Court: District Court, E.D. Pennsylvania; March 20, 2012; Federal District Court
Alberto J. Lopez, the plaintiff, was employed by Tri-State Drywall, Inc. and Dean Ganoudis as a framer for drywall installation at a veterans' facility. He claims he was hired at a prevailing wage of $59.59 per hour but was instead paid $17.00 per hour as an independent contractor. Lopez alleges violations of the Fair Labor Standards Act (FLSA) and the Pennsylvania Wage Payment and Collection Law (WPCL), including failure to pay contracted compensation, violations of FLSA record-keeping and notice provisions, and common law claims for conversion and unjust enrichment.
The defendants filed a motion to dismiss certain counts of Lopez's First Amended Complaint. The court granted the motion to dismiss Lopez's FLSA claim (Count I) with prejudice, finding he failed to state a claim upon which relief can be granted. Specifically, the court noted that Lopez did not allege he was denied overtime compensation, and the FLSA does not provide remedies for unpaid non-overtime compensation if the employee received at least minimum wage. The court also declined to exercise jurisdiction over Lopez's remaining state law claims, allowing him to pursue those in state court.
The court’s standard of review under Rule 12(b)(6) requires that all allegations be taken as true and viewed in the light most favorable to the plaintiff, but mere labels or formulaic recitations of elements are insufficient for a claim to survive dismissal. Lopez acknowledged he was not claiming lost overtime but requested discovery to assess whether he could represent other potential plaintiffs under the FLSA.
Mr. Lopez contends that there is a private right of action for record-keeping violations under the Fair Labor Standards Act (FLSA), challenging the defendant's assertion that such a right is well-settled against his claim. The FLSA mandates employers to pay at least the minimum wage and overtime compensation for hours exceeding forty per week, with violators liable for unpaid wages plus liquidated damages. However, the act does not provide for recovery of unpaid non-overtime compensation if the employee was paid at least the minimum wage, a principle upheld by most federal courts regarding "gap-time" claims. Mr. Lopez is not seeking unpaid overtime but the difference between what he claims he was owed and what he was actually paid, which excludes him from FLSA coverage as it constitutes a "gap-time" claim.
Tri-State cites the Third Circuit's ruling in Symczyk, asserting that a collective action under the FLSA requires a "factual nexus" between the plaintiff's situation and that of other employees, which Mr. Lopez fails to demonstrate since he does not allege that Tri-State's policy affected him regarding overtime. Although Mr. Lopez argues for entitlement to discovery to establish this connection for his co-workers, the court finds he lacks standing to pursue a collective action under the FLSA. The enactment of the Portal-to-Portal Act in 1947 limited private FLSA plaintiffs to those asserting claims in their own right, thereby eliminating representative actions from the statute. Consequently, the court concludes that Mr. Lopez has not presented a valid claim under the FLSA and cannot bring a collective action on behalf of his co-workers. Thus, it agrees with Tri-State that the FLSA's record-keeping provisions do not grant Mr. Lopez a private right of action.
Tri-State has successfully argued that there is no private right of action for record-keeping violations under the Fair Labor Standards Act (FLSA), citing several federal cases that support this position. The court found no contrary cases cited by Mr. Lopez, reinforcing that the FLSA allows employees to recover unpaid wages while granting the Secretary of Labor the authority to address other FLSA violations, including record-keeping issues. Additionally, the failure of an employer to post required notices does not create a private right of action, as confirmed by the absence of supporting case law. Consequently, Mr. Lopez’s claims regarding FLSA record-keeping and notice violations were dismissed under Rule 12(b)(6).
Following this dismissal, the court examined whether it could assert jurisdiction over Mr. Lopez's remaining state law claims. Although Tri-State did not argue subject matter jurisdiction, the court interpreted its motion as a challenge under Rule 12(b)(1), allowing the acceptance of the plaintiff's factual allegations as true. The complaint asserted jurisdiction based on FLSA provisions and federal question jurisdiction but failed to adequately plead the basis for jurisdiction over the state law claims. Mr. Lopez likely sought supplemental jurisdiction under 28 U.S.C. 1367, which allows district courts to hear related state law claims. However, the court may decline such jurisdiction if all original jurisdiction claims have been dismissed or if the state claims involve complex issues. Since all of Mr. Lopez's original claims were dismissed, the court opted not to exercise supplemental jurisdiction over the state law claims, pursuant to 28 U.S.C. 1367(c)(3).
The Third Circuit has indicated skepticism regarding the use of supplemental jurisdiction over WPCL (Wage Payment and Collection Law) claims, as demonstrated in De Asencio v. Tyson Foods, Inc., where it identified complex questions of Pennsylvania law concerning the applicability of the WPCL to at-will, non-collective bargaining employees. The court in De Asencio concluded that such matters are better suited for resolution in Pennsylvania state courts, leading to a decision to decline supplemental jurisdiction under 28 U.S.C. § 1367(c)(1). This rationale is applicable to the current case, prompting the court to reject supplemental jurisdiction over Mr. Lopez's state law claims, which are therefore dismissed without prejudice, allowing him to seek appropriate recourse in state court.
In the accompanying order dated March 20, 2012, the court addressed motions from defendants Tri-State Drywall, Inc. and Dean Ganoudis to dismiss various counts of the First Amended Complaint. The court granted the motion to dismiss Mr. Lopez's FLSA claim with prejudice due to failure to state a claim. It declined to exercise jurisdiction over the remaining state law claims, dismissing them without prejudice. The court noted that Mr. Lopez did not assert diversity jurisdiction or jurisdiction under the Class Action Fairness Act, nor did he include class action allegations for his state law claims.
