 (2d Cir. 2009)). In deciding such a motion, the Court construes the complaint in the plaintiff's favor and accepts all factual allegations as true. Id. at 339. However, “[j]urisdiction must be shown affirmatively, and that showing is not made by drawing from the pleadings inferences favorable to the party asserting it.” Ryan v. United States, No. 15-CV-2248 (GHW), 2015 WL 7871041, at *3 (S.D.N.Y. Dec. 3, 2015) (quoting APWU v. Potter, 343 F.3d 619, 623 (2d Cir. 2003)).
Defendants moved to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) to argue that the Court should decline to exercise supplemental jurisdiction over state law claims. See Def. Mem. at 16-17. The Court is additionally presented with a jurisdictional issue in Section II.E.1, infra, that implicates the 12(b)(1) standard.
2. Motion to Dismiss for Failure to State a Claim
Rule 12(b)(6) allows a party to move to dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). In considering a Rule 12(b)(6) motion, a court accepts all factual allegations in the complaint as true and draws all reasonable inferences in the plaintiffs favor. See Palin v. N.Y. Times Co., 940 F.3d 804, 809 (2d Cir. 2019) (quoting Elias v. Rolling Stone LLC, 872 F.3d 97, 104 (2d Cir. 2017)); Chase Grp. All. LLC v. City of N.Y. Dep't of Fin., 620 F.3d 146, 150 (2d Cir. 2010).
To survive dismissal, a plaintiff must allege enough facts “to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Facial plausibility exists when the plaintiff “pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). Moreover, “the plaintiff must provide the grounds upon which his claim rests through factual allegations sufficient ‘to raise a right to relief above the speculative level.'” ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007) (quoting Twombly, 550 U.S. at 555). Although Rule 8 “does not require ‘detailed factual allegations,' . . . it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). “A pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action will not do.'” Id. (quoting Twombly, 550 U.S. at 555). Determining whether a complaint states a plausible claim is a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679.
3. Evidentiary Standard
On a motion to dismiss under Rule 12(b)(6), “district courts must limit their consideration to: (1) the factual allegations in the complaint, which are accepted as true; (2) documents attached to the complaint as an exhibit or incorporated in it by reference; (3) matters of which judicial notice may be taken; or (4) documents either in plaintiff's possession or of which plaintiff had knowledge and relied on in bringing suit.” Ebomwonyi, 473 F.Supp.3d at 345 (quoting Roth v. CitiMortgage Inc., 756 F.3d 178, 180 (2d Cir. 2014)) (cleaned up).
For a document “[t]o be incorporated by reference, the complaint must make a clear, definite and substantial reference to [it].” McLennon v. City of New York, 171 F.Supp.3d 69, 88 (E.D.N.Y. 2016) (quoting Madu, Edozie & Madu, P.C. v. SocketWorks Ltd. Nigeria, 265 F.R.D. 106, 123 (S.D.N.Y. 2010)) (citation omitted). “Limited quotation does not constitute incorporation by reference.” Id. at 88-89 (quoting Looney v. Black, 702 F.3d 701, 716 n.2 (2d Cir. 2012)).
C. Plaintiffs Have Stated a Claim for Unpaid Overtime
Subject to certain exceptions, both the FLSA and NYLL require that employees who work more than 40 hours per week be compensated for overtime work at a rate of one and one-half times their regular rate of pay. 29 U.S.C. § 207(a)(1); NYLL §§ 650 et seq.; Hobbs v. Knight-Swift Transportation Holdings, Inc., No. 21-CV-1421 (AT), 2022 WL 118256, at *3 (S.D.N.Y. Jan. 12, 2022) (overtime claims under NYLL “are evaluated under the same standards as claims under the [FLSA]”). To state a plausible overtime claim, a plaintiff must “sufficiently” allege: (1) “40 hours of work in a given workweek,” and (2) “some uncompensated time in excess of the 40 hours.” Lundy v. Catholic Health System of Long Island, Inc., 711 F.3d 106, 114 (2d Cir. 2013).
Defendants argue that plaintiffs' claims should fail because “neither Elev8 Centers nor Urban Recovery had actual or constructive knowledge of Plaintiffs' time worked outside of shifts and through meal breaks.” Def. Mem. at 2. However “[e]mployer knowledge is clearly not a pleading requirement under the FLSA.” Katz v. Equinox Holdings, Inc., No. 20-CV-9856 (VEC), 2022 WL 1292262, at *3 n.5 (S.D.N.Y. Apr. 29, 2022) (citing cases).
Those requirements are not met by “general assertions” that a plaintiff “typically, occasionally, or regularly worked more than forty hours a week, without more . . . .” Limauro v. Consolidated Edison Co. of New York, Inc., No. 20-CV-3558 (CM), 2021 WL 1226872, at *2 (S.D.N.Y. Mar. 31, 2021) (cleaned up). Rather plaintiffs must “provide sufficient detail about the length and frequency of [their] unpaid work to support a reasonable inference that [they] worked more than forty hours in a given week.” Hobbs, 2022 WL 118256, at *3 (citing Nakahata v. N.Y.-Presbyterian Healthcare Sys., Inc., 723 F.3d 192, 201 (2d Cir. 2013)).
In the Report, the Court concluded that plaintiffs did not adequately allege either (1) 40 hours of work in a given workweek, or (2) sufficient facts demonstrating uncompensated overtime work. Each requirement is addressed below in light of the SAC.
1. Plaintiffs Have Sufficiently Alleged 40 Hours of Work
With respect to hours worked, Thompson and Watt each previously alleged to have work schedules that, including lunch breaks, amounted to a 37.5 hour work week when factoring in one-hour lunch breaks. See Report at 11. Now, Thompson alleges that although his “hours and schedules fluctuated,” “he frequently worked well over 40 hours per week.” SAC ¶ 33. Watt likewise now alleges that although her “hours and schedule fluctuated greatly,” she “frequently worked well over 40 hours per week.” Id. ¶ 44. While those assertions alone are too general to pass muster, see, e.g., Mendoza v. Cornell Univ., No. 20-CV-2110 (MKV), 2021 WL 918622, at *2 (S.D.N.Y. Mar. 10, 2021) (allegations that employee “regularly worked more than forty hours per week . . . cannot, standing alone, establish a plausible claim”), this time, plaintiffs have provided time records attached to the SAC providing specific weeks in which they were each compensated for 40 hours or more but maintain that they were not adequately compensated for overtime work. See, e.g., Dkt. No. 76-16 at 26-30 (Thompson: week of 8/12-8/18/2019 paid for 46.25 hours; week of 08/19-8/26/2019 paid for 46 hours; week of 08/26-09/01/2019 paid for 48 hours; week of 09/02-09/08/2019 paid for 48.5 hours); Dkt. No. 76-22 at 14, 17, 19-20 (Watt: week of 07/22-7/26/2019 paid for 41.5 hours; week of 08/26-8/30/2019 paid for 40 hours; week of 09/30-10/05/2019 paid for 47.5 hours). Those are sufficient to plausibly allege “40 hours of work in a given workweek.” Lundy, 711 F.3d at 114; see, e.g., Werst v. Sarar USA Inc., No. 17-CV-2181 (VSB), 2018 WL 1399343, at *6 (S.D.N.Y. Mar. 16, 2018) (in defeating motion to dismiss, plaintiff provided “detailed chart of . . . weekly shifts, which provides context for his claim that he worked at least 45 hours per week to well over 50 hours per week without receiving overtime compensation” (cleaned up)).
These calculations come from the “Pay Totals” column of the time records.
The cited records indicate that Thompson and Watt received overtime pay. See, e.g., Dkt. No. 76-16 at 26-28; Dkt. No. 76-22 at 17, 20. However, plaintiffs' unpaid overtime allegations stem from their assertions that they were uncompensated during meal breaks when they were required to work and for time spent working that was not recorded on pay records. See discussion at II.C.2, infra. The pagination in the cited time records was generated by the ECF system.
2. Plaintiffs Have Sufficiently Alleged Uncompensated Overtime
Thompson previously alleged that he was “routinely” required to stay after 4:00 p.m. and perform work on weekends as needed. Report at 12. Now, he additionally alleges that this requirement to stay occurred “approximately two to three times per week . . . for approximately one hour.” SAC ¶ 38. Watt, for her part, now alleges that she “was required to arrive at work approximately 30 minutes prior to the start of her scheduled shift every day.” Id. ¶ 50. Each resulted in approximately two to three hours of unpaid work time per week. See id. ¶¶ 38, 50.
With respect to meal breaks, plaintiffs previously alleged that defendants would automatically deduct one hour's pay even though “throughout” his employment, Thompson “rarely took the full hour [lunch] break,” and Watt would be required to keep working. Report at 12. Now, plaintiffs allege that employees “would routinely be required to work through their meal breaks and/or take extremely short breaks,” SAC ¶ 37, and have produced time records showing one-hour deductions for meals despite shorter clocked periods. See Dkt. No. 76-16 (numerous examples of “Break Time” row showing under one hour but one hour deducted because of “break” in “Deductions” column); Dkt. No. 76-22 (same).
Defendants maintain that plaintiffs' more specific allegations of unpaid overtime nevertheless fail under Lundy. See Def. Mem. at 10. The Court disagrees. The allegations at issue in Lundy were insufficient because they referred only to uncompensated work time before and after scheduled shifts that “typically” resulted in additional time per shift. Lundy, 711 F.3d at 114-15. Those allegations were “void of any facts regarding the nature and frequency of [the] interruptions during the relevant time period.” Id. at 112; see also Mokrov v. Aeroflot Russian Airlines, No. 20-CV-588 (GBD), 2021 WL 2435801, at *4 (S.D.N.Y. June 15, 2021) (“[A]llegations that a plaintiff ‘typically,' ‘occasionally,' or ‘regularly' worked more than forty hours a week, without more, are insufficient to state a claim[.]”).
On the other hand, in Werst, the court concluded that employee-plaintiffs had provided “sufficient factual context . . . to state plausible overtime claims” where they had provided not only general allegations that they “regularly worked in excess of 40 hours” but had supplemented those pleadings with “further factual context,” including a “detailed chart” of “weekly shifts” and alleged hours worked. 2018 WL 1399343, at *6. Likewise here, Thompson and Watt have each supplemented general allegations with specific facts about the nature and the estimated amount of the time they were required to work without pay, and specific, albeit approximate, frequencies of these alleged violations. See SAC ¶¶ 38, 50. With respect to claims of unpaid work due to meal break deductions, plaintiffs have provided time sheets setting forth specific dates of the alleged violations. See Dkt. No. 76-16 (Thompson's time sheets); Dkt. No. 76-22 (Watt's time sheets).
As Thompson and Watt have each “set forth the approximate number of unpaid regular hours . . . allegedly worked,” Angiulo v. Cty. of Westchester, No. 11-CV-7823 (CS), 2012 WL 5278523, at *2 (S.D.N.Y. Oct. 25, 2012), they have “satisf[ied] the Second Circuit's edict that a complaint contain specificity as to uncompensated hours worked during a particular week.” Kuck v. Planet Home Lending, LLC, 354 F.Supp.3d 162, 168 (E.D.N.Y. 2018) (citing cases) (discussing application of Lundy, 711 F.3d at 114-15; Nakahata, 723 F.3d at 201-02; and Dejesus v. HF Mgmt. Servs., LLC, 726 F.3d 85, 86 (2d Cir. 2013)). This is sufficient to survive a motion to dismiss. See, e.g., Katz, 2022 WL 1292262, at *3 (“Katz has pled three specific weeks during which [time] she worked more than 40 hours without receiving overtime pay, and approximations are not fatal to an overtime claim under the FLSA at the motion to dismiss stage.” (citation omitted)).
Plaintiffs also newly allege that they are owed unpaid wages because defendants maintained an impermissible policy of rounding down hours worked, see SAC ¶¶ 2, 18-specifically, that defendants adopted a new rounding policy in 2019, and that the policy only “round[ed] down employees' hours to the nearest 15 minute interval.” SAC ¶ 35. While defendants are correct that neutral rounding policies are legally permissible, see Def. Mem. at 2; Reply at 5-6; see generally 29 C.F.R. § 785.48(b), rounding policies are impermissible where they “result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked.” 29 C.F.R. § 785.48(b). Thus, an allegation, such as the one made here, that an employer rounded hours to its employees' detriment is sufficient to survive a motion to dismiss. See, e.g., Neor v. Acacia Network, Inc., No. 22-CV-4814 (ER), 2023 WL 1797267, at *3 (S.D.N.Y. Feb. 7, 2023) (“The Court finds that the FAC describes a policy that consistently undercompensates employees in a prohibited fashion, and therefore, that Plaintiffs have sufficiently pleaded facts to support a claim for detrimental rounding to survive a Rule 12 motion to dismiss.”). Plaintiffs have therefore adequately alleged unpaid overtime due to impermissible rounding.
D. Plaintiffs Have Stated a Claim for Unpaid Gap-Time Under NYLL
The FLSA does not provide a remedy for unpaid wages under 40 hours worked per week (“gap-time”), Lundy, 711 F.3d at 116, but NYLL does. Nakahata, 723 F.3d at 201-02 (“Plaintiffs may, however, have a gap-time claim pursuant to the NYLL.”); see also Werst, 2018 WL 1399343 at *7 (“Claims for gap-time compensation are cognizable under [] NYLL but not under the FLSA.” (citation omitted)).
Under NYLL, “[i]f any employee is paid by his or her employer less than the wage to which he or she is entitled . . . he or she shall recover in a civil action the amount of any such underpayments ....” § 663(1). “Unlike an overtime claim, a gap-time claim requires no predicate showing of minimum hours worked; rather, an allegation of hours worked without compensation may give rise to a [cognizable] claim.” Nakahata, 723 F.3d at 202.
In Werst, the court concluded that plaintiffs had stated a gap-time claim because they had alleged “(1) an arbitrary reduction in employee hours, . . . and (2) lunch breaks that were interrupted or non-existent,” and had supported those allegations with specific facts. Werst, 2018 WL 1399343, at *7. Plaintiffs have done the same here. They have alleged that they were required to work past their shifts and through lunch breaks and were not compensated for that time. SAC ¶¶ 37, 38, 50. And, as explained above, they have offered the requisite specificity by providing estimated unpaid hours worked and time sheets that support their allegations that defendants had a policy of automatically deducting one hour for meal breaks. See Dkt. No. 76-16 (Thompson's time sheets); Dkt. No. 76-22 (Watt's time sheets); see also, e.g., Bowen v. Baldwin Union Free Sch. Dist., No. 15-CV-6829 (JMA) (GRB), 2018 WL 4560726, at *7 (E.D.N.Y. Aug. 31, 2018) (“To the extent plaintiff has plausibly alleged his entitlement to overtime compensation, he also has pleaded his right to recover straight time compensation for work performed in excess of 35 hours, but totaling 40 or less hours in a particular week.”), adopted by 2018 WL 4558403 (Sept. 21, 2018). In sum, plaintiffs have stated a plausible gap-time claim under NYLL.
E. Plaintiffs Have Stated a Claim for Failure to Provide Wage Notices and Statements Under NYLL
Additionally, plaintiffs reallege that defendants failed to provide proper wage statements and wage notices in compliance with NYLL. See SAC ¶¶ 87-88. NYLL Section 195-New York's Wage Theft Prevention Act (“WTPA”)-covers both claims. First, Section 195(1)(a) requires employers to provide a written wage notice “at the time of hiring” informing employees of certain specified information. Second, Section 195(3) requires employers to provide wage statements to employees “with every payment of wages” that contain the dates of work covered by the statement, the rate of pay, and gross and net wages paid.
The Court did not reach these claims in the Report, as it recommended that supplemental jurisdiction over state law claims be declined and that they be dismissed without prejudice. See Report, 2022 WL 589957, at *6 n.8.
1. Plaintiffs Have Alleged Sufficient Harm to Confer Standing for Wage Notice and Wage Statement Claims
“In the wake of the Supreme Court's decision in TransUnion, courts in this Circuit have held that plaintiffs lack standing to bring wage notice and statement claims under the NYLL absent any concrete, downstream consequences of the recordkeeping violation.” Chen v. Lilis 200 W. 57th Corp., No. 19-CV-7654 (VEC), 2023 WL 2388728, at *8 (S.D.N.Y. Mar. 7, 2023) (referring to TransUnion LLC v. Ramirez, 141 S.Ct. 2190, 2205 (2021)). “Vague allegations that Defendants' violations facilitated their other unlawful conduct do not give rise to a cognizable downstream consequence.” Chen, 2023 WL 2388728, at *8 (citing cases). On the other hand, “allegations” that go “beyond asserting a bare statutory violation and sufficiently allege concrete harm” resulting from “the underpayment of wages” pass muster because “monetary injury is a concrete harm sufficient for purposes of Article III standing.” Mateer v. Peloton Interactive, Inc., No. 22-CV-740 (LGS), 2022 WL 2751871, at *2 (S.D.N.Y. July 14, 2022).
Here, plaintiffs not only allege that defendants “willfully operated their business with a policy of not providing” proper wage notices or wage statements, SAC ¶¶ 87-88, they specifically allege that these failures “actually harmed” them by depriving them of the “ability to contest [wage] calculations” and “to further delay providing proper compensation to low wage earners,” resulting “in delayed payment of all proper wages.” Id. ¶¶ 60-61. As the SAC sufficiently sets forth a “monetary injury” stemming from the alleged statutory violations-i.e. “delay” in “proper compensation”-the Court has jurisdiction to consider these claims. See, e.g., Metcalf v. TransPerfect Translations Int'l, Inc., No. 19-CV-10104 (ER) (KHP), 2023 WL 2674743, at *5 (S.D.N.Y. Mar. 29, 2023) (plaintiffs had standing based on allegation that “inaccurate wage statements provided by [employer] resulted in them being underpaid for nearly nine months”).
Plaintiffs further allege that these failures “allowed Defendants to hide the proper frequency of pay to employees.” SAC ¶ 60. However, as the Court recommends dismissing plaintiffs' claim for failure to compensate a manual worker on a weekly basis, that particular allegation is not relevant to the remaining causes of action.
2. Plaintiffs Have Sufficiently Alleged Wage Notice Violations
The WTPA requires that wage notices contain the regular hourly pay rate; overtime hourly pay rate; the amount of tip credit claimed as part of the minimum wage; the regular pay day; the employer's name; any “doing business as” names the employer used; the physical address of the employer's main office or principal place of business; the mailing address if different; and the employer's telephone number. NYLL §§ 195-1, 2. The employer is required to “preserve and maintain” wage notices “for six years,” § 195-1, and “has the burden of proving compliance.” § 146-2.2(d).
Plaintiffs allege that defendants “operated their business with a policy of not providing . . . proper wage notices.” SAC ¶ 88. Defendants respond that they provided a wage notice to Thompson and attached one from Elev8 Centers, see Def. Mem. at 19, which includes Thompson's signature dated March 14, 2018 and a pay rate, but does not provide any employer information, overtime pay rate, or indicate when notice was given. See Dkt. No. 91-4 at 106. Defendants do not claim that they provided a wage notice to Watt, nor do they provide one from Thompson's work at Urban Recovery. See Def. Mem. at 19 (“Elev8 Centers Provided a Wage Notice to Thompson and Wage Statements to both Plaintiffs”).
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The wage notice attached by defendants to a declaration in support of their motion, see Dkt. No. 91-4 at 106, is not properly considered on a motion to dismiss. See, e.g., Ebomwonyi, 473 F.Supp.3d at 345 (quoting Roth v. CitiMortgage Inc., 756 F.3d 178, 180 (2d Cir. 2014)). However, the Court may, in its discretion, treat the motion to dismiss “as one for summary judgment under Rule 56.” Fed.R.Civ.P. 12(d); see, e.g., Girardi v. Ferrari Express, Inc., No. 20-CV-4298 (VSB) 2023 WL 2744027, at *3 (S.D.N.Y. Mar. 31, 2023) (“[W]hen matters outside the pleadings are presented in response to [or in support of] ¶ 12(b)(6) motion, a district court must either exclude the additional material and decide the motion on the complaint alone or convert the motion to one for summary judgment under Fed.R.Civ.P. 56 and afford all parties the opportunity to present supporting material.” (quoting Friedl v. City of New York, 210 F.3d 79, 83 (2d Cir. 2000)).
Normally, courts are presented with the question of whether to convert a motion to dismiss to one for summary judgment in a posture where summary judgment would be adverse to the non-moving party and where the records submitted would result in a favorable finding to the moving party. See, e.g., Cram v. Pepsico Exec. Income Deferral Comp. Program, No. 08-CV-10627 (CS), 2010 WL 4877275, at *8 (S.D.N.Y. Aug. 9, 2010). That is not the case here, where the wage notice submitted by defendants is incomplete (as the employer information is entirely blank) and appears, if anything, to be in violation of the WTPA. See, e.g., NYLL §§ 195-1 (requires, inter alia, employer's name to be listed).
“The ultimate decision of whether to convert a Rule 12(b)(6) motion into a Rule 56 motion is discretionary,” Fernandez v. Windmill Distrib. Co., 159 F.Supp.3d 351, 357 (S.D.N.Y. 2016), and the court may decide to “give the non-movant the opportunity to take relevant discovery.” Anglisano v. New York City Dep't of Educ., No. 14-CV-3677 (SLT) (SMG), 2015 WL 5821786, at *9 (E.D.N.Y. Sept. 30, 2015). Accordingly, discovery should proceed and the motion to dismiss should be denied as to the wage notice claim.
3. Plaintiffs Have Sufficiently Alleged Wage Statement Violations
Finally, plaintiffs allege that defendants “operated their business with a policy of not providing proper wage statements.” SAC ¶ 58. Defendants counter that they provided biweekly wage statements to Thompson and Watt, see Def. Mem. at 19, and similarly attached wage statements to their motion papers. See Dkt. No. 91-4 at 108-48, 213-78. Plaintiffs argue that they both “allege that they were not paid for all hours worked[, and thus] . . . the wage statements do not reflect their actual, total hours.” Pl. Mem. at 18.
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As “[t]he legislative objective animating § 195(3) requires the employer to furnish wage statements that accurately reflect the number of hours an employee worked[,] . . . the determination of the number of hours that plaintiff worked is crucial in determining whether the wage statements comply with § 195(3).” Santiago v. Home Infusion Grp., Inc., No. 20-CV-5455 (ENV) (LB), 2022 WL 17798164, at *2 (E.D.N.Y. Dec. 19, 2022) (citing cases). Given that adjudication of the related overtime claims will dictate the outcome of the wage statement claims, the motion to dismiss should be denied as to the wage statement claims to allow them to proceed in tandem. See, e.g., id. (preserving § 195(3) claim until after disputed facts between employee and employer over number of hours worked resolved).
III. CONCLUSION
For the foregoing reasons, defendants' motion to dismiss the Second Amended Complaint should be denied with respect to plaintiffs' claims for unpaid overtime and unpaid wages under the FLSA and NYLL and failure to provide proper wage notices and wage statements under NYLL. The motion should be granted with respect to the claims of unpaid spread of hours premiums and failure to compensate manual workers on a weekly basis under NYLL, which were pleaded without leave of the Court.
Plaintiffs have again (in November 2022) submitted a letter-motion requesting a pre-motion conference in anticipation of a motion for conditional certification. Dkt. No. 79. That request is denied without prejudice until the issues addressed in this Report and Recommendation are resolved, as it would be inefficient for the conditional certification motion to proceed before the pending motion is finally adjudicated and the record is clear as to what claims, if any are moving forward.
PROCEDURE FOR FILING OBJECTIONS
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days from service of this Report and Recommendation to file written objections. See also Fed.R.Civ.P. 6. Such objections, and any responses to such objections, shall be filed with the Clerk of the Court, with courtesy copies delivered to the chambers of the Honorable Paul G. Gardephe, United States Courthouse, 40 Foley Square, New York, New York. Any requests for an extension of time for filing objections must be directed to Judge Gardephe.
FAILURE TO FILE OBJECTIONS WITHIN FOURTEEN (14) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72. See Thomas v. Arn, 474 U.S. 140 (1985); Wagner & Wagner, LLP v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Garwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010).