United States District Court, D. Maryland
L. Russell, III United States District Judge
MATTER is before the Court on Defendants Lois Peters, Frank
Dickerson, International Health Care Consultants, Inc.
(“IHC Consultants”), Cedar Lane Senior Assisted
Living Facility, Inc. (“Cedar Lane”), and
Ashleigh's Senior Assisted Living, Inc.'s
(“Ashleigh's”) Defendants' Motion to
Dismiss the Secretary's Complaint (ECF No. 10). The
Motion is ripe for disposition, and no hearing is necessary.
See Local Rule 105.6 (D.Md. 2018). For the reasons
outlined below, the Court will deny the Motion.
is a registered nurse, the president of IHC Consultants, and
the owner and manager of four group homes that provide
assisted-living services to the elderly in Maryland. (Compl.
¶ 2, ECF No. 1). The group homes are: (1) Astoria House
in Fulton, Maryland; (2) Astoria II in Columbia, Maryland;
(3) Golden Years Assisted Living in Mount Airy, Maryland; and
(4) Ashleigh's Place in Columbia, Maryland.
(Id.). Dickerson is vice president of IHC
Consultants and, like Peters, manages the group homes.
(Id. ¶ 3). Both Peters and Dickerson hire and
fire employees, set their work schedules and compensation,
distribute weekly payroll, and supervise employees
day-to-day. (Id. ¶¶ 7- 8). Peters
“regularly” visits the group homes, while
Dickerson visits them “several times each week to check
on their books [and tell] the employees how to perform their
work.” (Id.). IHC, whose registered office is
a house in Clarksville, Maryland, operates the group homes.
(Id. ¶ 4). Cedar Lane, whose registered office
is a house in Columbia, Maryland and was incorporated by
Peters in October 2017, operates Astoria II. (Id.
¶ 5). Ashleigh's, whose registered office is a house
in Columbia and was incorporated by Peters in October 2017,
operates Ashleigh's Place. (Id. ¶ 6).
employed at least twenty-seven people from September 19, 2015
through at least September 20, 2017 as Caregivers and
Medication Technicians. (Id. ¶ 11; id.
Sched. A [“Employee List”]). Defendants paid the
Caregivers and Medication Technicians a day rate
“purportedly for twelve hours of work per day,
typically from 6:00 a.m. to 6:00 p.m., or from 7:00 a.m. to
7:00 p.m.” (Id. ¶ 12). Defendants paid
some employees $65.00 per day and others $80.00 per day.
(Id.). Defendants “required many of the
Caregivers and Medication Technicians to stay overnight at
the group homes, scheduling them for shifts ranging from five
to fifteen consecutive days, e.g., Monday at 6am through
Saturday at 6am.” (Id. ¶ 13). During the
overnight shifts, the employees had to “respond to the
needs of the elderly residents, many of whom suffered from
dementia, whenever such needs arose, ” which meant they
were interrupted several times each night. (Id.).
Defendants did not provide private space for the employees
when they stayed overnight, which prevented them from getting
adequate sleep or enjoying private leisure activities.
(Id.). During these overnight shifts, the employees
were not paid beyond the day rate. (Id.). When they
worked more than forty hours per week, they were not paid at
a higher overtime rate. (Id. ¶¶ 14-15).
September 21, 2018, Plaintiff U.S. Secretary of Labor
Alexander Acosta (the “Secretary”) sued
Defendants. (ECF No. 1). The Secretary alleges that from
September 19, 2015 through at least September 20, 2017,
Defendants willfully: (1) failed to compensate employees at
the statutory hourly minimum required by Section 6 of the
Fair Labor Standards Act (“FLSA” or the
“Act”), 29 U.S.C. § 201 et seq.
(2018); (2) failed to compensate employees at the proper
overtime rate for hours worked in excess of forty hours per
week pursuant to Sections 7 and 15(a)(2) of the Act; (3)
failed to provide any compensation for mandatory overnight
shifts; and (4) failed to make, keep, and preserve adequate
and accurate records of employee hours pursuant to Sections
11(c) and 15(a)(5) of the Act. (Id. ¶¶
11-17). The Secretary seeks unpaid minimum wage and overtime
compensation, as well as liquidated damages, pursuant to
Section 16(c) of the Act and an injunction to prevent
Defendants from further violating the FLSA pursuant to
Section 17 of the Act. (Id. at 7-8).
November 21, 2018, Defendants filed their Motion to Dismiss
the Secretary's Complaint. (ECF No. 10). On December 19,
2018, the Secretary filed an Opposition. (ECF No. 18). On
January 16, 2019, Defendants filed a Reply. (ECF No. 19).
Standard of Review
purpose of a Rule 12(b)(6) motion is to “test[ ] the
sufficiency of a complaint, ” not to “resolve
contests surrounding the facts, the merits of a claim, or the
applicability of defenses.” King v.
Rubenstein, 825 F.3d 206, 214 (4th Cir. 2016) (quoting
Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th
Cir. 1999)). A complaint fails to state a claim if it does
not contain “a short and plain statement of the claim
showing that the pleader is entitled to relief, ”
Fed.R.Civ.P. 8(a)(2), or does not “state a claim to
relief that is plausible on its face, ” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is
facially plausible “when the plaintiff pleads factual
content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Id. (citing Twombly, 550
U.S. at 556). “Threadbare recitals of the elements of a
cause of action, supported by mere conclusory statements, do
not suffice.” Id. (citing Twombly,
550 U.S. at 555). Though the plaintiff is not required to
forecast evidence to prove the elements of the claim, the
complaint must allege sufficient facts to establish each
element. Goss v. Bank of America, N.A., 917
F.Supp.2d 445, 449 (D.Md. 2013) (quoting Walters v.
McMahen, 684 F.3d 435, 439 (4th Cir. 2012)),
aff'd sub nom., Goss v. Bank of America,
NA, 546 Fed.Appx. 165 (4th Cir. 2013).
considering a Rule 12(b)(6) motion, a court must examine the
complaint as a whole, consider the factual allegations in the
complaint as true, and construe the factual allegations in
the light most favorable to the plaintiff. Albright v.
Oliver, 510 U.S. 266, 268 (1994); Lambeth v. Bd. of
Comm'rs, 407 F.3d 266, 268 (4th Cir. 2005) (citing
Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)). But,
the court need not accept unsupported or conclusory factual
allegations devoid of any reference to actual events,
United Black Firefighters v. Hirst, 604 F.2d 844,
847 (4th Cir. 1979), or legal conclusions couched as factual
allegations, Iqbal, 556 U.S. at 678.
argue that the Complaint, or some part thereof, should be
dismissed for several reasons, including that it fails to
meet the pleading standard under Twombly and
Iqbal because its allegations are conclusory and not
specific enough. The Secretary counters that he has pleaded
enough details to allow the Court to infer Defendants are
liable. The Court will examine the arguments in turn.
Single Enterprise and Covered Employer
argue that they are not a single enterprise or a covered
employer under the Act, whereas the Secretary argues that
Defendants are. The Court agrees with the Secretary.
the FLSA, an “enterprise” consists of “the
related activities performed (either through unified
operation or common control) by any person or persons for a
common business purpose, and includes all such activities
whether performed in one or more establishments or by one or
more corporate or other organizational units . . . .”
29 U.S.C. § 203(r)(1) (2018). For separate entities to
qualify as a “single enterprise” under the Act,
they must make a three-part showing: (1) “the entity or
entities must engage in ‘related
activities'”; (2) “performed through
‘unified operation' or ‘common
control'”; (3) “for a common business
purpose.” Dole v. Odd Fellows Home Endowment
Bd., 912 F.2d 689, 692 (4th Cir. 1990) (citing Brock
v. Hamad, 867 F.2d 804, 806 (4th Cir. 1989) (per
the Complaint alleges Defendants all operate group homes that
provide assisted living services for elderly residents,
meeting the “related activities” prong of the
Fourth Circuit's test. Next, the Complaint alleges that
Peters owns and manages the Corporate Defendants and the
group homes and that Dickerson is intimately involved in the
management of the group homes, their employees, and their
finances. Third, per the pleadings, Defendants have the
common business purpose of operating the group homes.
Accordingly, Defendants constitute a single enterprise under
FLSA provides that a covered employer is one that “is
engaged in the operation of a hospital, an institution
primarily engaged in the care of the sick, the aged, or the
mentally ill or defective who reside on the premises of such
institution.” 29 U.S.C. § 203(s)(1)(B). While
Defendants argue that the Secretary merely mimicked the
statutory language, the Complaint sufficiently establishes
that the Defendants “operate ‘group homes that
provided assisted living services to elderly ...