United States District Court, N.D. Alabama, Western Division
MEMORANDUM OF OPINION
SCOTT COOGLER, UNITED STATES DISTRICT JUDGE.
Court has before it Defendants' Rule 12(b)(6) Motion to
Dismiss. (Doc. 20.) Plaintiff Jacki Beck (“Beck”)
brought this action alleging unpaid minimum wages and
overtime violations under the Fair Labor Standards Act
(“FLSA”), 29 U.S.C. § 201, et seq.,
as well as breach of contract, fraud, and unjust enrichment
under Alabama state law. All Defendants, Financial Technology
Corp (“FITECH”), Teachers ‘N Tools, Inc.
(“TNT”), Smart Data Strategies, Inc.
(“Smart Data Strategies”), Marion Edwin Lowery
(“Lowery”), Isaac A. Smith, II
(“Smith”), move to dismiss Beck's FLSA claims
against them because she has failed to state a valid claim
for unpaid minimum wages, and all Defendants except FITECH
move to be dismissed as party defendants because they lack
the requisite employer-employee relationship with Plaintiff.
For the reasons below, the Motion to Dismiss is due to be
GRANTED. (Doc. 20.)
Jacki Beck, (“Beck”) commenced this action on
November 15, 2016, and defendants filed a motion to dismiss
on December 12. In its July 17, 2017, Memorandum of Opinion
and Order (doc. 18), the Court dismissed Plaintiff's
claims under the FLSA for failure to state a claim, and her
state law claims for lack of subject matter jurisdiction,
giving Plaintiff leave to amend her complaint to avoid
dismissal. Plaintiff filed her first amended complaint (doc.
19) within the ten (10) days proscribed by the Court's
Order. Defendant's filed the pending motion to dismiss
all claims in Plaintiff's first amended complaint on
August 8, 2017. (Doc. 20.)
was employed by Teachers ‘N Tools, Inc.
(“TNT”) as a sales representative, selling retail
products to school systems in the southeastern United States.
Defendants Lowery and Smith purchased TNT and FTC-Teachers
‘N Tools, Inc. (“FTC-TNT”) in 2013. Lowery
and Smith made TNT a subsidiary of Financial Technology Corp.
(“FITECH”). TNT appeared as an employer on
Beck's W-2 form and also withheld taxes from Beck's
paychecks in 2015. Lowery and Smith later made FTC-TNT an
assumed name of FITECH. Lowery and Smith also own Smart Data
purchasing TNT, Lowery and Smith retained Beck to sell
products and services in exchange for an annual salary of
$36, 000, plus commissions on sales and renewals. Commissions
were equal to 30% of the gross profit on any new software
sales, 20% of gross profit on any renewals of software sales,
and 25% of gross profits on all other sales. Beck was also
guaranteed commission on all renewals of products or software
originally sold by her. When Beck made a sale, Lowery would
obtain the product to provide to the customer.
was a competent employee, and was the top salesperson in 2014
and 2015. However, Defendants were routinely late in paying
Beck, or simply did not pay her at all. Whether Beck was paid
monthly or bi-monthly, the payments were made for the same
amount. Beck alleges she was paid $38, 125.32 for 2015 and
$24, 240.61 for the relevant part of 2016. Beck claims she is
owed more than $32, 797.10 in commissions for 2015, and $9,
845.55 in commissions for 2016, amounting to approximately
$42, 642.65 in total unpaid commissions. In 2016, Lowery and
Smith sent a letter to Beck purporting to change her salary
and commission structure. Lowery also fired Beck's
co-worker in 2016, and gave a raise to another co-worker
around the same time. In 2015, Beck traveled extensively and
frequently worked more than forty hours per week. Beck
personally incurred travel expenses because the firm credit
card provided by Defendants was often declined. These costs
included mileage and gas, hotel stays, food, and other
expenses. Beck claims that a sum of approximately $155.86 for
miscellaneous expenses has not been reimbursed. Beck also
claims that she was enrolled in Defendants' group health
plan, and Defendants paid a portion of her health insurance
premiums. In 2015, Defendants lost the health insurance plan,
but continued to deduct insurance premiums from Beck's
paycheck totaling $2, 277.00 over several pay periods. After
losing health insurance, Beck incurred out-of-pocket medical
expenses amounting to $964.03. Smith was involved in the
decision of whether to reimburse Beck for improper insurance
withholdings, in addition to the travel and medical expenses.
Though Defendants promised to reimburse Beck for these
expenses, they have not done so in full.
survive a 12(b)(6) motion to dismiss for failure to state a
claim, the complaint must contain “a short and plain
statement of the claim showing that the pleader is entitled
to relief.” Fed.R.Civ.P. 8(a)(2). However, to satisfy
this standard, the complaint must also include
“sufficient factual matter, accepted as true, to state
a claim for relief that is plausible on its face.”
Id. at 678 (internal quotations omitted).
establishes a two-step process for evaluating a complaint.
First, the Court must “identify pleadings that,
because they are no more than conclusions, are not entitled
to the assumption of truth.” Id. at 679.
Second, “[w]hen there are well-pleaded factual
allegations, a court should assume their veracity and then
determine whether they plausibly give rise to an entitlement
to relief.” Id. Factual allegations in a
complaint need not be detailed, but they “must be
enough to raise a right to relief above the speculative
level.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555 (2007).
need not specifically plead each element in his or her cause
of action, but the pleading must contain “enough
information regarding the material elements of a cause of
action to support recovery under some viable legal
theory.” Am. Fed'n of Labor & Cong. of
Indus. Orgs. v. City of Miami, Fla., 637 F.3d 1178, 1186
(11th Cir. 2011). Ultimately, the Court must be able to draw
a reasonable inference from the facts that the other party is
liable. Reese v. Ellis, Painter, Ratterree & Adams,
LLP, 678 F.3d 1211, 1215 (11th Cir. 2012). The Court
must construe pleadings broadly and resolve inferences in the
nonmoving party's favor. Levine v. World Fin. Network
Nat'l Bank, 437 F.3d 1118, 1120 (11th Cir. 2006).
do not dispute that FITECH was Beck's employer during the
relevant employment period. (Doc. 20 at 1.) Defendants TNT,
Lowery, Smith, and SDS, however, move to dismiss the claims
against them under Rule 12(b)(6). These defendants claim they
had neither an employer-employee relationship nor a contract
with Beck during the period relevant to her FLSA claim. In
order to recover under the FLSA, a plaintiff must show that a
defendant is her “employer” as defined by the
FLSA. 29 U.S.C § 207(a)(1). The FLSA broadly defines an
employer to include “any person acting directly or
indirectly in the interest of an employer in relation to an
employee.” 29 U.S.C § 203(d). This analysis is
broad and depends “on the circumstances of the whole
activity.” Alvarez Perez v. Sanford-Orlando Kennel
Club, Inc., 515 F.3d 1150, 1160 (11th Cir. 2008)
(quoting Hodgson v. Griffin & Brand of McAllen,
Inc., 471 F.2d 235, 237 (5th Cir. 1973)).
to employ means to “suffer or permit to work, ”
and “[a]n entity suffers or permits an individual to
work if, as a matter of economic reality, the individual is
dependent on the entity.” Antenor v. D & S
Farms, 88 F.3d 925, 929 (11th Cir. 1996) (internal
quotations omitted). This “economic reality” test
considers “whether the 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 ...