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Chado v. National Auto Inspections, LLC

United States District Court, D. Maryland

November 28, 2018

IAN CHADO et al., Plaintiffs
v.
NAT'L AUTO INSPECTIONS, LLC, trading as Carchex, et al., Defendants

          MEMORANDUM AND ORDER

          James K. Bredar, Chief Judge.

         I. Background

         This case has been reassigned to the undersigned following amendment of the complaint, which resulted in the addition of two new parties who do not consent to the jurisdiction of a magistrate judge to conduct all proceedings in the case. Now pending before the Court is the motion of Defendant Carchex, LLC ("Carchex"), to dismiss the amended complaint. (ECF No. 89.) The motion has been briefed. (ECF Nos. 99, 101.) Also pending before the Court is Carchex's motion to vacate the January 5, 201, 8, order of reference to a magistrate judge for all proceedings or, alternatively, to sever Carchex from the case. (ECF No. 91.) That motion has also been briefed. (ECF Nos. 100, 102.) No. hearing is required for either motion. Local Rule 105.6 (D. Md. 2016). The motions will be denied.

         II. Standard of 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.

         III. Allegations of the Amended Complaint

         This case is brought pursuant to the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. §§ 201 et seq., the Maryland Wage and Hour Law, Md. Code Ann., Lab. & Empl. §§ 3-401 et seq., and the Maryland Wage Payment and Collection Law, Md. Code Ann., Lab. & Empl. §§ 3-501 et seq. Plaintiffs allege they were employed by Defendants, named as National Auto Inspections, LLC, trading as Carchex ("NAI"); Carchex, LLC ("Carchex"); and Jason Goldsmith. (Am. Compl. ¶¶ 50, 51.) Plaintiffs all worked from Defendants' call center in Hunt Valley, Maryland. (Id. ¶ 104.)

         Defendants are engaged in the sale of vehicle-related insurance products, including Extended Vehicle Protection Plans ("EVPP"), roadside assistance plans, and prepurchase inspections. (Id. ¶¶ 43, 44.) Defendants also provide assistance to customers for acquisition of car insurance from Defendants' partners. (Id. ¶ 44.) Defendants' business model is to own and operate a call center. (Id. ¶ 45.) During Plaintiffs' employment, they communicated with consumers in various states for the purpose of making sales. (Id. ¶ 49.) Each Plaintiff was employed for various terms as an EVPP Specialist, also known as a Vehicle Protection Specialist (generally referred to as "Specialist"); every Plaintiffs specific term of employment is alleged in the amended complaint. (Id. ¶¶ 52-90.) Defendants controlled Plaintiffs' tasks, duties, hours, and rates and methods of pay. (Id. ¶¶ 93-97.)

         To sell the products offered by Defendants and their partners, Plaintiffs made calls to prospective customers and received calls from prospective customers at the call center. (Id. ¶ 105.) Outbound calls were generated from leads provided by direct mail, referrals from Defendants' partners, and potential customers' requests for information through Defendants' website. (Id.) During calls with prospective customers, Plaintiffs were required to follow scripts developed by Defendants. (Id. ¶¶ 106, 107.)

         Defendants compensated Plaintiffs through a complex piece-rate system that incorporated commissions, bonuses, and deductions. (Id. ¶¶ 115-128.) The compensation plan provided no additional compensation during weeks in which Plaintiffs worked more than forty hours. (Id. ¶ 129.) Regarding the hours Plaintiffs worked, the amended complaint alleges the following:

130. Plaintiffs and other Specialists consistently worked over forty (40) hours each week. Working overtime was integral to their employment.
131. Plaintiffs were scheduled to work a minimum of forty-five (45) hours per week. This was based on working five (5) nine (9) hour shifts Monday through Friday. Each shift was to include a one (1) hour break for lunch, however Plaintiffs and other Specialists routinely worked through lunch to cover Defendants' phones as well as increase their sales numbers.
132. Plaintiffs and other Specialists were also scheduled to work on the weekends. They all had to work at least one (1) Saturday every three (3) weeks, which was a five (5) to nine (9) hour shift.
133. During weeks when Plaintiffs and other Specialists were scheduled to work on Saturdays, they had to work a minimum of fifty (50) to fifty-four (54) hours per week. Therefore, Plaintiffs and other Specialists consistently worked between forty-five (45) and fifty-four (54) hours each week as a result of their regular schedules.
134. Plaintiffs and other Specialists were scheduled to work five (5) nine (9) hour shifts Monday through Friday. The start time for each shift was dependent upon Defendants' needs. Some Specialists would begin their shifts at 8:00 a.m. Others would begin at 9:00 a.m. or 10:00 a.m. Some would begin even later. This resulted in Plaintiffs and other Specialists working staggered shifts.
135. Due to working staggered shifts, the time that Plaintiffs' and other Specialists' shifts ended varied. Depending on the time they actually arrived to work, Plaintiffs and other Specialists would typically leave work between 5:00 p.m. to 8:00 p.m. Due to the ...

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