United States District Court, D. Utah, Central Division
MEMORANDUM DECISION AND ORDER GRANTING IN PART AND
DENYING IN PART MOTION TO DISMISS (ECF NO. 7)
J. FURSE UNITED STATES MAGISTRATE JUDGE.
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 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.
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.
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., ¶¶
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.
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.,
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.)
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.)
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.)
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.)
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.)
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