Alvarez v. Gov't Emps. Ins. Co.

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ASHLEY ALVAREZ, et al., Plaintiffs, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY, Defendant.

Civil Action No. GLR-24-722

United States District Court, D. Maryland

November 5, 2024

MEMORANDUM OPINION

George L. Russell, III Chief United States District Judge.

THIS MATTER is before the Court on Defendant Government Employees Insurance Company's (“GEICO”) Motion to Dismiss Plaintiffs Ashley Alvarez and Mark Sowell's Amended Complaint (ECF No. 48)^[1]; Plaintiffs' Motion for Court-Authorized Notice under 29 U.S.C. § 216(b) (ECF No. 50); Plaintiffs' Motion to Seal (ECF No. 52) GEICO's Motion to Strike Declaration Testimony (ECF No 64); and GEICO's Motion to Seal (ECF No. 66). The Motions are ripe for disposition, and no hearing is necessary. See Local Rule 105.6 (D.Md. 2023). For the reasons outlined below, the Court will grant in part and deny in part GEICO's Motion to Dismiss (ECF No. 48), deny GEICO's Motion to Seal (ECF No. 66), and deny GEICO's Motion to Strike (ECF No. 64). The Court will also grant in part and deny in part Plaintiffs' Motion for Court-Authorized Notice under 29 U.S.C. § 216(b) (ECF No. 50), and deny Plaintiffs' Motion to Seal (ECF No. 52).

I. BACKGROUND^[2]

A. Factual Background

This action arises out of GEICO's alleged violations of the Fair Labor Standards Act (“FLSA”), California Labor Code, California Business and Professions Code, and Massachusetts Wage Law. (Am. Compl. at 25-34, ECF No. 43).^[3]Plaintiffs bring this action on behalf of themselves and all others similarly situated.

GEICO is a Maryland corporation and insurance provider. (Am. Compl. ¶¶ 45, 106). It maintains ten regional offices, (id. ¶ 46), and “operates in all fifty states, including California and Massachusetts,” (id. ¶ 1). Plaintiffs Ashley Alvarez and Mark Sowell worked as Special Investigators for GEICO from February 2019 to August 2021 and May 2017 to August 2021, respectively. (Id. ¶¶ 9, 31). During their tenure with GEICO, Alvarez was assigned to the California office,^[4] while Sowell reported to the New York office.^[5](Id. ¶¶ 9, 31).

As Special Investigators, Plaintiffs' “job was to investigate [and document] claims of suspected insurance fraud.” (Am. Compl. ¶ 2). Their duties included:

[R]eviewing case files; running background checks; examining provider billing reports; driving out to medical facilities, accident scenes, or theft sites; gathering evidence; interviewing witnesses and law enforcement; confirming police reports; canvassing and surveilling scenes; conducting examinations under oath; and writing and submitting reports about their findings in cases.

(Id.).

Plaintiffs allege that GEICO knowingly and willfully required them to work overtime without compensation. (See Am. Compl. ¶¶ 5, 6, 107, 111-12). GEICO “assigned Special Investigators an ever-increasing workload, knowing this work would require substantially more than 40 hours per week to complete” but “routinely denied permission [to work overtime] . . . and actively deterred Special Investigators from reporting overtime.” (Id. ¶ 3). GEICO's performance standards were structured such that Special Investigators were forced to “meet a battery of . . . metrics to remain in good standing- metrics that could only be satisfied by working substantial overtime hours.” (Id. ¶ 4). GEICO allegedly pressured Special Investigators not to report their overtime hours by providing disciplinary action, including lower performance ratings, to those who failed to complete their workload within 7.75 hours per day. (See id. ¶¶ 4, 108, 109). As a result, “Special Investigators worked off the clock and did not report those hours in GEICO's timekeeping system.” (Id. ¶ 4).

Plaintiffs Alvarez and Sowell allege that during full workweeks, Alvarez generally worked “54.5 hours per week” and Sowell worked “approximately 60 hours,”^[6] but neither were permitted to “report more than 7.75 hours per day (adding up to 38.75 hours per week).” (Am. Compl. ¶¶ 20-21, 28, 39, 41). For example, on one occasion when Alvarez “enter[ed] more than 38.75 hours” into the timekeeping system, (id. ¶ 28), her supervisor, Eduardo Lopez, “altered her timecard so that it only reflected 38.75 hours for that workweek.” (Id.). When questioned about the alteration, Lopez informed Alvarez that “he would not approve her overtime request and that she should not enter more than 7.75 hours per day into the timekeeping system.” (Id.). With “rare exceptions,” GEICO did not pay Alvarez nor Sowell “for all hours worked in excess of 38.75 hours per workweek.” (Id. ¶¶ 21, 42).

Alvarez maintains that her “extreme workload” “rarely” afforded her an opportunity to take a rest or lunch break. (See Am. Compl. ¶¶ 17-18, 24). When Alvarez told her manager, Cory Forseth, “that GEICO's demands [ ] interfere[ed] with her ability to take meal and rest breaks[,]” she was told that she “could use her time driving between client meetings to eat or take a break.” (Id. ¶ 25). Regardless, Forseth instructed Alvarez to “enter her time as though she had taken the full meal and rest breaks.” (Id.). Accordingly, Alvarez “continued to enter breaks and meal periods in GEICO's timekeeping system even on days when she was not able to take them.” (Id.).

In or around July of 2021, Alvarez, again, expressed “concerns about her overtime hours and workload during a video teleconference call with Lopez and Rene Cubas, the Region[al] Manager.” (Am. Compl. ¶ 29). This time, her superiors placed her “on an action plan” and instructed her to “simply . . . complete the work within 7.75 hours each day.” (Id.). As a result, “Alvarez submitted her two-weeks' notice shortly thereafter and left GEICO in August 2021.” (Id.).

B. Procedural History

On March 11, 2024, initial Plaintiffs Alvarez and Sowell filed their original Class Action Complaint and Demand for Jury Trial against GEICO on behalf of themselves and similarly situated individuals.^[7] (ECF No. 1). Alvarez and Sowell later filed several Notices of Consent to join twelve Opt-In Plaintiffs.^[8] (ECF Nos. 6-10, 24, 34). On April 12, 2024, GEICO filed a Motion to Dismiss for Failure to State a Claim. (ECF No. 27). Plaintiffs filed an Amended Complaint on April 24, 2024 (ECF No. 43). They assert eight causes of action against GEICO for: unpaid overtime wages under the Fair Labor Standards Act, California Wage Laws, and Massachusetts Wage Laws (Claims One, Two, and Seven); record keeping violations under California Wage Laws (Claim Three); meal and rest period violations under California Wage Laws (Claim Four); untimely payment of wages under California Wage Laws and Massachusetts Wage Laws (Claims Five and Eight); and unfair competition under California Wage Laws (Claim Six).^[9] (Am. Compl. at 25-34). Plaintiffs seek damages, as well as declaratory, injunctive, and equitable relief. (Id. at 35).

GEICO filed the instant Motion to Dismiss on May 8, 2024. (ECF No. 48). Plaintiffs filed their Opposition on May 22, 2024, (ECF No. 57), and GEICO filed its Reply on June 5, 2024, (ECF No. 60). Plaintiffs also filed a Motion for Court-Authorized Notice. (ECF No. 50). GEICO filed an Opposition to the Motion for Court-Authorized Notice, (ECF No. 61), and moved to strike the declarations submitted in support thereof, (ECF No. 64). On June 25, 2024, Plaintiffs filed a Reply in support of their Motion for Court-Authorized Notice and an Opposition to GEICO's Motion to Strike. (ECF Nos. 67, 68).

II. DISCUSSION

A. Motion to Dismiss

1. Standard of Review

The purpose of a Rule 12(b)(6) motion is to “test[] the sufficiency of a complaint,” not to “resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” King v. Rubenstein, 825 F.3d 206, 214 (4th Cir. 2016) (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999)). A complaint fails to state a claim if it does not contain “a short and plain statement of the claim showing that the pleader is entitled to relief,” Fed.R.Civ.P. 8(a)(2), or does not “state a claim to relief that is plausible on its face,” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citing Twombly, 550 U.S. at 555). Though the plaintiff is not required to forecast evidence to prove the elements of the claim, the complaint must allege sufficient facts to establish each element. Goss v. Bank of Am., N.A., 917 F.Supp.2d 445, 449 (D.Md. 2013) (quoting Walters v. McMahen, 684 F.3d 435, 439 (4th Cir. 2012)), aff'd, 546 Fed.Appx. 165 (4th Cir. 2013).

In considering a Rule 12(b)(6) motion, a court must examine the complaint as a whole, consider the factual allegations in the complaint as true, and construe the factual allegations in the light most favorable to the plaintiff. Albright v. Oliver, 510 U.S. 266, 268 (1994); Lambeth v. Bd. of Comm'rs of Davidson Cnty., 407 F.3d 266, 268 (4th Cir. 2005) (citing Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)). But the court need not accept unsupported or conclusory factual allegations devoid of any reference to actual events, see United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979) (finding dismissal of complaint proper because plaintiffs' “conclusory allegations” of discrimination were unsupported by “reference to particular acts, practices, or policies”), or legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555).

2. Analysi...