Austin v. Inc

ORDER granting in part and denying in part Deft's {{24}} Motion to Dismiss Complaint; Amended Complaint due 5/14/2010 by noon; Joint Status Report due by 5/14/2010 by noon, by Judge James L. Robart.

Western District of Washington, wawd-2:2009-cv-01679

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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 8 AT SEATTLE 9 10 RICHARD AUSTIN, CASE NO. C09-1679JLR 11 Plaintiff, ORDER GRANTING IN PART AND DENYING IN PART 12 v. MOTION TO DISMISS COMPLAINT 13 AMAZON.COM, INC., 14 Defendant. 15 I. INTRODUCTION 16 This matter comes before the court on Defendant Amazon.Com, Inc.'s 17 ("Amazon") motion to dismiss and/or motion to strike irrelevant allegations (Dkt. # 24) 18 from Plaintiff Richard Austin's First Amended Complaint ("FAC") (Dkt. # 20). Mr. 19 Austin filed this putative collective action in November 2009, alleging that Amazon 20 failed to pay its Warehouse Associates overtime pay in violation of the Fair Labor 21 Standards Act ("FLSA"), 29 U.S.C. §§ 201, 207, 216. Amazon responded to the 22 complaint with a motion to dismiss that it later withdrew after Mr. Austin amended his ORDER- 1 1 complaint to address Amazon's legal challenges to its original complaint and to add 2 claims for violation of Nevada's wage statute. Amazon thereafter filed the instant motion 3 to dismiss the FAC or in the alternative to strike irrelevant allegations contained therein. 4 Having reviewed the motion and the papers filed in support and opposition, and 5 finding oral argument unnecessary, the court GRANTS in part and DENIES in part the 6 motion (Dkt. # 24). As discussed below, the court (1) DENIES the motion to dismiss Mr. 7 Austin's FLSA claim; (2) GRANTS the motion to dismiss his wage claims under Nevada 8 law; (3) GRANTS Amazon's motion to strike the allegations relating to the Nevada wage 9 claim and the allegation relating to shortened meal breaks; (4) DENIES the motion to 10 strike the collective action allegations; and (5) GRANTS Mr. Austin leave to amend his 11 complaint to address the legal deficiencies contained in his wage claim under Nevada 12 law. 13 II. BACKGROUND 14 Mr. Austin alleges that he was employed as a "Warehouse Associate" for Amazon 15 in its Nevada warehouse from approximately September 2008 to approximately August 16 2009. (FAC ¶ 6.) As a Warehouse Associate, Mr. Austin was a non-exempt, hourly 17 employee and was required to "clock in" at or around his scheduled start time and "clock 18 out" at or around his scheduled end time. (Id. ¶ 12.) He alleges that he worked more 19 than 40 hours in any given week and did not receive compensation for these overtime 20 hours. (Id. at 6) Mr. Austin's allegations of unpaid overtime are based on Amazon's 21 policy of rounding time to the nearest quarter hour. (Id. Ex. A (Amazon's "Rounding 22 ORDER- 2 1 Policy"1).) Mr. Austin acknowledges that the Rounding Policy is "facially neutral" in 2 that it appears to favor neither the employee nor the employer. (Id. ¶ 14.) In practice, 3 however, Mr. Austin contends that the policy almost exclusively works to Amazon's 4 advantage because of Amazon's attendance and discipline policies. (Id. ¶¶ 14-15.) 5 A. Allegations Regarding Combination of Policies 6 The policy attached as exhibit A to the complaint purports to be Amazon's 7 Rounding Policy and Amazon does not dispute its authenticity in its motion to dismiss. 8 The policy states that it is "applied in conjunction with's attendance policy, 9 payroll rules, and systems for clocking in and out." (FAC Ex. A at 1.) The Rounding 10 Policy advises employees that they are expected to punch in as close to their scheduled 11 start and end times as possible. (Id.) Recognizing that some slight variation in time 12 punching will occur, Amazon established a process where time entries were rounded to 13 the nearest quarter hour. (Id.) Mr. Austin alleges, however, that the Rounding Policy is 14 biased toward Amazon. For example, under the policy, if an employee clocks in seven 15 minutes or less before their scheduled shift they will be paid from their scheduled start 16 time going forward and "no flag" will appear on the time clock system. (Id.) The same 17 is true if the employee clocks in within seven minutes after their scheduled shift time, 18 except that the grace period for avoiding the "flag" is three minutes after their scheduled 19 20 21 1 In ruling on a Rule 12(b)(6) motion, the court may consider the allegations contained in the complaint as well as the exhibits attached thereto. See Swartz v. KPMG LLP, 476 F.3d 756, 22 763 (9th Cir. 2007). ORDER- 3 1 time, as opposed to the seven minutes of grace time afforded the employee who clocks in 2 too early. (Id.) 3 According to Mr. Austin, the Rounding Policy described above favors Amazon 4 because it benefits from up to seven minutes of uncompensated work when the employee 5 clocks in early – conduct for which Amazon does not "flag" for discipline purposes. By 6 contrast, if the employee clocks in seven minutes after the scheduled start time, the 7 employee will be paid as if he or she started at the scheduled time – thus, benefitting the 8 employee with seven minutes of compensation for not working – yet, Amazon's policy is 9 to flag that employee for discipline. Amazon does provide a three minute window after 10 the scheduled start time that it considers a "grace period" and does not flag the employee 11 for discipline if they clock in within three minutes after their start time. (Id., Ex. A.) Mr. 12 Austin alleges that as a result of these policies he was not paid a minimum wage and, 13 when applicable, overtime wages for all hours he worked. (FAC ¶ 35-36.) 14 III. ANALYSIS 15 Amazon moves to dismiss the FAC on the basis that (1) its policy to round time to 16 the nearest quarter hour is a practice approved by the United States Department of Labor 17 ("DOL") and (2) there is no private right of action under Nevada law for unpaid 18 overtime. (See generally Mot.) In the alternative, Amazon moves to strike a number of 19 allegations in the FAC pursuant to Rule 12(f) of the Federal Rules of Civil Procedure. In 20 particular, Amazon seeks to strike the allegations regarding Nevada law and those 21 relating to missed or shortened meal breaks. (Mot. at 15; Reply (Dkt. # 27) at 8-9.) 22 ORDER- 4 1 A. Rule 12(b)(6) Standard 2 To survive a motion to dismiss pursuant to Federal Rule of Civil Procedure 3 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to 'state a 4 claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, __ U.S. __, 129 S. Ct. 5 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). It is 6 not enough for a complaint to "plead[ ] facts that are 'merely consistent with' a 7 defendant's liability." Id. (quoting Twombly, 550 U.S. at 557). Rather, "[a] claim has 8 facial plausibility when the plaintiff pleads factual content that allows the court to draw 9 the reasonable inference that the defendant is liable for the misconduct alleged." Id. 10 "The plausibility standard is not akin to a 'probability requirement,' but it asks for more 11 than a sheer possibility that a defendant has acted unlawfully." Id. (quoting Twombly, 12 550 U.S. at 556). Although a court considering a motion to dismiss must accept all of the 13 factual allegations in the complaint as true, the court is not required to accept as true a 14 legal conclusion presented as a factual allegation. Id. at 1949-50 (citing Twombly, 550 15 U.S. at 556). In the event the court finds that dismissal is warranted, the court should 16 grant the plaintiff leave to amend unless amendment would be futile. Lopez v. Smith, 203 17 F.3d 1122, 1127 (9th Cir.2000); Gillespie v. Civiletti, 629 F.2d 637, 640 (9th Cir. 1980). 18 B. Department of Labor Regulations 19 Amazon relies on 29 C.F.R. § 785.48(b) as support for the legality of its Rounding 20 Policy. Section 785.48(b) provides: 21 "Rounding" practices. It has been found that in some industries, particularly where time clocks are used, there has been the practice for 22 many years of recording the employees' starting time and stopping time to ORDER- 5 1 the nearest 5 minutes, or to the nearest one-tenth or quarter of an hour. Presumably, this arrangement averages out so that the employees are fully 2 compensated for all the time they actually work. For enforcement purposes this practice of computing working time will be accepted, provided that it is 3 used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually 4 worked. 5 29 C.F.R. § 785.48(b). Contrary to Amazon's arguments, however, the above DOL 6 regulation does not give Amazon a blank check to round time in any manner it sees fit. 7 The regulation does not contemplate the situation where an employer allows rounding 8 when it benefits the employer without disciplining the employee; but disciplines the 9 employee when the rounding does not work to the employer's advantage. Mr. Austin's 10 allegations center around what he believes to be Amazon's manipulation of the leniency 11 provided to employers who use the rounding method in a manner that does not "average[] 12 out so that the employees are fully compensated for all the time they actually work." 13 (Id.) This is distinguishable from Amazon's argument that it is legally permitted to round 14 time pursuant to the DOL regulation. Accordingly, the court denies Amazon's motion as 15 it relates to the application of the DOL regulation regarding rounding. 16 Amazon also argues that Mr. Austin's FLSA claim is "devoid of any legal 17 support." (Mot. at 8.) Amazon relies on Harding v. Time Warner, Inc., as a case that it 18 contends is particularly instructive to the court's analysis in this case. No. 09-CV-1212 – 19 WQHWMC, 2009 WL 2575898, *1 (S.D.Cal. Aug. 18, 2009). In Harding, the plaintiff 20 filed a wage and hour complaint against Time Warner. In the complaint, the plaintiff 21 argued that Time Warner's "practice of paying employees without regard to the number 22 of hours actually worked. . . included the 'rounding' of reported time worked-to the ORDER- 6 1 nearest 15 minutes-without ensuring that the employees were paid for all of the time 2 actually worked." (Id.) In doing so, the plaintiff argued that Time Warner inaccurately 3 under-reported the amount of time worked by the plaintiff and others. (Id.) The district 4 court held that the allegation that Time Warner had a "practice of rounding," without 5 more, was too generic and conclusory to satisfy the standard announced in Twombly. Id. 6 (citing Twombly, 550 U.S. at 556.) Here, Mr. Austin does not allege merely a "practice" 7 of rounding but explains the practice and provides a copy of the policy that he alleges 8 violates the FLSA. Thus, unlike the Harding case, Mr. Austin has provided sufficient 9 factual content to allow the court to draw the reasonable inference that Amazon is liable 10 for the misconduct alleged. See Iqbal, 129 S. Ct. at 1949. Accordingly, the court finds 11 the FAC sufficiently alleges a violation of the FLSA and further provides sufficient 12 factual background to support Mr. Austin's collective action allegations. The court 13 denies the motion as to the FLSA claim and denies the motion to strike the allegations 14 relating to a collective action pursuant to the FLSA. The court will consider Amazon's 15 arguments regarding whether the putative class is sufficiently similar to support a 16 collective action at the time the court considers the motion for class certification. 17 C. Wage Claim Under Nevada Law 18 Mr. Austin also asserts wage claims against Amazon under Nevada law. Mr. 19 Austin, however, titles his claims as an FLSA enforcement of Nevada law and admittedly 20 cites the wrong provision of the Nevada Revised Statutes ("NRS"). Moreover, although 21 Mr. Austin purports to seek damages under Nevada law for unpaid wages pursuant to 22 NRS 608.016, the FAC seeks damages only for overtime compensation under NRS ORDER- 7 1 608.018. The court therefore dismisses without prejudice the Nevada claim and the 2 allegations relating thereto f