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Solis v. The Circle Group, LLC

United States District Court, D. Colorado

April 5, 2017

VIOLETA SOLIS, CESAR SALAZAR, EDGAR CEBALLOS, AARON SALAS, HILDEBERTO ALDECO BALTAZAR, JUAN RAMON RODRIGUEZ, ADRIANA LIRA, NANCY GUTIERREZ, BEATRIZ MIRAMONTES, and those similarly situated, Plaintiffs,
v.
THE CIRCLE GROUP, LLC, LAG. DRYWALL, INC., a/k/a LA DRYWALL, INC., JAVIER MARTINEZ DRYWALL, LLC, and GULF COAST CONSTRUCTION, INC., Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT CIRCLE GROUP'S MOTION TO DISMISS AND GRANTING DEFENDANT LAG'S PARTIAL MOTION TO DISMISS

          R. Brooke Jackson United States District Judge

         This order addresses defendant The Circle Group, LLC's ("Circle Group") motion to dismiss and defendant L.A.G. Drywall, Inc.'s ("LAG") partial motion to dismiss. For the reasons given below, the Court grants in part and denies in part Circle Group's motion, and grants LAG's motion.

         BACKGROUND

         This case concerns the alleged underbelly of the construction boom in Denver and elsewhere across the country. Plaintiffs are several laborers who claim that the defendant subcontractor and sub-subcontractors have used illegal employment practices to exploit them.

         After a few volleys of pleadings and motions from the two sides, we now have plaintiffs' fourth amended complaint. Plaintiffs raise claims for violation of (1) the Fair Labor Standards Act ("FLSA"), (2) the Equal Pay Act, (3) the Colorado Trust Fund Act ("CTFA"), (4) various states' minimum wage, overtime, and wage-payment laws, and (5) the Colorado Wage Claim Act ("CWCA"), as well as (6) quantum meruit under Tennessee law, (7) breach of contract under Tennessee law, (8) discrimination on the basis of various classes protected by Title VII of the Civil Rights Act, (9) discrimination on the basis of race, national origin, and ancestry in violation of Title VII, (10) discrimination in violation of 42 U.S.C. § 1981, and (11) retaliation in violation of the FLSA and CWCA. The complaint proceeds against all defendants on a "joint employer" theory, which seeks to hold liable the subcontractor and its subcontractors alike.

         Circle Group has responded with a motion to dismiss the complaint outright, ECF No. 104, and LAG has filed a partial motion to dismiss the claim for unidentified states' wage laws, ECF No. 106. The motions have been fully briefed. See ECF Nos. 116, 117, 118, 120.

         STANDARD OF REVIEW

         To survive a 12(b)(6) motion to dismiss, the complaint must contain "enough facts to state a claim to relief that is plausible on its face." Ridge at Red Hawk, L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007) (quoting Bell Ail. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). While the Court must accept the well-pleaded allegations of the complaint as true and construe them in the light most favorable to the plaintiff, Robbins v. Wilkie, 300 F.3d 1208, 1210 (10th Cir. 2002), purely conclusory allegations are not entitled to be presumed true, Ashcroft v. Iqbal, 556 U.S. 662, 681 (2009). However, so long as the plaintiff offers sufficient factual allegations such that the right to relief is raised above the speculative level, he has met the threshold pleading standard. See Twombly, 550 U.S. at 556.

         ANALYSIS

         The attacks on plaintiffs' eleven claims can be grouped into three questions: first, whether plaintiffs have pleaded sufficient facts to support their theory that Circle Group is a joint employer for the purposes of federal labor laws; second, whether these allegations can sustain a joint employer theory under other federal and state laws; and third, setting aside the joint employer theory, whether plaintiffs have pleaded enough facts to support the remainder of their claims. The Court will consider each of these issues in turn.

         As an initial matter, however, I note that my review of these questions will exclude all evidentiary material attached by Circle Group. "[W]hen parties submit materials outside of the pleadings in support of or in opposition to a Rule 12(b)(6) motion, a court has broad discretion whether to accept and consider them." Dobson v. Anderson, 319 F.App'x 698, 702 (10th Cir. 2008). It would be inappropriate to consider Circle Group's submissions here because plaintiffs do not concede the authenticity of these documents, do not attach these documents to their complaint, and do not even reference most of these documents in their complaint. Circle Group's arguments can be addressed without converting its motion to dismiss into a motion for summary judgment.

         A. Joint Employment Under Federal Labor Laws.

         It is settled law that multiple entities may be held liable as "joint employers" under the FLSA and Title VII. See Falk v. Brennan, 414 U.S. 190, 195 (1973) (FLSA); Knitter v. Corvias Military Living, LLC, 758 F.3d 1214, 1226 (10th Cir. 2014) (Title VII).

         The Tenth Circuit has not yet addressed the issue of joint employment under the FLSA, but many courts follow the Ninth Circuit's four-factor Bonnette test. This test considers "whether an alleged 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, or (4) maintained employment records." Zachary v. Rescare Oklahoma, Inc.,471 F.Supp.2d 1175, 1179 (N.D. Okla. 2006) (citing Bonnette v. Cal. Health & Welfare Agency,704 F.2d 1465, 1470 (9th Cir. 1983)). However, these factors are not exhaustive. Indeed, the Supreme Court has held that an entity can be a joint employer "even when it does not hire and fire its joint ...


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