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Bergeron v. Ochsner Health System

United States District Court, E.D. Louisiana

August 23, 2017

DESIREE BERGERON ET AL.
v.
OCHSNER HEALTH SYSTEM ET AL.

         SECTION I

          ORDER & REASONS

          LANCE M. AFRICK UNITED STATES DISTRICT JUDGE.

         Before the Court is defendants' partial motion[1] to dismiss the named plaintiffs' third amended complaint (“complaint”).[2] The named plaintiffs oppose[3] the motion. For the foregoing reasons, the Court will grant the motion in part and deny it in part.

         I.

         The named plaintiffs are current and former employees of defendants Ochsner Health System and Ochsner Clinic Foundation (collectively, “Ochsner”).[4] They include certified registered nurse anesthetists, registered nurses, and nurse first assistants-all full-time hourly positions involved in direct patient care.[5]

         In a nutshell, the named plaintiffs allege that Ochsner underpaid them and similarly situated employees.[6] In fact, Ochsner has made partial payments of owed back wages.[7]

         According to the named plaintiffs, for a number of years Ochsner failed to correctly calculate employee weekly pay-both regular and overtime-by excluding “shift differentials” and “hourly on-call and callback pay” from employees' regular rates of pay.[8] Moreover, the named plaintiffs allege that Ochsner “automatically deduct[ed] lunch periods” from employees' shift times even when employees worked during those periods, which likewise shortchanged employees come payday.[9]

         The named plaintiffs also allege that Ochsner failed to pay some employees stipends and bonuses that Ochsner had agreed to pay them.[10] They further contend that these stipends and bonuses should have been included in employees' regular rates of pay for purposes of calculating overtime pay, and that their exclusion from regular rates of pay undervalued the overtime that employees were owed.[11]

         The named plaintiffs brought this lawsuit against Ochsner on behalf of themselves, as well as similarly situated current and former Ochsner employees. They allege that Ochsner's underpayment of employees violated both the Fair Labor Standards Act (“FLSA”) and the Employee Retirement Income Security Act of 1974 (“ERISA”), as well as Louisiana law. They seek to assert their FLSA claims as a collective action under the FLSA, and assert their ERISA and Louisiana law claims as class actions under Rule 23 of the Federal Rules of Civil Procedure.

         II.

         Under Federal Rule of Civil Procedure 12(b)(6), a district court may dismiss a complaint, or any part of it, where a plaintiff has not set forth well-pleaded factual allegations that would entitle him to relief. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir. 2007). A plaintiff's factual allegations must “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. In other words, 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, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570)).

         A facially plausible claim is one where “the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. If the well-pleaded factual allegations “do not permit the court to infer more than the mere possibility of misconduct, ” then “the complaint has alleged-but it has not ‘show[n]'-‘that the pleader is entitled to relief.'” Id. at 679 (quoting Fed.R.Civ.P. 8(a)(2)) (alteration in original).

         On a Rule 12(b)(6) motion to dismiss, a court limits its review “to the complaint, any documents attached to the complaint, and any documents attached to the motion to dismiss that are central to the claim and referenced by the complaint.” Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC, 594 F.3d 383, 387 (5th Cir. 2010); see also Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir. 1999). In assessing the complaint, the Court must accept all well-pleaded factual allegations as true and liberally construe all such allegations in the light most favorable to the plaintiff. Spivey, 197 F.3d at 774; Lowrey v. Tex. A&M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997). Where “the complaint ‘on its face show[s] a bar to relief, '” then dismissal is the appropriate course. Cutrer v. McMillan, 308 Fed. App'x. 819, 820 (5th Cir. 2009) (quoting Clark v. Amoco Prod. Co., 794 F.2d 967, 970 (5th Cir. 1986)).

         III.

         Ochsner seeks partial dismissal of the named plaintiffs' complaint. Specifically, Ochsner seeks dismissal of the named plaintiffs' Louisiana Wage Payment Act (“LWPA”) claims;[12] state law claims to the extent that they request unpaid overtime wages;[13] and all ERISA claims.[14] Ochsner also seeks to strike the named plaintiffs' state law class action allegations.[15] Lastly, Ochsner suggests that the possibility of double recovery by the named plaintiffs at the end of the litigation warrants the dismissal of certain claims now.[16]

         The Court will address each of Ochsner's arguments in turn.

         A.

         Ochsner argues that the named plaintiffs' claims under the LWPA should be dismissed for failure to make demand for payment prior to the commencement of the present litigation.[17] For their part, the named plaintiffs contend in their complaint that the complaint itself “serves as amicable demand” in satisfaction of the LWPA.[18]

         i.

         The LWPA's main purpose “is to compel an employer to pay the earned wages of an employee promptly after his dismissal or resignation and to protect discharged Louisiana employees from unfair and dilatory wage practices by employers.” Slaughter v. Bd. of Supervisors of S. Univ. and Agric. and Mech. College, 76 So.3d 438, 446 (La. Ct. App. 1st Cir. 2011). To that end, the LWPA obligates an employer to quickly pay an employee whatever amount the employee is due upon her discharge or resignation. La. R.S. § 23:631(A)(1)(a)-(b); see also Becht v. Morgan Building & Spas, Inc., 843 So.2d 1109, 1111 (La. 2003) (noting that the LWPA “creates liability for an employer who fails to timely pay wages owed to an employee after the employee voluntarily [or involuntarily] leaves employment”). To state a claim for unpaid wages under the LWPA, an employee must allege “i) that [the defendant] was her employer, ii) that the employee/employer relationship ceased to exist, iii) that at the time that the employee/employer relationship ended she was owed wages, and iv) that [the defendant] failed to submit the owed wages within the statutorily mandated 15 days.” Dillon v. Toys R Us-Delaware Corp., No. 2016-0983, 2017 WL 2351490, at *2 (La. Ct. App. 4th Cir. May 31, 2017).

         The LWPA also punishes employers who fail to promptly pay their former employees:

any employer who fails or refuses to comply with [that obligation] shall be liable to the employee either for ninety days wages at the employee's daily rate of pay, or else for full wages from the time the employee's demand for payment is made until the employer shall pay or tender the amount of unpaid wages due to such employee, whichever is the lesser amount of penalty wages.

Id. § 23:632(A). In addition to penalty wages, the LWPA provides that a court shall award “[r]easonable attorney fees” to an employee who files a “well-founded suit for any unpaid wages whatsoever, ” as long as the employee waits at least three days between “making the first demand following discharge or resignation” and filing suit. Id. § 23:632(C).

         The Louisiana Supreme Court[19] has held that “[i]n order to recover penalty wages and attorney's fees under [the LWPA], the claimant must show that (1) wages were due and owing; (2) demand for payment was made where the employee was customarily paid; and (3) the employer did not pay upon demand.” Becht, 843 So.2d at 1112; see also Wortham v. Acadia Healthcare, LLC, 160 So.3d 602, 605 (La. Ct. App. 3rd Cir. 2015) (noting that a plaintiff “has the burden of proving” each of the elements of the Becht standard); cf. Alumbaugh v. Global Data Sys., Inc., No. 08-1281, 2008 WL 5377673, at *6 (La. Ct. App. 1st Cir. 2008) (concluding that plaintiff made a prima facie showing that penalty wages were owed under the Becht standard, because plaintiff “made written demand” to defendant's “Payroll Administrator/Human Resources for [defendant] at [defendant's] place of business”). “Being penal in nature, ” the penalty wages provision of the LWPA “must be strictly construed” and “yield to equitable defenses.” Kaplon v. Rimkus Consulting Grp., Inc., of La., 39 So.3d 725, 733 (La. Ct. App. 4th Cir. 2010). For example, a court cannot award penalty wages where a “bona fide dispute exists over the amount of wages due.” Id.

         ii.

         For starters, demand is not required to assert a claim for unpaid wages under the LWPA. See La. R.S. § 23:631(A)(1)(a)-(b); Schuyten v. Superior Sys., Inc., 952 So.2d 98 (La. Ct. App. 1st Cir. 2007) (“The duty to pay the actual wages due is not dependent on the employee making a demand for payment.”); see also Dillon, 2017 WL 2351490, at *2 (explaining the elements of a LWPU unpaid wages claim). As such, an employee's alleged failure to make demand prior to filing suit does not merit dismissal of an LWPA claim for unpaid wages.

         A claim for penalty wages and attorney's fees is a different matter, as demand is required to recover them. See Becht, 843 So.2d at 1112 (explaining the elements of a claim for penalty wages and attorney's fees under the LWPA). The named plaintiffs do not dispute that they did not make a pre-suit demand for wages. Rather, they argue that the filing of the complaint itself constitutes making the statutorily required demand on Ochsner.

         However, one of the elements of a claim for penalty wages and attorney's fees- on which the named plaintiffs have the burden of proof-is that “demand for payment was made where the employee was customarily paid.” Id. (emphasis added). Suffice it to say, Ochsner's employees are not customarily paid in Section I of the U.S. District Court at 500 Poydras Street. As such, the named plaintiffs have failed to allege facts necessary to support a required element of a claim for penalty wages and attorney's fees-and so they have failed to state a claim upon which relief can be granted. Therefore, the Court will dismiss the named plaintiffs' claims for penalty wages and attorney's fees under the LWPA.

         B.

         Next, Ochsner argues that the named plaintiffs' state law claims, including the remaining LWPA claims, should be dismissed to the extent that those claims seek payment of overtime wages. According to Ochsner, Louisiana law does not mandate the payment of overtime wages[20] and such wages cannot be recovered via the named plaintiffs' state law claims.

         A review of the complaint reveals that the named plaintiffs explicitly exclude payment of unpaid overtime wages from the damages sought pursuant to those state law claims.[21] The named plaintiffs have therefore addressed Ochsner's concern.

         C.

         Ochsner also argues that the Court should dismiss the named plaintiffs' ERISA claims. The named plaintiffs allege that Ochsner 1) breached its fiduciary duty under ERISA by failing to credit overtime compensation and other wages toward employees' benefits under the Ochsner-sponsored employee benefit plan (“plan”), and 2) failed to maintain accurate plan records as required by ERISA. (Ochsner does not argue that the plan is not subject to ERISA.)

         Ochsner contends that, even if the named plaintiffs' allegations are true and Ochsner withheld wages and overtime compensation, “this was a corporate business decision” and not a decision that Oschner made in the capacity of an ERISA fiduciary.[22] Moreover, Ochsner argues that the named plaintiffs base their ERISA recordkeeping claim on Ochsner's alleged “failure to record and/or report all of the hours worked, ” although they admit that benefits under the plan were based on compensation, not hours.[23] Lastly, Ochsner asserts that-even if the named plaintiffs have stated otherwise viable ERISA claims-the named plaintiffs did not exhaust their administrative remedies prior to filing the present action.

         i.

         “Congress enacted ERISA to ‘protect . . . the interests of participants in employee benefit plans and their beneficiaries' by setting out substantive regulatory requirements for employee benefit plans and to ‘provid[e] for appropriate remedies, sanctions, and ready access to the Federal courts.'” Aetna Health Inc. v. Davila, 542 U.S. 200, 208 (2004) (quoting 29 U.S.C. § 1001(b)) (alteration in original). To that end, ERISA provides that a plan fiduciary “shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries, ” as well as “for the exclusive ...


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