Bah v. Enter. Rent-A-Car Co. of Bos., LLC

MAMADOU ALPHA BAH, Plaintiff, v. ENTERPRISE RENT-A-CAR COMPANY OF BOSTON, LLC,and ENTERPRISE HOLDINGS, INC., Defendants.

C.A. No. 17-12542-MLW

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

November 13, 2020

MEMORANDUM AND ORDER

WOLF, D.J.

I. SUMMARY

Plaintiff Mamadou Alpha Bah seeks to represent assistant branch managers who have worked for defendants Enterprise Rent-A-Car Company of Boston, LLC ("ERAC-Boston"), and Enterprise Holdings, Inc. ("EHI"). Bah alleges that ERAC-Boston and EHI violated the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§201 et seq., and the Massachusetts Overtime Law, Mass. Gen. Laws ch. 151, §1B. Both laws require that employers must pay employees overtime pay when they work more than 40 hours per week unless the employee is classified as exempt from overtime. See 29 U.S.C. §§207(a)(1), 213(a)(1); Mass. Gen. Laws ch. 151, §§1A, 1B.

Plaintiff claims that until November 2016, defendants willfully misclassified assistant branch managers as exempt from the overtime requirements. In November 2016, defendants sent him and other assistant branch managers a memorandum informing them that they would be reclassified as "non-exempt" because of an anticipated new Department of Labor ("DOL") regulation (the "Reclassification Memo"). Plaintiff alleges that the class members should have been classified as "exempt" previously and are entitled to back pay. Although plaintiff's direct employer was ERAC-Boston, he alleges that EHI was a "joint employer" and, therefore, also liable for the misclassification of assistant branch managers.

In 2018, the court dismissed plaintiff's claims against EHI without prejudice. See Dkt. Nos. 55, 56. In the Complaint, plaintiff had not distinguished between ERAC-Boston and EHI, but instead referred to both as "Enterprise." In doing so, plaintiff had relied on a theory that ERAC-Boston and EHI should be treated as an integrated enterprise despite First Circuit precedent rejecting this theory and establishing a different test for determining joint employer status. Therefore, the court granted EHI's motion to dismiss.

On October 15, 2018, plaintiff filed a First Amended Complaint (the "FAC"), with two sets of substantive changes in response to the court's ruling. See Dkt. No. 63. First, plaintiff separated the allegations to refer specifically to ERAC-Boston and EHI, rather than only to "Enterprise" as a single integrated unity. See, e.g., FAC ¶10. Second, plaintiff alleged that EHI made the decision to reclassify assistant branch managers as "non-exempt."See id. ¶25. He also alleged that Dwayne Walker, who sent the Reclassification Memo, was an employee of EHI and cited a Dwayne Walker's LinkedIn profile. See id. Defendants moved to dismiss the FAC. See Dkt. No. 65. They also submitted a letter sent to counsel for plaintiff stating, in effect, that plaintiff knew or should have known that Walker was employed by ERAC-Boston, and threatening to seek sanctions under Federal Rule of Civil Procedure 11 if the erroneous statement was not corrected. See Dkt. No. 60, at 3 of 7. After a hearing on February 6, 2020, plaintiff moved for leave to amend the FAC. See Dkt. No. 85. The court's focus, therefore, is now on plaintiff's Second Amended Complaint (Dkt. No. 92) (the "SAC") and defendants' Motion to Dismiss it (Dkt. No. 93) (the "Motion").

In the Motion, defendants argue that plaintiff has failed plausibly to allege (1) that EHI was his "joint employer," and (2) that any failure to pay required overtime wages was "willful." For the reasons explained in this Memorandum, the court is denying the Motion. In essence, the court finds that plaintiff has alleged facts stating a plausible misclassification claim. In addition, the court finds that because willfulness relates to defendants' affirmative statute of limitations defense, in the circumstances of this case it cannot properly be decided on a motion to dismiss. As the statute of limitations issue has practical significance for the future of this case, the parties are being ordered to conferand report concerning how it should be addressed in the next phase of the litigation.

II. PROCEDURAL HISTORY

Plaintiff filed the complaint for this putative collective and class action on December 21, 2017. See Dkt. No. 1. He also filed a motion asking the court to certify the case conditionally as a collective action under the FLSA and to authorize an associated notice to potential opt-in plaintiffs. See Dkt. No. 5. Defendants filed a motion to stay the class certification motion. See Dkt. Nos. 18, 19. The court granted the stay pending a decision on whether or not the case would be dismissed. See Dkt. No. 19.

On February 15, 2018, defendant ERAC-Boston answered the complaint. See Dkt. No. 27. However, defendant EHI moved to dismiss the claims against it, or in the alternative, for summary judgment on the issue of whether it was a joint employer of plaintiff. See Dkt. No. 24.

The court held a hearing on the motion to dismiss on September 17, 2018. See Dkt. No. 55. The court allowed the motion to dismiss because plaintiff had relied on a legally invalid integrated enterprise liability theory, rather than on the test articulated by the First Circuit for joint employer status, based on the economic reality shown by the totality of the alleged circumstances. See Sept. 17, 2018 Tr. 44:16-45:5 (Dkt. No. 57) (citing Baystate Alternative Staffing v. Herman, 163 F.3d 668 (1stCir. 1998)). The court held that plaintiff had failed to distinguish the actions of ERAC-Boston from those of EHI, his alleged joint employer. See id. at 45:21-46:11. Rather, plaintiff referred to EHI and ERAC-Boston collectively as "Enterprise" throughout most of the complaint. See id. Therefore, plaintiff had failed plausibly to allege facts supporting the conclusion that he had an employment relationship with EHI. See id. at 45:21-47:24 (citing Cavallaro v. UMass Memorial Healthcare, Inc., 678 F.3d 1, 10 (1st Cir. 2012)). However, the court noted that it was possible Bah could allege such a plausible claim against EHI. Therefore, the court dismissed the claims against EHI without prejudice, and ordered the parties to confer concerning whether the case could be resolved by agreement and, if not, how the case should proceed. See Dkt. No. 56.

On October 1, 2018, plaintiff reported that he planned to file an amended complaint. See Dkt. Nos. 59, 60. Defendants attached to their report a letter they had sent to plaintiff's counsel stating that, in their view, plaintiff could not file an amended complaint that alleged EHI was a joint employer without violating Federal Rule of Civil Procedure 11(b), which provides that in signing a pleading, an attorney represents that, after a reasonable inquiry, he believes the factual contentions being madeare true.¹ See Dkt. No. 60, at 3 of 7. Among other things, the letter stated that Dwayne Walker, who had sent the Reclassification Memo, was not employed by EHI. Id. Rather, he was a Vice-President of ERAC-Boston, as plaintiff knew or should have known because plaintiff's supervisor indirectly through higher managers reported to Walker. Id.

On October 15, 2018, Bah filed the FAC. See Dkt. No. 63. Among other things, it alleged that Walker was an employee of EHI as one basis for the claim that EHI was plaintiff's joint employer. See id. ¶25. On October 29, 2018, defendants moved to dismiss. See Dkt. No. 65. EHI again asserted that plaintiff had failed to allege a plausible claim that EHI was plaintiff's joint employer within the meaning of the FLSA and the Massachusetts Overtime Law, Mass. Gen. Laws ch. 151, §1B. See Dkt. No. 66. This time, however, ERAC-Boston did not answer the FAC. See Dkt. No. 65. Instead, it joined the second half of EHI's motion that requested dismissal of the amended complaint to the extent it alleged that any FLSA violation was "willful." See Dkt. Nos. 65, 66.

On January 21, 2020, defendants filed a notice of supplemental authority to inform the court that the DOL had promulgated a new regulation regarding the interpretation of "joint employer" withinthe meaning of the FLSA, which was consistent with the First Circuit's decision in Baystate, 163 F.3d 668. See Dkt. No. 77.

At a hearing on February 6, 2020, defendants argued that plaintiff and his counsel did not have a good-faith basis to believe that Walker, who sent the Reclassification Memo, was an employee of EHI. Tr. 24:14-28:3 (Dkt. No. 82). Instead, defendants asserted that, as an employee of ERAC-Boston, plaintiff knew or should have known that Walker was a regional Vice-President of ERAC-Boston, with a scope of responsibility limited largely to the North Shore region of Massachusetts. Id. at 25:17-22. Defendants reminded the court that defendants had sent plaintiff's counsel a letter stating that the allegation that Walker worked for EHI was false. Id.; see Dkt. No. 60 Ex. 1.

The court discussed whether continued reliance on this allegation by plaintiff's counsel would raise the possibility of sanctions under Federal Rule of Civil Procedure 11. See Feb. 6, 2020 Tr. 25:24-26:21 (Dkt. No. 82). In particular, the court noted that a litigant's obligations under Rule 11(b) is "not measured solely as of the time [that papers] are filed or submitted to the court, but include reaffirming to the court and advocating positions contained in those pleadings and motions after learning that they ceased to have any merit." Id. at 26:4-11 (quoting Fed. R. Civ. P. 11(b) advisory committee's note to 1993 amendment); see also Ark. Teacher Ret. Sys. v. State St. Bank & Tr. Co., No. 11-10230-MLW, 2020 WL 949885, *1, *36 (Feb. 27, 2020) (Fed. R. Civ. P. "11(b) provides that by presenting a pleading to a court an attorney is representing that he or she has made a reasonable inquiry and that all factual contentions are supported by evidence. . . . In addition, Rule 11 requires that an attorney not continue to advocate positions based on false statements after he or she learns t...