United States District Court, E.D. Kentucky, Central Division, Lexington
OPINION & ORDER
E. Wier, United States District Judge.
Sherwood (Plaintiff), initiated this putative individual and
collective action against Defendant Cook Out, Inc., and one
of its franchisee restaurants (collectively
“Defendants” or “Cook Out”) on behalf
of himself and other Cook Out employees. DE 1 (Complaint); DE
55 (Second Amended Complaint). Plaintiff asserts violations
of state and federal wage laws as well as an alternative KRS
446.070 theory. For the reasons fully explained below, the
Court finds the current operative pleading deficient,
dismisses the state law claims, but grants a limited period
of discovery on the FLSA claim.
bases his claims on the following allegations: From September
through November 2014, Defendants employed Sherwood as a
Manager in Training at the Richmond, Kentucky, Cook Out
location. Defendants regularly scheduled Sherwood to work at
least 50 hours per week. Plaintiff actually worked over 60
hours per week. Cook Out failed to pay Sherwood 1.5 times his
regular rate for hours he worked over 40. Sherwood
“harbored no understanding” that he would not be
paid time-and-a-half for overtime hours. Cook Out paid
Sherwood $8 per hour, so-called “Appreciation Pay,
” for worked hours exceeding 52.5 in a given workweek.
Sherwood contends such additional payments constituted
“hours-based bonuses” that caused his salary to
vary. Per Sherwood, such variance violates a proper
“fluctuating workweek pay practice, which [ ]
Defendants used here for Plaintiff[.]” DE 55 at ¶
alleges (as denominated) violations of the Fair Labor
Standards Act (“FLSA”), the Kentucky Wage Payment
Collection Law, and the Kentucky Remedies Law. DE 55 at
¶¶ 57-77. Defendants pursue Rule 12 dismissal of
all claims. DE 55 (Motion). The motion stands fully briefed
and ripe for review. DE 56 (Response); DE 59 (Reply).
survive a motion to dismiss, “a complaint must contain
sufficient factual matter, accepted as true, to ‘state
a claim to relief that is plausible on its face.'”
Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009)
(quoting Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955,
1974 (2007)). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id. However,
“a formulaic recitation of a cause of action's
elements will not do[.]” Twombly, 127 S.Ct. at
1965. Courts “must construe the complaint in the light
most favorable to the plaintiff and accept all allegations as
true.” Keys, 684 F.3d at 608. Yet, courts need
not accept “legal conclusion[s] couched as [ ] factual
allegation[s].” Papasan v. Allain, 106 S.Ct.
2932, 2944 (1986).
on Rule 8's minimal standards, Twombly and
Iqbal require a plaintiff to “plead facts
sufficient to show that her claim has substantive
plausibility.” Johnson v. City of Shelby, 135
S.Ct. 346, 347 (2014). Where plaintiffs state “simply,
concisely, and directly events that . . . entitle[ ] them to
damages, ” the rules require “no more to stave
off threshold dismissal for want of an adequate
statement[.]” Id.; El-Hallani v.
Huntington Nat. Bank, 623 Fed.Appx. 730, 739 (6th Cir.
2015) (“Although Twombly and Iqbal
have raised the bar for pleading, it is still low.”).
FLSA requires every covered “employer” to pay its
employees “not less than one and one-half times the
regular rate” for all hours worked in excess of forty
in a given workweek. 29 U.S.C. § 207(a)(1). The Sixth
Circuit has not (post-Twombly) squarely addressed
the standard for pleading a plausible FLSA overtime
claim. However, the Fourth Circuit recently
summarized the majority view:
[T]o make out a plausible overtime claim, a plaintiff must
provide sufficient factual allegations to support a
reasonable inference that he or she worked more than forty
hours in at least one workweek and that his or her employer
failed to pay the requisite overtime premium for those
overtime hours. Under this standard, plaintiffs seeking to
overcome a motion to dismiss must do more than merely allege
that they regularly worked in excess of forty hours per week
without receiving overtime pay.
[T]he standard . . . does not require plaintiffs to identify
a particular week in which they worked uncompensated overtime
hours. Rather, this standard is intended to require
plaintiffs to provide some factual context that will nudge
their claim from conceivable to plausible. . . . Thus, to
state a plausible FLSA overtime claim, plaintiffs “must
provide sufficient detail about the length and frequency of
their unpaid work to support a reasonable inference that they
worked more than forty hours in a given week. . . . A
plaintiff may meet this initial standard by estimating the
length of her average workweek during the applicable period
and the average rate at which she was paid, the amount of
overtime wages she believes she is owed, or any other facts
that will permit the court to find plausibility.
Hall v. DIRECTV, LLC, 846 F.3d 757, 777 (4th Cir.
2017) (citations and quotation marks omitted), cert.
denied, 138 S.Ct. 635 (2018); accord Landers v.
Quality Commc'ns, Inc., 771 F.3d 638, 644
(9th Cir. 2014); Davis v. Abington Memorial
Hospital, 765 F.3d 236 (3d Cir. 2014); Lundy v.
Catholic Health System of Long Island Inc., 711 F.3d
106, 114 (2d Cir. 2013); Pruell v. Caritas Christi,
678 F.3d 10, 13-15 (1st Cir. 2012). As a sister court
explained: “The emphasis in all these cases is
plausibility per Twombly and Iqbal, not the
creation of a novel pleading requirement.” Anderson
v. GCA Servs. Grp. of N. Carolina, Inc., No.
1:15-CV-37-GNS, 2015 WL 5299452, at *4 (W.D. Ky. Sept. 9,
2015). The Court considers Sherwood's allegations in
light of these principles.
claims flow entirely from the premise that Cook Out failed to
comply with or meet the requirements for a “fluctuating
workweek pay practice, which [ ] Defendants used here for
Plaintiff[.]” See DE 55 at ¶ 37.
Nonetheless, Sherwood urges that his complaint is sufficient
without regard to his fluctuating workweek
(“FWW”) allegations. See DE 59 at 8-10.
Sherwood also contends that, structurally, he had no
obligation to plead an FWW violation. Finally, Sherwood
contends that he has plausibly alleged FWW noncompliance and,
consequently, an FLSA violation. Defendant contests each
point. The Court addresses each argument in turn.
Court must judge the pleading before it. Sherwood stakes his
overtime theory on fluctuating workweek noncompliance by Cook
Out. He stakes noncompliance on two allegedly unmet (or
transgressed) required elements of the FWW model-one related
to Appreciation Pay and one related to the understanding
between employer and employee. The Court thus must assess
plausibility within the specific context of the theory
to certain requirements, the FWW structure (as an FLSA
compliant pay system) allows employers to pay employees a
“[f]ixed salary for fluctuating hours[, ]” plus
an overtime premium at “one-half” times the
standard rate, “in addition to such salary”; this
structure is one method of complying with the 1.5x regular
rate payment generally required for overtime. 29 C.F.R.
§§ 778.114 & 778.107 (“The general
overtime pay standard in section 7(a) requires that overtime
must be compensated at a rate not less than one and one-half
times the . . . regular rate[.]”). Undergirding the FWW
method is the idea that flat salary accounts for the
‘time' aspect of ‘time-and-a-half' for
overtime. See Id. (“Payment for overtime hours
at one-half such rate in addition to the salary satisfies the
overtime pay requirement because such hours have already been
compensated at the straight time regular rate.”).
in arguing he pleaded a viable FLSA claim without regard to
the FWW issues, ignores the complaint's clear terms.
Plaintiff explicitly claimed that Cook Out “used”
an FWW “pay practice[.]” Id. at ¶
37. Sherwood, though disputing whether it was fixed, concedes
that Cook Out paid him a salary. See DE 55 at ¶
35 (discussing the “salar[y] of Plaintiff”).
Further, Plaintiff alleges that Cook Out paid him $8, in
addition to his salary, for certain overtime hours.
Id. at ¶ 34. Sherwood is not claiming wholly
unpaid overtime but underpaid overtime.
See, e.g., DE 59 at 15 (“Cook Out was paying a
salary, half-time for some overtime hours worked, and then an
additional/time-based bonus payment for hours worked beyond
52.5 in a workweek[.]”). The FWW theory is the only
plausible route Plaintiff alleges for entitlement to relief
for such underpayments. See DE 59 at 8 (Cook Out
“should have paid Managers 1.5 times their regular
hourly rate for all hours worked beyond 40 in workweeks as
overtime pay, rather than the lower overtime rate that it
paid.”). Sherwood pleads no valid non-FWW theory to
explain his otherwise threadbare allegation that Cook Out,
e.g., failed “to pay proper overtime
wages[.]” DE 55 at ¶ 39.
foundation of any FLSA overtime claim is the plaintiff's
“regular rate, ” which is “a rate per
hour.” 29 U.S.C. § 207; 29 C.F.R. § 778.109.
“To calculate overtime pay, the Act requires employers
to divide total pay by total hours to determine an
employee's regular rate, and to multiply that rate by
150%. ‘Total pay' takes on different meanings
depending on each pay arrangement.” Acosta v. Min
& Kim, Inc., 919 F.3d 361, 364 (6th Cir. 2019).
Sherwood does not allege his (or any manager's) regular
rate. Nor does Sherwood plead any facts from which the Court
could begin to divine such rate-e.g., approximate
salary or total wages. Pruell, 678 F.3d at 15
(“Plaintiffs . . . presumably know how much they were
paid as wages[.]”).
Sherwood's allegations regarding pay adequacy largely are
in the vein of “those borderline phrases that while not
stating an ultimate legal conclusion, [are] nevertheless so
threadbare or speculative that [they] fail[ ] to cross the
line between the conclusory and the factual.”
Dejesus v. HF Mgmt. Servs., LLC, 726 F.3d 85, 89 (2d
Cir. 2013) (quotation marks omitted). For example, Plaintiff
contends he “regularly worked” 40 “hours
per workweek without being paid all overtime wages
required” and that he “was not paid 1.5 times his
regular rate of pay for each hour over 40[.]” DE 55 at
¶¶ 31- 32. These allegations are “little more
than a paraphrase of the statute.” Pruell, 678
F.3d at 13. Such bald conclusions are entitled to no
presumption of truthfulness. Cf. Landers, 771 F.3d
at 646 (“[P]laintiffs in these types of cases . . .
should be able to allege facts demonstrating there was at
least one workweek in which they worked in excess of forty
hours and were not paid overtime wages.” (emphasis
added)). Thus, Sherwood failed to “nudge” any
non-FWW theory “from conceivable to plausible[.]”
Hall, 846 F.3d at 777; see also Simpson v.
Baskin, No. 3:17-CV-01077, 2018 WL 1070897, at *8 (M.D.
Tenn. Feb. 26, 2018) (dismissing complaint that alleged
“a specific weekly and monthly rate of pay” but
failed to ...