The U.S. Court of Appeals for the Ninth Circuit has joined the First, Second, and Third Circuits in requiring employees asserting claims for unpaid overtime or minimum wage under the Fair Labor Standards Act to allege facts showing at least one week when they worked in excess of 40 hours and were not paid overtime or minimum wage.
In Landers v. Quality Communications, Inc., a putative collective action, the Ninth Circuit addressed, for the first time, the degree of specificity required to survive a motion to dismiss FLSA claims under the heightened pleading standards set forth by the U.S. Supreme Court in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009). Before Twombly and Iqbal, plaintiffs routinely satisfied Rule 8 of the Federal Rules of Civil Procedure, which requires a pleading to contain “a short and plain statement of the claim showing that the pleader is entitled to relief,” by parroting the statutory elements of a claim. Previously in the Ninth Circuit, plaintiffs satisfied Rule 8 by pleading merely that an employer failed to pay the employee minimum wages or overtime wages. See, e.g., Takacs v. A.G. Edwards & Sons, Inc., 44 F. Supp. 2d 1100 (S.D. Cal. 2006).
In Twombly and Iqbal, however, the Supreme Court held that a plaintiff cannot satisfy Rule 8 by pleading only “labels and conclusions,” “a formulaic recitation of the elements of a cause of action,” or “naked assertion[s]” devoid of “further factual enhancement.” The Court instead emphasized that a plaintiff must allege sufficient facts to make an alleged violation of the law “plausible” on its face as opposed to merely “possible.” The Twombly and Iqbal rulings set off a flurry of motions to dismiss by defendants seeking to force plaintiffs to more specifically allege the defendant’s wrongdoing. But what exactly do plaintiffs have to allege to sustain an FLSA claim, at least initially?
The plaintiff in Landers, a cable services installer, claimed that he and other similarly situated employees were compensated on a piecework basis and not paid overtime for work in excess of 40 hours a week. The plaintiff further alleged that the employer “falsely” listed overtime hours on paystubs that did not accurately reflect the hours actually worked and that the employer’s failure to pay overtime and/or minimum wage was willful.
The Ninth Circuit found these allegations insufficient to meet the plausibility standard of Twombly and Iqbal. As the court explained, “[n]otably absent from the allegations in Landers’s complaint, however, was any detail regarding a specific workweek when Landers worked in excess of forty hours and was not paid overtime for that specific workweek and/or was not paid minimum wages.” The court stopped short of requiring that Landers specify the amount of unpaid overtime or minimum wage or the total number of hours that were unpaid or underpaid. The court agreed with the First, Second, and Third Circuits, however, that “at a minimum the plaintiff must allege at least one workweek when he worked in excess of forty hours and was not paid for the excess hours in that workweek, or was not paid minimum wages.” Because the plaintiff failed to meet this standard and refused to amend his complaint, the court declined to remand the case to the district court for amendment and held that the district court had properly dismissed the case.
Many FLSA complaints, particularly in collective actions, are as bare as the deficient complaint in Landers, with plaintiffs choosing to give few facts and instead asserting conclusory allegations that the defendant violated the law. Based on this new Ninth Circuit opinion, as well as decisions in the First, Second and Third Circuits, employers are advised to carefully examine FLSA complaints for compliance with the Twombly/Iqbal pleading standards and consider filing motions to dismiss deficient complaints.