The opinion of the court was delivered by: Martini, U.S.D.J.
This matter comes before the Court on Defendants' motion to dismiss or, in the alternative, to strike counts two through seven of Plaintiffs' Class Action Complaint. There was no oral argument. Fed. R. Civ. P. 78. For the following reasons, Defendants' motion to dismiss is GRANTED. Accordingly, counts two through seven are DISMISSED.
Plaintiffs Susan Hyman, Christine L. Bonardi, and Barry N. Sugar were formerly employed by WM Financial Services, Inc. ("WM") as "securities brokers-insider sales persons" or "financial advisors" in New Jersey. (Class Action Complaint [hereinafter "Compl."] ¶¶ 8-10.) They seek to bring this lawsuit as a collective action under the Federal Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 216(b), and as a class action under Federal Rule of Civil Procedure 23 ("Rule 23"). In both actions, Plaintiffs seek to represent securities brokers and financial advisor trainees who WM employed on a commission basis.*fn1 The gravamen of their complaint is that WM failed to compensate them and the class for overtime hours worked as required by law, improperly charged them for certain expenses, and committed other violations of New Jersey state law.
Plaintiffs' complaint contains seven counts. Count one attempts to allege a claim under the overtime provision of the FLSA, 29 U.S.C. § 207. The remaining counts all attempt to allege state law Rule 23 class action claims. Specifically, counts two through four seek to assert class action claims under the New Jersey State Wage and Hour Law, N.J. Stat. §§ 34:11-56a to 11-56a38. Counts five and six purport to assert class action claims under the New Jersey Wage Payment Law, N.J. Stat. §§ 34:11-4.3, 34:11-4.6. Finally, count seven seeks damages for breach of contract.
WM now moves to dismiss or, in the alternative, to strike Plaintiffs' Rule 23 class action claims (i.e., counts two through seven). WM does so on various grounds. The main ground, though, rests on the incompatibility between Plaintiffs' FLSA and Rule 23 class action claims. Plaintiffs' oppose WM's motion.
In deciding a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), all allegations in the complaint must be taken as true and viewed in the light most favorable to the plaintiff. Trump Hotels & Casino Resorts, Inc., v. Mirage Resorts Inc., 140 F.3d 478, 483 (3d Cir. 1998); Warth v. Seldin, 422 U.S. 490, 501 (1975). If, after viewing the allegations in the complaint in the light most favorable to the plaintiff, it appears beyond doubt that no relief could be granted "under any set of facts which could prove consistent with the allegations," the Court may dismiss the complaint for failure to state a claim. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Zynn v. O'Donnell, 688 F.2d 940, 941 (3d Cir. 1982).
Rule 12(f) of the Federal Rules of Civil Procedure permits the Court to "order stricken from any pleading . . . any redundant, immaterial, impertinent, or scandalous matter," upon motion of a party. Fed. R. Civ. P. 12(f). To prevail on a motion to strike, the moving party must demonstrate that the challenged allegations "have no possible relation to the controversy and may cause prejudice to one of the parties, or . . . the allegations confuse the issues." Tonka Corp. v. Rose Art Industries, Inc., 836 F.Supp. 200, 217 (D.N.J.1993).
Congress enacted the FLSA in 1938 to govern wage and hour practices throughout the country. Specifically, the FLSA establishes a minimum hourly wage. 29 U.S.C. § 206. In addition, the FLSA's overtime provision requires employers to pay one and one-half times an employee's regular hourly rate of pay for work performed in excess of forty hours per week. 29 U.S.C. § 207. Employers who violate these provisions are "liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages." 29 U.S.C. § 216(b).
When first enacted, the FLSA produced a tremendous amount of litigation. In response, Congress passed the Portal-to-Portal Act in 1947. Under this Act, Congress prevented plaintiffs from bringing class actions under the FLSA. Now, plaintiffs are only allowed to bring "collective actions" under the Act. In a collective action, a plaintiff only becomes a member of the action if he affirmatively "opts-in" to the action. See 29 U.S.C. § 216(b). This is in stark contrast to the traditional Rule 23 class action, which operates as an "opt-out" scheme. Under Rule 23, putative class members are automatically included in the class action unless they expressly state otherwise. See Fed. R. Civ. P. 23(c)(2)(B).
The purpose of amending the FLSA is clear. Congress added the opt-in requirement to "limit[ ] private FLSA plaintiffs to employees who asserted claims in their own right and freeing employers from the burden of representative actions." Hoffman-La Roche, Inc. v. Sperling, 493 U.S. 165, 173 (1989) (citing Portal-to-Portal Act of 1947, ch. 52, §§ 5(a), 6, 7, 61 Stat. 87-88). This was meant to curb the "excessive litigation spawned by plaintiffs lacking a personal interest in the outcome" of FLSA suits. Id; see also De Asencio v. Tyson Foods, Inc., 342 F.3d 301, 306 (3d Cir. 2003) (noting that in enacting the Portal-to-Portal Act, "Congress attempted to strike a balance to maintain employees' rights but to curb the number of lawsuits."). The Third Circuit described this amendment as a "crucial policy decision." De Asencio, 342 F.3d at 310.
In the present case, Plaintiffs are attempting to bring a FLSA collective action and a Rule 23 class action. WM objects to this tactic. They argue that it violates Congress's intent to limit FLSA plaintiffs to the opt-in requirement. According to WM, Plaintiffs are attempting an endrun around the FLSA's opt-in requirement by forcing it to litigate overtime claims brought by plaintiffs who, essentially, have no personal ...