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Anyere v. Wells Fargo

March 29, 2010


The opinion of the court was delivered by: Judge Joan H. Lefkow


This putative class action has been filed by current and former employees of Wells Fargo Company, Inc. ("Wells Fargo"), alleging that Wells Fargo has denied them overtime pay to which they are entitled under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq.*fn1

Wells Fargo has moved to dismiss the collective action allegations pursuant to Federal Rule of Civil Procedure 12(b)(6). For the following reasons, Wells Fargo's motion [# 24] is granted in part and denied in part.


A motion to dismiss under Rule 12(b)(6) challenges a complaint for failure to state a claim upon which relief may be granted. See Fed. R. Civ. P. 12(b)(6); Gen. Elec. Capital Corp. v. Lease Resolution Corp., 128 F.3d 1074, 1080 (7th Cir. 1997). In ruling on a 12(b)(6) motion, the court accepts as true all well-pleaded facts in the plaintiff's complaint and draws all reasonable inferences from those facts in the plaintiff's favor. Dixon v. Page, 291 F.3d 485, 486 (7th Cir. 2002). In order to survive a Rule 12(b)(6) motion, the complaint must not only provide the defendant with fair notice of the claim's basis, but must also establish that the requested relief is plausible on its face. Ashcroft v. Iqbal, --- U.S. ----, 129 S.Ct. 1937, 1949, 173 L.Ed. 2d 868 (2009); see also Bell Atl. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed. 2d 929 (2007).


Plaintiffs are current or former employees of Wells Fargo who worked as credit managers. Am. Compl. ¶ 9. Credit managers work directly with customers to consolidate various forms of debt into mortgage debt. Id. ¶¶ 12-14. Plaintiffs allege that they were regularly required to work overtime for which they were not compensated. Id. ¶¶ 21-23, 28-29, 36. In spite of an official schedule of 9:00 a.m to 6:00 p.m, Monday through Friday, with an hour for lunch, id. ¶ 19, plaintiffs assert they were often required to work through lunch, id. ¶ 20, on Saturdays, id. ¶ 23, and "until 8:00 in the evening or later." Id. ¶ 22. Plaintiffs allege that Wells Fargo managers often "verbally disciplined employees for logging more than 40 hours per week," id. ¶ 29, and "typically went into... time sheets and made adjustments to reflect that employees had only worked 40 hours" even though employees had logged overtime hours. Id. ¶ 28. Plaintiffs seek to certify a collective action against Wells Fargo pursuant to 29 U.S.C. § 216(b). Plaintiffs' proposed opt-in class would consist of "all current and former similarly situated Illinois employees of [Wells Fargo] during the three (3) years immediately preceding the filing of this action... if they worked [in] excess of forty (40) hours in a week during the past three (3) years and were not paid overtime as required by the FLSA." Id. at 8-9.


Wells Fargo has moved to dismiss plaintiffs' collective action allegations on the basis of issue preclusion, asserting that the Northern District of California's decision in Castle v. Wells Fargo Financial, Inc., No. C 06-4347 SI, 2008 U.S. Dist. LEXIS 106703 (N.D. Cal. Feb. 20, 2008), precludes plaintiffs from litigating their collective action claims here.*fn2 Issue preclusion, also called collateral estoppel, is an affirmative defense, which provides that "once a court has decided an issue of fact or law necessary to its judgment, that decision may preclude relitigation of the issue in a suit on a different cause of action involving a party to the first case." Allen v. McCurry, 449 U.S. 90, 94, 101 S.Ct. 411, 414, 66 L.Ed. 2d 308 (1980) (citation omitted). For issue preclusion to apply, the following four conditions must be met:

(1) the issue sought to be precluded is the same as that involved in a prior action; (2) the issue was actually litigated; (3) the determination of the issue was essential to the final judgment; and (4) the party against whom estoppel is invoked was represented in the prior action.

Adair v. Sherman, 230 F.3d. 890, 893 (7th Cir. 2000). "[T]he defendant has the burden to set forth facts sufficient to satisfy each element of the defense." Id. at 894. It is within the court's discretion to allow an affirmative defense such as collateral estoppel or res judicata to be raised on a motion to dismiss. See Muhammad v. Oliver, 547 F.3d 874, 878 (7th Cir. 2008) ("[W]hen an affirmative defense is disclosed in the complaint, it provides a proper basis for a Rule 12(b)(6) motion."); Lambert v. Conrad, 536 F.2d. 1183, 1186 (7th Cir. 1976) ("[R]es judicata may be raised by pre-answer motion or at least that it is within the district court's discretion to allow it to be so raised."); Cueto v. Grogan, No. 08-0808-DRH, 2009 U.S. Dist. LEXIS 78532, at *9 (S.D. Ill. Sept. 1, 2009) (granting motion to dismiss based on collateral estoppel).

In Castle, plaintiffs proposed a nationwide FLSA collective action against Wells Fargo based on allegations similar to those presented in this case. Castle, 2008 U.S. Dist. LEXIS 106703, at *3. The proposed collective class in Castle included approximately 14,000 individuals spread across 48 states. Id. Plaintiffs sought certification of a class of "[a]ll persons who are or have been employed by [Wells Fargo] as credit manager, senior credit manager, assistant manager, or loan processor within the United States." Id. at *5. The Castle court relied on twenty-four declarations from former Wells Fargo employees in eight states. Id. at *4. Based on these declarations, the court found that some plaintiffs "recorded overtime hours worked, and that their managers later altered their time records..., [while] [o]ther declarants state[d] that they were told not to record overtime hours." Id. The court in Castle denied plaintiffs' motion for conditional collective class certification because the individuals in the proposed class were not similarly situated. Id. at *14. Rather, "[a]t the most, [the Castle] plaintiffs' evidence suggests differing 'policies' or practices depending on the branch or the district, rather than on a nationwide basis." Id.

Wells Fargo contends that the Castle court's determination that plaintiffs were not similarly situated with regard to a nationwide class precludes plaintiffs' assertion of a nationwide and an Illinois class because plaintiffs make similar fact allegations to those presented by the Castle plaintiffs. In particular, Wells Fargo asserts that plaintiffs' allegations that they were pressured not to record overtime and that their managers changed overtime hours entered in an electronic time card system necessarily indicate that individualized fact determinations predominate and that this issue was already conclusively decided by the Castle court.

Although Wells Fargo maintains that plaintiffs are attempting to bring a nationwide collective action, plaintiffs have conceded that this is not their intent. See Pls.' Resp. at 3 ("Plaintiffs[ ] will be seeking certification of a class under § 216(b) within Illinois for former and current credit managers of Wells Fargo.").*fn3 The Amended Complaint, however, does contain language that credit managers nationwide are similarly situated to the named plaintiffs. See Am. Compl. ΒΆΒΆ 5, 10, 34. To the extent that the complaint can be read to seek relief for a nationwide ...

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