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Molling v. McArthur

United States District Court, D. Utah, Central Division

September 17, 2018

ADAM MOLLING, Plaintiff,
v.
ROBERT G. MCARTHUR and RGM DESIGN, INC., Defendants.

          MEMORANDUM DECISION AND ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS (ECF NO. 7)

          EVELYN J. FURSE UNITED STATES MAGISTRATE JUDGE.

         In December 2017, Plaintiff Adam Molling filed the Complaint in this matter. (Compl., ECF No. 2.) Mr. Molling's Complaint asserted claims against Defendants Robert G. McArthur and RGM Design, Inc. (collectively, “RGM”) for (1) failure to pay overtime in violation of the Fair Labor Standards Act (“FLSA”), (2) retaliation in violation of the FLSA, and (3) breach of the covenant of good faith and fair dealing. (Compl., ¶¶ 23-39, ECF No. 2.) On February 27, 2018, RGM moved to dismiss Mr. Molling's Complaint in its entirety. (Mot. to Dismiss (“Mot.”), ECF No. 7.) After receipt of the Motion to Dismiss, on March 13, 2018, Mr. Molling filed an Amended Complaint omitting his first cause of action for failure to pay overtime in violation of the FLSA but continuing to assert claims for retaliation under the FLSA and breach of the covenant of good faith and fair dealing. (See Am. Compl., ECF No. 11.) Mr. Molling opposed the Motion to Dismiss, arguing that he pled his remaining two causes of action sufficiently. (Pl.'s Resp. to Mot. to Dismiss (“Opp'n”), ECF No. 12.) RGM filed its Reply on March 16, 2018. (Reply in Supp. of Mot. to Dismiss (“Reply”), ECF No. 14.) The Court[1] held a hearing on RGM's Motion to Dismiss on May 17, 2018. (ECF No. 25.) The parties agreed the Court should consider the Motion to Dismiss as fully briefed and addressing the Amended Complaint because the arguments as to the remaining causes of action had not changed.

         Given that Mr. Molling filed an Amended Complaint omitting his cause of action for failure to pay overtime in violation of the FLSA, the Court DENIES AS MOOT RGM's Motion to the extent it seeks dismissal of that claim. Further, as explained in detail below, the Court finds Mr. Molling sufficiently pleads an FLSA retaliation claim and therefore DENIES RGM's Motion as to that claim. However, the Court agrees with RGM that Mr. Molling fails to state a claim for breach of the covenant of good faith and fair dealing and therefore GRANTS RGM's Motion as to that claim.

         FACTUAL BACKGROUND

         Mr. Molling's Amended Complaint asserts claims against RGM Design, Inc. and Robert G. McArthur, the principal owner of RGM Design, Inc. (Am. Compl. 1, ECF No. 11.) Mr. Molling alleges he began working for RGM as a Financial Controller and LDS Project Manager in July 2013. (Id., ¶¶ 8, 11.) At the start of his employment, he worked part-time on an hourly basis, and by the end of his employment in September 2017, he worked full time on an hourly basis. (Id., ¶¶ 9-10, 22.) Mr. Molling asserts that beginning September 1, 2017 he engaged in protected activities under the FLSA, that he suffered an adverse employment action when RGM terminated him on September 11, 2017, and that a causal connection exists between his termination and the protected activities, in part because of the short time period between the protected activities and his termination. (Id., ¶¶ 25-27.)

         Providing background to the events of September 2017, Mr. Molling alleges that in October 2013, a company employee told him that RGM did not pay overtime wages and that Mr. Molling then brought the issue to Mr. McArthur's attention and advised him to follow the FLSA and pay overtime. (Am. Compl., ¶ 13, ECF No. 11.) Mr. Molling asserts RGM elected to pay a straight time rate for hours worked over forty hours per week instead of an overtime rate. (Id.) He then asserts that in April 2014, he and then-office manager, Aubrey Andrus, met with RGM to encourage payment of overtime wages. (Id., ¶ 14.) He claims that RGM began to pay overtime wages at that point but never paid back wages. (Id.)

         Mr. Molling alleges that a few years later, on September 1, 2017, RGM moved to a new location and during the move asked him to stay and continue working overtime. (Am. Compl., ¶ 16, ECF No. 11.) Concerned that RGM would not properly pay him overtime wages, Mr. Molling agreed to stay and work only if RGM would pay him overtime. (Id., ¶¶ 16, 25(a).) Mr. Molling claims he stayed and worked because RGM assured him it would pay him overtime wages. (Id., ¶ 16.)

         On the same day, Mr. McArthur and then-office manager Maurine Jaramillo called Mr. Molling to a meeting where they informed him of a new policy that required hourly employees who worked more than forty hours a week to “bank hours” and use them as paid time off at a future date. (Id., ¶ 17.) Mr. Molling asserts that during the meeting, he told them he thought the practice violated the FLSA and that he opposed the practice. (Id., ¶¶ 17, 25(b).) Mr. McArthur responded that he disagreed and told Mr. Molling to direct further questions to the company accountant. (Id., ¶ 17.)

         Mr. Molling claims he then spoke to the company accountant, David Tucker, who confirmed that banking hours violated the FLSA and told Mr. Molling he would talk to Mr. McArthur about the issue. (Id., ¶¶ 18, 25(c).) Mr. Molling also spoke to Ms. Jaramillo again, who told him she felt RGM would terminate her if she opposed the practice of banking hours. (Id., ¶¶ 19, 25(d).) Mr. Molling claims he followed-up with Mr. Tucker again on September 7, 2018 to see if RGM intended to change the banking hours policy. (Am. Compl., ¶¶ 20, 25(e), ECF No. 11.) Mr. Tucker indicated that he had not yet spoken to Mr. McArthur. (Id., ¶ 20.)

         Subsequently, on September 8, 2017, Mr. Molling alleges he spoke to Mr. McArthur about the overtime policy again and informed him he spoke to Mr. Tucker who agreed the policy of banking overtime hours violated the FLSA. (Id., ¶¶ 21, 25(f).) He claims that in response, Mr. McArthur began lecturing Mr. Molling “about checking up on him.” (Id., ¶ 21.)

         On the following Monday, September 11, 2017, Mr. Molling alleges Mr. McArthur asked to speak to him alone outside the building and, at that time, terminated his employment. (Am. Compl., ¶ 22, ECF No. 11.) Mr. Molling recorded the conversation. (Id.) During that conversation, Mr. Molling and Mr. McArthur discussed the events of the prior week. (Id.) Among other things Mr. Molling indicated that he said he could stay to help with the move but that RGM would have to pay overtime and that Mr. McArthur got upset. (Id.) Mr. McArthur replied “Right, because you weren't even willing to try when you knew we were so tight on budget. You knew we were so tight . . . .” (Id.) Mr. Molling reiterated that the overtime policy violated the law. (Id.)

         Mr. Molling asserts claims against RGM for retaliation in violation of the FLSA and for breach of the covenant of good faith and fair dealing. (Am. Compl., ¶¶ 23-32, ECF No. 11.) Mr. Molling seeks unpaid wages, back wages, front wages, compensatory damages, and attorney's fees and costs. (Id. at 9.)

         LEGAL STANDARD

         To survive a motion to dismiss under Rule 12(b)(6), a complaint must allege “‘enough facts to state a claim to relief that is plausible on its face.'” Hogan v. Winder, 762 F.3d 1096, 1104 (10th Cir. 2014) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 547 (2007)). “‘A claim has facial plausibility 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. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). In reviewing a motion to dismiss, the court accepts as true the well-pled factual allegations and views the allegations in the light most favorable to the plaintiff, drawing all reasonable inferences in the plaintiff's favor. Wilson v. Montano, 715 F.3d 847, 852 (10th Cir. 2013). “[A] plaintiff must offer specific factual allegations to support each claim.” Kan. Penn Gaming, LLC v. Collins, 656 F.3d 1210, 1214 (10th Cir. 2011) (citing Twombly, 550 U.S. at 570). A complaint survives ...


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