United States District Court, S.D. Texas, Corpus Christi Division
MEMORANDUM AND RECOMMENDATION ON DEFENDANTS'
MOTIONS TO DISMISS
B. LIBBY UNITED STATES MAGISTRATE JUDGE.
Jose Zuniga, a former restaurant employee, filed this Fair
Labor Standards Act (“FLSA”) collective action on
January 16, 2019, for unpaid wages and overtime pay against
five Defendants, Gracia Mexican Kitchen, LLC
(“Gracia”), Matthew Hoeg (“Hoeg”),
Brian Smith (“Smith”), David Martinez
(“Martinez”) and Adrian Hembree
“Defendants”), alleging Defendants are their
joint employers. (D.E. 1). Plaintiff has also asserted common
law Quantum Meruit claims. (D.E. 1, Pages 12-13). On February
14, 2019, Defendants Hembree, Hoeg and Smith filed a Motion
to Dismiss. (D.E. 11). Subsequently, Plaintiff filed a
Response to which Defendants' replied. (D.E. 13 and D.E.
15). On April 16, 2019, Defendant Martinez also filed a
Motion to Dismiss, to which Plaintiff filed a Response. (D.E.
27 and DE. 33).
matter has been referred to the undersigned Magistrate Judge
for case management and making recommendations on dispositive
motions pursuant to 28 U.S.C. § 636. (D.E. 4). For the
reasons stated below, the undersigned recommends Defendants
Hoeg, Smith and Hembree's Motion to Dismiss be
DENIED and Defendant Martinez's Motion
to Dismiss be GRANTED. (D.E. 11 and D.E.
27). However, Plaintiff is GRANTED leave to
amend on or before July 19, 2019.
12(b)(6) MOTION STANDARD OF REVIEW
Rule of Civil Procedure 12(b)(6) allows a party to move to
dismiss an action for failure to state a claim upon which
relief can be granted. Fed.R.Civ.P. 12(b)(6). In deciding a
Rule 12(b)(6) motion to dismiss for failure to state a claim,
“[t]he court accepts all well-pleaded facts as true,
viewing them in the light most favorable to the
plaintiff.” In re Katrina Canal Breaches
Litig., 495 F.3d 191, 205 (5th Cir. 2007) (citation
omitted). To survive the motion, a nonmovant must plead
“enough facts to state a claim to relief that is
plausible on its face” and must plead those facts with
enough specificity “to raise a right to relief above
the speculative level, on the assumption that all the
allegations in the complaint are true (even if doubtful in
fact).” Id. (citing Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007)).
court's task is to determine whether the plaintiff has
stated a legally cognizable claim that is plausible, not to
evaluate the plaintiff's likelihood of success.”
Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC,
594 F.3d 383, 387 (5th Cir. 2010) (citing Ashcroft v.
Iqbal, 556 U.S. 662 (2009)). “A claim has facial
plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”
Iqbal, 556 U.S. at 678 (citation omitted).
“The plausibility standard is not akin to a
‘probability requirement,' but it asks for more
than a sheer possibility that a defendant has acted
unlawfully.” Id. (citation omitted).
recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice. Id.
(citation omitted). “While legal conclusions can
provide the framework of a complaint, they must be supported
by factual allegations” to be entitled to the
assumption of truth. Id. at 679 (“When there
are well-pleaded factual allegations, a court should assume
their veracity and then determine whether they plausibly give
rise to an entitlement to relief.”). Under Rule
8(a)(2), plaintiffs are not required to include
“detailed factual allegations, ” but at the same
time “more than an unadorned,
the-defendant-unlawfully-harmed-me accusation” is
needed. Iqbal, 556 U.S. at 678. “To survive a
Rule 12(b)(6) motion to dismiss, the complaint ‘does
not need detailed factual allegations,' but it must
provide the plaintiff's grounds for entitlement to relief
- including factual allegations that, when assumed to be
true, ‘raise a right to relief above the speculative
level.'” N. Cypress Med. Ctr. Operating Co.,
Ltd. v. Cigna Healthcare, 781 F.3d 182, 191 (5th Cir.
2015) (citing Twombly, 550 U.S. at 555).
“EMPLOYER” UNDER THE FLSA
in both Motions to Dismiss, argue Plaintiff has failed to
adequately plead that each were “employed” by
them. “Employer” is defined by the FLSA to mean
“any person acting directly or indirectly in the
interest of an employer in relation to an employee.” 29
U.S.C. § 203(d); Lee v. Coahoma Cnty., 937 F.2d
220, 226 (5th Cir. 1991). Interpreted expansively, the
“term employer includes individuals with managerial
responsibilities and ‘substantial control over the
terms and conditions of the [employee's]
work.'” Id. at 226 (citation omitted).
While “merely being an officer or shareholder”
will not subject an individual to FLSA liability,
“employer status may be appropriate where operational
control coincides with one's position as a shareholder,
officer, or owner.” Gray v. Powers, 673 F.3d
352, 355-56 (5th Cir. 2012).
Fifth Circuit uses the “economic reality” test to
evaluate whether a person possesses such operational control
with respect to the employment relationship. Id. at
355-57. The Court should consider whether the alleged
employer: (1) possessed the power to hire and fire the
employees; (2) supervised and controlled employee work
schedules or conditions of employment; (3) determined the
rate and method of payment; and (4) maintained employment
records. Id. at 355 (citation omitted). Where there
may be more than one employer, courts “must apply the
economic realties test to each individual or entity alleged
to be an employer and each must satisfy the four part
test.” Id. at 355 (citation omitted).
“While each element need not be present in every case,
” the person must have control over at least some
aspects of the employment relationship as “finding
employer status when none of the factors is present would
make the test meaningless.” Gray, 673 F.3d at
357 (“While the Fifth Circuit ‘has on several
occasions found employment status even though the
defendant-employer had no control over certain aspects of the
relationship,' it does not follow that someone who does
not control any aspect of the employment relationship is an
employer.”) (citation omitted).
argues applying the economic reality test to all Defendants,
the allegations in the Complaint are sufficient to support
their contention that all Defendants were joint employers. In
the Complaint, relevant to the issue of joint employers,
Plaintiff asserts Defendants Hoeg, Smith, Hembree and
Martinez are Managing Members of Defendant Gracia. (D.E. 1,
Page 5). Plaintiff also states:
are joint employers pursuant to 29 C.F.R. § 791.2.
Defendants directly or indirectly hired Plaintiffs and the
Putative Class Members, controlled their work schedules and
conditions of employment, and determined the rate ...