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Rogier v. Chambers

Superior Court of Massachusetts, Suffolk

August 31, 2016

Joseph Rogier et al. [1]
v.
Herbert G. Chambers et al. [2] ; Other Parties: Anthony Kent et al. [3]
v.
Herbert G. Chambers et al. No. 134818

         Filed September 1, 2016

          MEMORANDUM AND ORDER ON DEFENDANTS' MOTION TO DISMISS

          Edward P. Leibensperger, Justice of the Superior Court.

         Plaintiffs, former employees of automobile dealerships owned by defendant, Herbert G. Chambers, allege violations of the Massachusetts Wage Act and minimum wage and overtime laws. Plaintiffs seek relief on behalf of themselves and a class of all others similarly situated. This motion to dismiss presents the issue of whether plaintiffs may maintain the action against corporate entities by which they were not directly employed. Based on the relatedness of the defendant entities, plaintiffs argue that they have standing to proceed. The non-employer defendants, on the other hand, contend that they are entitled to rely upon the law respecting separate corporate formations to limit plaintiffs to asserting claims only against their direct employers. For the reasons stated below, the non-employer defendants' motion will be allowed.

         BACKGROUND

         The nine plaintiffs in Rogier (No. 2015-2876) are former employee salespersons at four separate dealerships owned by Chambers. Each of the dealerships is organized as a separate corporation. Rogier and Saia worked at Herb Chambers of Burlington, Inc. Kent, Garrett, Sebelon, Younis and Devlin worked at Herb Chambers Route 9, Inc. Underwood worked at Herb Chambers of Natick, Inc. Zerai worked at Herb Chambers 1186, Inc. The Rogier plaintiffs sue twenty-seven (27) corporations in addition to their direct employers, plus two individuals--Herbert G. Chambers, the owner, president, treasurer, and sole registered director of each of the named defendants, and James Duchesneau, the chief financial officer, vice president and assistant secretary of defendant Jennings Road Management Corp. (" JRM").

         The five plaintiffs in Kent (No. 2016-849) are former employee Client Care Specialists and/or Business Development Managers at four separate dealerships owned by Chambers.[5] Each of the dealerships is a separate corporation. Kent and Devlin worked at Herb Chambers of Westborough, Inc. Avallon and Underwood worked at Herb Chambers of Natick, Inc. Avallon also worked at Herb Chambers Andover Street, Inc. Razon worked at Herb Chambers 1186, Inc. As in Rogier, the Kent plaintiffs sue twenty-seven (27) corporations in addition to their direct employers, as well as Chambers and Duchesneau.

         Plaintiffs in both cases state in their complaints that they were employed by " defendants" without specifying which of the dealerships or other defendants they are referring to. It is evident from plaintiffs' memoranda in opposition to defendants' motion to dismiss, however, that the use by plaintiffs of the generic " defendants" as their employers is meant as a legal conclusion. That is, that according to plaintiffs all defendants " employed" them based on the legal theories of " joint employer" or " single integrated enterprise" as allegedly recognized under the Federal Fair Labor Standards Act (" FLSA"). To clarify, plaintiffs' counsel was asked at oral argument on this motion whether it could be stipulated as to which entity actually engaged each plaintiff and issued a paycheck to each plaintiff. Plaintiffs' counsel then stipulated that each plaintiff received his or her paycheck from the dealership where each worked. Therefore, for purposes of analyzing the parties' arguments with respect to this motion to dismiss, the dealership corporation where a plaintiff worked will be referred to as his or her direct employer, and the court will consider whether, as a matter of law, the other defendants may be potentially liable as indirect employers under the Massachusetts statutes.

         In Rogier, plaintiffs allege that as salespersons they were paid based solely on commissions earned from the sale of vehicles. In Kent, plaintiffs allege that as Client Care Specialists and/or Business Development Managers they were paid between $400 and $800 per week, plus contingent production bonuses. In both cases, plaintiffs allege that the payment scheme violated the Massachusetts Wage Act (G.L.c. 149, § § 148, 150) and statutory requirements for the payment of minimum wages and overtime (G.L.c. 151, § § 1, 1A and 1B).[6]

         At this stage, defendants do not contest whether each plaintiff adequately pleads claims against his or her direct employer corporation, as well as against Chambers as the president and treasurer of each direct employer corporation. Defendants' argument is that plaintiffs do not have standing to sue corporations that were not their direct employers. Because Duchesneau was not an officer of any of the direct employer corporations, defendants contend that plaintiffs may not assert any claims against him.

         DISCUSSION

         I apply the well-known standard for the consideration of a motion to dismiss. To survive a motion to dismiss, a complaint must set forth the basis for the plaintiff's entitlement to relief with " more than labels and conclusions." Iannacchino v. Ford Motor Co., 451 Mass. 623, 636, 888 N.E.2d 879, quoting Bell A. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The court accepts as true the facts alleged in the complaint and draws every reasonable inference in favor of the plaintiff. Curtis v. Herb Chambers I-95, Inc., 458 Mass. 674, 676, 940 N.E.2d 413 (2011).[7] Where, as here, the motion attacks the standing of a plaintiff to assert a claim, the motion implicates whether the court has subject matter jurisdiction, although the issue may also be addressed as one raising whether the plaintiff fails to state a claim upon which relief may be granted. Doe v. The Governor, 381 Mass. 702, 705, 412 N.E.2d 325 (1980).

         Defendants' motion to dismiss raises a pure question of law: Does Massachusetts law recognize that an employee may sue a corporation other than his or her direct employer for violation of employment laws? Stated another way, assuming the truth of plaintiffs' allegations regarding the common ownership and common operating policies of the corporations within the Herb Chambers family of dealerships, and the control and exercise of authority by at least one of those corporations, JRM, may an employee of one dealership claim that he is also an employee of the other companies? The answer to that question if this case were brought under the FLSA appears to be " yes, " at least as to JRM if not the other dealership corporations. Whether the answer is the same under Massachusetts law requires, principally, an examination of the respective statutes and then an application of Massachusetts common law. Counsel for both sides indicate that there is no Massachusetts appellate precedent directly on point.

         1. The FLSA

          Under the FLSA, 29 U.S.C. § 201 et seq. (" the Act"), an employee may have multiple employers for the work he performs, each entity responsible for compliance with the requirements of the statute. Baystate Alternative Staffing, Inc. v. Herman, 163 F.3d 668, 675 (1st Cir. 1998) (" Baystate ") (" The FLSA contemplates several simultaneous employers, each responsible for compliance with the Act"). That is because of the " expansiveness" of the Act's definition of " employer." Falk v. Brennan, 414 U.S. 190, 195, 94 S.Ct. 427, 38 L.Ed.2d 406 (1973). The Act defines " employer" as " any person acting directly or indirectly in the interest of an employer in relation to an employee . . ." 29 U.S.C. § 203(d). The definition is broad and comprehensive so as to apply to many working relationships that, absent the Act, would not fall within an employer-employee category. Baystate at 675. " [T]he remedial purposes of the FLSA require courts to define " ...


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