Avery et al v. Chariots for Hire et al, No. 8:2009cv02524 - Document 30 (D. Md. 2010)
Court Description: MEMORANDUM OPINION. Signed by Chief Judge Deborah K. Chasanow on 9/16/10. (sat, Chambers)
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Avery et al v. Chariots for Hire et al Doc. 30 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND : FRED AVERY, et al. : v. : Civil Action No. DKC 09-2524 : CHARIOTS FOR HIRE, et al. : MEMORANDUM OPINION Presently pending and ready for review in this Fair Labor Standards Act action is a motion to dismiss Plaintiffs’ amended complaint or, in the alternative, for summary judgment filed by Defendants Chariots for Hire, et al. (Paper 18). The issues are briefed fully and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, Defendants’ motion will be granted in part and denied in part. I. Background The following Amended Complaint. facts are alleged by Plaintiffs in their Plaintiffs Fred Avery, Inez Henry, and Eddie Mackey Jr. were employed as drivers by Defendant Chariots for Hire, a business that provides chauffeured ground transportation in the Washington, D.C. metropolitan area and throughout the East Coast. (Paper 15 ¶¶ 17, 18, 19, 25, 28). Defendant Chariots for Hire is owned by Defendant M and C Enterprises. (Id. at ¶ 20). Defendants Michael Fortkort and Courtney West Dockets.Justia.com are co-owners Enterprises. of Chariots for Hire and M and C (Id. at ¶¶ 22-23). Plaintiffs limousines, Defendants drove sedans, Chariots for Hire motor sport coaches, utility (Id. at ¶ 6). limo buses, vehicles, and minibuses, vans for Before 2009, Plaintiffs were paid on an hourly, not salaried, basis regardless of the type of vehicle they drove. (Id. at ¶ 28). Defendants promised to pay Plaintiffs $16 per hour for work done Monday through Friday and $20 per hour on Saturdays, including from the time they arrived at the yard where vehicles are kept until the time they returned the vehicle to the yard at the end of a day. (Id. at 38). Defendants maintained a system whereby employees tracked their hours in log books. (Id. at ¶ 37). Plaintiffs were not compensated for the pre-trip cleanings and inspections they were required to conduct before picking up customers. (Id. at ¶ 29). And Defendants deducted up to $100 per paycheck from Plaintiffs’ wages for damage to the vehicles, such as dents, scratches, and dings. (Id. at ¶ 41). In January 2009, Defendant West held a staff meeting to discuss compensation changes. Beginning in January 2009, Plaintiffs’ work hours were capped at eight per day; for trips over eight hours they were paid a day rate. (Id. at ¶ 30). Plaintiffs were promised a $25 meal per diem for out-of-town trips. (Id. at ¶ 45). At the meeting, West promised Plaintiffs 2 that he would start paying drivers for pre-trip cleaning and inspections. (Id. at ¶ 46). Defendants twenty percent maintained service partial gratuity. a fee, practice which of charging included (Id. at ¶ 47). tax, clients fuel, a and Drivers were instructed by Defendant Fortkort and the company’s Chauffeur Manual not to request tips from customers. (Id. at ¶ 48). At the January 2009 meeting, drivers complained about not receiving tips when customers were charged a gratuity. (Id. at ¶ 49). Former customers Sean Logan and Brendan Barber thought that a portion of the service fee they paid would be given to Avery. (Id. at ¶¶ 50-51). Plaintiff Avery was employed November 2007 to August 2009. by Chariots (Id. at ¶ 31). for Hire from Plaintiff Henry was employed by Chariots for Hire from January to June 2009. (Id. at ¶ 34). Hire from Plaintiff Mackey was employed by Chariots for Plaintiffs February compensated. regularly 2007 to worked April hours 2009. for (Id. at ¶¶ 32, 34, 36). which (Id. they at ¶ were 35). not Plaintiff Avery worked more than forty hours a week but was not compensated at a rate of time-and-a-half for overtime hours when he drove Defendants’ vehicles with a gross vehicle weight of less than 10,001 pounds. (Id. at ¶ 32). Additionally, Plaintiffs were not compensated 3 for the meal per diem or pre-trip cleaning or inspections. (Id. at ¶ 45-46). Plaintiffs filed a complaint against Defendants for unpaid wages under the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq. (the “FLSA”), and the Maryland Wage and Hour Law (“MWHL”), Md. Code Ann. Lab. & Empl. §§ 3-401 et seq. and §§ 8-101 et seq. (Paper 1). Plaintiffs brought the lawsuit as action under the FLSA and as a class action. 2009, Plaintiffs filed an amended a collective On December 18, complaint.1 (Paper 15). Plaintiffs’ amended complaint alleges claims for unpaid wages under the FLSA, unpaid wages under the MWHL, breach of agreement, and fraudulent misrepresentation.2 1 Defendants did not move to strike Plaintiffs’ amended complaint but have moved to dismiss the amended complaint because Plaintiffs did not seek leave to amend. Fed.R.Civ.P. 15(a)(1), which allows parties to amend once as a matter of course, was revised on December 1, 2009. Defendants filed their initial motion to dismiss Plaintiffs’ complaint on November 18, 2009. The revised Rule allows a plaintiff to amend within twenty-one days of the filing of a motion under Rule 12(b). Because Defendants’ 12(b) motion was filed during the transition time and Defendants address Plaintiffs’ amended complaint in their second 12(b) motion, Plaintiffs’ amended complaint will be permitted. 2 Plaintiffs seek compensatory damages for unpaid and overtime wages under the FLSA and unpaid wages under the Maryland Wage Payment Law, liquidated damages equal to their unpaid wages under the FLSA, treble damages under the Maryland Wage Payment and collection law, prejudgment interest, a declaration that this action is maintainable as a collective 4 A. Standard of Review The purpose of a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) is to test the sufficiency of the plaintiff’s complaint. See Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th 1999). Cir. Except in certain specified cases, a plaintiff’s complaint need only satisfy the “simplified pleading standard” of Rule 8(a), Swierkiewicz v. Sorema N.A., 534 U.S. 506, 513 (2002), which requires a “short and plain statement of the claim showing Fed.R.Civ.P. requires a that the 8(a)(2). is Nevertheless, ‘showing,’ rather entitlement to relief.” 544, 555 n.3 (2007). pleader than a entitled “Rule to relief.” 8(a)(2) blanket still assertion, of Bell Atl. Corp. v. Twombly, 550 U.S. That showing must consist of more than “a formulaic recitation of the elements of a cause of action” or “naked assertion[s] Ashcroft v. Iqbal, devoid of 129 S.Ct. further 1937, factual 1949 enhancement.” (2009)(internal citations omitted). In its determination, the court must consider all well-pled allegations in a complaint as true, Albright v. Oliver, 510 U.S. action under 29 U.S.C. § 216(b), a direction for Defendants to provide Plaintiffs with a list of all persons employed by Defendants during the class period, an award of attorney’s fees and costs, and all other relief as the court deems necessary. (Paper 15, at 11). 5 266, 268 (1994), and must construe all factual allegations in the light most favorable to the plaintiff. See Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir. 1999)(citing Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993)). The court need not, however, accept unsupported legal allegations, Revene v. Charles County Comm’rs, 882 F.2d 870, 873 (4th Cir. 1989), legal conclusions couched as factual allegations, Iqbal, 129 S.Ct. at 1950, or conclusory factual allegations devoid of any reference to actual events, United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979). See also (4th Cir. 2009). Francis v. Giacomelli, 588 F.3d 186, 193 “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged, but it has not ‘show[n] . . . that the pleader is entitled to relief.’” (quoting Fed.R.Civ.P. 8(a)(2)). Iqbal, 129 S.Ct. at 1950 Thus, “[d]etermining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” B. Analysis 1. Unpaid Wages Id. The FLSA is a federal statute of general application that establishes minimum wages, overtime pay, child labor, and equal pay requirements. 29 C.F.R. § 778.0. 6 “All employees whose employment has the relationship to interstate or foreign commerce which the Act specifies are subject to the prescribed labor standards unless specifically exempted from them.” Id. Similarly, all employers having such employees are required to comply with the Act’s provisions unless they are relieved by an exemption under the Act. as a remedial act narrowly construed. and, Id. The FLSA was enacted by Congress therefore, its exemptions must be See Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392, reh’g denied, 362 U.S. 945 (1960). To state a prima facie case under the FLSA, plaintiff must show “as a matter of just and reasonable inference that the wages paid to him did not satisfy the requirements of the FLSA.” Caro-Galvan v. Curtis Richardson, Inc., 993 F.2d 1500, 1513 (11th Cir. 1993)(internal citation omitted); see also Hunter v. Sprint Corp., 453 F.Supp.2d 44, 52 (D.D.C. 2006)(“plaintiff-employee can make out a prima facie case of an FLSA violation by alleging that he performed work for which he was not properly compensated and then ‘produc[ing] sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference.’”). a. Overtime Wages Defendants assert that Plaintiffs have not stated a claim for unpaid or overtime wages. Defendants argue that Plaintiffs 7 are not entitled to overtime exemption to the FLSA and MWHL. Plaintiffs entitled to respond overtime that wages wages under the motor carrier (Paper 18, Attach. 1, at 8). at least because he Plaintiff is not Avery exempt is from coverage under the FLSA pursuant to the motor carrier exemption. (Paper 25, at 7-10). Plaintiffs assert that Plaintiff Avery often drove vehicles with a gross weight of less than 10,001 pounds, which, they argue, are not defined as commercial motor vehicles under 49 U.S.C. § 31132(1). 29 U.S.C. § 207(a)(1) provides: (a) Employees engaged in interstate commerce; additional applicability to employees pursuant to subsequent amendatory provisions (1) Except as otherwise provided in this section, no employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one half times the regular rate at which he is employed. The overtime pay provision in § 207 does not apply to employees “with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service pursuant to the provisions of section 31502 of Title 49 [the 8 Motor Carrier Act of 1935].” 29 U.S.C. § 213(b)(1). 49 U.S.C. § 31502(b)(2) provides: (b) Motor carrier and private motor carrier requirements. The Secretary of Transportation may prescribe requirements for: (1) qualifications and maximum hours of service of employees of, and safety of operation and equipment of, a motor carrier; and (2) qualifications and maximum hours of service of employees of, and standards of equipment of, a motor private carrier, when needed to promote safety of operation. “Motor carrier” for purposes of § 31502(b) has the same meaning given that term in § 13102 of the same title. During the relevant time period, the definition of “motor carrier” in 49 U.S.C. § 13102 changed several times. Prior to August 10, 2005, § 13102 defined a “motor carrier” as a “person providing motor vehicle transportation for compensation.” Effective August 10, 2005, the definition was modified with the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for vehicle” Users from (SAFETEA-LU) the by definition striking and the inserting phrase the “commercial motor vehicle (as defined in section 31132).” L. No. 109-59, § 4142(a) U.S.C. § 13102(14) (2005). (2005) (codified as amended “motor phrase Pub. at 49 Section 31132 defined a commercial motor vehicle as a: 9 Self propelled or towed vehicle used on the highways in interstate commerce to transport passengers or property, if the vehicle – (A) Has a gross vehicle weight rating or gross vehicle weight of at least 10,001 pounds, whichever is greater; (B) is designed or used to transport more than 8 passengers (including the driver) for compensation; (C) is designed or used to transport more than 15 passengers, including the driver, and is not used to transport passengers for compensation; or (D) is used in transporting material found by the Secretary of Transportation to be hazardous under section 5103 of this title and transported in a quantity requiring placarding under regulations prescribed by the Secretary under section 5103. 49 U.S.C. § 31132(1). This definition remained in effect until June 6, 2008, when Congress restored the pre-SAFETEA-LU Act definition of motor carrier in the SAFETEA-LU Technical Corrections Act, so that the definition of motor carrier was no longer limited to drivers of commercial vehicles. See No. 110-244 § 305 (2008). 49 U.S.C. § 13102(14); Pub. L. The Technical Corrections Act also added a note to section 7 of the Fair Labor Standards Act, however, which effectively limited the applicability of the motor carrier exemption to the same types of employees covered under SAFETEA-LU’s definition. Specifically the Corrections Act, added the following note to section 7: 10 Technical (a) APPLICABILITY FOLLOWING THIS ACT. – Beginning on the date of enactment of this act [June 6, 2008], § 7 of the Fair Labor Standards Act of 1938 (29 U.S.C. § 207) shall apply to a covered employee notwithstanding § 13(b)(1) of that Act [the Motor Carrier Exemption] (b) COVERED EMPLOYEES DEFINED. – In this section, the term ‘covered employee’ means an individual – (1) Who is employed by a motor carrier or private carrier (as such terms are defined by § 13102 of Title 49 of United States Code, as amended by § 305); (2) Whose work, in whole or in part, is defined(A) As that of a driver, driver’s helper, loader, or mechanic; and (B) As affecting the operation of motor vehicles weighing 10,000 pounds or less in transportation on public highways in interstate or foreign commerce, except vehicles – (i) Designed or used to transport more than eight passengers (including the driver) for compensation; (ii) Designed or used to transport more than 15 passengers (including the driver) and not used to transport passengers for compensation; or (iii) Used in transporting material found by the 11 (3) Secretary of Transportation to be hazardous under § 5103 of Title 49, United States Code, and transported in a quantity requiring placarding under regulations prescribed by the Secretary under § 5103 of Title 49, United States; and Who performs duties on motor vehicles weighing 10,000 pounds or less. Pub. L. No. 110-244 Title III, § 305 (2008). The parties proffer differing interpretations of the definition of “commercial motor vehicle” in the motor carrier exemption under SAFETEA-LU and the motor vehicle description in the June 2008 note to section 7 of the FLSA. Defendants contend that even when Plaintiff Avery was driving vehicles weighing less than 10,001 pounds the exemption still applied to him because he was driving a “vehicle designed or used to transport eight or more passengers for compensation.” (Paper 28, at 7-9). Plaintiff Avery counters that the vehicle weight test is not separate and transport distinct eight or from more the requirement passengers for that the vehicle compensation and, therefore, to be exempt from the FLSA’s overtime requirement an employee must drive a vehicle that both weighs more than 10,000 pounds and is designed or passengers for compensation. used to transport at least (Paper 25, Attach. 1, at 8-9). 12 eight Defendants have the better argument. Both the definition of commercial motor vehicle in § 31132(1) under SAFETEA-LU and the note to section 7 of the FLSA in the Technical Corrections Act list the vehicle attributes necessary for an employee to qualify for the alternatives. motor carrier exemption in a list of Although the definition does not include an “or” between each item in the list, there is an “or” to separate the final item from the penultimate one. This structure traditionally used to indicate a list of alternatives. is See George Hyman Constr. Co. v. Occupational Safety & Health Review Comm’n, 582 F.2d 834, 840 (4th Cir. 1978)(“Normally, use of a disjunctive indicates alternatives and requires they be treated separately unless repugnant to such the a construction Act.”). Here, renders the the only provision reasonable interpretation is that the series of items was meant to be a list of alternatives. as an additional Plaintiffs’ approach of reading each item conjunctive requirement every employee from the exemption’s scope. second and third items in the list would remove almost For example, if the are read as mutual requirements, i.e. if the motor carrier exemption only applied to employees driving vehicles used or designed to transport eight or more passengers for compensation and used to transport fifteen or more passengers not for compensation, it would be nearly impossible to find an employee whose job responsibilities 13 fell within these parameters. There is no evidence that Congress intended to restrict the scope of the exemption so severely. The more reasonable interpretation, and the one that will be applied here, is that the list contains alternatives such that the motor carrier exemption applies to employees that drive vehicles weighing at least 10,001 pounds and to employees that drive vehicles that could transport at least passengers for compensation, regardless of weight. Plaintiff Avery drove vehicles carrying at eight Thus, when least eight passengers, regardless of their gross weight, he was exempt from overtime pay. The remaining question is whether he remained exempt if and when he drove a vehicle that seated fewer than eight passengers. As an initial matter, the complaint does not allege specifically that Plaintiff Avery drove any vehicles that seated fewer than eight people. Plaintiffs drove The amended complaint states only that motor coaches, limo buses, minibuses, limousines, sedans, sport utility vehicles, and vans (Paper 15 at ¶ 6), and includes as an exhibit a copy of a printed ad for Chariots for Hire listing twenty-eight vehicles available for rental, only one of which seats fewer than eight people. Paper 15, Exhibit B). spent at least some (See But even assuming that Plaintiff Avery portion of 14 his working time operating vehicles that seat fewer than eight people, he is still subject to the motor carrier exemption. Neither the language of the FLSA nor the motor carrier exemption indicates how to categorize individuals who operate both commercial vehicles. guidance motor vehicles and non-commercial motor The Department of Labor regulations do not provide on the use of a mixed fleet, but do address the somewhat analogous issue of mixed duties involving safety of operation. In that context the regulations suggest the general rule that “if the bona fide duties of the job performed by the employee are in fact such that he is called upon in the ordinary course of his work to perform, either regularly or from time to time, safety-affecting activities ... he comes within the exemption in all workweeks when he is employed at such job.” 29 C.F.R. § 782.2(b)(3) (2010). “Where this is the case, the rule applies regardless of the proportion of the employee’s time or of his activities which is actually devoted to such safetyaffecting work in a particular workweek, and the exemption will be applicable even in a workweek when the employee happens to perform no work directly affecting safety of operation.” Id. “On the other hand, where the continuing duties are so trivial, casual, and insignificant as to be de minimus, the exemption will not apply to him in any workweek so long as there is no change in his duties.” Id. 15 Courts that have considered the issue of a mixed fleet are somewhat divided on the proper approach, but the prevailing view is that the motor vehicle exemption should apply so long as the time an employee spends operating commercial motor vehicles is more than de minimus. No. 08-0717-Civ, 2009)(“[W]hen favors 2009 mixed coverage See, e.g., Hernandez v. Brink’s, Inc., WL 113406 activities of the *6 occur, employee (S.D.Fla. the Jan. 15, Motor Carrier Act the course of during employment.”); Dalton v. Sabo, Inc., Civ. No. 09-358-AA, 2010 WL 1325613, *4 (D.Or. 2010)(holding that motor carrier exemption applied to plaintiffs that performed maintenance on a fleet that consisted of vehicles weighing both more and less than 10,000 pounds); but see Tews v. Renzenberger, 592 F.Supp.2d 1331 (D.Kan. 2009)(holding that the mere presence of a few commercial motor vehicles in a company’s fleet does not render all of its driver’s exempt from overtime pay).3 3 As the Court of Appeals for Courts have disagreed as to whether to place the emphasis on the type of work done by the employer as a whole or on the work done by individual employees. Compare Tidd v. Adecco USA Inc., 2008 WL 4286512 (D.Mass. Sept. 17, 2008)(noting that the MCA exemption hinges on “what the employer does” rather than on an “individual employee’s daily work”) with Tews v. Renzenberger, Inc., 592 F.Supp.2d 1331, 1348 (D.Kan. 2009)(“applicability of the motor carrier exemption turns on the activities of each individual plaintiff (as opposed to the makeup of defendant’s vehicle fleet)”). This distinction is more relevant in cases where the employees contesting the 16 the Seventh Circuit aptly explained, “[d]ividing jurisdiction over the same drivers, with the result that their employer would be regulated under the Motor Carrier Act when they were driving the big trucks and under the Fair Labor Standards Act when they were driving trucks that might weigh only a pound less, would require burdensome record-keeping, create confusion, and give rise to mistakes and disputes.” Collins v. Heritage Wine Cellars, Ltd., 589 F.3d 895, 901 (7th Cir. 2009). In vehicle vehicles some situations wholly is where predominates of very and limited use the of non commercial motor of commercial motor use duration or extent, it may be appropriate to differentiate between employees or to apply the motor carrier exemption only for those periods of time when employees were operating commercial vehicles. Halsted Commc’ns Ltd., 620 F.Supp.2d 193, See Brooks v. 199-201 (D.Mass. 2009)(finding motor carrier exemption did not apply where there was no evidence that any of the employees seeking overtime had ever worked on or driven the company’s limited number of exemption’s applicability were not directly involved in operation of commercial motor vehicles. In Tews for example, only four percent of the employer’s fleet consisted of commercial motor vehicles and there was significant doubt that most of the employees had ever operated a commercial vehicle. Id. Here, both Chariots for Hire as a whole and Plaintiff Avery were engaged in activities affecting the safe operation of commercial motor vehicles. 17 commercial motor vehicles); Tews v. Renzenberger, Inc., 592 F.Supp.2d 1331, 1346 (D.Kan. 2009)(rejecting argument that “the mere presence of commercial motor vehicles in [a] fleet renders all employee-drivers exempt under the MCA exemption”). This case does not present a situation where the use of qualifying commercial motor vehicles was so limited, however, and thus it is not necessary to decide where the line must be drawn. Accordingly, Plaintiffs have not stated a claim for overtime compensation under the FLSA. b. Minimum Wages Defendants contend that Plaintiffs’ claims for unpaid wages fail because they do not allege that Defendants failed to pay them the minimum wage for all the hours they worked. Plaintiffs do not respond to Defendants’ arguments regarding Plaintiffs’ claim for unpaid wages. 29 U.S.C. § 206 provides, in relevant part: Every employer shall pay to employees who in any workweek commerce or in the production commerce, or is employed in engaged in commerce or in the goods for commerce, wages at rates: (1) except as otherwise section, not less than each of his is engaged in of goods for an enterprise production of the following provided in this (A) $5.85 an hour, beginning on the 60th day after May 25, 2007; (B) $6.55 an hour, beginning 12 months after that 60th day; and 18 (C) $7.25 an hour, beginning 24 months after that 60th day[.] The FLSA does not guarantee that employees are paid for every hour of work and does not allow for employees to recover more than the statutory minimum wage. See Blankenship v. Thurston Motor Lines, 415 F.2d 1193 (4th Cir. 1969)(finding “there was no statutory violation [under the FLSA] so long as each employee received during each week compensation equal to or exceeding the product of the total number of hours worked and the statutory minimum hourly rate.”)(citation and internal quotations omitted). Plaintiffs allege that they made $16 an hour on weekdays and $20 on Saturdays before 2009, and were paid for eight hours of work or a day rate from January 2009 onward. ¶¶ 30, 38). (Paper 1 at These amounts are clearly in excess of $7.25 an hour, the minimum wage currently required under the FLSA, and were in excess of whatever the minimum wage was from 2007 to 2009. Plaintiffs have alleged that they were unpaid for certain hours that they worked, but have not alleged that they were not paid the statutory minimum wage for each of the total number of hours they worked. Therefore, Plaintiffs have not stated a claim for unpaid wages under the FLSA. 19 c. Wages for Pre-Trip Cleaning Inspections Defendants contend that Plaintiffs’ claims for damages as a result of the time they spent inspecting and cleaning the vehicles they drove must be dismissed because, even counting that time, Plaintiffs were compensated minimum required by the FLSA. Plaintiffs’ claim should be above the statutory Defendants also contend that dismissed because the pre-trip cleanings and inspections are “preliminary activities” that are non-compensable under Section 4 of the Portal-to-Portal Act, 29 C.F.R. § 785.50(a)(2). (Paper 18, Attach. 1, at 17). Plaintiffs respond that drivers who drive vehicles that are not covered by the Motor Carrier Act exemption, like Plaintiff Avery, are entitled to pay for their pre-trip cleanings and inspections. (Paper 25, at 11-22). As discussed above, Plaintiff Avery and other drivers who spend a portion of their time driving vehicles weighing less than 10,001 pounds are still covered by the Motor Carrier Act exemption, and Plaintiffs have not alleged that they were not paid the statutory minimum wage for each of the total number of hours they worked. Therefore, Plaintiffs have not stated a claim for unpaid wages for the time they spent inspecting and cleaning the vehicles, and it is not necessary to consider the applicability of the Portal-to-Portal Act. 20 d. Gratuities Defendants argue that Plaintiffs have not stated a violation because they have not alleged that Defendants promised to pay them any portion of the service charge or gratuities collected from customers. Plaintiffs do not respond to Defendants’ argument. Under the FLSA, the “gratuity” alleged by Plaintiffs in the amended complaint does not constitute a tip or wages to which employees are entitled. The United States Department of Labor regulations, § 29 C.F.R. 531.55 (“Examples of amounts received as tips”), provide: A compulsory charge for service, such as 10 percent of the amount of the bill, imposed on a customer by an employer’s establishment, is not a tip and, even if distributed by the employer to his employees, cannot be counted as a tip received in applying the provisions of section 3(m) and 3(t). . . . Likewise, where the employment agreement is such that amounts presented by customers as tips belong to the employer and must be credited or turned over to him, the employee is in effect collecting for his employer additional income from the operations of the latter’s establishment. Even though such amounts are not collected by imposition of any compulsory charge on the customer, plainly the employee is not receiving tips within the meaning of section 3(m) and 3(t). The amounts received from customers are the employer’s property, not his, and do not constitute tip income to the employee. 21 not Under the regulations, Plaintiffs have not stated a claim for unpaid wages in the form of gratuities or tips. e. Deductions from Wages Defendants assert that Plaintiffs have not stated a claim for unpaid wages due to deductions made from their paychecks for damages to the vehicles. Defendants point out that Plaintiffs allege that Defendants had a policy of deducting up to $100 per paycheck for Defendants damages actually but that deducted they did wages not from allege their whether paychecks. Defendants also note that it is not impermissible under the FLSA to deduct wages unless it reduces the total wages below the statutory minimum wage per hour. Plaintiffs counter that the Maryland Wage Payment and Collection Law prohibits an employer from making any deductions from the wages of an employee absent certain specified circumstances. Plaintiffs have not stated a claim under the FLSA or the MWHL for paychecks. Defendants unpaid wages Plaintiffs actually due to have deducted deductions not wages damage to Defendants’ vehicles. alleged from made from their any facts that paychecks for their Furthermore, a deduction of wages is only impermissible if the deduction reduces total wages per hour below the statutory minimum wage. See Howard County, 730 F.Supp. 667, 673 (D.Md. 1990). Mullins v. Plaintiffs did not allege that any deductions caused their wages to fall 22 below the statutory minimum. Plaintiffs argue in their brief that the such deductions violate Collection Law (“MWPCL”). Maryland Wage Payment and But Plaintiffs’ complaint does not reference the MWPCL in Plaintiffs’ claims; it only references it in Plaintiffs’ prayer for relief. (See Paper 15, at 11). Therefore, Plaintiff has not stated a claim under the FLSA, MWHL, or MWPCL for deductions from their paychecks. 2. Breach of Agreement Defendants argue that Plaintiffs have not stated a claim for breach assuming of that contract, it agreement the under “Changes provides only Maryland for 2009” for law document payment when because, even constitutes a driver a is “required to dump/clean the bus” and not for any other cleaning activity in any other type of vehicle. Defendants note that Plaintiffs only alleged that they cleaned “vehicles” and did not provide any facts to support that they cleaned “buses.” (Paper 18, Attach. 1, at 21)(citing Paper 15 ¶¶ 42, 71). A claim heightened for breach pleading of agreement requirement. To is not satisfy subject the to a pleading requirement Plaintiffs need only include sufficient detail to show that the requisite elements for breach of agreement could be met if the pleaded facts are taken as true. For breach of agreement, the requisite elements that must be shown are “that the defendant owed the plaintiff a contractual obligation and 23 that the defendant breached that obligation.” Taylor v. NationsBank, N.A., 365 Md. 166, 175 (2001). At this stage of the case, Plaintiffs have sufficient detail to survive a motion to dismiss. included Plaintiffs have alleged that a contract existed between the parties whereby Defendants would compensate Plaintiffs for pre-trip cleanings and inspections. Defendant West As factual promised to support, begin Plaintiffs paying drivers state that for these cleanings and inspections, (Paper 15 ¶ 46), and also that the “‘Changes for 2009’ document was an offer to pay Plaintiffs for the time they spent dumping/cleaning the vehicles in addition to the day rate they were promised.” (Id. at ¶ 67). Plaintiffs further allege that they accepted this offer by continuing to clean the vehicles, and Defendants’ subsequent failure to pay them constituted a breach of the agreement. Plaintiffs’ claim for breach of agreement will not be dismissed because they used the term vehicle rather than bus in the complaint. 3. Fraudulent Misrepresentation Defendants argue that Plaintiffs have not stated a claim for fraudulent statements to misrepresentation customers or related Plaintiffs to Defendants’ about gratuities. Defendants assert that the facts alleged by Plaintiffs do not meet the heightened pleading standards under Fed.R.Civ.P. 9(b). (Paper 18, Attach. 1, at 22). 24 Defendants maintain that Plaintiffs’ complaint does not specify who made the allegedly fraudulent statements, when the statements were made, or how Plaintiffs came to rely on them. that the only potentially (Id. at 23). adequate factual Defendants argue allegation is an advertisement to customers that stated, “Additional 20% service fee (tax, fuel and partial gratuity).” Attach. 4, at 2). provide for parties. a (Id.)(citing Paper 15, Defendants note that Maryland law does not cause of action for statements made to third (Paper 18, Attach. 1, at 24). Plaintiffs respond that they sufficiently pled a claim for fraudulent misrepresentation. that: Plaintiffs state that they pled (1) Plaintiffs were told by Defendants that they would be given tips, (2) Defendants’ website stated that a portion of the service fee paid by customers would be given to the drivers as a gratuity, false (3) and was Defendants made knew with that reckless their representation indifference to the was truth because Plaintiffs were not given tips, (4) Defendants kept the tips themselves, representations (5) by not Plaintiffs requesting relied tips from on Defendants’ customers and because customers regularly told Plaintiffs that they had paid a gratuity to significant the Defendants, income as a and result (Paper 25, at 15-16). 25 (6) of Plaintiffs were Defendants’ denied actions. To state a claim for fraudulent misrepresentation under Maryland law, a plaintiff must allege: (1) that the defendant made a false representation to the plaintiff, (2) that its falsity was either known to the defendant or that the representation was made with reckless indifference as to its truth, (3) that the misrepresentation was made for the purpose of defrauding the plaintiff, (4) that the plaintiff relied on the misrepresentation and had the right to rely on it, and (5) that the plaintiff suffered compensable injury resulting from the misrepresentation. Alleco Inc. v. Harry & Jeanette Weinberg Found., Inc., 340 Md. 176, 195 (1995). Because Plaintiffs allege that Defendants engaged in fraud, their claim is subject to the heightened pleading standard under Fed.R.Civ.P. 9(b). states that “in Harrison, 176 F.3d at 783-84. all averments of fraud or Rule 9(b) mistake, the circumstances constituting fraud or mistake shall be stated with particularity. of mind of a Malice, intent, knowledge, and other condition person may be averred generally.” The word circumstances “is interpreted to include the ‘time, place and contents of the false representation, as well as the identity of the person making the misrepresentation and what [was] obtained thereby.’” Inc., 197 Superior F.Supp.2d Bank, 298, F.S.B. 313-14 v. Tandem (D.Md. Nat’l Mortgage, 2000)(quoting Assocs. v. Greenfeld, 564 F.Supp. 273, 280 (D.Md. 1983)). 26 Windsor The purposes of Rule 9(b) are to provide the defendant with sufficient notice of the basis for the plaintiff’s claim, protect the defendant against frivolous suits, eliminate fraud actions where all of the facts are learned only after discovery, and safeguard the defendant’s reputation. 784. Harrison, 176 F.3d at In keeping with these objectives, a “court should hesitate to dismiss a complaint under Rule 9(b) if the court is satisfied (1) that the defendant has been made aware of the particular circumstances for which she will have to prepare a defense at trial and (2) that [the] plaintiff has substantial prediscovery evidence of those facts.” Plaintiffs have Id. not pled with particularity what representation Defendants made to them and when Defendants made the representation. that “Defendants Plaintiffs’ amended complaint only states intentionally collected and kept the Plaintiffs’ tips for its own benefit after telling Plaintiffs that the tips would be paid to them.” (Paper 15 ¶ 74). Plaintiffs do not allege the time, place, and contents of the false representation, or the identity of the person making the misrepresentation and what was obtained thereby. Plaintiffs may misrepresentation parties. Tobacco not for state statements a claim made by Additionally, for Defendants fraudulent to third See Estate of White ex rel. White v. R.J. Reynolds Co., 109 F.Supp.2d 424, 27 430 (D.Md. 2000)(“[U]nder Maryland law, there is no fraudulent misrepresentation cause of action for statements made to third parties.”)(citing Parlette v. Parlette, 88 Md.App. 628, 635 (1991)). Therefore, Plaintiffs have not stated a claim for fraudulent misrepresentation. II. Conclusion For the foregoing reasons, Defendants’ motion to dismiss will be granted in part and denied in part. A separate Order will follow. /s/ DEBORAH K. CHASANOW United States District Judge 28
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