In a significant case for healthcare and other employers, a Massachusetts federal district court dismissed, with prejudice, and denied certification of a wage and hour class and collective action at the initial stage of the case, finding that the plaintiffs “failed to allege that this proposed nebulous block of potentially over 4,000 plaintiffs are ‘similarly situated.’” As in similar decisions discussed on this blog (here and here), the court criticized the vague and conclusory allegations in the complaint, which the court found failed to state a claim under the FLSA. Most significantly, however, in what may become a powerful argument for healthcare employers seeking to dismiss class and collective actions, the court went a step further and held that the complaint failed to satisfy the pleading standards for class and collective actions under the FLSA and Rule 23 of the Federal Rules of Civil Procedure. To survive a motion to dismiss in such cases, the court stated, “a plaintiff must properly allege a factual basis showing that there are similarly situated persons entitled to relief . . . and/or that [there are] common issues of fact.”
In Manning v. Boston Medical Center Corporation, the plaintiffs filed a putative class action under the FLSA and state common law, alleging that the defendants failed to pay plaintiffs for: (1) work during their lunch breaks; (2) pre- and post-shift work; and (3) time spent attending training programs. After the court granted the defendants’ motion to dismiss the original complaint under section 301 of the Labor Management Relations Act, the plaintiffs amended the complaint on behalf of 4,000 non-union employees in nearly 50 different job positions. The defendants again moved to dismiss.
As to the CEO and Senior HR Director, who were named as individual defendants, the court found the complaint was deficient “because there are simply no allegations tying either of them directly to the alleged FLSA violations or linking them in any way to the common law claims.”
As to the defendants’ motion to dismiss the claims against the hospital, the court held that “a plaintiff must properly allege a factual basis showing that there are similarly situated persons entitled to relief pursuant to 29 U.S.C. § 216(b) and/or that common issues of fact that predominate are sufficient to pass muster under the traditional Fed. R. Civ. P. 12(b)(6) standard.” In this regard, the court found that the complaint failed to allege that the off-the-clock work and the allegedly uncompensated training programs “amounted to some official policy for each of the more than 50 discrete occupational classes plaintiffs claim make up the potential class.” The court further stated that “the existence of such ‘policies’ across a group of putative plaintiffs whose job function, hours, and daily tasks share little to no common ground is simply not plausible.”
The court also found that the plaintiffs’ conclusory allegations failed to provide sufficient facts to support the substance of their claims. The court noted that the plaintiffs “do not allege that any employees were ‘required’ to perform any work during their off time. The only allegations in the complaint that suggest an element of compulsion are utterly conclusory in nature.” The court also found the complaint failed to provide facts demonstrating that the defendants had actual or constructive knowledge of the overtime worked, an essential element of an FLSA overtime claim. Finally, the court found that the complaint failed to identify the training sessions plaintiffs claimed they attended without compensation, when those training sessions were conducted, which groups of employees attended, and the estimated unpaid time spent at the training sessions.
With respect to collective action certification, the court rejected the plaintiffs’ arguments that the hospital’s automatic deduction policy gave rise to an FLSA collective action. The court held that “mere adoption of a system that, by default, deducts meal breaks from its employees’ compensation does not constitute a unified policy of FLSA violations capable of binding together [a collective action].” (Bracket in the original)
For purposes of certification under Rule 23 of the Federal Rules of Civil Procedure, the court concluded that individualized issues predominated over class-wide issues:
"[I]ndividualized analysis is inevitable here. The highly particularized inquiries include the dates of the work-interrupted meal breaks and trainings, the job related activities performed during each ‘pre-’and ‘post-’ shift, whether those activities constituted compensable ‘work’ . . . whether any compensation was paid for this time, whether defendants had knowledge of each plaintiffs’ work, plus the compensation paid to each plaintiff and how it was calculated. These individualized factual inquiries predominate over any class-wide issues and thus also foreclose class treatment under Rule 23."
Thus, Manning confirms that courts are willing to scrutinize broad, conclusory allegations in wage and hour class and collective actions, and also provides a basis to dismiss such actions when the complaint fails to provide a factual basis for plaintiffs’ claims that there are similarly situated persons subject to the same allegedly unlawful policies and/or that there are common issues of fact that bind putative class members.