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Raskas v. Lattice, Inc.

United States District Court, D. New Jersey

July 3, 2019

SCOTT RASKAS, Plaintiff,
v.
LATTICE, INC., PAUL BURGESS, JOSEPH NOTO, and TERRY WHITESIDE, Defendants.

          ADAM EDWARD GERSH FLASTER/GREENBERG PC On behalf of Plaintiff

          DAVID J. SPRONG BECKER LLC On behalf of Defendants Lattice, Inc., Paul Burgess, and Terry Whiteside

          DARREN MATHEW PFEIL SHAMY, SHIPERS & LONSKI, P.C. On behalf of Defendant Joseph Noto

          OPINION

          NOEL L. HILLMAN, U.S.D.J.

         Plaintiff has lodged a complaint against his former employer for violations of the federal Fair Labor Standards Act and various New Jersey state laws. Presently before the Court are the motions of Defendants to dismiss Plaintiff's claims against them. For the reasons expressed below, the Court will grant Defendants' motions to dismiss as to Plaintiff's FMLA claim, and decline to retain jurisdiction over Plaintiff's remaining state law claims.

         BACKGROUND & DISCUSSION

         Plaintiff, Scott Raskas, claims that on December 2, 2014, he accepted employment with Defendant, Lattice Inc., as the Director of Marketing. Plaintiff claims that he: (1) “accepted the position on a salary basis and was supposed to be an exempt employee”; (2) “was to work as a full-time employee at an executive level”; (3) “in early 2016, . . . [he] took on additional responsibilities related to selling to correctional facilities and managing the activities of the sales team”; and (4) he “dutifully and faithfully performed his role, ” including the additional duties “without any increase in salary.” (Amend. Compl. at 4, Docket No. 13 at 4.)

         Plaintiff alleges that even though he “routinely worked in excess of 40 hours per week, ” in December 2016, “Lattice began withholding significant portions of [his] salary from him, ” claiming that “unfavorable business conditions [] created short-term cash flow issues for the business.” (Id. at 5.) Plaintiff claims that while he continued to work and perform his duties, and despite his inquiries and complaints, “Lattice failed to pay him the salary he was owed.” (Id.) Plaintiff claims that after working for almost a year without his full salary, Lattice terminated him in retaliation for filing this action to collect his wages.[1] (Id. at 5-6.) Plaintiff claims that “[p]ast due salary owed to [him] is in excess of $100, 000.00.” (Id. at 6.)

         Plaintiff has filed claims against Lattice and three of its corporate officers for breach of contract under New Jersey state law (Count I), violations of New Jersey's Wage and Hour Laws (Counts II and III), violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201, et seq. (Count IV), and retaliation under New Jersey's Conscientious Employee Protection Act (Count V). Plaintiff's purported basis for subject matter jurisdiction is under 28 U.S.C. § 1331 for his FLSA claim, and supplemental jurisdiction under 28 U.S.C. § 1367 for his state law claims.

         Three of the Defendants - Lattice, Paul Burgess, and Terry Whiteside - filed an answer to Plaintiff's amended complaint, and then, somewhat incongruously, moved to dismiss Plaintiff's amended complaint for lack of subject matter jurisdiction. These Defendants argue that Plaintiff cannot maintain his FLSA claim because he was exempt from the FLSA overtime requirements, and without a viable federal claim, subject matter jurisdiction is lacking. The fourth defendant, Joseph Noto, did not file an answer, but instead filed a motion to dismiss under Fed.R.Civ.P. 12(b)(6).[2] Plaintiff opposes Defendants' motions, arguing that he has properly pleaded his FLSA claim, and the issue of whether he is exempt from the FLSA overtime requirements is a factual issue that cannot be resolved on a motion to dismiss. Plaintiff also refutes the other bases for dismissal argued by Noto.

         1. Standard to Apply to Defendants' Motions

         As a primary matter, there is a meaningful and significant difference between the dismissal of a case for lack of subject matter jurisdiction and the dismissal of a federal claim for its failure on the merits. “‘Whether the complaint states a cause of action on which relief could be granted is a question of law and ... it must be decided after and not before the court has assumed jurisdiction over the controversy. If the court does later exercise its jurisdiction to determine that the allegations in the complaint do not state a ground for relief, then dismissal of the case would be on the merits, not for want of jurisdiction.'” Growth Horizons, Inc. v. Delaware County, Pa., 983 F.2d 1277, 1280 (3d Cir. 1993) (quoting Bell v. Hood, 327 U.S. 678, 682 (1946)). “‘[D]ismissal for lack of jurisdiction is not appropriate merely because the legal theory alleged is probably false, but only because the right claimed is so insubstantial, implausible, foreclosed by prior decisions of this Court, or otherwise completely devoid of merit as not to involve a federal controversy.'” Id. at 1280-81 (quoting Kulick v. Pocono Downs Racing Ass'n, 816 F.2d 895, 899 (3d Cir. 1987) (quoting Oneida Indian Nation v. County of Oneida, 414 U.S. 661, 666 (1974)).

         Here, although coached in the language of a Rule 12(b)(1) motion, the essence of the motion by Lattice, Burgess, and Whiteside is that Plaintiff has failed to assert a plausible FLSA claim on the facts alleged and if this count falls away no separate basis for jurisdiction exists for the other counts. This is a motion to dismiss for failure to state a claim, not a motion to dismiss for lack of subject matter jurisdiction.[3]

         While as explained infra the complaint, as pled, clearly fails to assert a FLSA claim, the Court does not conclude that the claim is “so insubstantial, implausible, foreclosed by prior decisions of this Court, or otherwise completely devoid of merit” as to deprive the Court of jurisdiction. Since the three Defendants have filed an answer, the Court will consider their application as Rule 12(c) motion.[4] In contrast, the fourth defendant, Joseph Noto, did not file an answer, but instead filed a motion to dismiss under Fed.R.Civ.P. 12(b)(6). The legal standard to be applied to the two motions is the same.[5]

         2. Assessment of Plaintiff's FLSA claim

         The Third Circuit has explained that the “‘FLSA establishes federal minimum-wage, maximum-hour, and overtime guarantees that cannot be modified by contract.'” Davis v. Abington Memorial Hosp., 765 F.3d 236, 241 (3d Cir. 2014) (quoting Genesis Healthcare Corp. v. Symczyk, 133 S.Ct. 1523, 1527 (2013)). Under the FLSA, an employer must pay its employees at least a specified minimum hourly wage for work performed, and the employer must pay one and one-half times the employer's regular wage for hours worked in excess of forty hours per week. Id. (citing 29 U.S.C. §§ 206, 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.” Id. (quoting § 216(b)). Thus, to recover overtime compensation under the FLSA, “an employee must prove that he worked overtime hours without compensation, and he must show the amount and extent of his overtime work as a matter of just and reasonable inference.” Id. (citations and quotations omitted).

         Certain employees are exempt from the overtime wage requirements, however. Under 29 U.S.C. § 213(a)(1), “any employee employed in a bona fide executive, administrative, or professional capacity (including any employee employed in the capacity of academic administrative personnel or teacher in elementary or secondary schools), or in the capacity of outside salesman (as such terms are defined and delimited from time to time by regulations of the Secretary, ” is exempt from overtime requirements. FLSA exemptions are to be given a fair (as opposed to narrow) interpretation, Depalma v. Scotts Company, LLC, 2019 WL 2417706, at *5 (D.N.J. June 10, 2019) (citing Encino Motorcars, LLC v. Navarro, 138 S.Ct. 1134, 1142 (2018) (quoting A. Scalia & B. Garner, Reading Law 363 (2012)), and employers bear the burden to prove that an employee qualifies for an FLSA exemption, Depalma, 2019 WL 2417706 at *6 (citing Mazzarella v. Fast Rig Support, LLC, 823 F.3d 786, 790-91 (3d Cir. 2016); Martin v. Cooper Elec. Supply Co., 940 F.2d 896, 900 (3d Cir. 1991)).

         In this case, Plaintiff's FLSA claim alleges:

52. Pursuant to the Fair Labor Standards Act, Defendants are liable to Mr. Raskas for the foregoing conduct, including, without limitation, failing to compensate him for overtime because he was improperly characterized as exempt when he was not paid on a salary basis, ...

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