Sampson v. Medisys Health Network Inc

NELLIE SAMPSON, on behalf of herself and all other employees similarly situated, Plaintiffs,

v. MEDISYS HEALTH NETWORK INC., THE JAMAICA HOSPITAL, THE BROOKDALE HOSPITAL MEDICAL CENTER, FLUSHING HOSPITAL ANDMEDICAL CENTER, PENINSULA HOSPITAL CENTER, DAVID P. ROSEN, and MAX SCLAIR, Defendants.

No. 10-CV-1342 (SJF) (ARL)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

Dated: February 8, 2011

ORDER

FEUERSTEIN, J.

On March 24, 2010, Claudette Fraser commenced this action on behalf of others similarly situated against Medisys Health Network, Inc., the Jamaica Hospital, the Brookdale Hopsital Medical Center, Flushing Hospital and Medical Center, Peninsula Hospital Medical Center, David P. Rosen and Max Sclair (collectively "defendants") alleging violations of the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. § 201 et seq. ("FLSA"), and the Racketeer Influenced and Corrupt Organizations Act 18 U.S.C. § 1961, et seq. ("RICO"). Prior to serving the complaint upon defendants, plaintiff's counsel filed "Consent to Become a Party Plaintiff forms signed by twelve (12) employees of defendants, and, on June 16, 2010, filed an amended complaint (the "complaint") substituting Nellie Sampson as the named plaintiff and adding related state law claims. To date, plaintiff's counsel has filed twenty (20) consent forms onbehalf of employees of defendants (collectively "plaintiffs") and has voluntarily dismissed the claims of several plaintiffs.

On September 30, 2010, defendants filed a motion to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. DE 68. On October 4, 2010, plaintiffs filed a motion "to strike inappropriately submitted evidence, " arguing that the court should not consider several collective bargaining agreements ("CBAs") submitted by defendants when deciding the motion. DE 79. On December 21, 2010, plaintiffs filed a "motion for expedited notice to affected employees" wherein plaintiffs request that the Court issue an order (1) "requiring the issuance of an expedited notice to" relevant employees; (2) "requiring defendants to provide... a list... of all current and former employees" subject to the policies in question; (3) "requiring defendants to post notices and opt-in forms... at defendants' locations"; (4) "requiring defendants to email such notices and opt-in forms to employees"; (5) "requiring defendants to publish such notice... in defendants' newsletter[s]"; and requesting an expedited hearing upon plaintiffs' motion for expedited notice. DE 98, 103.

I. Factual Background

Plaintiffs allege that Medisys Health Network, Inc. and the other named defendant medical centers belong to "a single, integrated enterprise" ("Medisys"), compl. ¶ 36, related through "common membership, governing bodies and trustees and/or officers, " id. ¶ 18, and that defendants David P. Rosen and Max Sclair are the President and Chief Executive Officer and the Vice President of Human Resources of Medisys respectively. Id. ¶¶ 40, 52. The namedplaintiff belongs to a group of proposed plaintiffs who were employees of Medisys paid hourly, id. ¶ 10, and "were suffered or permitted to work by defendants and not paid their regular or statutorily required rate of pay for all hours worked." Id. ¶ 65.

Plaintiffs challenge several "policies" of Medisys which they allege violated the aforementioned laws:

(1) "Meal and Break Deduction Policy." Plaintiffs allege that defendants' "timekeeping system automatically deducts time from [plaintiffs'] paychecks each day for meals, breaks and other reasons, " but that plaintiffs "do in fact perform work during those breaks and are not paid for that time." Id.¶¶ 68, 70. Therefore, plaintiffs argue, they "are not fully compensated for work they perform during breaks." Id. ¶ 85;

(2) "Pre-and Post-Schedule Work Policy." Plaintiffs allege that defendants "suffered or permitted" them to "perform work before and/or after the end of their scheduled shifts" but did not pay them "for all of the time spent performing such work as a result of defendants' policies, practices and/or time recording system" Id. ¶¶ 89-90. Therefore, plaintiffs allege, they should have been paid for work performed "before and/or after their shifts." Id. ¶ 91;

(3) "Training Policy." Plaintiffs allege that defendants "suffered or permitted [plaintiffs] to attend compensable training programs" but "fail[ed] to pay [them] for all time spent attending such training sessions." Id. ¶¶ 93-94.

Furthermore, plaintiffs allege that these policies, and Medisys' practice of mailing payroll checks to plaintiffs which deceptively underpaid them pursuant to these policies, constituted a "scheme" consisting of "illegally, willfully and systematically withholding or refusing to pay [plaintiffs] their regular or statutorily required rate of pay for all hours worked." Id. ¶¶ 108-112.

II. Analysis

A. Rule 12(b)(6) Motion to Dismiss

1. Standard of Review

The standard of review on a motion made pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure requires that a plaintiff plead sufficient facts "to state a claim for relief that is plausible on its face." Bell Atlantic Corp. v. Twombly. 550 U.S. 544, 547, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007). A complaint must give the defendant "fair notice of what the... claim is and the grounds upon which it rests." Erickson v. Pardus. 551 U.S. 89, 93, 127 S. Ct. 2197, 2200, 167 L. Ed. 2d 1081 (2007). See also Boykin v. KeyCorp. 521 F.3d 202, 214 (2d Cir. 2008). However, a "pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.'" Ashcroft v. Iqbal.---U.S.----, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009) (quoting Twombly. 550 U.S. at 555). "Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of further factual enhancement.'" Iqbal. 129 S. Ct. at 1949 (quoting Twombly. 550 U.S. at 557). "Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Twombly. 550 U.S. at 555. The plausibility standard requires "more than a sheer possibility that defendant has acted unlawfully." Iqbal. 129 S.Ct, at 1949.

In deciding a motion to dismiss, the Court must liberally construe the claims, accept allfactual allegations in the complaint as true, and draw all reasonable inferences in favor of the plaintiff. Goldstein v. Pataki, 516 F.3d 50, 56 (2d Cir. 2008), cert, denied, 128 S. Ct. 2964, 171 L. Ed. 2d 906 (2008) (quoting Chambers v. Time Warner. Inc.. 282 F.3d 147, 152 (2d Cir. 2002)). However, this standard "is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere Conclusory statements, do not suffice." Iqbal. 129 S. Ct. at 1949. "While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Id. at 1950. When determining a motion to dismiss pursuant to Rule 12(b)(6), the Court must limit itself to the facts alleged in the complaint, which are accepted as true; to any documents attached to the complaint as exhibits or incorporated by reference therein; to matters of which judicial notice may be taken; or to documents upon the terms and effect of which the complaint "relies heavily" and which are, thus, rendered "integral" to the complaint. Chambers, 282 F.3d at

2. FLSA Claims

Plaintiffs' allegation of a purported violation of FLSA consists of a reference without citation at the beginning of the complaint, id. ¶ 1, a jurisdictional reference to 29 U.S.C. § 216(b), id. ¶ 2, and a general incorporation of the first one hundred and ninety six (196) paragraphs of the complaint by reference. Id.¶ 197. The complaint references "illegal pay policies, " id. ¶ 67, and alleges that "compensable work time was being excluded from the [plaintiffs'] pay." Id. ¶ 83. Although it describes the specific policies, the complaint does not articulate which part of the FLSA plaintiffs contend was violated.

An employee who works fewer than forty (40) hours in a week, and is paid for those hours at a rate of at least minimum wage, cannot state a claim pursuant to the wage and hour provisions of the FLSA. See United States v. Klinghoffer Bros. Realty Corp.. 285 F.2d 487, 494 (2d Cir. 1961); Wolman v Catholic Health Svs. of Lone Island No. 10-CV-1326, 2010 WL 5491182 (E.D.N.Y. December 30, 2010). Insofar as plaintiffs challenge defendants' failure to compensate them for working during meals and breaks, the Court interprets plaintiffs to be seeking overtime and "gap time" compensation pursuant to the FLSA based upon the totality of the allegations in the complaint and the moving papers. Conzo v. City of New York. 667 F.Supp.2d 279, 283 (S.D.N.Y. 2009) (defining "gap time" compensation as "compensation for hours worked 'in the gap' between non-overtime hours compensated for by their salary and hours above [forty] 40 which are compensated for with overtime pay"); see also Wolman v Catholic Health Svs. of Long Island No. 10-CV-1326, 2010 WL 5491182 (E.D.N.Y. December 30, 2010) (construing a similar complaint to purport to allege theses claims).

A. Overtime Claims

The FLSA states that "no employer shall employ any of his employees... for a workweek longer than forty [40] hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half [1 1/2] times the regular rate at which he is employed." 29 U.S.C. § 207(a)(1). Although the Second Circuit has not defined the elements of a FLSA overtime claim, the statute explicitly requires that for an eligible employee to be qualified for heightened compensation, he or she must work, see Chao v. Gotham Registry, Inc., 514 F.3d 280 (2d Cir. 2008) (when an employee is 'working' for the purposes of overtime compensation), and that the hours worked be in excess of...