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Johnson v. CRC Holdings, Inc.

United States District Court, D. Maryland

March 7, 2017

CRC HOLDINGS, INC. d/b/a CRC SALOMON, et al., Defendants



         Plaintiff Lisa Johnson brought the instant action against her former employer, CRC Holdings, Inc. (“CRC”), and its owner, Cregg R. Seymour (“Seymour”), alleging that she was not paid the full wages she was due under the Fair Labor Standards Act, the Maryland Wage and Hour Law, and the Maryland Wage Payment Collection Law. (Compl., ECF No. 1.) Defendants have filed a MOTION TO DISMISS AND/OR TO STAY PROCEEDINGS AND COMPEL ARBITRATION (ECF No. 7), and Plaintiff has responded (ECF No. 9). No hearing is necessary. Local Rule 105.6 (D. Md. 2016). For the reasons stated below, Defendants' motion will be granted as a motion to stay proceedings and compel arbitration.

         I. Standard for Dismissal for Failure to State a Claim

         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 Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Facial plausibility exists “when 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. An inference of a mere possibility of misconduct is not sufficient to support a plausible claim. Id. at 679. As the Twombly opinion stated, “Factual allegations must be enough to raise a right to relief above the speculative level.” 550 U.S. at 555. “A pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action will not do.' . . . Nor does a complaint suffice if it tenders ‘naked assertion[s]' devoid of ‘further factual enhancement.'” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555, 557). Although when considering a motion to dismiss a court must accept as true all factual allegations in the complaint, this principle does not apply to legal conclusions couched as factual allegations. Twombly, 550 U.S. at 555.

         II. Allegations of the Complaint[[1]]

         CRC is a company that provides court reporting services. (Compl. ¶ 2.) Plaintiff alleges that she was employed by CRC as a Production Coordinator from August 18, 2014, through June 30, 2015, before she was promoted to Office Manager, a position she occupied until April of 2016. (Id. at ¶ 21.) Plaintiff's complaint relates exclusively to the period of her employment as a Production Coordinator, during which time she had little discretion in performing her tasks, had no supervisory role, performed no data analysis or interpretation, and did not set policy for CRC's business. (Id. at ¶¶ 33-40.) As a Production Coordinator, Plaintiff alleges that she was routinely required to work in excess of forty hours per week: often working through lunch, staying at the office late, responding to phone calls during what was otherwise her personal time, and engaging in weekend travel. (Id. at ¶¶ 47-61.) Nonetheless, Plaintiff alleges that she never received any overtime compensation during the period in question, but was instead paid a flat rate based on an annual salary.[2] (Id. at ¶ 62.) Therefore, Plaintiff alleges, in failing to pay overtime, Defendants acted in violation of the Fair Labor Standards Act of 1938, 29 U.S.C. §§ 201-219 (2017) (“FLSA”), the Maryland Wage and Hour Law, Md. Code Ann., Lab. & Empl. §§ 3-401-3-431 (LexisNexis 2016) (“MWHL”), and the Maryland Wage Payment Collection Law, Md. Code Ann., Lab. & Empl. §§ 3-501-3-509 (LexisNexis 2016) (“MWPCL”). (Compl. ¶¶ 70-85.)

         III. Analysis

         Defendants base their motion to dismiss on the premise that Plaintiff waived her rights under the applicable wage laws when she entered into a Separation Agreement and Release (“the Agreement”) on May 7, 2016. (Defs.' Mot. to Dismiss ¶ 2.) Because a ruling on this affirmative defense is improper at this stage in the proceedings, and because the Agreement is extrinsic to the Complaint and not relied on by it, Defendants' motion to dismiss will be denied. However, even if the Court were to consider this defense, it would not find that Plaintiff waived her claims under the pertinent statutes. Furthermore, Defendant Seymour is a proper party under the pertinent statutes, so Defendants' motion that he be dismissed will likewise be denied. However, because the Agreement also contained a valid arbitration clause, Defendants' motion to compel arbitration will be granted, and the case will be stayed pending arbitration of Plaintiff's claims.

         A. Motion to Dismiss

         1. Proper Considerations on a Motion to Dismiss

         Defendants fail to present any justification why, on a motion to dismiss, the Court should consider their argument that Plaintiff waived her right to sue.

         Generally, a defense to a claim for relief in a pleading must be raised in a responsive pleading. Fed.R.Civ.P. 12(b). The Federal Rules of Civil Procedure carve out seven exceptions for defenses that may be raised on a motion to dismiss, including failure to state a claim upon which relief can be granted. See Id. Under such a motion, courts generally constrain their considerations to the allegations of the complaint and any attached documents, but may also consider extrinsic evidence that is “integral to and explicitly relied on in the complaint” and the authenticity of which is unchallenged by the plaintiffs. Am. Chiropractic Ass'n v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004).

         Defendants' motion to dismiss is based on the notion that Plaintiff waived her right to sue Defendants when she signed the Agreement. (Defs.' Mot. to Dismiss ¶ 2.) This affirmative defense does not obviously fit under any of the enumerated exceptions under Rule 12 of the Federal Rules of Civil Procedure, [3] so consideration of the argument is not timely. Even assuming that Defendants' argument could properly be considered under Rule 12(b)(6), the evidence upon which Defendants rely (i.e., the Agreement) was neither attached to the Complaint nor integral to or relied upon by the ...

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