Krauss v. Walmart, Inc.

1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF CALIFORNIA 8 9 HOPE KRAUSS, aka DEONTE No. 2:19-cv-00838-JAM-DB KRAUSS, individually and on 10 behalf of all those similarly situated, 11 ORDER GRANTING DEFENDANTS’ Plaintiff, MOTION TO DISMISS 12 v. 13 WAL-MART, INC., a Delaware 14 corporation; WAL-MART ASSOCIATES, INC.; and DOES 1 15 through 50, inclusive, 16 Defendants. 17 18 Plaintiff Hope Krauss (“Plaintiff”) brings this putative 19 class action against her former employer, Defendants Walmart, 20 Inc. and Wal-Mart Associate, Inc. (collectively “Walmart” or 21 “Defendants”), for violating California’s labor laws. First 22 Amended Compl. (“FAC”), ECF No. 10. Defendants move to dismiss 23 Plaintiff’s claims. Mot. to Dismiss (“Mot.”), ECF No. 14. 24 For the reasons set forth below, the Court GRANTS 25 Defendants’ motion.1 26 27 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was 28 scheduled for October 22, 2019. 1 I. FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND 2 Plaintiff Hope Krauss, a resident of California, worked as a 3 full-time associate in the produce and meat departments at 4 Defendants’ Walmart Supercenter in West Sacramento, California, 5 from September 16, 2017 to October 22, 2018. FAC. ¶ 3. 6 Plaintiff contends Walmart committed a litany of California Labor 7 Code violations—each one, primarily hinging upon the allegation 8 that Walmart did not pay her all that she was owed. See 9 generally FAC. Plaintiff claims Walmart (1) required her to work 10 off the clock and during meal and rest breaks without 11 compensation; (2) inaccurately recorded the amount of time she 12 worked; (3) refused to compensate her for overtime hours; 13 (4) failed to reimburse her for necessary business-related 14 expenses; (5) and generally withheld funds she was entitled to 15 upon her termination. FAC ¶¶ 4-9. Moreover, she alleges 16 Walmart committed at least two of these violations—failure to pay 17 wages due upon termination and failure to provide accurate wage 18 statements—knowingly and intentionally. FAC ¶¶ 40-43. 19 On November 29, 2018, Plaintiff filed her Complaint in 20 Sacramento County Superior Court. Id. ¶ 1. Walmart removed the 21 case to federal court on May 10, 2019, alleging jurisdiction 22 under the Class Action Fairness Act of 2005 (“CAFA”). Notice of 23 Removal, ECF No. 1, at 2; 28 U.S.C. § 1332(d). Plaintiff later 24 filed an amended complaint, ECF No. 10, alleging eight violations 25 of the California Labor Code and a claim under California’s 26 Unfair Competition Law (“UCL”). Id. ¶¶ 53-58; Cal. Bus. & Prof. 27 Code §§ 17200 et. seq. Plaintiff asserts each claim as an 28 “aggrieved employee” and on behalf of other current and former 1 Walmart employees under the California Private Attorneys General 2 Act of 2004 (“PAGA”). Id. ¶¶ 59-63. 3 Walmart moves to dismiss the First Amended Complaint, in its 4 entirety, for failure to state a claim. Mot. at 2. Plaintiff 5 opposes the motion. Opp’n, ECF No. 17. 6 7 II. OPINION 8 A. Legal Standard 9 Federal Rule of Civil Procedure 8(a)(2) requires “a short 10 and plain statement of the claim showing that the pleader is 11 entitled to relief.” Courts must dismiss a suit if the 12 plaintiff fails to “state a claim upon which relief can be 13 granted.” Fed. R. Civ. Proc. 12(b)(6). To defeat a Rule 14 12(b)(6) motion to dismiss, a plaintiff must “plead enough facts 15 to state a claim to relief that is plausible on its face.” Bell 16 Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). This 17 plausibility standard requires “factual content that allows the 18 court to draw a reasonable inference that the defendant is 19 liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 20 662, 678 (2009). “At this stage, the Court “must accept as true 21 all of the allegations contained in a complaint.” Id. But it 22 need not “accept as true a legal conclusion couched as a factual 23 allegation.” Id. 24 B. Judicial Notice 25 Generally, when deciding a 12(b)(6) motion, the Court “may 26 not consider materials outside the complaint and pleadings.” 27 Holland v. TD Ameritrade, Inc., No. CIV S-10-2110-GEB, 1012 WL 28 592042, at *2 (E.D. Cal. Feb. 22, 2012). However, Federal Rule 1 of Evidence 201 allows a court to take judicial notice of “a 2 fact that is not subject to reasonable dispute because it (1) is 3 generally known within the trial court’s territorial 4 jurisdiction; or (2) can be accurately and readily determined 5 from sources whose accuracy cannot be questioned.” Id. 6 Defendants ask this Court to take judicial notice of 7 Plaintiff Hope Krauss’s wage statements for purpose of assessing 8 Plaintiff’s Sixth Cause of Action. Mot. at 2. Defendants 9 contend that judicial notice is appropriate because these wage 10 statements form the basis of Plaintiff’s inaccurate wage 11 statement claim. Id. Plaintiff has not opposed this request. 12 Rather, Plaintiff relies on this exhibit in her Opposition. 13 Opp’n at 10. Because Walmart’s wage statements “can be 14 accurately and readily determined” as an official wage statement 15 and because Plaintiff does not dispute this request, the Court 16 will take judicial notice of the existence of Walmart’s wage 17 statements. 18 C. Analysis 19 1. Failure to Provide Meal Period and Rest Breaks 20 An employer must provide an employee with a thirty-minute 21 meal period for every five hours of work. See Cal. Lab. Code 22 § 512(a). An employer cannot require an employee to work during 23 meal period or rest breaks. Id. at § 226.7(b). Moreover, an 24 employer shall pay an additional hour of pay for each workday 25 that a meal period or rest break is not provided. Id. at 26 § 226.7(b). 27 Plaintiff alleges Defendants failed to provide her and 28 class members with required meal periods and rest breaks. FAC 1 ¶¶ 19-26. Defendants argue Plaintiff’s allegations are 2 conclusory because she fails to specify how Walmart impeded her 3 from taking her breaks. Mot. at 11. The Court agrees. 4 To survive a Rule 12(b)(6) motion to dismiss, Plaintiff 5 need not make “detailed factual allegations.” Twombly, 550 U.S. 6 at 555. But her “factual allegations must be enough to raise a 7 right to relief above the speculative level.” Id. This 8 requires factual allegations that are “more than labels and 9 conclusions.” Id. Indeed, this Court has previously held that 10 failing to describe what an employer actually told plaintiff or 11 did to interfere with meal periods and rest breaks, results in 12 allegations that are “factually lacking and border on wholly 13 conclusory.” Chavez v. RSCR California, Inc., No. 2:18-CV- 14 03137-JAM-AC, 2019 WL 1367812 at *3 (E.D. Cal. Mar. 26, 2019); 15 see also Morrelli v. Corizon Health Inc., 1:18-CV-1395-LJO-SAB, 16 2018 WL 6201950, at *3 (E.D. Cal. November 28, 2018). 17 Plaintiff sets forth a single sentence in support of each 18 claim. FAC ¶ 4-5. She alleges Defendants’ violations flowed 19 from “workload demands or from managerial employees ordering her 20 to complete work tasks” either prior to taking the required 21 break or before completing her required break. Id. Plaintiff 22 maintains her claim is properly pled since she has “describe[d] 23 how her meal and rest breaks were interrupted and with what 24 frequency.” Opp’n at 6. Plaintiff further contends that she 25 need not plead a “particular instance” when these alleged 26 violations occurred. Opp’n at 6. Plaintiff is mistaken. 27 Plaintiff fails to “describe what [Walmart] actually told 28 [her] or did to interfere with meal periods and rest breaks.” 1 Chavez, 2019 WL 1367812 at *3. Moreover, Plaintiff does not 2 sufficiently allege that she worked a shift long enough to 3 trigger meal or rest periods obligations. As this Court 4 determined in Chavez, “failure to plead at least one occasion on 5 which she was impeded from taking a meal or rest break likely 6 runs afoul of the Ninth Circuit’s decision in Landers v. Quality 7 Communications, Inc., 771 F.3d 638 9th Cir. 2014).” Chavez, 8 2019 WL 1367812 at *3; see also Landers, 771 F.3d at 645–46 9 (holding that “at a minimum, a plaintiff asserting a violation 10 of the FLSA overtime provisions must allege that she worked more 11 than forty hours in a given workweek without being compensated 12 for the hours worked in excess of forty during that week.”). 13 Accordingly, Plaintiff’s allegations fall short of 14 plausibility. At a minimum, Plaintiff must demonstrate that she 15 was even entitled to the required meal period or rest breaks 16 during those work days. For the aforementioned reasons, the 17 Court DISMISSES Plaintiff’s meal period and rest breaks WITHOUT 18 PREJUDICE. 19 2. Failure to Pay Minimum and Overtime Wages 20 California state law requires an employer to pay employees 21 the minimum wage for all hours worked. See Cal. Lab. Code 22 § 1197. Additionally, employers must pay overtime for work 23 exceeding eight hours in one workday and forty hours in any 24 workweek. See Id. § 510. An employee receiving less than the 25 legal minimum wage or legal overtime compensation is entitled to 26 recover in a civil action. See Id. § 1194. 27 Defendants argue Plaintiff’s minimum and overtime wage 28 claims fail for three reasons: (1) Plaintiff does not specify a 1 single work week where she worked over 40 hours per week and was 2 not paid overtime, (2) Plaintiff has not provided any specific 3 details regarding the nature of her alleged overtime work, and 4 (3) Plaintiff does not specify what managerial employees 5 supposedly said that led Plaintiff to believe she was expected 6 to work overtime. Mot. 12-14. Plaintiff maintains that she has 7 sufficiently plead each claim, and that Defendants’ 8 interpretation of what Rule 12(b)(6) requires “demand[s] too 9 much at this stage.” Opp’n at 7. 10 Plaintiff correctly asserts that she is not required to 11 “approximate the number of hours worked without compensation.” 12 Opp’n at 7 (quoting Landers, 771 F.3d at 646). However, to 13 survive a motion to dismiss, she must allege, at a minimum, that 14 she worked more than forty hours in a given workweek without 15 overtime compensation. Landers, 771 F.3d at 644-46. Plaintiff 16 has not done this. See Mot. at 12. 17 Plaintiff merely states that she and class members “were 18 required to work off the clock and through meal breaks.” Opp’n 19 at 6; FAC ¶¶ 4-6,29,33. Plaintiff has thus only presented 20 “generalized allegations.” Landers, 771 F.3d at 646. “Notably 21 absent” from Plaintiff’s complaint is “any detail regarding a 22 given workweek when [Plaintiff] worked in excess of forty hours 23 and was not paid overtime for that given workweek and/or was not 24 paid minimum wages.” Id. For this reason alone, Plaintiff’s 25 minimum wage and overtime claims fail. The Court thus need not 26 address the two other reasons Defendants provide in support of 27 dismissing these claims. The Court DISMISSES Plaintiff’s 28 minimum and overtime wage claims WIHOUT PREJUDICE. 1 3. Failure to Pay All Wages Due to Discharged and 2 Quitting Employees 3 An employer is required to pay all earned and unpaid wages 4 to an employee who is discharged. See Cal. Lab. Code §§ 201-03. 5 These wages are due and payable immediately upon discharge. See 6 Id. § 201. Accrued wages must be paid within 72 hours. See Id. 7 § 202. Willfully failing to do so, makes an employee liable for 8 waiting time penalties in the form of continued compensation to 9 the employee for up to 30 workdays. See Id. § 203. 10 Plaintiff’s claim for failure to pay accrued wages is 11 premised on Defendants alleged failure to compensate her for 12 overtime and minimum wages resulting from lack of meal periods 13 and rest breaks. FAC §§ 36-41; Mot. at 17. Because Plaintiff’s 14 underlying causes of actions fail, this derivative claim fails 15 as well. The Court therefore DISMISSES this claim WITHOUT 16 PREJUDICE. 17 4. Failure to Furnish Accurate Itemized Wage Statements 18 California Labor Code Section 226 itemizes nine categories 19 of information that must be included in a wage statement. See 20 Cal. Lab. Code § 226. If an employee suffers injury by an 21 employer’s knowing and intentional failure to provide such 22 information, she is entitled to recover damages as prescribed in 23 the statute and reasonable attorney’s fees. Id. 24 Plaintiff alleges that Defendants: 25 “[F]ailed to provide PLAINTIFF and CLASS MEMBERS timely and accurate itemized wage statements in writing showing 26 [the nine required categories of information], in 27 violation of California Labor Code § 226 and IWC Wage Order No. 1-2001, §7.” 28 1 FAC ¶ 43. As Defendants correctly point out, “[t]his generic 2 allegation merely restates the requirements of Labor Code 3 section 226(a).” Accordingly, this “formulaic recitation of the 4 elements of [this] cause of action” is not sufficient to 5 adequately plead this claim. Twombly, 550 U.S. 544. 6 Even more inimical to Plaintiff’s claim, Defendants argue 7 it is “derivative of her alleged wage and hour claims” and 8 therefore forbidden. Reply at 4; see Maldonado v. Epsilon 9 Plastics, Inc. 22 Cal. App. 5th 1308, 1337 (2018) (holding that a 10 plaintiff is not entitled to double recovery when their 11 inaccurate wage statement claim “boils down to the proposition 12 that any failure to pay overtime...also generates a wage 13 statement injury.”). The Court agrees. In their motion to 14 dismiss, Defendants warned Plaintiff that although her claim was 15 too vague to comprehend, if she was “attempting to allege a 16 derivative wage statement claim” it was prohibited. Mot. at 14. 17 But in her opposition, Plaintiff confirms her derivative wage 18 allegations by clarifying that her meal period, rest breaks, and 19 overtime claim allegations are “sufficient facts from which it 20 could be inferred that [Walmart] deliberately failed to pay 21 wages for time worked, as required to state a clam [under 22 Section 226].” Opp’n at 10. Plaintiff’s claim thus fails as a 23 matter of law. 24 Finally, Plaintiff attempts to shoehorn a new allegation 25 into her complaint by way of her opposition. Pointing to the 26 wage statements the Court judicially noticed, Plaintiff argues 27 that Defendants’ wage statements list the wrong employer. Opp’n 28 at 9. This allegation is nowhere to be found in Plaintiff’s 1 complaint. Mot. at 5. The Court will not accept this new 2 theory, since “facts articulated in [an] opposition brief cannot 3 cure the deficiencies of the complaint.” Morrelli, 2018 WL 4 6201950, at *3. 5 For these reasons, the Court DISMISSES Plaintiff’s itemized 6 wage statement claim WITHOUT PREJUDICE. 7 5. Failure to Maintain Required Records 8 Employers are required to maintain payroll records for 9 three years at their place of employment or in a central 10 location in the state. See Cal. Lab. Code. 1174(d); see also 11 IWC Wage Order No. 7-2001, § 7. To properly state this claim, a 12 plaintiff must plead facts that provide “some reasonable basis” 13 for concluding the employer violated this provision. Kemp v. 14 Int’l Bus Machines Corp., No. C-09-4683 MHP, 2010 WL 4698490, at 15 *4 (N.D. Cal. Nov. 8, 2010). Defendants argue Plaintiff’s 16 record-keeping claims are inadequately pled because they, again, 17 “rest on conclusions, not facts.” Mot. at 15. Plaintiff does 18 not respond to this argument in her opposition. See generally 19 Opp’n. The Court interprets Plaintiff’s failure to oppose this 20 argument as acquiescence of its merit. The Court therefore 21 DISMISSES this claim WITH PREJUDICE. 22 6. Failure to Reimburse 23 Employers must indemnify employees for all necessary 24 expenditures or losses incurred in direct consequence of the 25 discharge of an employee’s duties or in obedience to the 26 directions of the employer. See Cal. Lab. Code § 2802(a). To 27 state a claim under Section 2802, a Plaintiff must explain: how 28 or when an employer failed to reimburse; the specific nature of 1 the business expense at issue; whether the employer knew such 2 expenses were incurred; and whether the employer willfully 3 refused to reimburse such expenses. Nelson v. Dollar Tree 4 Stores, Inc., 2:11-cv-01334 JAM, 2011 WL 3568498, at *3 (E.D. 5 Cal. Aug. 15, 2011). Plaintiff must also “provide a single 6 instance when such cost was actually incurred and not 7 reimbursed.” Chavez, 2019 WL 1367812 at *3. 8 Plaintiff alleges that Defendants failed to reimburse her 9 for two incurred expenses: (1) cell-phone app utilized for work 10 communication and (2) work boots for working in walk-in 11 freezers. FAC ¶ 7. Defendants argue Plaintiff’s claims should 12 be dismissed because “she does not provide a single instance 13 when an alleged business expense was actually incurred and not 14 reimbursed,” nor does she specify the costs, nature of expense, 15 employer knowledge, or willful refusal to reimburse of her cell 16 phone expenses. Mot. at 7. The Court agrees. 17 Plaintiff fails to explain whether the cell-phone app 18 required a fee to download, let alone whether Walmart even knew 19 that she downloaded this app or purchased these boots. FAC 20 ¶¶ 49-52. Because Plaintiff fails to allege even a single 21 instance when Walmart did not reimburse her for reimbursement- 22 eligible items, this claim fails. Chavez, 2019 WL 1367812 at 23 *3. The Court DISMISSES this claim WITHOUT PREJUDICE. 24 7. UCL Claim 25 Plaintiff’s UCL claim is predicated on her preceding causes 26 of actions for violations of the California Labor Code. FAC 27 ¶¶ 53-58. Because Plaintiff failed to sufficiently plead those 28 underlying causes of action, her UCL claim also fails. The 1 Court DISMISSES Plaintiff’s UCL claim WITHOUT PREJUDICE. 2 8. PAGA Claims 3 Plaintiff’s PAGA claims are likewise derivative of her 4 claims under the California Labor Code. FAC ¶ 61. Because 5 Plaintiff’s underlying California Labor Code claims fail, her 6 PAGA claim fails as well. The Court therefore need not address 7 whether Plaintiff satisfied PAGA’s exhaustion requirement. Mot. 8 at 18. The Court DISMISSES Plaintiff’s PAGA claim WITHOUT 9 PREJUDICE. 10 D. Defendants’ Strike Request 11 In a footnote, Defendants’ request that this court strike 12 the putative class definition. Mot. at 8 n.1. Defendants argue 13 this definition is overbroad because “most of Krauss’s claims 14 have one or three-year statutes of limitation.” Id. Plaintiff 15 did not respond to this request in her Opposition. However, the 16 failure to respond does not change the fact that this was a 17 procedurally improper request. Accordingly, the Court need not 18 decide this issue. 19 20 III. ORDER 21 For the reasons set forth above, the Court GRANTS 22 Defendants’ Motion to Dismiss. Because amendment is not futile, 23 the Court grants Plaintiff leave to amend her claims, except for 24 her seventh cause of action for failure to maintain required 25 records, which is dismissed with prejudice. See Cook, Perkiss 26 and Liehe, Inc. v. Northern Cal. Collection Serv., Inc., 911 F.2d 27 242, 247 (9th Cir. 1990). 28 /// 1 If Plaintiff elects to amend her complaint, she shall file a 2 Second Amended Complaint within twenty (20) days of this Order. 3 Defendants’ responsive pleadings are due twenty (20) days 4 thereafter. 5 IT IS SO ORDERED. 6 Dated: November 19, 2019 kA teiren staves odermacr 7008 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13