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Oddo v. Bimbo Bakeries USA, Inc.

United States District Court, D. New Jersey

May 17, 2017

CHRISTOPHER ODDO, PHILLIP BRUCATO and MICHAEL LENNON, on behalf of themselves and those similarly situated, Plaintiffs,



         The plaintiffs, Christopher Oddo, Phillip Brucato, and Michael Lennon, filed an individual, collective, and class action civil complaint, seeking, on behalf of themselves and other similarly situated, lost wages, damages, and other relief for the alleged failure of defendant Bimbo Bakeries USA, Inc. (hereinafter "BBUSA") to pay overtime compensation, in violation of the Fair Labor Standards Act ("FLSA") and the New Jersey Wage and Hour Law ("NJWHL"). BBUSA brings a motion to dismiss on the grounds that: (1) the plaintiffs' claims are completely preempted by Section 301 of the Labor Management Relations Act ("LMRA"); and (2) the plaintiffs have not adequately pleaded a LMRA Section 301 claim. For the reasons discussed below, I will deny BBUSA's motion to dismiss.

         I. BACKGROUND

         The plaintiffs are Route Sales Representatives ("RSRs") for BBUSA. As such, their "primary duties are driving delivery trucks along established routes and delivering and stocking [BBUSA's] products at national chain, local chain, and independent retailers." (Compl. ¶ 33)[1] The plaintiffs (hereinafter, the "RSRs") allege that BBUSA pays them each "a base salary of $110.00 per week plus a 12% commission on proceeds generated from sales to retailers along [their] delivery route[s]." (Id. ¶¶35-37) They allege that, "[d]uring at least one workweek within the last three (3) years, [they and the putative class members] worked over 40 hours . . . ." (Id. ¶ 48) The RSRs claim the NJWHL and FLSA require BBUSA to pay them and putative class members additional compensation for hours worked beyond 40 hours per week-i.e., "overtime" pay, but that BBUSA does not. (Id. ¶¶ 38, 50) They also allege that BBUSA has failed to implement an hours tracking system. (Id. ¶ 59)

         The RSRs allege they are "employees" within the meaning of the FLSA and NJWHL and that they have suffered damages as a result of the BBUSA's unlawful failure to pay overtime wages. (Id. ¶¶ 67, 73) They also aver, with respect to their FLSA claim, that BBUSA's failure is willful and not based in a reasonable interpretation of the law. (Id. ¶¶ 66) The RSRs seek: (i) injunctive relief to prohibit BBUSA from continuing its illegal policy and practice; (ii) compensation and reimbursement "for any and all pay and benefits they would have received" but for BBUSA's allegedly unlawful actions; (iii) liquidated damages in an amount equal to actual damages under the FLSA; (iv) costs and expenses; and (v) any other relief this Court deems just and proper. (Id. p. 11)

         BBUSA's motion to dismiss hinges on a series of collective bargaining agreements (collectively, the "CBA") that BBUSA says are grounds for preemption of the RSRs' NJWHL and FLSA claims. The CBA, effective January 2015 through December 2018, is significant because BBUSA claims the RSRs are members of the International Brotherhood of Teamsters Local No. 802 union (the "Union"), which bargains with BBUSA for the terms and conditions of its members' employment and memorializes those terms and conditions in the CBA. (Br. 1, 4) The RSRs do not deny that the CBA governs the terms and conditions of their employment. (See, e.g., Lynch Decl. C p.2 (Oddo's claim filed with the New Jersey Division of Wage and Hour Compliance, alleging "[BBUSA] and Teamsters Local 802 have a collective bargaining agreement. . . ."))

         BBUSA points to eight provisions in the CBA that purportedly govern the RSRs' pay. (Br. 4-6 (citing CBA Arts. 3, 4, 8, 16, 27, 31, and Letter of Agreement) These provisions describe if and how RSRs are paid during vacation, holidays, birthdays, funeral leave, and service time, and also set forth a basic wage and overtime pay formula and scale. The CBA provides for an "alternative compensation program" for the RSRs, which incorporates the basic wage and overtime formula as an alternative to commission-based pay:

RSRs shall receive for each week the higher of (i) compensation calculated at the regular hourly rate of $21.00 for all hours worked in any 5-day regular work week and $31.50 for all overtime hours worked (not counting½ hour daily for mandatory meal break) and (ii) their base pay plus commissions at the negotiated rates set forth in Article 27 of the CBA.

(Br. 5 (paraphrasing CBA Art. 27(b)-(c) 85 (i)(2)-(4)) The "negotiated rate" since January 3, 2016, has been $110 base pay with a 12% net commission-i.e., what the RSRs allege they receive in the complaint. (See Compl. ¶ 37)

         Before setting forth the alternative compensation program, the CBA states: "The Company and the Union agree that the base pay and commission provisions of the parties' [CBA] compensate fully [RSRs] under federal and state overtime pay laws because of their job duties as outside salespersons and because the U.S. Secretary of Transportation has the power to regulate the [RSRs] in the performance of their duties. (CBA Art. 27(i)(1))

         The CBA also requires BBUSA to institute a time recording system and to record RSR's hours. (CBA, Art. 27(i)(5)) Additionally, the CBA lays out a mandatory grievance and arbitration procedure, through which "all disputes, " including disputes regarding pay, are to be resolved. (See CBA Arts. 9-10, 27(i)(2))[2]


         A. Whether Rule 12(b)(1) or Rule 12(b)(6) Governs BBUSA's Motion

         BBUSA moves to dismiss the RSRs' complaint for lack of subject matter jurisdiction, asserting a factual challenge based on the CBA. (See Defs. Br. 10) BBUSA fails to explain why its challenge should be jurisdictional, rather than merits-based. Some courts in this district have applied only a 12(b)(6) standard to determine LMRA preemption issues, see, e.g., Carluccio v. Parsons Inspection & Maint. Corp., No. CIV A 06-4354 JLL, 2007 WL 1231758, at *2 (D.N.J. Apr. 24, 2007), while others have applied Rule 12(b)(1), see, e.g., Johnson v. Longer Transp. Corp., No. CIV.A. 15-1256 JLL J, 2015 WL 2254671, at *3 (D.N.J. May 13, 2015). From its moving papers, I presume BBUSA reasons that because the LMRA preempts the RSRs' claims, the RSRs' only recourse is to bring suit against BBUSA for breach of the CBA. And, to bring a breach of CBA claim, the RSRs would be required to exhaust the CBA's grievance and arbitration procedures before suing in federal court unless they can state a "hybrid" claim against BBUSA and the Union.[3] DelCostello v. Int'lBhd. of Teamsters, 462 U.S. 151, 163, 103 S.Ct. 2281, 2290 (1983) ("It has long been established that an individual employee may bring suit against his employer for breach of a collective bargaining agreement. Ordinarily, however, an employee is required to attempt to exhaust any grievance or arbitration remedies provided in the collective bargaining agreement." (citation omitted)).

         Because, BBUSA argues, the RSRs have not stated a hybrid claim, the RSRs must seek relief pursuant to the CBA's grievance and arbitration provisions. The RSRs contest the enforceability of these provisions. Nevertheless, "[i]t is a long-standing tenet of law that an employee must attempt to exhaust the grievance and arbitration procedures set forth in the collective bargaining agreement between his employer and his union before he has standing to maintain an action under Section 301 of the [LMRA]." Monacelli v. Revlon, No. CIV. 89-4369 (CSF), 1990 WL 105760, at *4 (D.N.J. July 2, 1990); see also Shaffer v. Mitchell Transport, Inc., 635 F.2d 261, 264 (3d Cir. 1980) (citations omitted) ("[I]f [a] collective bargaining agreement provide[s] for resolution of [a] dispute through arbitration, the court ha[s] no jurisdiction to address the merits."). With the RSRs' very ability to maintain a suit up for debate, I am satisfied that Rule 12(b)(1) is an appropriate rule to apply here.

         B. Rule 12(b)(1)

         Motions to dismiss for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1) may be raised at any time. Iwanowa v. Ford Motor Co., 67 F.Supp.2d 424, 437-38 (D.N.J. 1999). "[B]ecause subject matter jurisdiction is non-waivable, courts have an independent obligation to satisfy themselves of jurisdiction if it is in doubt. See Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 278, 97 S.Ct. 568, 50 L.Ed.2d 471 (1977). A necessary corollary is that the court can raise sua sponte subject-matter jurisdiction concerns." Nesbit v. Gears Unlimited, Inc., 347 F.3d 72, 76-77 (3d Cir. 2003).

         Rule 12(b)(1) challenges may be either facial or factual attacks. See 2 Moore's Federal Practice § 12.30[4] (3d ed. 2007); Mortensen v. First Fed. Sav. & LoanAss'n, 549 F.2d 884, 891 (3d Cir. 1977). A facial challenge asserts that the complaint does not allege sufficient grounds to establish subject matter jurisdiction. Iwanowa, 67 F.Supp.2d at 438. A court considering such a facial challenge assumes that the allegations in the complaint are true, and may dismiss the complaint only if it nevertheless appears that the plaintiff will not be able to assert a colorable claim of subject matter jurisdiction. Cardio-Med. Assoc, Ltd. v. Crozer-Chester Med. Ctr., 721 F.2d 68, 75 (3d Cir. 1983); Iwanowa, 67 F.Supp.2d at 438. A factual attack, on the other hand, permits the Court to consider evidence extrinsic to the pleadings. Gould Elecs. Inc. v. United States, 220 F.3d 169, 178 (3d Cir. 2000), holding modified on other grounds by Simon v. United States, 341 F.3d 193 (3d Cir. 2003). Thus "Rule 12(b)(1) does not provide plaintiffs the procedural safeguards of Rule 12(b)(6), such as assuming the truth of the plaintiffs allegations." CNA v. United States, 535 F.3d 132, 144 (3d Cir. 2008).

The burden of establishing federal jurisdiction rests with the party asserting its existence, [citing DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n. 3, 126 S.Ct. 1854, 164 L.Ed.2d 589 (2006).] "Challenges to subject matter jurisdiction under Rule 12(b)(1) may be facial or factual." [citing Common Cause of Pa. v. Pennsylvania, 558 F.3d 249, 257 (3d Cir. 2009) (quoting Taliaferro v. Darby Twp. Zoning Bd., 458 F.3d 181, 188 (3d Cir. 2006)).] A facial attack "concerns 'an alleged pleading deficiency' whereas a factual attack concerns 'the actual failure of [a plaintiffs] claims to comport [factually] with the jurisdictional prerequisites."' [citing CNA v. United States, 535 F.3d 132, 139 (3d Cir. 2008) (alterations in original) (quoting United States ex rel. Atkinson v. Pa. Shipbuilding Co., 473 F.3d 506, 514 (3d Cir.2007)).]
"In reviewing a facial attack, the court must only consider the allegations of the complaint and documents referenced therein and attached thereto, in the light most favorable to the plaintiff." [citing Gould Elecs. Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000).] By contrast, in reviewing a factual attack, "the court must permit the plaintiff to respond with rebuttal evidence in support of jurisdiction, and the court then decides the jurisdictional issue by weighing the evidence. If there is a dispute of a material fact, the court must conduct a plenary hearing on the contested issues prior to determining jurisdiction." [citing McCann v. Newman Irrevocable Trust, 458 F.3d 281, 290 (3d Cir. 2006) (citations omitted).]

Lincoln Ben. Life Co. v. AEILife, LLC, 800 F.3d 99, 105 (3d Cir. 2015) (footnotes omitted; case citations in footnotes inserted in text). I consider BBUSA's jurisdictional challenge a factual attack and therefore, will consider the CBA as extrinsic evidence. In the end, it may matter little; the authenticity of the CBA, which is integral to the parties' relationship, is not disputed, and even on a Rule 12(b)(6) standard it would likely be considered. See Schmidt v. Skolas, 770 F.3d 241, 249 (3d Cir. 2014) ("However, an exception to the general rule is that a 'document integral to or explicitly relied upon in the complaint' may be considered 'without converting the motion to dismiss into one for summary judgment.' ") (quoting In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997)); Pension Ben. Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993) ("We now hold that a court may consider an undisputedly authentic document that a defendant attaches as an exhibit to a motion to dismiss if the plaintiffs claims are based on the document.").

         C. Rule 12(b)(6)

         In Sections III.C 8b D, I briefly consider in the alternative the issue of failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Rule 12(b)(6) provides for the dismissal of a complaint, in whole or in part, if it fails to state a claim upon which relief can be granted. The defendant, as the moving party, bears the burden of showing that no claim has been stated. Animal Science Products, Inc. v. China Minmetals Corp., 654 F.3d 462, 469 n. 9 (3d Cir. 2011). For the purposes of a motion to dismiss, the facts alleged in the complaint are accepted as true and all reasonable inferences are drawn in favor of the plaintiff. New Jersey Carpenters & the Trustees Thereof v. Tishman Const. Corp. of New Jersey, 760 F.3d 297, 302 (3d Cir. 2014).

         Federal Rule of Procedure 8(a) does not require that a complaint contain detailed factual allegations. Nevertheless, "a plaintiffs obligation to provide the 'grounds' of his 'entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." BellAtl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Thus, the complaint's factual allegations must be sufficient to raise a plaintiffs right to relief above a speculative level, so that a claim is "plausible on its face." Id. at 570; see also West Run Student Housing Assocs., LLC v. Huntington Nat. Bank, 712 F.3d 165, 169 (3d Cir. 2013). That facial-plausibility standard is met "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). While "[t]he plausibility standard is not akin to a 'probability requirement'. . . it asks for more than a sheer possibility." Iqbal, 556 U.S. at 678.


         A. Whether The LMRA Preempts The RSRs' NJWHL Claim

         BBUSA argue that the RSRs' NJWHL claim fails because it is completely preempted by the LMRA. Specifically, BBUSA argues the NJWHL claim arises from the CBA, or alternatively, depends upon the court's interpretation of the CBA.[4]

         Section 301(a) of the LMRA provides: "Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties." 29 U.S.C. § 185(a).

Although section 301 refers only to jurisdiction, it has been interpreted as authorizing federal courts to fashion a body of common law for the enforcement of collective bargaining agreements. Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 456, 77 S.Ct. 912, 917, 1 L.Ed.2d 972 (1957). An underlying reason for the development of federal law in this area is the need for uniform interpretation of contract terms to aid both the negotiation and the administration of collective bargaining agreements. See Local 174, Teamsters v. Lucas Flour Co., 369 U.S. 95, 103-04, 82 S.Ct. 571, 576-77, 7 L.Ed.2d 593 (1962) (differing interpretations would stimulate and prolong labor disputes).

Antol v. Esposto, 100 F.3d 1111, 1115 (3d Cir. 1996), amended, (3d Cir. Jan. 20, 1997).

         In furtherance of this purpose,

LMRA § 301 completely preempts a state cause of action . . . when the resolution of said action is "substantially dependent upon analysis of the terms of an agreement made between the parties in a labor contract." Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 220, 105 S.Ct. 1904, 85 L.Ed.2d 206 (1985); see also Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 413, 108 S.Ct. 1877, 100 L.Ed.2d 410 (1988) ("[A]n application of state law is pre-empted by § 301 of the Labor Management Relations Act of 1947 only if such application requires the interpretation of a collective-bargaining agreement."). By contrast, when resolution of the state law claim is "independent" of a CBA and does not require construing one, the state law claim is not preempted by § 301. Lingle, 486 U.S. at 410, 108 S.Ct. 1877; accord Antol v. Esposto, 100 F.3d 1111, 1117 (3d Cir. 1996).

New Jersey Carpenters & the Trustees Thereof v. Tishman Const. Corp. of New Jersey, 760 F.3d 297, 305-06 (3d Cir. 2014).

         Whether a claim requires a court to construe or interpret a CBA to the point that the claim depends on interpretation of the CBA is a question riddled with nuance and exception. Merely considering the terms of a collective-bargaining agreement-looking to undisputed terms in a CBA or interpreting a CBA solely to compute damages, for example-does not warrant preemption. SeeLivadas v. Bradshaw, 512 U.S. 107, 124, 114 S.Ct. 2068 (1994) ("[W]hen the meaning of contract terms is not the subject of dispute, the bare fact that a collective-bargaining agreement will be consulted in the course of state-law litigation plainly does not require the claim to be extinguished."); Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 413 n. 12, 108 S.Ct. 1877 (1988) ("Although federal law would govern the interpretation of the agreement to determine the proper damages, the underlying state-law claim, not otherwise pre-empted, would stand."); Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 261-62, 114 S.Ct. 2239, 2248 (1994) ("'[P]urely factual questions' about an employee's conduct or an employer's conduct and motives do not 'requir[e] a court to interpret any term of a collective-bargaining agreement.'" (citing Lingle, 486 U.S. at 407)); see also Bull v. United Parcel Serv., Inc., No. CIV. 07-2291 KM MCA, 2014 WL 2965696, at *13-14 (D.N.J. July 1, 2014) ("The CBA may have been relevant to the determination of certain issues of fact, but there is no dispute about what it says, what it means, whether it is valid, or whether [the plaintiff] is bound by it. . . . [The defendant] cites the CBA to bolster its case and justify its actions. That is perfectly permissible, but it does not transform this case into one about, or arising from, the CBA."), affd in part, appeal dismissed in part, 620 F.App'x 103 (3d Cir. 2015).

         Article 27 of the CBA provides that the RSRs are to be paid the higher of (a) $21.00/hour and $31.50/overtime hour or (b) a given week's commission-based income. From that provision, BBUSA draws the implication that the RSRs' demand for overtime compensation is necessarily grounded in, or arises from, the CBA. (See Br. 13) And even if the RSRs' NJWHL claim is not directly based on the CBA, BBUSA argues, it is still preempted because it substantially depends on analyzing the CBA-that is, it "requires the Court to interpret how the CBA's pay and ...

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