Foon v. Centene Management Company, LLC ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 MICHELE FOON, on behalf of herself No. 2:19-cv-01420-MCE-AC and others similarly situated, 12 Plaintiff, 13 MEMORANDUM AND ORDER v. 14 CENTENE MANAGEMENT 15 COMPANY, LLC, and DOES 1 to 10, inclusive, 16 Defendants. 17 18 19 Plaintiff Michele Foon (“Plaintiff”), individually and on behalf of all similarly situated 20 individuals, initiated this putative wage and hour class action against Defendant Centene 21 Management Company (“Defendant”) in San Joaquin County Superior Court. Defendant 22 thereafter removed the action to federal court pursuant to the Class Action Fairness Act 23 of 2005, 28 U.S.C. § 1332(d). Presently before the Court is Defendant’s Motion to 24 Dismiss six of Plaintiff’s causes of action. ECF No. 19. For the following reasons, 25 Defendant’s Motion is GRANTED with leave to amend.1 26 /// 27 1 Because oral argument would not be of material assistance, the Court ordered this matter 28 submitted on the briefs. E.D. Cal. Local Rule 230(g). 1 BACKGROUND2 2 3 Defendant employs Plaintiff in an hourly, non-exempt position in California. 4 Plaintiff alleges that Defendant failed to provide all required ten-minute rest breaks to 5 Plaintiff and former and other current non-exempt employees. Defendant also allegedly 6 required Plaintiff to work double-digit-hour days without providing the requisite breaks 7 and failed to provide Plaintiff and other similarly situated employees with meal breaks 8 when they worked shifts exceeding five hours per day. 9 Further, when Defendant paid Plaintiff and putative class members for missed 10 and/or non-compliant meal and rest breaks, it did so only at their base hourly pay rate 11 and not their “regular rate of compensation,” which would include commissions, non- 12 discretionary bonuses, and other items of compensation. Defendant also allegedly failed 13 to indemnify its California employees for all necessary expenditures or losses incurred 14 during the discharge of their duties, including those for computer and internet equipment 15 and services. For example, Defendant allegedly failed to compensate Plaintiff for her 16 cell phone and equipment services costs, office equipment and rent, and mileage, which 17 were incurred directly in discharge of her work duties. Finally, Defendant allegedly did 18 not include on the employees’ itemized written statements all applicable hourly rates in 19 effect during the pay period and the corresponding number of hours worked at each 20 hourly rate by the employee. 21 On April 19, 2019, Plaintiff provided written notice to the Labor and Workforce 22 Development Agency (“LWDA”) and Defendant regarding the alleged Labor Code 23 violations. Plaintiff never received written notice from the LWDA stating it intended to 24 investigate Plaintiff’s allegations. She thereafter initiated this action setting forth the 25 following causes of action: (1) Failure to Provide Rest Breaks; (2) Failure to Provide 26 Meal Breaks; (3) Failure to Reimburse; (4) Failure to Provide Accurate Itemized Wage 27 2 The following recitation of facts is taken, sometimes verbatim, from Plaintiff’s Class Action 28 Complaint. Ex. A, ECF No. 1-1 (“Compl.”). 1 Statements; (5) Violations of Business and Professions Code §§ 17200 et seq.; 2 (6) Violation of the Private Attorneys General Act (“PAGA”); and (7) Failure to Produce 3 Records Upon Request.3 4 5 STANDARD 6 7 On a motion to dismiss for failure to state a claim under Federal Rule of Civil 8 Procedure 12(b)(6), all allegations of material fact must be accepted as true and 9 construed in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. 10 Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Rule 8(a)(2) requires only “a short and plain 11 statement of the claim showing that the pleader is entitled to relief” in order to “give the 12 defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Bell 13 Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 14 47 (1957)). A complaint attacked by a Rule 12(b)(6) motion to dismiss does not require 15 detailed factual allegations. However, “a plaintiff’s obligation to provide the grounds of 16 his entitlement to relief requires more than labels and conclusions, and a formulaic 17 recitation of the elements of a cause of action will not do.” Id. (internal citations and 18 quotations omitted). A court is not required to accept as true a “legal conclusion 19 couched as a factual allegation.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009) 20 (quoting Twombly, 550 U.S. at 555). “Factual allegations must be enough to raise a right 21 to relief above the speculative level.” Twombly, 550 U.S. at 555 (citing 5 Charles Alan 22 Wright & Arthur R. Miller, Federal Practice and Procedure § 1216 (3d ed. 2004) (stating 23 that the pleading must contain something more than “a statement of facts that merely 24 creates a suspicion [of] a legally cognizable right of action.”)). 25 Furthermore, “Rule 8(a)(2) . . . requires a showing, rather than a blanket 26 assertion, of entitlement to relief.” Id. at 556 n.3 (internal citations and quotations 27 3 Defendant has not moved to dismiss Plaintiff’s Seventh Cause of Action, which shall be allowed 28 to proceed. 1 omitted). Thus, “[w]ithout some factual allegation in the complaint, it is hard to see how 2 a claimant could satisfy the requirements of providing not only ‘fair notice’ of the nature 3 of the claim, but also ‘grounds’ on which the claim rests.” Id. (citing 5 Charles Alan 4 Wright & Arthur R. Miller, supra, at § 1202). A pleading must contain “only enough facts 5 to state a claim to relief that is plausible on its face.” Id. at 570. If the “plaintiffs . . . have 6 not nudged their claims across the line from conceivable to plausible, their complaint 7 must be dismissed.” Id. However, “[a] well-pleaded complaint may proceed even if it 8 strikes a savvy judge that actual proof of those facts is improbable, and ‘that a recovery 9 is very remote and unlikely.’” Id. at 556 (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 10 (1974)). 11 A court granting a motion to dismiss a complaint must then decide whether to 12 grant leave to amend. Leave to amend should be “freely given” where there is no 13 “undue delay, bad faith or dilatory motive on the part of the movant, . . . undue prejudice 14 to the opposing party by virtue of allowance of the amendment, [or] futility of the 15 amendment . . . .” Foman v. Davis, 371 U.S. 178, 182 (1962); Eminence Capital, LLC v. 16 Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (listing the Foman factors as those to 17 be considered when deciding whether to grant leave to amend). Not all of these factors 18 merit equal weight. Rather, “the consideration of prejudice to the opposing party . . . 19 carries the greatest weight.” Id. (citing DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 20 185 (9th Cir. 1987)). Dismissal without leave to amend is proper only if it is clear that 21 “the complaint could not be saved by any amendment.” Intri-Plex Techs. v. Crest Group, 22 Inc., 499 F.3d 1048, 1056 (9th Cir. 2007) (citing In re Daou Sys., Inc., 411 F.3d 1006, 23 1013 (9th Cir. 2005); Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 24 1989) (“Leave need not be granted where the amendment of the complaint . . . 25 constitutes an exercise in futility . . . .”)). 26 /// 27 /// 28 /// 1 ANALYSIS 2 3 A. First and Second Causes of Action: Failure to Provide Rest Breaks and Meal Breaks 4 5 To state the foregoing claims, a plaintiff must “allege facts showing that there was 6 a given week in which he [or she] was entitled to but denied minimum or overtime 7 wages” and must provide “sufficient detail about the length and frequency of [his or her] 8 unpaid wages.” Landers v. Quality Communications, Inc., 771 F.3d 638, 645-46 (9th Cir. 9 2014), as amended (Jan. 26, 2015).4 Therefore, a plaintiff is required to allege facts 10 identifying at least one workweek in which he or she was denied required breaks. 11 Plaintiff alleges Defendant “intentionally and regularly failed to provide all 10- 12 minute rest breaks to [Plaintiff] and former and other current non-exempt employees for 13 every 4 hours they worked, in violation of Labor Code §§ 226.7 and 512.” Compl., ¶ 7. 14 Plaintiff further alleges Defendant “repeatedly within the past months required her to 15 work double-digit-hour days without providing required rest breaks”; and that Plaintiff 16 “and other members of the Rest Break Class were not provided with rest breaks as 17 required by law, nor did they receive an additional hour of premium pay for each missed 18 rest break.” Id. ¶¶ 8, 37. These conclusory allegations lack any factual detail from which 19 the Court could plausibly infer how Plaintiff suffered any actual violations. Therefore, in 20 accordance with Landers, Plaintiff’s rest and meal break claims are DISMISSED with 21 leave to amend. 22 B. Third Cause of Action: Failure to Reimburse for Business Expenses 23 “To establish liability under Labor Code § 2802, an employee must show that 24 (1) the employee made expenditures or incurred losses; (2) the expenditures or losses 25 4 California district courts routinely apply the Landers standard, which was directed at claims arising under the federal Fair Labor Standards Act, to California Labor Code Violations. See Mie Yan v. 26 Francesca’s Collections, Inc., 2018 WL 984637, at *8 (N.D. Cal. Feb. 20, 2018) (“Federal courts considering claims under the California Labor Code apply the standard set forth in Landers[.]”); Shann v. 27 Durham School Services, L.P., 182 F. Supp. 3d 1044, 1048 (C.D. Cal. 2016) (“The pleading standards set forth in Landers apply equally to Plaintiffs’ state overtime, minimum wage, meal period, and rest break 28 allegations.”). 1 were incurred in direct consequence of the employee’s discharge of his or her duties, or 2 obedience to the directions of the employer; and (3) the expenditures or losses were 3 necessary.” Lindell v. Synthes USA, 155 F. Supp. 3d 1068, 1075 (E.D. Cal. 2016) 4 (internal quotations and citations omitted). Whether the expenditures were 5 “‘necessary’ . . . depends on the reasonableness of the employee’s choices.” Gattuso v. 6 Harte-Hanks Shoppers, Inc., 42 Cal. 4th 554, 568 (2007). Additionally, “before an 7 employer's duty to reimburse is triggered, it must either know or have reason to know 8 that the employee has incurred an expense.” Stuart v. RadioShack Corp., 9 641 F. Supp. 2d 901, 904 (N.D. Cal. 2009). 10 Plaintiff alleges that she “and the other members of the Reimbursement Class 11 were not indemnified by [Defendant] for necessary expenses such as internet service 12 and mileage.” Compl., ¶ 45(a). Again, such an allegation is too conclusory. Plaintiff 13 fails to explain the necessity and reasonableness of her expenses in relation to the 14 business and fails to present any costs for her expenses. Without additional facts, the 15 Court cannot evaluate whether § 2802 applies to Plaintiff’s allegations in the first place. 16 See Wert v. U.S. Bancorp, 2014 WL 2860287, at *6 (S.D. Cal. June 23, 2014) 17 (dismissing similar allegations as inadequate). Given the complete dearth of facts in the 18 Complaint, the Third Cause of Action is DISMISSED with leave to amend. 19 C. Fourth Cause of Action: Failure to Provide Accurate Itemized Wage Statements 20 21 Plaintiff asserts Defendant failed to furnish wage statements as required by Labor 22 Code § 226. To establish a § 226 claim, the Plaintiff must demonstrate both a violation 23 of § 226(a) and an injury under § 226(e). Apodaca v. Costco Wholesale Corp., 24 675 F. App'x 663, 665 (9th Cir. 2017). Under § 226, an employer shall provide his or her 25 employee a written itemized statement showing, among other things, gross wages 26 earned, total hours worked by the employee, and inclusive dates of the period for which 27 the employee is paid. Cal. Lab. Code § 226(a). In turn, under § 226(e)(2)(A), “[a]n 28 employee is deemed to suffer injury for purposes of this subdivision if the employer fails 1 to provide accurate and complete information as required by any one or more of the 2 items” identified in § 226(a) “and the employee cannot promptly and easily determine 3 [such information] from the wage statement alone . . . ” Finally, Labor Code § 226(e) 4 allows recovery if an employee is suffering from injury resulting from “a knowing and 5 intentional failure by an employer” to provide itemized and accurate wage statements. 6 Under § 226(e), “a failure to pay wages is only ‘willful’ where the Defendant has no ‘good 7 faith’ argument that wages were not owed (i.e., a violation is only willful where the 8 Defendant cannot raise any defense to payment in good faith).” Woods v. Vector Mktg. 9 Corp., No. C-14-0264 EMC, 2015 WL 5188682, at *8 n.8 (N.D. Cal. Sept. 4, 2015). 10 Plaintiff fails to adequately show an injury because she did not allege either that 11 she was not provided wage statements at all or that the wage statements she did receive 12 prevented her from “promptly and easily determine[ing]” the wages paid. See Avina v. 13 Marriot Vacations Worldwide Corp., 2018 WL 6844713, at *5 (C.D. Cal. Oct. 15, 2018) 14 (“Since Avina has not alleged that he did not receive a wage statement, to show injury 15 he must allege facts that indicate that he could not promptly and easily determine what 16 wages he was already paid or that the wage statements otherwise failed to comply with 17 § 226(a)’s requirements. It is not enough that he allege that the statements were 18 inaccurate.”). In addition, her Complaint is wholly conclusory as to whether any failure 19 on Defendant’s part was “willful.” Plaintiff’s Fourth Cause of Action is thus DISMISSED 20 with leave to amend. 21 D. Fifth Cause of Action: Violation of Business and Professions Code § 17200 22 23 Plaintiff’s Fifth Cause of Action is derivative of her foregoing claims. See Compl., 24 ¶ 54 (“The statutory violations, as alleged above in the First through Fourth Causes of 25 Action, are unfair business practices within the meaning of the Unfair Competition Law 26 (Business and Professions Code §§ 17200 et seq).”). Given its derivative nature, the 27 Fifth Cause of Action is also DISMISSED with leave to amend. 28 /// VASO □□ OUIVING RENN MIVA MII HO Ye OMT GO 1 E. Sixth Cause of Action: Violation of PAGA 2 According to the Complaint, Plaintiff seeks to represent “aggrieved employees” for 3 || PAGA purposes, explaining that “[flormer and other current California employees are 4 | also aggrieved employees in that one or more of the alleged violations were also 5 || committed against them during their time of employment with [Defendant].” Compl., 6 || 9 58. These allegations, however, are legally insufficient. See Duran v. Maxim 7 | Healthcare Servs. Inc., No. CV 17-01072-AB (EX), 2018 WL 5915644, at *6 (C.D. Cal. g | Mar. 9, 2018); Jeske v. Maxim Healthcare Servs., Inc., No. CV F 11-1838 LUO JLT, 2012 g | WL 78242, at *13 (E.D. Cal. Jan. 10, 2012).5 Therefore, Plaintiff's Sixth Cause of Action 10 | is DISMISSED with leave to amend. 11 12 CONCLUSION 13 14 For the reasons stated above, Defendant's Motion to Dismiss (ECF No. 19) is 15 | GRANTED with leave to amend. Not later than twenty (20) days following the date this 16 || Memorandum and Order is electronically filed, Plaintiff may (but is not required to) file an 17 || amended complaint. If no amended complaint is timely filed, the causes of action 48 || dismissed by virtue of this Order will be deemed dismissed without leave to amend upon 49 || no further notice to the parties. 20 IT |S SO ORDERED. 21 || Dated: May 5, 2020 22 { Yo 23 MORRISON C. ENGLAND, J UNITED STATES DISTRI 24 25 26 27 28 veasons dine ine extent is derivative of Plaintiff's other claims, this cause of action also fails for the