Monroe v. Hayward Unified Sch. Dist.

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ARNOLD MONROE and DONTA SNOWDEN, individuals, Plaintiffs, v. HAYWARD UNIFIED SCHOOL DISTRICT and FREMONT UNIFIED SCHOOL DISTRICT, Defendants.

No. 22-cv-04489-LB

United States District Court, N.D. California, San Francisco Division

March 12, 2023

ORDER GRANTING MOTIONS TO DISMISS

RE: ECF NOS. 27, 28

LAUREL BEELER, UNITED STATES MAGISTRATE JUDGE

INTRODUCTION

The plaintiffs - Arnold Monroe and Donta Snowden - worked as sanitation workers for the two defendants: Hayward Unified School District and Fremont Unified School District. They each worked for no more than forty hours a week at each district but their total weekly hours exceeded forty hours. Citing California Government Code § 20610, which applies to the calculation of pension benefits, they contend that the defendants are one employer and did not pay them minimum wages and overtime wages, in violation of the federal Fair Labor Standards Act (FLSA) and in breach of their union contract. The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6) on the ground that they are not a joint employer.

California Government Code § 20610 applies only to the calculation of retirement benefits, not to wage-and-hours claims. No legal authority supports the contention that the school districts are one employer and thus collectively required to pay overtime pay. To the contrary, the school districts are separate employers by law. The court grants the motions to dismiss.

STATEMENT

The plaintiffs worked as sanitation workers for the two school districts. Each worked forty hours a week for one district and extra hours for the second district: (1) Mr. Monroe worked about twenty hours a week for Fremont Unified School District (from May 4, 1981, to April 2021) and about forty hours a week for Hayward Unified School District (from October 22, 1999, to April 2021), and then he retired; and (2) Mr. Snowden has worked about forty hours a week for Hayward Unified School District since 1998 and about twenty-five hours a week for Fremont Unified School District since September 2, 2002. Both plaintiffs have a collective-bargaining agreement that governs their employment.^[1]

The plaintiffs sued the defendants for (1) breach of their collective-bargaining agreements, (2) failure to pay minimum wage in violation of the FLSA, 29 U.S.C. § 206, and (3) failure to pay overtime wages in violation of the FLSA Id. § 207.^[2] The court held a hearing on March 9 2023.

JURISDICTION

The court has federal-question subject-matter jurisdiction over the FLSA claims under 28 U.S.C. § 1331 and supplemental jurisdiction over the state claim under 28 U.S.C. § 1367. All parties consented to magistrate-judge jurisdiction under 28 U.S.C. § 636.^[3]

STANDARDS OF REVIEW

A complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief” to give the defendant “fair notice” of (1) what the claims are and (2) the grounds upon which they rest. Fed.R.Civ.P. 8(a)(2); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Thus, “[a] complaint may fail to show a right to relief either by lacking a cognizable legal theory or by lacking sufficient facts alleged under a cognizable legal theory.” Woods v. U.S. Bank N.A., 831 F.3d 1159, 1162 (9th Cir. 2016).

A complaint does not need detailed factual allegations, but “a plaintiff's obligation to provide the ‘grounds' of his ‘entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555 (cleaned up). A complaint must contain factual allegations that, when accepted as true, are sufficient to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); NorthBay Healthcare Grp., Inc. v. Kaiser Found. Health Plan, Inc., 838 Fed.Appx. 231, 234 (9th Cir. 2020). “[O]nly the claim needs to be plausible, and not the facts themselves....” NorthBay, 838 Fed.Appx. at 234 (citing Iqbal, 556 U.S. at 696); see Interpipe Contracting, Inc. v. Becerra, 898 F.3d 879, 886-87 (9th Cir. 2018) (the court must accept the factual allegations in the complaint “as true and construe them in the light most favorable to the plaintiff”) (cleaned up).

Put another way, “[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. “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. “Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of ‘entitlement to relief.'” Id. (cleaned up).

If a court dismisses a complaint because of insufficient factual allegations, it should give leave to amend unless “the pleading could not possibly be cured by the allegation of other facts.” Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911 F.2d 242, 247 (9th Cir. 1990). If a court dismisses a complaint because its legal theory is not cognizable, the court should give leave to amend if the plaintiff could “articulate a cognizable legal theory if given the opportunity.” Steele-Klein v. Int'l Bhd. of Teamsters, Loc. 117, 696 Fed.Appx. 200, 202 (9th Cir. 2017).

ANALYSIS

The dispositive issue is whether the defendants are one employer or distinct entities.^[4] They are separate entities and separate employers.

Under the FLSA, an employer is “any person acting directly or indirectly in the interest of an employer in relation to an employee and includes a public agency.” 29 U.S.C § 203(d).

“Regulations promulgated under the FLSA recognized that . . . [w]hen more than one entity is an employer [of the same employee] for purposes of the FLSA, the entities are termed ‘joint employers.'” Torres-Lopez v. May, 111 F.3d 633, 638 (9th Cir. 1997) (quoting 29 C.F.R. § 791.2(a)). Where there are joint employers, “all of the employee's work for all of the joint employers during the workweek is considered as one employment for purposes of the Act.” 29 C.F.R. § 791.2(a) (effective Aug. 5, 1958, to Mar. 15, 2020). Although § 791.2 has been amended over the years, for present purposes all versions are substantially the same: “If all the relevant facts establish that two or more employers are acting entirely independently of each other and are completely disassociated with respect to the employment of a particular employee,” they are not joint employers. Id.; Id. § 791.2(e)(2) (effective Mar. 16, 2020, to Oct. 4, 2021).

In addition to the regulations, the Ninth Circuit has adopted two tests to determine whether multiple employers are joint employers under the FLSA. Campanelli v. Image First Healthcare Laundry Specialists, Inc., No. 15-cv-04456-PJH, 2018 WL 934545, at *3-5 (N.D. Cal. Feb. 16, 2018). First, the four-part “economic reality” test applies to the “vertical” joint-employment situation where “a company has contracted for workers who are directly employed by an intermediary company.” Chao v. A-One Med. Servs., Inc., 346 F.3d 908, 917 (9th Cir. 2003); Senne v. Kan. City Royals Baseball Corp., 591 F.Supp.3d 453, 511 (N.D. Cal. 2022) (citing Bonnette v. Cal. Health & Welfare Agency, 704 F.2d 1465, 1470 (9th Cir. 1983)). The four factors are whether the alleged joint employer “(1) had 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.” Lesnik v. Eisenmann SE, 374 F.Supp.3d 923, 942 (N.D. Cal. 2019) (quoting Bonnette, 704 F.2d at 1470).

Second, “horizontal joint employment exists when two (or more) employers each separately employ an employee and are sufficiently associated with or related to each other with respect to the employee.” Campanelli, 2018 WL 934545, at *5 (cleaned up). “There is typically an established or admitted employment relationship between the employee and each of the employers, and often the employee performs separate work or works separate hours for each employer.” Id. (cleaned up). The horizontal test looks at three factors: (1) whether “there is an arrangement between the employers to share the employee's services,” (2) whether “one employer is acting directly or indirectly in the interest of the other employer . . . in relation to the employee,” or (3) whether “one employer controls, is controlled by, or is under common control with the other employer” and therefore the two “share control” of the employee. Chao, 346 F.3d at 917-18 (quoting 29 C.F.R. § 791.2(b) (effective Aug. 5, 1958, to Mar. 15, 2020)).

“Whether an entity is a ‘joint employer' under the FLSA . . . is a question of law.” Aguilar v. Rumi Constr., No. C 07-0272 JL, 2007 WL 9812735, at *3 (N.D. Cal. June 4, 2007). “At the pleadings stage, although the plaintiff is not required to conclusively establish that [the] defendants were her joint employers,” she “must at least allege some facts in support of this legal conclusion.” Lesnik, 374 F.Supp.3d at 942 (cleaned up).

Here, the plaintiffs cannot allege facts to support their FLSA claims because under the California Education Code, the defendants are different employers that “are acting entirely independently of each other and are completely disassociated with respect to the employment of a particular employee.” 29 C.F.R. § 791.2(a) (effective Aug. 5, 1958, to Mar. 15, 2020).

School districts act through school boards, which are the employers. Gonzales v....