Acosta v. Jani-King of Oklahoma, No. 17-6179 (10th Cir. 2018)Annotate this Case
The district court dismissed with prejudice of the Secretary of Labor’s complaint against Jani-King of Oklahoma, Inc. Jani-King is a janitorial company providing cleaning services in the Oklahoma City area. Following an investigation into Jani-King’s employment practices, the Secretary of Labor filed a complaint alleging violations of the Fair Labor Standards Act and seeking an injunction to require Jani-King to keep the requisite FLSA employee records. Specifically, the Secretary asserted that individuals who formed corporate entities and enter franchise agreements as required by Jani-King “nonetheless personally perform the janitorial work on behalf of Jani-King” and, based on the economic realities of this relationship, were Jani-King’s employees under the FLSA. Jani-King successfully moved to dismiss, arguing: (1) under Rule 12(b)(6), the Secretary failed to plausibly suggest that every franchise owner should have been treated as an employee under the FLSA; and (2) under Rule 12(b)(7), the Secretary failed to name the franchisees as necessary parties. The Tenth Circuit found the Secretary’s amended complaint contained sufficient facts to state a facially plausible claim for relief. In so concluding, the Court made no determination as to the merits of the case, only that it survived the initial Rule 12(b)(6) motion to dismiss.