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Flores v. HMS Host Corp.

United States District Court, D. Maryland

October 23, 2019

RONALDO FLORES, et al. Plaintiffs,
v.
HMS HOST CORP., et al. Defendants, and, AMY STORCH, et al. Plaintiffs,
v.
HMS HOST CORP., et al. Defendants.

          MEMORANDUM OPINION

          Paula Xinis, United States District Judge

         Pending before the Court in these companion FLSA class cases are Defendants' motions to dismiss in Flores v. HMS Host Corp., No. 8:18-cv-03312-PX, ECF No. 15, and Storch v. HMS Host Corp., No. 8:18-cv-03322-PX, ECF No. 14. The motions are fully briefed, and no hearing is necessary. See Loc. R. 105.6. For the following reasons, Defendants' motions are DENIED.

         I. Background

         These cases are related to Acey v. HMS Host USA, Inc., No. 8:18-cv-01395-PX, also pending before this Court. Acey involves a Fair Labor Standards Act (“FLSA”) suit also against Defendants HMS Host Corporation and HMS Host USA, Inc. (collectively “HMS Host, ” “HMS, ” or “Defendants”). Acey, ECF No. 115 at 1. HMS Host owns and operates food and beverage franchises across the United States, mostly in large airports. Id. The Acey Plaintiffs are employees of HMS Host and allege that their employer systematically under-compensated them in violation of the FLSA. Id. at 1-2.

         Acey had been filed originally in the Western District of Tennessee. Id. at 2. At the time Acey was transferred to this District, the Plaintiffs represented that they would pursue claims on behalf of three groups of employees: (1) untipped “Quick Service Restaurant” (“QSR”) employees; (2) untipped “warehouse runner/receiver/utility” (“runner”) employees; and (3) tipped waitstaff. Id. at 3. The Acey Plaintiffs initially intended to amend the Complaint to reflect the three distinct subclasses. Id. at 3. Instead, in September 2018, the Acey Plaintiffs narrowed their Complaint so that it only alleged claims on behalf of QSR employees. See Acey, ECF No. 96 at ¶ 4. The “runner” employees then filed Flores, ECF No. 1, and the waitstaff filed Storch, ECF No. 1.

         The Court has already denied Defendants' motion to dismiss the Acey Complaint. Acey, ECF No. 115. The Court now turns to similar, but not identical, challenges that HMS lodges against the Flores and Storch Complaints.

         The allegation unifying all three cases is that HMS Host used a coordinated scheme to under-compensate its employees. Acey, ECF No. 1 at ¶ 14; Flores, ECF No. 1 at ¶ 15; Storch, ECF No. 1 at ¶ 15. The precise theories vary slightly from case to case. But, at bottom, each Complaint accuses HMS Host of “strictly enforc[ing]” a set of “labor budgets” that were out of line with the operational demands of its establishments. Acey, ECF No. 1 at ¶ 14; Flores, ECF No. 1 at ¶ 15; Storch, ECF No. 1 at ¶ 15. Then, to meet these unrealistic labor budgets, management extracted unpaid and underpaid labor from its employees. Acey, ECF No. 1 at ¶ 14; Flores, ECF No. 1 at ¶ 15; Storch, ECF No. 1 at ¶ 15.

         The runner employees bring one claim for overtime wages through named Plaintiff Ronaldo Flores, asserting that HMS Host failed to pay any wages for Plaintiffs' “off-the-clock” work. Flores, ECF No. 1 at ¶¶ 44-51. Flores maintains that he “routinely” worked eight to ten hours in excess of a forty-hour work week but was not properly compensated for that time. Id. at ¶ 25. Flores worked off-the-clock before his shift started, during breaks, and after scheduled shifts. Id. at ¶ 28. This work consisted of opening the warehouse in the morning, cleaning, making various deliveries, and swapping CO2 tanks and kegs. Id. Flores alleges that management ignored his complaints and threatened disciplinary action if he refused to work off-the-clock. Id. at ¶¶ 30-31.

         The waitstaff employees, through named plaintiffs Amy Storch, Samantha Curry and Jenna Plotkin (collectively “Storch”), allege that HMS Host required the waitstaff to work one to three off-the-clock hours per shift, performing such tasks as cutting fruit, cleaning and sweeping, and preparing place settings. Storch, ECF No. 1 at ¶ 22. The Storch plaintiffs further allege that Defendants improperly deprived them of a minimum wage for “related, non-tip producing” duties. Id. at ¶ 41. On this claim, Storch puts forward a host of tasks that Defendants required her to perform that did not earn her tips.[1] Id. at ¶¶ 23, 41. Storch specifically notes that these tasks took up more than 20% of her time, but that she received a “tip credit wage” instead of the regular minimum wage. Id.

         HMS Host now moves to dismiss the entirety of Flores and Storch's complaints. Flores, ECF No. 15; Storch, ECF No. 14. Much as they did in Acey, HMS Host argues that Plaintiffs have averred boilerplate FLSA violations that cannot survive challenge. Flores, ECF No. 15-1 at 8-17; Storch, ECF No. 14-1 at 9-11, 14-16. Additionally, with respect to the Storch Complaint, HMS Host contends that a recent 2018 Department of Labor (“DOL”) opinion letter forecloses Storch's “related duties” claim by reinterpreting a pivotal regulation. Storch, ECF No. 14-1 at 11-13, 16-17. The Court addresses each contention in turn.

         II. Standard of Review

         A motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of the complaint. Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006). The Court accepts “the well-pled allegations of the complaint as true, ” and construes all facts and reasonable inferences most favorably to the plaintiff. See Ibarra v. United States, 120 F.3d 472, 474 (4th Cir. 1997). To survive a motion to dismiss, a complaint's factual allegations “must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations omitted).

         III. Discussion

         A. Motion to Dismiss the Flores and Storch ...


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