Smith v. Mini Mart Inc. et alBRIEF in Opposition to 28 MOTION to Dismiss Counts I, III, and IV of Plaintiff's Amended ComplaintD. Colo.July 9, 2017Page 1 of 20 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 1:17-cv-00671 CRAIG SMITH and ALEXANDRA BOUCHARD THACKER, individually, and on behalf of all others similarly situated, Plaintiffs, v. MINI MART, INC., a Wyoming Corporation, Defendant. PLAINTIFFS’ BRIEF IN OPPOSITION TO DEFENDANT’S MOTION TO DISMISS COUNTS I, III AND IV OF PLAINTIFFS’ AMENDED COMPLAINT Plaintiffs, Craig Smith (“Smith”) and Alexandra Bouchard Thacker (“Bouchard”) (collectively, “Plaintiffs”), individually and on behalf of all others similarly situated, through counsel, the Sawaya & Miller Law Firm, and pursuant to Rules 8 and 12(b)(6) of the Federal Rules of Civil Procedure and D.C. COLO.LCivR 7.1(d), hereby oppose Defendant Mini Mart, Inc.’s Motion to Dismiss Counts I, III and IV of Plaintiffs’ Amended Complaint (ECF No. 28), and state as follows: I. INTRODUCTION Plaintiffs allege that their former employer, Defendant Mini Mart, Inc. (“Mini Mart”), violated their rights, and the rights of other, similarly-situated employees under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (“FLSA”) and the wage and hour laws of Colorado and Wyoming, C.R.S. § 8-4-101, 7 C.C.R. § 1103-1, Wyo. Stat. Ann. § 27-4-101 et seq., and Wyo. Case 1:17-cv-00671-PAB-MEH Document 31 Filed 07/09/17 USDC Colorado Page 1 of 20 Page 2 of 20 Admin. Code WSD LBRS Ch. 1 § 6 (“State Laws”) by: (1) failing to pay the federal minimum wage to Bouchard and potential FLSA Class members; (2) failing to pay overtime compensation to Bouchard and the FLSA Class members; (3) making illegal wage deductions in violation of State Laws; (4) and engaging in unjust enrichment in violation of the common laws of Colorado and Wyoming. ECF No. 25 ¶¶ 91-129.1 In its Motion, Defendant asks the Court to dismiss Plaintiffs’ FLSA minimum wage claim based on the argument that Plaintiff received the minimum wage on a weekly basis. ECF No. 28 at 7. Defendant thus argues that the Court should adopt the “Klinghoffer Rule” - an approach that has not been adopted by the Tenth Circuit Court of Appels since it was introduced more than half a century ago. See Klinghoffer Bros. Realty Corp., 285 F.2d 487 (2d Cir.1960). Because the Klinghoffer Rule is contrary to the requirements and purposes of the FLSA, and because Bouchard and her class were paid less than $7.25 per hour, (see 29 U.S.C. § 206), this Court should reject Defendant’s argument and deny Defendants’ Motion to Dismiss Count I. Defendant also asks the Court to Dismiss Plaintiffs’ claims for unlawful deductions and unjust enrichment. Because Plaintiffs and their class were deprived of earned wages due to Defendants’ policies requiring them to pay Mini Mart’s business expenses, however, they clearly state plausible claims under the State Laws of Colorado and Wyoming. As such, this Court should deny Defendant’s Motion to Dismiss Counts III and IV of the Amended Complaint. 1 Smith also alleges individual claims for violations of the FLSA and Colorado Wage and Hour Law, which claims are not at issue in Defendant’s Motion to Dismiss. Case 1:17-cv-00671-PAB-MEH Document 31 Filed 07/09/17 USDC Colorado Page 2 of 20 Page 3 of 20 II. RELEVANT FACTS Defendant Mini Mart is a Wyoming corporation that owns and operates hundreds of convenience stores throughout the United States, including approximately 141 stores in Colorado and Wyoming. ECF No. 25 ¶¶ 21-23. Representative Plaintiff Smith was employed by Mini Mart from January 21, 2015 to December 26, 2016. Id.¶¶ 24, 37. Representative Plaintiff Bouchard was employed by Mini Mart from 2010 to 2016. Id. ¶¶ 38, 44.2 At all times relevant to this action, Mini Mart was engaged in interstate commerce and had a gross income of more than $500,000.00. Id. ¶¶ 19-20, 91-92. At all times relevant hereto, Mini Mart had a policy or practice requiring Smith, Bouchard, and all other similarly-situated employees to drive to the stores of Mini Mart’s competitors on a daily, or near-daily, basis to observe and record the gas prices being charged at those stores. Id. ¶¶ 45-46. Mini Mart also required these employees to deliver money to the bank for Mini Mart on a daily, near-daily, or weekly basis. Id. ¶¶ 60-61. Mini Mart failed to compensate Bouchard and other, similarly-situated employees (“FLSA Class”) for the time they spent driving to competitors’ stores. ECF No. 25 ¶ 59. Mini Mart also failed to compensate Smith, Bouchard, and other, similarly-situated employees (“Rule 23 Class”) for the gas, vehicle wear-and-tear, vehicle maintenance, and other Mini Mart expenses they incurred in driving to competitor’s stores and to the bank. Id. ¶¶ 68-72. Bouchard and the members of the FLSA Class were hired to work for Mini Mart for an hourly wage. ECF 25 ¶¶ 39-40. Mini Mart required Bouchard and the FLSA Class members to 2 Plaintiffs’ Amended Complaint contains a typographical error reflecting that Bouchard began her employment in 2009. Paragraph 38 should state that “Individual and Representative Plaintiff Bouchard was hired by Mini Mart as an hourly employee in 2010.” Case 1:17-cv-00671-PAB-MEH Document 31 Filed 07/09/17 USDC Colorado Page 3 of 20 Page 4 of 20 drive to competitors’ stores prior to clocking in each day. Id. ¶¶ 50-52, 54. Bouchard and the FLSA Class members spent up to 30 minutes per day performing these duties. Id. ¶¶ 55-56. Mini Mart did not pay Bouchard and the members of the FLSA Class for the hours they spent driving to competitors’ stores. Id. ¶¶ 58-59. Because many of the hours the Employees spent performing such duties were in excess of 40 per week, Bouchard and the FLSA Class members should have received one and one-half times their regular rate of pay for their hours. Id. ¶¶ 57, 91-98.3 Smith, Bouchard, and the members of the Rule 23 Class drove thousands of miles each year to comply with Mini Mart’s policies and/or practices requiring them to drive to competitors’ stores and to the bank. ECF No 25 ¶¶ 65-66. Mini Mart required the employees to use their own vehicles and gas, and to pay for the maintenance necessary to perform these duties. Id. ¶¶ 67-70. Neither the Plaintiffs nor the members of the Rule 23 Class executed valid agreements or authorizations that would have allowed Mini Mart to charge them with its business expenses. Id. ¶ 73. Because of Mini Mart’s actions, the wages of Smith, Bouchard, and the Rule 23 Class were constantly reduced by the mandatory costs of performing their driving duties. Id. ¶ 72. III. ARGUMENT A. STANDARD OF REVIEW Under the Federal Rules of Civil Procedure, a complaint “must contain a ‘short and plain statement of the claim showing that the pleader is entitled to relief.’” Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009) (citing Fed. R. Civ. P. 8). This pleading standard “does not require ‘detailed factual allegations,’ but it demands more than an unadorned, the-defendant-unlawfully-harmed- 3 Defendant concedes that these allegations state a claim upon which relief may be granted. ECF No. 28 at 6 n. 2. Case 1:17-cv-00671-PAB-MEH Document 31 Filed 07/09/17 USDC Colorado Page 4 of 20 Page 5 of 20 me accusation.” Id. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). To meet this standard, and survive a 12(b)(6) motion to dismiss, a complaint must contain sufficient factual matter which, accepted as true, “state[s] a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678. A complaint states a plausible claim if it contains “factual content that allows the court to draw the reasonable inference” that “there is more than a mere possibility” that the plaintiff is entitled to relief. Id. In ruling on a 12(b)(6) motion, the court must “assume the truth of the plaintiff’s well- pleaded factual allegations and view them in the light most favorable to the plaintiff.” Ridge at Red Hawk, LLC v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007). “Granting a motion to dismiss is a harsh remedy which must be cautiously studied, not only to effectuate the spirit of the liberal rules of pleading but also to protect the interests of justice.” Dias v. City & Cnty. of Denver, 567 F.3d 1169, 1178 (10th Cir. 2009) (citations omitted). “Dismissal under Rule 12(b)(6) should only be granted when it appears that the non-moving party can prove no set of facts in support of the claims that would entitle the plaintiff to relief.” Martinez v. Gabriel, No. 10-CV-02079-CMA- MJW, 2012 WL 1719767, at *1 (D. Colo. May 15, 2012). B. PLAINTIFFS’ AMENDED COMPLAINT STATES A PLAUSIBLE MINIMUM WAGE CLAIM UNDER THE FLSA. The Fair Labor Standards Act (“FLSA”) provides that “[e]very employer shall pay to each of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, wages at… $7.25 an hour, beginning [July 24, 2009].” 29 U.S.C. § 206(a)(1)(C) (emphasis added). Thus, “[t]he FLSA requires an employer to pay a minimum wage for each hour it employs an employee.” Pabst v. Oklahoma Gas & Elec. Co., 228 F.3d 1128, 1132 (10th Cir. Case 1:17-cv-00671-PAB-MEH Document 31 Filed 07/09/17 USDC Colorado Page 5 of 20 Page 6 of 20 2000) (emphasis added); cf. Salazar v. Butterball, LLC, No. 08-CV-02071-MSK-CBS, 2009 WL 6048979, at *4 (D. Colo. Dec. 3, 2009). “The requirements to state a claim of a FLSA violation are quite straightforward, requiring plaintiff to show a failure to pay overtime compensation and/or minimum wages to covered employees - no more.” Rayfield v. Sandbox Logistics, LLC, No. 16-CV-2231-JLK, 2016 WL 6806239, at *1 (D. Colo. Nov. 9, 2016). To state a plausible claim for failure to pay the minimum wage, a plaintiff must allege (1) that he was an employee of a covered employer; and (2) that the employer violated the FLSA by filing to pay him minimum hourly wages. Labbe, 319 F. App’x at 763. 1. PLAINTIFFS STATE PLAUSIBLE FLSA MINIMUM WAGE CLAIMS. In this case, Smith and Bouchard allege that they were employed by Mini Mart, a Wyoming corporation that owns and operates hundreds of convenience stores throughout the United States. ECF No. 25 ¶¶ 19-21. Plaintiffs further allege that Mini Mart was engaged in commerce and had a gross income of more than $500,000.00 at all times during their employment. Id. ¶¶ 19-20, 91- 92. Mini Mart is therefore an employer covered by the FLSA. 29 U.S.C. § 203(d), (s). As such, the first element of Bouchard and the FLSA Class’s minimum wage claim has been met. See Labbe, 319 F. App’x at 763. Bouchard also alleges that “Mini Mart violated the FLSA by failing to pay [her] minimum hourly wages.” Bouchard alleges that she and the members of the FLSA Class were hourly employees. ECF No. 25 ¶¶ 39-40. She alleges that Mini Mart required Bouchard and the FLSA Class members to drive to competitors’ stores prior to clocking in each day. Id. ¶¶ 50-56. She further alleges that Mini Mart failed to pay her and the FLSA Class anything for the hours they Case 1:17-cv-00671-PAB-MEH Document 31 Filed 07/09/17 USDC Colorado Page 6 of 20 Page 7 of 20 spent driving to competitors’ stores and to the bank. Id. ¶¶ 58-59. Plaintiffs have thus established that Mini Mart failed to pay Bouchard and the FLSA Class the federal minimum wage for each hour they worked. See Pabst, 228 F.3d at 1132. In the Bouchard’s case, Mini Mart deprived Bouchard of at least $1,319.50 during each of the last two years of her employment ($7.25/hour x 30 minutes/day x 7 days/week x 52 weeks/year). ECF No. 25 ¶¶ 41, 56. Plaintiffs allege that each member off the FLSA class was deprived of a similar amount each year. Id. ¶ 58. 2. DEFENDANT’S MINIMUM WAGE METRIC SHOULD BE REJECTED. Defendant seeks to avoid liability under the FLSA by encouraging this Court to adopt a weekly measuring rod - as opposed to an hourly measuring rod - for minimum wages, retroactively reducing Bouchard’s hourly wage rate to account for the hours for which she was not paid. ECF No. 28 at 7. As this Court has noted, this measuring rod, which has become known as the Klinghoffer rule, has never been adopted by the Tenth Circuit Court of Appeals. Romero v. Top- Tier Colorado LLC, No. 15-CV-02101-MEH, 2016 WL 497095, at *4 (D. Colo. Feb. 9, 2016). Moreover, because the Klinghoffer Rule is contrary to the purposes and requirements of the FLSA, it should be rejected by this Court. See Norceide v. Cambridge Health All., 814 F. Supp. 2d 17, 22-26 (D. Mass. 2011). Plaintiffs recognize that this Court applied the Klinghoffer rule in Romero v. Top-Tier Colorado LLC, in a case involving tipped employees. No. 15-CV-02101-MEH, 2016 WL 497095, at *5 (D. Colo. Feb. 9, 2016), rev’d, 849 F.3d 1281 (10th Cir. 2017). However, in reversing that decision, the Tenth Circuit Court of Appeals stated that the employer could not use the amount that Plaintiffs received to excuse the fact that they were not paid the minimum wage. Romero v. Top-Tier Colorado LLC, 849 F.3d 1281, 1284-85 (10th Cir. 2017). The Court of Appeals reasoned Case 1:17-cv-00671-PAB-MEH Document 31 Filed 07/09/17 USDC Colorado Page 7 of 20 Page 8 of 20 that under the defendant’s approach, an employer could pay the tipped employees “nothing at all” - which would clearly violate the FLSA. Id. at 1285. Defendant essentially argues, as did the defendant in Top-Tier, that because Blanchard and the FLSA Class members eventually received more than the minimum wage (if their wages are retroactively averaged and their rates reduced), it does not matter whether or not Defendant actually paid them $7.25 per hour. Defendant’s argument “ignores the plain language of the minimum wage provision and undermines the FLSA’s primary purpose of ensuring a fair wage for workers.” Norceide, 814 F. Supp. 2d at 23 (citing to Dolan v. Postal Service, 546 U.S. 481, 486 (2006) in holding that statutory interpretation “depends upon reading the whole statutory text, considering the purpose and context of the statute, and consulting any precedents or authorities that inform the analysis”). The FLSA “speaks only of an hourly wage.” Id. “Thus, while it does not explicitly state how to calculate what an employee has been paid for an hour’s worth of work, the statute’s text is explicit that, with respect to the minimum wage, the only metric Congress envisioned was the hour, with each hour having its own discrete importance.” Id. at 24 (emphasis added). Moreover, “[t]he principal congressional purpose in enacting the [FLSA] was to protect all covered workers from substandard wages and oppressive working hours, ‘labor conditions [that are] detrimental to the maintenance of the minimum standard of living necessary for health, efficiency and general well-being of workers.’” Id. (citations omitted); see Shapiro v. United States, 335 U.S. 1, 31-32 (1948) (statutes capable of two interpretations must be read “in the manner which effectuates rather than frustrates the major purpose of the legislative draftsmen”). Where an employer knows that its employees are working unrecorded hours before their shifts, Case 1:17-cv-00671-PAB-MEH Document 31 Filed 07/09/17 USDC Colorado Page 8 of 20 Page 9 of 20 and fails to pay them for those hours, the FLSA has been violated. See Norceide, 814 F. Supp. 2d at 25-26. Mini Mart hired Bouchard and each of the FLSA Class members as hourly employees. It represented to Bouchard that she would be paid $12.00 (and later $13.75) for each hour that she worked, and made similar promises to the other Class members. See ECF No. 25 ¶ 40. Instead, Mini Mart paid these employees nothing for the hours they were required to work each day before their shifts began: a rate of “0.00 an hour.” See 29 U.S.C. § 206 (requiring payment of “7.25 an hour”). Bouchard and the FLSA Class members were not free to choose their activities during this unpaid time - they were forced to work for a wage that was lower than the $12.00/hour they were promised or risk losing their employment. It was precisely this kind of unfair, oppressive behavior that the FLSA was meant to remedy. Norceide, 814 F. Supp. 2d at 24. Because Defendant’s motion to dismiss Plaintiffs’ minimum wage claim is entirely based on the Klinghoffer Rule, and because the Klinghoffer Rule is contrary to the language and purpose of the FLSA, Defendant’s motion should be denied. C. THE COMPLAINT STATES PLAUSIBLE WAGE DEDUCTION CLAIMS. 1. COLORADO WAGE AND HOUR LAW: The Colorado Wage Act, C.R.S. § 8-4-101 et seq. (“CWA”) is “a comprehensive wage code designed to require employers to make timely payment of wages earned by an employee and to provide adequate judicial relief when employers fail to pay wages when due.” Cusimano v. Metro Auto, Inc., 860 P.2d 532, 533 (Colo. App. 1992). The Colorado courts have held that the CWA “should be liberally interpreted to serve its purpose.” Fang v. Showa Entetsu Co., 91 P.3d 419, 421 (Colo. App. 2003). Case 1:17-cv-00671-PAB-MEH Document 31 Filed 07/09/17 USDC Colorado Page 9 of 20 Page 10 of 20 Section 8-4-105 of the CWA declares: No employer shall make a deduction from the wages or compensation of an employee except as follows: (a) Deductions mandated by or in accordance with local, state, or federal law including, but not limited to, deductions for taxes, “Federal Insurance Contributions Act” (“FICA”) requirements, garnishments, or any other court-ordered deduction; (a.5) Deductions for contributions attributable to automatic enrollment in an employee retirement plan, as defined in section 8-4-105.5, regardless of whether the plan is subject to the federal “Employee Retirement Income Security Act of 1974”, as amended; (b) Deductions for loans, advances, goods or services, and equipment or property provided by an employer to an employee pursuant to a written agreement between such employer and employee, so long as it is enforceable and not in violation of law; (c) Any deduction necessary to cover the replacement cost of a shortage due to theft by an employee if a report has been filed with the proper law enforcement agency in connection with such theft pending a final adjudication by a court of competent jurisdiction; except that, if the accused employee is found not guilty in a court action or if criminal charges related to such theft are not filed against the accused employee within ninety days after the filing of the report with the proper law enforcement agency, or such charges are dismissed, the accused employee shall be entitled to recover any amount wrongfully withheld plus interest. In the event an employer acts without good faith, in addition to the amount wrongfully withheld and legally proven to be due, the accused employee may be awarded an amount not to exceed treble the amount wrongfully withheld. In any such action the prevailing party shall be entitled to reasonable costs related to the recovery of such amount including attorney fees and court costs. (d) Any deduction, not listed in paragraph (a), (a.5), (b), or (c) of this subsection (1), that is authorized by an employee if the authorization is revocable, including deductions for hospitalization and medical insurance, other insurance, savings plans, stock purchases, supplemental retirement plans, charities, and deposits to financial institutions; (e) A deduction for the amount of money or the value of property that the employee failed to properly pay or return to the employer in the case where a terminated employee was entrusted during his or her employment with the collection, disbursement, or handling of such money or property. The Case 1:17-cv-00671-PAB-MEH Document 31 Filed 07/09/17 USDC Colorado Page 10 of 20 Page 11 of 20 employer shall have ten calendar days after the termination of employment to audit and adjust the accounts and property value of any items entrusted to the employee before the employee’s wages or compensation shall be paid as provided in section 8-4-109. This is an exception to the pay requirements in section 8-4-109. The penalty provided in section 8-4-109 shall apply only from the date of demand made after the expiration of the ten-day period allowed for payment of the employee’s wages or compensation. If, upon such audit and adjustment of the accounts and property value of any items entrusted to the employee, it is found that any money or property entrusted to the employee by the employer has not been properly paid or returned the employer as provided by the terms of any agreement between the employer and the employee, the employee shall not be entitled to the benefit of payment pursuant to section 8-4-109, but the claim for unpaid wages or compensation of such employee shall be disposed of as provided for by this article. C.R.S. § 8-4-105(1) (emphasis added). The Colorado Minimum Wage Order (“CMWO”) declares that “[n]o employer shall make a deduction from the wages or compensation of an employee in violation of the Colorado Wage Act, C.R.S. § 8-4-105.” 7 C.C.R. § 1103-1:9. Under Colorado Wage and Hour Law, “wages or compensation” is defined as: (I) All amounts for labor or service performed by employees, whether the amount is fixed or ascertained by the standard of time, task, piece, commission basis, or other method of calculating the same or whether the labor or service is performed under contract, subcontract, partnership, subpartnership, station plan, or other agreement for the performance of labor or service if the labor or service to be paid for is performed personally by the person demanding payment. No amount is considered to be wages or compensation until such amount is earned, vested, and determinable, at which time such amount shall be payable to the employee pursuant to this article. (II) Bonuses or commissions earned for labor or services performed in accordance with the terms of any agreement between an employer and employee; (III) Vacation pay earned in accordance with the terms of any agreement. If an employer provides paid vacation for an employee, the employer shall pay upon separation from employment all vacation pay earned and determinable Case 1:17-cv-00671-PAB-MEH Document 31 Filed 07/09/17 USDC Colorado Page 11 of 20 Page 12 of 20 in accordance with the terms of any agreement between the employer and the employee. C.R.S. § 8-4-101(14)(a); cf. 7 C.C.R. § 1103-1:2. Neither the CWA nor the CMWO defines “deduction.” The Colorado courts and the Tenth Circuit Court of Appeals have held that where a term is not defined by the CWA, a court must “look to the plain meaning of the language used, considered within the context of the statute as a whole.” Deherrera v. Decker Truck Line, Inc., 820 F.3d 1147, 1160 (10th Cir. 2016); Salazar v. Butterball, LLC, 644 F.3d 1130, 1143 (10th Cir. 2011) (quoting Bly v. Story, 241 P.3d 529, 533 (Colo. 2010)). To determine the plain meaning of words in a Colorado statute, the court may “resort to dictionary definitions.” Metro Wastewater Reclamation Dist. v. Cont’l Cas. Co., 834 F. Supp. 1254, 1258 (D. Colo. 1993) (citing Hecla Min. Co. v. New Hampshire Ins. Co., 811 P.2d 1083, 1090 (Colo. 1991). Merriam-Webster’s Dictionary defines deduction as “an act of taking away” or “something that is or may be subtracted.” Deduction, Merriam-Webster’s Dictionary, available online at https: //www.merriam-webster.com/dictionary/deduction. Black’s Law Dictionary defines deduction as “the act or process of subtracting or taking away.” Deduction, Black’s Law Dictionary (10th ed. 2014). Under either definition, a “deduction” is something that is taken away or subtracted. 2. WYOMING WAGE AND HOUR LAW: Wyoming’s Wage and Hour Law, Wyo. Stat. Ann. § 27-4-101 et seq., requires that “[e]very person, firm or corporation… shall, on or before the first day of each month, pay their employees the wages earned by them during the first half of the preceding month….” Wyo. Stat. Ann. § 27- 4-101(a). The Wyoming Administrative Code provides that: Case 1:17-cv-00671-PAB-MEH Document 31 Filed 07/09/17 USDC Colorado Page 12 of 20 Page 13 of 20 The following sums shall constitute proper offsets from wages due an employee. (i) Any sums deducted from wages pursuant to the Internal Revenue Code or any other Federal tax provision. (ii) Any sums deducted from wages pursuant to the Social Security Administration Act and the Federal Insurance Contribution Act. (iii) Any sums deducted from wages as dues, contributions, or other fees to any labor organization or association; and any sums as contributions for any employee’s participation or eligibility in any health, welfare, insurance, retirement, or other benefit plan or program, … (iv) Any sums deducted from wages as payments, repayments, contributions, deposits, to any credit union, banking, savings, loan, trust or other financial institution, provided: (A) That such employee has granted written authorization for such deductions; and (B) That such deductions shall terminate upon the employee’s written revocation of said authorization. (v) Any sums deducted from wages as payment for any purchase of goods or services by the employee from the employer… (vi) Any sums deducted from wages for damages suffered by the employer due to the employee’s negligence… (vii) Any sums deducted from wages pursuant to “Attachment“ (W.S. 1-15- 201 through 1-15-212) or “Garnishment“ (W.S. 1-15-401 through 1-15- 425) and W.S. 27-4-106 through 27-4-108. (viii) Any sums deducted from wages as repayment to the employer by the employee of any cash advances, loans or payments of expenses for optional benefits such as tuition assistance, relocation and training, made to the employee by such employer, provided: (A) That the cash advance, loan or payment of expenses to the employee occurred while said employee was in the employ of such employer; and (B) That the employee’s receipt of such cash advance, loan or payment of expenses is evidenced by the employee’s written acknowledgement. (ix) Any sums deducted from wages resulting from cash shortages, … Case 1:17-cv-00671-PAB-MEH Document 31 Filed 07/09/17 USDC Colorado Page 13 of 20 Page 14 of 20 (x) Any sums deducted from wages as payment for any purchase of tools, equipment, uniforms, or other items required for the employment of the employee, provided: (A) That the employee has actual or constructive possession of the items; and (B) That the employee’s purchase and receipt of the item is evidenced by written acknowledgement. (xi) Any sums deducted from wages as payment for tools, equipment, uniforms, or other items assigned to the employee by the employer, provided: (A) That such item was assigned to the employee to be used within the scope of the employee’s employment. (B) That the employee gave written acknowledgement of the receipt of such items; and (C) That such items have not been returned to the employer upon termination. Wyo. Admin. Code WSD LBRS Ch. 1, § 6(b) (emphasis added). Wyoming’s Wage and Hour Law further declares that “[n]o employer shall be permitted to deduct wages due an employee any sums not enumerated in this chapter.” Wyo. Admin. Code WSD LBRS Ch. 1, § 6(f). “Wages” is defined as “compensation, including fringe benefits, for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission, or other basis.” Wyo. Admin. Code WSD LBRS Ch. 1, § 6(a)(i). “Compensation” is defined as “remuneration, pay, salary or commission to be received by an employee for labor, services or as a result of his or her employment whether the compensation is determined on a time, task, weight, piece, hourly, chore or other basis.” Wyo. Admin. Code WSD LBRS Ch. 1, § 6(a)(ii). Case 1:17-cv-00671-PAB-MEH Document 31 Filed 07/09/17 USDC Colorado Page 14 of 20 Page 15 of 20 Wyoming’s Wage and Hour Law does not define “offset.” See Wyo. Admin. Code WSD LBRS Ch. 1, § 6. The dictionaries define “offset” as “something that serves to counterbalance or to compensate for something else.” Offset, Merriam-Webster’s Dictionary, available at https://www.merriam-webster.com/dictionary/offset; cf. Offset, Black’s Law Dictionary (10th ed. 2014). 3. THE PLAINTIFFS STATE PLAUSIBLE WAGE DEDUCTION CLAIMS UNDER THE WAGE AND HOUR LAWS OF COLORADO AND WYOMING. Plaintiffs allege that Mini Mart took away/ subtracted from their wages, and the wages of similarly-situated Rule 23 Class members, by forcing them to pay Mini Mart’s business expenses. ECF No. 25 ¶¶ 45-74. At all times relevant to the Complaint, Mini Mart had policies and/or practices of requiring Plaintiffs and the Rule 23 Class to travel to competitors’ stores and to the bank without compensating them for the costs of performing such duties. Id. ¶¶ 45-46, 51, 72. These policies/practices took “wages earned by an employee” away from Plaintiffs and the Rule 23 Class members. See Brownlee, 49 F. Supp. 3d at 878. Under C.R.S. § 8-4-105 and Wyo. Admin Code WSD LBRS Ch. 1 § 6, an employer who takes money from its employee(s) must comply with the strict requirements each States’ Wage and Hour Law, obtaining a written agreement and/or specific authorization prior to doing so. There are no facts before the Court indicating that Mini Mart complied with any such requirements, and Plaintiffs explicitly alleges that they, and the Rule 23 Class members, “did not execute valid agreements or authorizations that would allow Mini Mart to charge them with its business expenses in the manner described” in Count I of the Amended Complaint. ECF No. 25 ¶ 73. Mini Mart argues that one case from the U.S. District Court for the District of Kansas, Wass v. NPC, 688 F. Supp. 2d 1282, 1288 (2010), reflects a “rejection” of Smith’s theory in this Case 1:17-cv-00671-PAB-MEH Document 31 Filed 07/09/17 USDC Colorado Page 15 of 20 Page 16 of 20 case. ECF No. 28 at 9-10. In that case, the plaintiff pizza delivery workers alleged, inter alia, that their employer provided them with a partial reimbursement for automobile expenses that was so insufficient that it forced their wages below the state and federal minimum wages. Id. at 1288. The District Court in Kansas stated that the “defendant would not be in violation of the minimum wage laws merely by failing to reimburse plaintiffs for expenses” and that “such failure must be in an amount great enough to bring plaintiffs’ wages for a particular time period below the legal minimums.” Id. (emphasis added). The Court concluded that the plaintiffs had not pled any facts to support their allegations regarding the insufficiency of the defendant’s reimbursement, dismissed the plaintiff’s claims and granted them leave to amend their complaint. Id. Unlike the plaintiffs’ claims in Wass, Plaintiffs’ deduction claims do not arise under state or federal minimum wage laws. Smith and Bouchard allege that Mini Mart violated C.R.S. § 8-4- 105 and Wyo. Admin Code WSD LBRS Ch. 1 § 6, which explicitly prohibit wage deductions that do not comport with the requirements set forth in those laws. Also, unlike the plaintiffs in Wass, Smith has alleged ample facts to support his deduction claims. See ECF No. 25 ¶¶ 35-38, 40-45, 49-51. Contrary to Mini Mart’s assertions, this Court has recognized that under-reimbursed business expenses can constitute “kickbacks” where an employer requires its employees to use their personal vehicles to perform job duties and fails to pay for the wear-and-tear incurred in the performance of such duties. Smith v. Pizza Hut, Inc., No. 09-CV-01632-CMA-BNB, 2011 WL 2791331, at *4 (D. Colo. July 14, 2011) (denying motion to dismiss based on minimum wage provisions of the FLSA); cf. Koral v. Inflated Dough, Inc., No. 13-CV-02216-WYD-KMT, 2014 WL 4904400, at *4 (D. Colo. Sept. 29, 2014) (holding that plaintiffs had stated viable claim under Case 1:17-cv-00671-PAB-MEH Document 31 Filed 07/09/17 USDC Colorado Page 16 of 20 Page 17 of 20 Colorado Minimum Wage Act by alleging under-reimbursement of business expenses); Lozoya v. AllPhase Landscape Constr., Inc., No. 12-CV-1048-JLK, 2015 WL 1757080, at *3 (D. Colo. Apr. 15, 2015) (denying summary judgment where fact issues existed as to “deductions made for broken or damaged equipment, allegedly personal cell phone use, uniforms, small tools, and safety equipment”); See also Lozoya v. AllPhase Landscape Constr., Inc., No. 12-CV-1048-JLK, 2015 WL 1524639, at *2 (D. Colo. Mar. 31, 2015) (granting class certification for plaintiffs’ deduction claims). Mini Mart’s argument that Plaintiff’s claims are precluded by Wass is therefore completely without merit. Because Plaintiffs have alleged ample facts that allow the Court to draw the reasonable inference that Mini Mart is liable for making unlawful wage deductions in violation of the wage and hour laws of Colorado and Wyoming, Mini Mart’s motion to dismiss Count III should be denied. See Iqbal, 556 U.S. at 678. D. THE COMPLAINT STATES PLAUSIBLE UNJUST ENRICHMENT CLAIMS. In Colorado, the elements of an unjust enrichment claim are: “(1) that at plaintiff’s expense (2) defendant received a benefit (3) under circumstances that would make it unjust for defendant to retain the benefit without paying.” DCB Const. Co. v. Cent. City Dev. Co., 965 P.2d 115, 119- 20 (Colo. 1998). “Whether retention of the benefit is unjust is a fact-intensive inquiry in which courts look to, among other things, the intentions, expectations, and behavior of the parties.” Melat, Pressman & Higbie, L.L.P. v. Hannon Law Firm, L.L.C., 287 P.3d 842, 847 (Colo. 2012). Similarly, a Wyoming plaintiff alleging unjust enrichment must prove the following elements: “(1) Valuable services were rendered, or materials furnished, (2) to the party to be charged, (3) which services or materials were accepted, used and enjoyed by the party, and, (4) Case 1:17-cv-00671-PAB-MEH Document 31 Filed 07/09/17 USDC Colorado Page 17 of 20 Page 18 of 20 under such circumstances which reasonably notified the party to be charged that the plaintiff, in rendering such services or furnishing such materials, expected to be paid by the party to be charged. Without such payment, the party would be unjustly enriched.” Boyce v. Freeman, 39 P.3d 1062, 1065 (Wyo. 2002). Defendant falsely asserts that Wyoming State Law requires Bouchard to show that “she provided notice to [Mini Mart] that she expected to be reimbursed for her mileage.” ECF No. 28 at 3. As Defendant later tacitly admits, however, Wyoming law only requires a plaintiff to establish that the enrichment occurred “under such circumstances which reasonably notified the party to be charged that the plaintiff… expected to be paid.” Id. at 11-12 (citing Boyce, 39 P.3d at 1065). Defendant also claims that Plaintiffs have not sufficiently alleged that Mini Mart’s retaining of the benefits it received from the Rule 23 Class would be “unjust.” ECF No. 28 at 12-13. Notably, Defendant does not deny that Plaintiffs and the Rule 23 class provided Mini Mart with benefits, or that Defendant received those benefits. See ECF No. 28 at 12-13. Instead, Defendants merely ask the Court to ignore the bulk of Plaintiffs’ allegations, which include the following facts: (a) Mini Mart had a policy or practice requiring Plaintiffs and the Class to incur expenses against their pay; (b) Plaintiffs and the Class were forced to use their own vehicles to comply with Mini Mart’s policy or practice; (c) Plaintiffs and the Class were forced to pay for the gas and wear-and-tear they used to travel to competitors’ stores and the bank for Mini Mart - costs that are properly Mini Mart business expenses; and (d) Mini Mart obtained and retained the value of the money that was taken from Smith’s and the Class members’ income without any valid justification for doing so. ECF No. 45-51, 60-74. Clearly, these allegations demonstrate circumstances “which reasonably notified the party to be charged that the plaintiff… expected to be paid” and circumstances under Case 1:17-cv-00671-PAB-MEH Document 31 Filed 07/09/17 USDC Colorado Page 18 of 20 Page 19 of 20 which it would be unjust for Defendant to retain the benefits they received without paying. 4 See Boyce, 39 P.3d at 1065. Because Plaintiffs’ allegations state plausible claims for unjust enrichment under Colorado and Wyoming law, Defendant’s motion to dismiss Count IV should be denied. IV. CONCLUSION WHEREFORE, Plaintiffs respectfully ask the Court to deny Defendant’s Motion to Dismiss Counts I, III, and IV of Plaintiffs’ Amended Complaint. Respectfully submitted, CRAIG SMITH and ALEXANDRA BOUCHARD THACKER, individually, and on behalf of all others similarly situated By: /s/ Adam M. Harrison _______________________ David H. Miller Adam M. Harrison THE SAWAYA & MILLER LAW FIRM 1600 Ogden Street Denver, Colorado 80218 Telephone: 303-839-1650 E-mail: DMiller@sawayalaw.com AHarrison@sawayalaw.com Counsel for Plaintiffs Craig Smith and Alexandra Bouchard Thacker, individually and on behalf of all others similarly situated 4 In its Motion, Mini Mart improperly urges the Court to find that Plaintiffs’ unjust enrichment claims “could never be certified for class treatment.” ECF No. 28 at 13 (citing Friedman v. Dollar Thrifty Auto. Grp., Inc., 304 F.R.D. 601 (D. Colo. 2015)). All of the cases Mini Mart cites in support of this proposition, however, involved case-specific findings in response to motions to certify filed under Fed. R. Civ. P 23. See id. at 608-612. Mini Mart has not and cannot cite any legal authority demonstrating that a trial court can (or should) dismiss class claims under Rule 12 based on a belief that the plaintiffs are unlikely to succeed in their certification motion. Plaintiffs object to Defendant’s untimely and improper motion in this regard. Case 1:17-cv-00671-PAB-MEH Document 31 Filed 07/09/17 USDC Colorado Page 19 of 20 Page 20 of 20 CERTIFICATE OF SERVICE I certify that on the 7th day of July, 2017, I delivered a copy of the foregoing Plaintiffs’ Brief in Opposition to Defendant’s Motion to Dismiss Counts I, III and IV of Plaintiffs’ Amended Complaint to the chambers of the Magistrate Judge and opposing counsel at the addresses listed below. I was unable to file these documents through the CM/ECF system because that system was down. Hon. Magistrate Judge Hegarty Hegarty_Chambers@cod.uscourts.gov Josh Kirkpatrick Andrew Epstein Littler Mendelson Jkirkpatrick@littler.com Aepstein@littler.com I further certify that on this 9th day of July, 2017, I filed the foregoing document through the Court’s CM/ECF system, which generated a copy to all counsel of record. /s/ Adam M. Harrison _______________________ Adam M. Harrison Case 1:17-cv-00671-PAB-MEH Document 31 Filed 07/09/17 USDC Colorado Page 20 of 20
