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Costello v. Whole Foods Market Group Inc.

United States District Court, D. Massachusetts

August 8, 2016



          George A. O’Toole, Jr. United States District Judge.

         The complaint in this action alleges the following:

         Ryan Costello worked at a Whole Foods Market in Jamaica Plain, Massachusetts, from approximately June 2014 to October 2015. He began there as a part-time employee making $10 an hour. At the time of the relevant events, he was employed full-time, being paid $13.54 an hour. He worked as part of a team in the “prepared foods” department of the market.

         Whole Foods installed a burrito bar and a pizza station in September 2015. These two new stations added more responsibilities for the members of the prepared food team, and Costello believed that he and his coworkers deserved to be paid an additional $1 an hour as compensation for the additional work. He drafted a petition that requested a $1 per hour raise for his entire team. He distributed this petition to a number of his coworkers who, along with the plaintiff himself, signed it. The plaintiff and his coworkers presented the petition to their managers and posted it on an employee bulletin board.

         Five days after submitting the petition, Costello was called into a meeting with a regional executive coordinator for Whole Foods and Wanda Hernandez, the general manager of the Jamaica Plain Whole Foods store. Costello was told he was being investigated for statements that he purportedly made while soliciting signatures for the petition. It was claimed that another employee had complained that Costello had been soliciting signatures “while on the clock.” A week later, Costello’s employment was terminated for “lying during an investigation.”

         Costello alleges that he did not lie during the investigation, but rather was fired for his activity in seeking higher wages. His complaint, originally filed in Suffolk Superior Court, asserts four causes of action. Count I claims that he was fired in retaliation for raising complaints about an “oppressive and unreasonable wage” in violation of the Massachusetts Minimum Fair Wage Law. See M.G.L. ch. 151, §§ 1, 19. Count II claims that he was fired in retaliation for raising complaints about the defendants’ failure to have paid him wages earned in violation of the Massachusetts Wage Act. See M.G.L. ch. 149, § 148A. Counts III and IV allege breach of contract and breach of the implied contractual covenant of good faith and fair dealing. All four claims are asserted against both Whole Foods and Hernandez individually. The complaint seeks damages for lost wages and emotional distress, subject to statutory trebling, as well as attorneys’ fees and costs.

         The defendants removed the case to this Court, invoking diversity of citizenship as the basis for jurisdiction. See 28 U.S.C. § 1332. Whole Foods is a Delaware corporation with its principal place of business in Texas. Both Costello and Hernandez are Massachusetts citizens, a circumstance that would ordinarily preclude diversity jurisdiction, but Whole Foods asserts that Hernandez was fraudulently joined for the purpose of defeating federal jurisdiction and therefore should be disregarded in assessing whether the conditions for jurisdiction under § 1332 are met.

         There are two pending motions. The defendants have moved to dismiss the complaint for failure to state a claim upon which relief can be granted. See Fed. R. Civ. Pro. 12(b)(6). The plaintiff has moved to remand the case to the state court, arguing both the absence of complete diversity and the insufficiency of the damages in light of the statutory amount-in-controversy threshold.

         I. Jurisdiction

         A. Fraudulent Joinder

         Whether the necessary complete diversity of citizenship exists turns on whether Hernandez has been fraudulently joined to defeat jurisdiction under § 1332.

[I]t is generally recognized that, under the doctrine of fraudulent joinder, removal is not defeated by the joinder of a non-diverse defendant where there is no reasonable possibility that the state’s highest court would find that the complaint states a cause of action upon which relief may be granted against the non-diverse defendant.

Universal Truck & Equip. Co. v. Southworth-Milton, Inc., 765 F.3d 103, 108 (1st Cir. 2014). Thus, determining whether the parties are diverse is similar to an evaluation of the merits of the plaintiff’s claims against the pertinent defendant. See, e.g., id. at 108 n.3 (citing Poulos v. Naas Foods, Inc., 959 F.2d 69, 73 (7th Cir.1992) (“[T]he federal court must engage in an act of prediction: is there any reasonable possibility that a state court would rule against the non-diverse defendant?”) (alteration in original)); Polyplastics, Inc. v. Transconex, Inc., 713 F.2d 875, 877 (1st Cir. 1983) (“[A] finding of fraudulent joinder bears an implicit finding that the plaintiff has failed to state a cause of action against the fraudulently joined defendant . . . .”).

         As noted above, Counts I and II are both claims for retaliation. Costello alleges that Whole Foods and Hernandez fired him in retaliation for his complaining about rights protected by the Massachusetts Minimum Fair Wage Law (“MFWL”) and the Massachusetts Wage Act. Counts III and IV are common law based contract claims.

         1. Minimum Fair Wage Law

         The defendants argue that the Minimum Fair Wage Law has nothing to do with the plaintiff’s grievance. At all times during his employment, Costello was earning equal to or more than $10 per hour. During his employment at Whole Foods, the statutory minimum wage was first $8 (in 2014) and then $9 (in 2015). See M.G.L. ch. 151, § 1. Alternative minimum wages for specific industries may be set by the Director of the Department of Labor Standards, see id. § 7, but there is no allegation that any such rate was applicable to Costello.

         Instead, the plaintiff argues that in addition to setting a minimum wage, the statute also forbids payment of an “oppressive and unreasonable wage.” Id. § 1. An “oppressive and unreasonable wage” is broadly defined by statute to be “a wage which is both less than the fair and reasonable value of the services rendered and less than sufficient to meet the minimum cost of living necessary for health.” Id. § 2.

         The plaintiff’s theory is that a wage rate higher than the established minimum wage may nonetheless be “oppressive and unreasonable” in particular circumstances. It appears to be an entirely novel theory. Indeed, the plaintiff has provided no case at all in which an employee’s higher than minimum wage salary was found nonetheless to violate the Minimum Fair Wage Law. Courts in previous cases have analyzed the viability of claims under the MFWL by referencing only the statutory minimum wage. See, e.g., Huston v. FLS Language Ctrs., 18 F.Supp.3d 17, 23-24 (D. Mass. 2014); Dagan v. Jewish Cmty. Hous. for the Elderly, 699 N.E.2d 840, 847 (Mass. App. Ct. 1998).

         It appears ‘twas always thus, as an early case concerning the MFWL from the Supreme Judicial Court shows. In Robinson v. Pine Grove Cemetery Corp., the employee, Ray Wilday, was, from 1947 to 1950, paid an annual salary of $1, 200 at the rate of $100 per month. 162 N.E.2d 16, 17 (Mass. 1959). The MFWL had been first passed in 1947, and then, like now, “declared it to be against public policy to employ any person in an occupation at an oppressive and unreasonable wage.” See id. Then, like now, specific rates could be set by statute or by the appropriate administrator.[1] However, unlike now, from the initial date of passage of the act until January 1, 1950, there was no general minimum wage rate established. Rather, wage boards recommended various minimum wages for particular industries. No minimum wage had been recommended for Wilday’s occupation. At the start of 1950, the first generally applicable minimum wage of sixty-five cents per hour came into effect. On these facts, the Supreme ...

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