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Darvette Smith, et al v. Family Video Movie Club

August 4, 2011

DARVETTE SMITH, ET AL., PLAINTIFFS,
v.
FAMILY VIDEO MOVIE CLUB, INC., DEFENDANT.



The opinion of the court was delivered by: Samuel Der-yeghiayan, District Judge

MEMORANDUM OPINION

This matter is before the court on Defendant Family Video Movie Club, Inc.'s (FVMC) partial motion to dismiss and motion to strike. For the reasons stated below, the partial motion to dismiss is granted and the motion to strike is denied.

BACKGROUND

FVMC allegedly owns and operates over 700 movie and video game rental stores in 19 different states. Plaintiffs were allegedly employed by FVMC in stores in Iowa, Illinois, and Michigan. Plaintiffs were allegedly paid at an hourly rate and were required to perform work while not on the clock, such as assisting customers, opening the stores, cleaning and maintaining stores, making phone calls, working on inventory, stocking shelves, closing down stores, and making bank deposits. Plaintiffs brought the instant action and include in their amended complaint Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq. claims (Count I), Illinois Minimum Wage Law (IMWL), 820 ILCS 105/1 et seq. claims (Count II), and Michigan Minimum Wage Law (MMWL), Mich. Comp. Laws §408.384, overtime claims and minimum wage claims (Count III). FVMC moves to dismiss the overtime claims in Count III and to strike the class allegations in Counts II and III.

LEGAL STANDARD

In ruling on a motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(6) (Rule 12(b)(6)), a court must "accept as true all of the allegations contained in a complaint" and make reasonable inferences in favor of the plaintiff. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009)(stating that the tenet is "inapplicable to legal conclusions"); Thompson v. Ill. Dep't of Prof'l Regulation, 300 F.3d 750, 753 (7th Cir. 2002). To defeat a Rule 12(b)(6) motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Iqbal, 129 S.Ct. at 1949 (internal quotations omitted)(quoting in part Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A complaint that contains factual allegations that are "merely consistent with a defendant's liability . . . stops short of the line between possibility and plausibility of entitlement to relief." Iqbal, 129 S.Ct. at 1949 (internal quotations omitted).

DISCUSSION

I. Motion to Dismiss

FVMC argues that the MMWL overtime claims should be dismissed because it is exempt from the MMWL. The MMWL provides in part that it "does not apply to an employer who is subject to the minimum wage provisions of the fair labor standards act of 1938, 29 USC 201 to 219, unless those federal minimum wage provisions would result in a lower minimum hourly wage than provided in" the MMWL. Mich. Comp. Laws §408.394(1). FVMC contends that it is subject to the FLSA and therefore is not subject to the MMWL. Plaintiffs do not contest FVMC's assertion that if FVMC is subject to the FLSA, then FVMC is not subject to the MMWL. It is also apparent that Plaintiffs agree that FVMC is subject to the FLSA since Plaintiffs have included FLSA claims in the amended complaint. Plaintiffs point out that in October 2006, the federal minimum wage became lower than the MMWL minimum wage. However, FVMC indicates that it is only moving to dismiss the MMWL overtime claims in Count III that are based upon alleged violations of the MMWL overtime protections, not the minimum wage protections.

Under Mich. Comp. Laws §408.394(1), even if the MMWL provided a minimum wage lower than the federal minimum wage, the MMWL provides an additional exemption from the overtime provisions of the MMWL. Id. (stating that "Section 4a does not apply"); Arrington v. Michigan Bell Telephone Co., 746 F.Supp. 2d 854, 857 (E.D. Mich. 2010)(explaining the "additional exemption" for the overtime provisions). Plaintiffs concede that §408.394(1) provides the additional exemption and that FVMC falls under that exemption. (Ans. 12). Plaintiffs argue, however, that they can proceed under the savings clause of the MMWL, which provides: "[n]otwithstanding any other provision of this act, subsection (1)(a) and (b) and subsection (2) do not deprive an employee or any class of employees of any right that existed on September 30, 2006 to receive overtime compensation or to be paid the minimum wage." Mich. Comp. Laws §408.394(5). Plaintiffs argue that they can proceed on the MMWL overtime claims because Plaintiffs fall within a class of employees that had a right under FLSA to overtime pay on September 30, 2006. (Ans. 12). Plaintiffs do not cite any authority to support their position. (Ans. 12). In regard to the issue of overtime compensation, the savings clause of the MMWL does not indicate that Plaintiffs can pursue overtime claims under MMWL, but indicates that the MMWL exemptions do not deprive Plaintiffs from pursuing any right that existed on September 30, 2006 to receive overtime compensation. Plaintiffs in fact are pursuing FLSA claims for overtime compensation in Count I. Thus, Plaintiffs are not being deprived of bringing FLSA claims under the rights that existed on September 30, 2006 to receive overtime compensation. Therefore, the motion to dismiss the MMWL overtime claims (Count III) is granted.

II. Motion to Strike

FVMC moves to strike the class allegations in Counts II and III. In regard to the IMWL and MMWL claims, FVMC argues that any class that Plaintiffs sought to certify under Federal Rule of Civil Procedure 23(a) (Rule 23(a)) for the IMWL and MMWL claims would be preempted by the FLSA. There are three types of federal preemptions: "express preemption, conflict (or implied) preemption, and field (or complete) preemption." Hoagland v. Town of Clear Lake, Ind., 415 F.3d 693, 696 (7th Cir. 2005). FVMC argues that the FLSA expressly preempts the MMWL and IMWA claims. (Reply 5). Express preemption by Congress "occurs when a federal statute explicitly states that it overrides state or local law." Hoagland, 415 F.3d at 696. FVMC argues that 29 U.S.C. §216(b) (Section 216(b)) of the FLSA prescribes certain actions. Section 216(b) provides in part the following:

Any employer who violates the provisions of section 206 or section 207 of this title shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages. Any employer who violates the provisions of section 215(a)(3) of this title shall be liable for such legal or equitable relief as may be appropriate to effectuate the purposes of section 215(a)(3) of this title, including without limitation employment, reinstatement, promotion, and the payment of wages lost and an additional equal amount as liquidated damages. An action to recover the liability prescribed in either of the preceding sentences may be maintained against any employer (including a public agency) in any Federal or State court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated. No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought.

Id. (emphasis added). FVMC argues that the reference to the limitation for bringing actions involving FLSA claims shows that the FLSA preempts Rule 23(a) class claims for state law claims that are connected to minimum wages and overtime. However, the FLSA also includes a provision authorizing claims such as in the instant action. The FLSA specifically includes a "savings clause" that authorizes states to enact more favorable legislation involving wages and hours, providing that "[n]o provision of this chapter or of any order thereunder shall excuse noncompliance with any Federal or State law or municipal ordinance establishing a minimum wage higher ...


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