United States District Court, D. Colorado
THEODORE KORAL, individually and on behalf of all others similarly situated, Plaintiff,
INFLATED DOUGH, INC., a Colorado corporation, Defendant.
ORDER DENYING MOTION TO DISMISS
WILEY Y. DANIEL, Senior District Judge.
I. INTRODUCTION AND BACKGROUND
THIS MATTER is before the Court on the Defendant's Motion to Dismiss Plaintiff's Amended Complaint (ECF No. 25), filed on January 3, 2014. The Plaintiff filed a Response (ECF No. 26) on January 28, 2014 and the Defendant filed a Reply (ECF No. 27) on February 14, 2014.
By way of background, the Plaintiff was employed by the Defendant as a pizza delivery driver from September of 1999 to April of 2012. ECF No. 21, ¶ 7. The federal minimum wage rate during this time period was $7.25 per hour and the Colorado minimum wage rate ranged from $7.24 per hour in 2010; $7.36 per hour in 2011; $7.64 per hour in 2012; and $7.78 per hour in 2013. ECF No. 21, ¶¶ 49 and 65. While employed by the Defendant, the Plaintiff was compensated at the federal minimum wage rate only while working inside the Defendant's restaurant. ECF No. 21, ¶ 27. While on delivery, his hourly wage rate was reduced. Id. He would then be directly compensated $4.62 per hour in addition to reimbursement for his vehicle-related expenses at a rate of $0.16 per mile driven regardless of actual costs. Id. Pursuant to the Fair Labor and Standards Act ("FLSA"), 29 U.S.C. § 206, during months when the Plaintiff received $30 or more in tips, he was entitled to $2.13 per hour in compensation. ECF No. 21, ¶ 49. Further, during months when the Plaintiff received $30 or less in tips, he was entitled to $7.25 per hour in compensation. Id. The Plaintiff's direct compensation combined with tips received was required to meet the $7.25 minimum wage rate. Id.
On December 9, 2013, the Plaintiff filed an Amended Class and Collective Action Complaint and Jury Demand ("Amended Complaint"), individually and on behalf of all others similar situated, alleging that the Defendant failed to properly reimburse the Plaintiff for vehicle expenses incurred while on delivery. ECF No. 21. The Plaintiff asserts that this practice was in violation of both federal and state minimum wage requirements under the FLSA, 29 U.S.C. § 201, et seq., and the Colorado Minimum Wage of Workers Act ("CMWWA"), Colo. Rev. Stat. Ann. § 8-6-101, et seq., respectively. Id. As justification, the Plaintiff reasons that the Defendant's reimbursement policy was inappropriate because it required him to pay out-of-pocket for business related vehicle expenses incurred beyond the $0.16 per mile allocation. Id. Thus, it is the Plaintiff's position that he was compensated less than the federal and Colorado minimum wage rates because his wages were effectively reduced by his unreimbursed out-of-pocket business related expenses. Id.
In response to the Amended Complaint, the Defendant filed its Motion to Dismiss Plaintiff's Amended Complaint on January 3, 2014, alleging several deficiencies. ECF No. 25. In that motion, the Defendant argues that the Plaintiff's claims lack legal support and that the Amended Complaint fails to sufficiently plead the factual basis of liability as required by Fed.R.Civ.P. 12(b)(6). Id. After carefully reviewing the applicable pleadings, the Defendant's motion is denied as set forth below.
II. STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b)(6) provides that a defendant may move to dismiss a claim for "failure to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). The Court's inquiry is "whether the complaint contains enough facts to state a claim to relief that is plausible on its face.'" Ridge at Red Hawk, LLC v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007)). In reviewing a motion under Rule 12(b)(6), the Court "must accept all... well-pleaded allegations of the complaint as true and must construe them in the light most favorable to the plaintiff." David v. City & Cnty. of Denver, 101 F.3d 1344, 1352 (10th Cir. 1996). A pleading that offers labels and conclusions' or a formulaic recitation of the elements of a cause of action will not do. Nor does the complaint suffice if it tenders naked assertion[s]' devoid of further factual enhancement.'" Id. at 678 (quoting Twombly, 550 U.S. at 555, 557). Furthermore, conclusory allegations are "not entitled to the assumption of truth." Id. at 679.
In the Plaintiff's first claim for relief, he maintains that the Defendant violated the FLSA for failing to pay him the federal minimum wage rate to which he was entitled. In the Plaintiff's second claim for relief, he maintains that the Defendant similarly violated the CMWWA for failing to pay him the Colorado minimum wage rate to which he was entitled. The Defendant alleges several deficiencies as to these claims for relief, which are addressed in turn below.
A. FLSA Claim and Knowledge of Violation
The Defendant argues that the Plaintiff's FLSA claim should be dismissed because the Defendant had no reason to be aware of the Plaintiff's out-of-pocket business related expenses and because the Amended Complaint does not allege that the Defendant had reason to be aware or was put on notice of such expenses. The Plaintiff does not address this argument in his response to the Defendant's Motion to Dismiss.
As to this issue, the Defendant cites numerous cases that stand for the proposition that an employer's knowledge of an employee's overtime is an essential element of an FLSA claim, in that failing to allege employer knowledge warrants dismissal. Upon review of the FLSA portion of the Amended Complaint, it is evident that the Plaintiff does not specifically allege that the Defendant knew or should have known of the Plaintiff's vehicle expenses in surplus of the $0.16 per mile allocation. However, the cases cited by the Defendant address overtime and not specific ...