State of Maine v. Klein

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( STATE OF MAINE CUMBERLAND, ss. SUPERIOR COURT CIVIL ACTION DOCKET NO: CV-IO-327 ,[/ v . { ) '-"'~ j '. STATE OF MAINE and MAINE DEPARTMENT OF LABOR, BUREAU OF LABOR STANDARDS ORDER Plaintiffs, v. STEPHEN KLEIN and MERMAID TRANSPORTATION COMPANY, INC. Defendants Defendant Stephen Klein moves to dismiss all claims against him in his personal capacity. The motion is denied. BACKGROUND As set forth in the State's complaint, Mr. Klein is the president, treasurer, and a director of defendant Mermaid Transportation Company, Inc. (CampI. ~I 3.) }"1ermaid employs drivers to transport its customers in passenger vans throughout Maine and to airports located in Manchester, New Hampshire, and Boston, Massachusetts. (CompI. <Ifeu 4-5.) In 2005, the State began receiving complaints from the defendants' employees about paychecks being returned for insufficient funds. (Compl. <II 22.) The employees also alleged that Mr. Klein or Mermaid would ask them not to cash their paychecks until a later date. (CampI. 91 22.) The State contacted Mr. Klein, but the problems persisted. (CompI. <[ 23.) In 2009, the State received an anonymous complaint alleging that the defendants were withholding overtime pay from employees who were entitled 1 ) ( to receive it. (Compi. lj[ 24.) The State responded by auditing Mermaid's payroll records for the periods of 2007, 2008, and 2009. (Com pI. lj[ 25.) These audits revealed that twenty-seven employees were due overtime in the amount of $45,392.45. (Com pI. <[ 25.) The State demanded that the defendants pay these back wages, but the defendants have not done so. (Compi. lj[ 26.) The Sta te filed a complaint against both Mermaid and Mr. Klein on July 7, 2010, alleging violations of Maine's wage and hour laws contained in title 26 of the Maine Revised Statutes. Mr. Klein has moved to dismiss the claims against him on the ground that the complaint fails to allege sufficient facts to hold him individually liable as an "employer" under the statues. DISCUSSION On a motion to dismiss, the court examines "the complaint in the light most favorable to the plaintiff to determine whether it sets forth elements of a cause of action or alleges facts that would entitle the plaintiff to relief pursuant to some legal theory." Heber v. LlIceme-ill-Maille Village Corp., 2000 ME 137, lj[ 7, 755 A.2d 1064, 1066 (quoting McAfee v. Calf, 637 A.2d 463, 465 (Me. 1994)). The term "employer" is not defined in Maine's wage and hour laws. Dir. of Burean of Labor Standards v. Connier, 527 A.2d 1297, 1299 (Me. 1987). Absent a definition, Mr. Klein contends that Mermaid's separate corporate existence precludes him from being an "employer" subject to the wage lavvs in this action. This argument is not persuasive for two reasons. First, the State's complaint docs not illlege that Mermaid employed all of the underpaid employees. Second, the Law Court hils held that courts milY look to economic realities underlying a situation when determining who is or is not an "employer" under the statutes. Connier, 527 A.2d at 1299-1300. lnsteild, courts may consider 2 all relevant circumstances and balance a number of factors to reach beyond "formalistic labels or common law notions of employment relationships." fd. at 1300. Placing substance over form "is consistent with the overall remedial nature of the minimum wage and overtime laws." fd. The State's complaint puts Mr. Klein on notice thJt he might held personally accountable as an employer for failing to issue paychecks in a timely manner and failing to pay employees overtime. The corporate form does not strictly limit who may be an "employer" in a given situation, and dismissing the clJims against Mr. Klein at this early phase of litigJtion would be premature. The entry is: DefendJnt Stephen Klein's motion to dis 3 E VIEW STATE OF MAINE ET AL VS STEPHEN KLEIN ET AL UTN:AOCSsr -2010-0068860 01 0000003232 PERKINS, DAVID 30 MILK STREET PO BOX 449 PORTLAND ME 04112-0449 MERMAID TRANSPORTATION COMPANY INC DEF F DEF F STEPHEN KLEIN CASE #:PORSC-CV-2010-00327 RTND RTND 07/28/2010 07/28/2010 WYMAN, ELIZABETH 02 0000007772 111 SEWALL STREET 6 STATE HOUSE STATION AUGUSTA ME 04333-0006 RTND STATE OF MAINE PL F RTND PL BUREAU OF LABOR STANDARDS F 07/07/2010 07/07/2010

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