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McDunnah v. Tu Moda Spa For Beauty & Wellness, Inc.

United States District Court, D. Massachusetts

November 3, 2017




         Before me is Defendants' second motion to dismiss the complaint in this action for failure to state a claim. Docket #19; see Fed.R.Civ.P. 12(b)(6). Plaintiff filed an opposing memorandum on June 26, 2017. See Docket #21. In this second motion, Defendants seek dismissal of both counts of Plaintiff's First Amended Complaint. For the reasons that follow, the motion is GRANTED WITHOUT PREJUDICE as to Count I and DENIED as to Count II. I allow Plaintiff a final chance to amend Count I to state a viable claim for unpaid overtime wages.

         I. BACKGROUND

         In this employment action, Plaintiff Michelle McDunnah seeks recovery from Defendants Tu Moda Spa for Beauty & Wellness, Inc. and Josue Rosa, Tu Moda's owner and manager, for alleged unpaid wages, failure to provide meal breaks, unpaid overtime wages, and illegal wage deductions. See generally Docket #16. Defendants removed this action from Worcester District Court, Docket #1, and the parties consented to my jurisdiction, Docket #9. Defendants previously moved to dismiss Plaintiff's original complaint for failure to state a claim. See Docket #6. I granted that motion without prejudice, affording Plaintiff an opportunity to remedy defects in Count I (failure to pay for hours worked and for overtime) and Count II (illegal wage deductions). Docket #13. Plaintiff took up that opportunity and filed a First Amended Complaint on May 4, 2017. Docket #16.

         The First Amended Complaint alleges the following. Plaintiff worked for Defendants as a massage therapist and esthetician from October 26, 2004 through October 12, 2014. Docket #16 ¶ 2. Her schedule varied, but she most often worked thirty hours per week. Id. ¶ 17. Defendants paid Plaintiff weekly on a commissions-only basis. Id. ¶ 13.

         Count I of the First Amended Complaint contends that Defendants failed to pay Plaintiff for hours worked and for overtime and did not allow Plaintiff meal breaks to which she was entitled. In support of these claims, Plaintiff avers that Defendants forced her to attend meetings and trainings, perform “non-commissioned based side work, ” report for unpaid work days, and go to promotional events, for which Plaintiff received no commissions and thus no compensation. Id. ¶¶ 14-15. These tasks exceeded one fifth of Plaintiff's total work time in weeks during which Defendants held a “client appreciation day, ” conducted off-site advertising at a trade show, or held certain meetings. Id. ¶¶ 2, 18. Defendants also “occasionally” required Plaintiff to spend an entire workday on uncompensated tasks, id. ¶ 16, and required that Plaintiff arrive at work fifteen minutes before her first appointment, id. ¶ 19. Plaintiff submits that she consequently received insufficient compensation for her work, in violation of section 206(a)(1) of the federal Fair Labor Standards Act[1] (the “FLSA”) and various provisions of the Massachusetts Wage and Hour Laws.[2] Id. ¶ 20.

         Defendants' sparse filing seeks dismissal of Count I for three reasons, each of which is set forth in one sentence with no supporting citations. First, Defendants emphasize that the First Amended Complaint neither states nor establishes that Plaintiff's compensation ever amounted to less than the federal minimum wage. Docket #20 at 2. Second, they note that two of the statutes cited in Count I-Mass. Gen. Laws c. 149 §§ 110, 101-govern certain employees' meal breaks, a subject on which Plaintiff's allegations are silent.[3] Id. Finally, Defendants argue in conclusory fashion that the facts in the First Amended Complaint “give no plausible basis” for Plaintiff's overtime claim under Massachusetts law. Id.

         As for Count II, Plaintiff alleges that Defendants illegally deducted charges from her pay. She claims that when she started her job, she and Defendants agreed that her compensation would consist entirely of fifty-five percent commissions “of the gross services” for each client service she performed. See Docket #16 ¶¶ 2, 23. Plaintiff also allegedly “was reassured there would not be any further deductions” aside from this 55%/45% commission split. Id. ¶ 23. According to Plaintiff, Defendants violated this agreement by deducting from Plaintiff's commissions arbitrary and unspecified “service charges” of from one hundred to two hundred dollars each week, id. ¶ 2, which included deductions for Defendants' overhead costs, id. ¶ 26.

         Plaintiff acknowledges that Defendants' employee handbook called for commissions of fifty-five percent “after the service charge is deducted.” Id. ¶ 25. But she asserts that she never received a copy of the handbook, that she never agreed to any service charge deduction, and that she “most often” learned about changes to the service charge “well after they occurred” by hearing other employees discuss it. Id. ¶¶ 24, 31, 36. Further, Defendant Rosa allegedly “admitted upon questioning” that the service charges deducted from Plaintiff's wages “were arbitrary[] and did not reflect any real or cognizant [sic] costs of products or materials.” Id. ¶ 32. Plaintiff also accuses Defendant Rosa of repeatedly changing the service charge without notice and failing to update information about the charge for months at a time. Id. ¶¶ 28, 30. Finally, Plaintiff alleges that her paychecks simply indicated her gross pay, with no accounting of the work she performed, no indication of the amount of the service charge for each pay period, and no itemized documentation of the costs and expenses on which the service charge purportedly was based.[4] Id. ¶ 29. Plaintiff maintains that these deductions contravene the purpose of section 148 of the Massachusetts Wage Act[5] as interpreted by the Massachusetts Supreme Judicial Court (“SJC”) in Awuah v. Coverall North America Inc., 460 Mass. 484 (2011). See id. ¶ 34.

         Defendants' advance two arguments supporting dismissal of Count II. First, they seek to distinguish the SJC's Awuah opinion, which Plaintiff cited in the First Amended Complaint, from the present case. They highlight that the SJC's decision dealt with workers who, unlike Plaintiff, were misclassified as independent contractors by their employers. See Docket #20 at 2. They also contend that “[t]he SJC was not asked, and did not address, the question of whether an employer could deduct from an employee's pay expenses not statutorily mandated.” See Id. Second, Defendants argue that an earlier U.S. District Court opinion in the Awuah litigation, 740 F.Supp.2d 240 (D. Mass. 2010), undercuts Plaintiff's theory of liability insofar as it expressly noted that no Massachusetts law prohibited an employer and employee from agreeing to shift certain costs from the former to the latter so long as the employee earned minimum wage. See id. at 2-3. Defendants urge that the legal premise underlying Count II therefore lacks foundation. Id. at 3.

         II. STANDARD

         When resolving a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the Court must assume the complaint's well-pleaded facts to be truthful and must draw all reasonable inferences from those facts in the plaintiff's favor. Ruiz v. Bally Total Fitness Holding Corp., 496 F.3d 1, 5 (1st Cir. 2007) (citing Rogan v. Menino, 175 F.3d 75, 77 (1st Cir. 1999)). The Court also will consider any materials attached to a complaint or incorporated into a complaint by reference, as those materials are deemed part of the pleading itself. Trans-Spec Truck Serv. v. Caterpillar, 524 F.3d 315, 321 (1st Cir. 2008). However, the plaintiff's “legal labels and conclusions” are to be “isolate[d] and ignore[d]” at this stage. Schatz v. Republican State Leadership Committee, 669 F.3d 50, 55 (1st Cir. 2012); cf. Haag v. United States, 736 F.3d 66, 69 (1st Cir. 2013) (quoting Iqbal, 556 U.S. at 678) (“Although we view all well-pleaded facts in the light most favorable to the non-moving party, ‘the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.'”). The Court thus need not credit a party's “bald assertions, unsupportable conclusions, periphrastic circumlocutions, and the like.” Centro Medico del Turabo, Inc. v. Feliciano de Melecio, 406 F.3d 1, 5-6 (1st Cir. 2005) (quoting Aulson v. Blanchard, 83 F.3d 1, 3 (1st Cir. 1996)).

         To survive this motion, the First Amended Complaint's stated claims must be facially plausible. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). In other words, Plaintiff's “[f]actual allegations must be enough to raise a right to relief above the speculative level . . . on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Id. at 555 (citations omitted). “The plausibility standard is not akin to a ‘probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 556). Dismissal therefore lies if Plaintiff's well-pleaded facts do not “possess enough heft to show that [P]laintiff is entitled to relief.” Ruiz Rivera v. Pfizer Pharms., LLC, 521 F.3d 76, 84 (1st Cir. 2008) (quotations and alterations omitted).

         In order to adequately state her claim under the FLSA and the Massachusetts Wage Act, Plaintiff must allege that 1) she was Defendants' employee; 2) her work for Defendants involved an interstate activity; and 3) Defendants undercompensated her for her work. Manning v. Bos. Med. Ctr. Corp., 725 F.3d 34, 43 (1st Cir. 2013). Defendants only challenge the viability of Count I as to ...

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