United States District Court, D. Colorado
ORDER GRANTING DEFENDANT'S MOTION TO
DISMISS
William J. Martinez United States District Judge
This
matter is before the Court on Defendant Thomas J. Palic DC
PC's, d/b/a Palic Clinic (“Palic's”)
Motion to Dismiss for Failure to State a Claim (the
“Motion to Dismiss”) and Early Motion for Summary
Judgment (ECF No. 8) (jointly the “Motions”). For
the reasons that follow, the Court finds that dismissal
without prejudice is appropriate. The Court does not reach
Defendant Palic's alternative request for summary
judgment, as the factual record remains too underdeveloped to
permit a properly supported summary judgment ruling at this
time.
I.
BACKGROUND
On June
6, 2019, Plaintiff Simona Frank filed suit against Defendant
Palic in Colorado state court, seeking to recover unpaid
wages under the Fair Labor Standards Act (“FLSA”)
and the Colorado Wage Claim Act (“CWCA”). (ECF
No. 1 at 1.) Defendant filed a Notice of Removal with this
Court on June 28, 2019. (ECF No. 1.) On July 5, 2019,
Defendant filed a Motion to Dismiss and Motion for Summary
Judgment. (ECF No. 8.) Plaintiff on July 26, 2019 filed a
Response (ECF No. 18), and Defendant on August 9, 2019 filed
a Reply (ECF No. 19).
Defendant
Palic operates a chiropractic clinic (the
“Clinic”). (ECF No. 8 at 1.) Plaintiff alleges
that she “was hired as a manager for Defendant on or
about March 1, 2015, ” but that she “was paid a
salary of nothing for 2015, 2016, and 2017, and $3, 432 for
2018 up to July 28, 2018.” (ECF No. 1-1 at 4.)
Plaintiff further alleges that she worked an average of fifty
hours per week, “was responsible for managing and
supervising 1 employee as needed, ” and performed such
other tasks as “billing Medicare and insurance when
required; training office staff; [and] doing general
receptionist duties.” Id. While Plaintiff
concedes that “[t]here is no employment contract,
” she seeks “$162, 818 in regular and overtime
wages (based on competitive wages).” Id.
Plaintiff further alleges that “[o]n April 14, 2019,
[she] made a written demand for payment for the wages she is
owed to Defendant through counsel, ” and that to date,
Defendant has refused to pay. Id. at 4-5.
II.
LEGAL STANDARD
Under
Federal Rule of Civil Procedure 12(b)(6), a party may move to
dismiss a claim in a complaint for “failure to state a
claim upon which relief can be granted.” The 12(b)(6)
standard requires the Court to “assume the truth of the
plaintiff's well-pleaded factual allegations and view
them in the light most favorable to the plaintiff.”
Ridge at Red Hawk, LLC v. Schneider, 493 F.3d 1174,
1177 (10th Cir. 2007). In ruling on such a motion, the
dispositive inquiry is “whether the complaint contains
‘enough facts to state a claim to relief that is
plausible on its face.'” Id. (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)). Granting a motion to dismiss “is a harsh
remedy which must be cautiously studied, not only to
effectuate the spirit of the liberal rules of pleading but
also to protect the interests of justice.” Dias v.
City & Cnty. of Denver, 567 F.3d 1169, 1178 (10th
Cir. 2009) (internal quotation marks omitted). “Thus,
‘a well-pleaded complaint may proceed even if it
strikes a savvy judge that actual proof of those facts is
improbable, and that a recovery is very remote and
unlikely.'” Id. (quoting Twombly,
550 U.S. at 556).
III.
DISCUSSION
A.
Plaintiff's FLSA Claims
Defendant
argues that Plaintiff's allegations are insufficient to
plausibly infer the existence of an employer-employee
relationship, as required by the FLSA. (ECF No. 8 at 7-9.)
The Court agrees.
The
FLSA defines an “employee” as “any
individual employed by an employer.” 29 U.S.C. §
203(e)(1). In turn, “employer” is defined as
“any person acting directly or indirectly in the
interest of an employer in relation to an employee.”
Id. § 203(d). “Employ” is defined
as “suffer or permit to work.” Id.
§ 203(g). While these definitions do not provide much
guidance, the Supreme Court has instructed that the
“economic reality” of the relationship governs
whether an individual is an employee for purposes of the
FLSA. Tony & Susan Alamo Found. v. Sec'y of
Labor, 471 U.S. 290, 295 (1985). “The economic
reality test includes inquiries into whether the alleged
employer has the power to hire and fire employees, supervises
and controls employee work schedules or conditions of
employment, determines the rate and method of payment, and
maintains employment records.” Baker v. Flint
Eng'g & Const. Co., 137 F.3d 1436, 1440 (10th
Cir. 1998).
While
the term “employee” should be broadly construed,
“when relationships have deviated from the traditional
understanding of employment in fundamental ways, the Supreme
Court has refused to shoehorn them into the [FLSA].”
Steelman v. Hirsch, 473 F.3d 124, 129 (4th Cir.
2007). The FLSA would not apply, for instance, to volunteers
who “without promise or expectation of compensation,
but solely for [their] personal purpose or pleasure, worked
in activities carried on by other persons either for their
pleasure or profit.” Walling v. Portland Terminal
Co., 330 U.S. 148, 152 (1947). Nor would the FLSA apply
to individuals who “without any express or implied
compensation agreement, might work for their own advantage on
the premises of another.” Id. Additionally,
the Tenth Circuit has held that general partners in a
business are not covered by the FLSA. Wheeler v.
Hurdman, 825 F.2d 257, 277 (10th Cir. 2007).
“[A]ttributes of partnership such as exposure to risk,
managerial control, and the ability to share in profits,
‘introduce complexities and economic realities that are
not consonant with employee status.'”
Steelman, 473 F.3d at 129 (quoting Wheeler,
825 F.2d at 275).
Taking
Plaintiff's sparse allegations as true, that Defendant
would be liable under the FLSA is conceivable, but given the
minimal facts alleged in the complaint, it is not plausible.
As an initial matter, it is difficult to envision an
individual having a reasonable expectation that she would be
compensated for her labor after working for free for over
three years. Plaintiff alleges that she eventually requested
compensation, but not until over four years after she
allegedly began working for Defendant-shortly before she
brought this action in state court. While at this stage of
the proceedings the Court must make all reasonable inferences
in Plaintiff's favor, the Court cannot reasonably infer
that she had in fact requested compensation prior to that
very late date.
Moreover,
Plaintiff herself asserts that “[t]here is no
employment contract.” (ECF No. 1-1 at 4.) While this is
a vague and conclusory statement, and is not itself
dispositive of the issue, it does manifest an admission by
Plaintiff that there was no express agreement providing for
terms under which her and Defendant's working
relationship would be bound. This further weighs against the
plausibility of a “bargained-for exchange of labor for
mutual economic gain that occurs in a true employer-employee
relationship.” Steelman, 473 F.3d at 130.
Indeed, Plaintiff “describes the work she claims to
have done . . . but does not state any facts concerning how
[Defendant] supervised or controlled the work.”
Devore v. Lyons, 2016 WL 6277810 (N.D. Tex. Oct. 25,
2016). Nor does Plaintiff allege whether Defendant
“ha[d] the ...