Gregg v. Bohemian Club

• Court: District Court, N.D. California
• Decided: January 19, 2024
• Docket: 3:23-cv-02760
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ANTHONY GREGG, et al., Case No. 23-cv-02760-AMO

8 Plaintiffs, ORDER RE MOTIONS TO DISMISS v. 9 Re: Dkt. Nos. 34, 35 10 BOHEMIAN CLUB, et al., Defendants. 11

12 13 Before the Court are Motions to Dismiss from Defendants Pomella LLC (“Pomella”) and 14 Bohemian Club. The Motions are suitable for decision without oral argument. Accordingly, the 15 hearing set for January 25, 2024, is VACATED. See Civil L.R. 7-1(b). Having read the parties’ 16 papers and carefully considered their arguments and the relevant legal authority, the Court hereby 17 GRANTS both Motions to Dismiss. 18 BACKGROUND 19 This is a putative class action involving wage and hour claims. Plaintiffs bring this action 20 against Defendants Monastery Camp, Bohemian Club, and Pomella LLC, alleging they jointly 21 employed Plaintiffs as valets. To properly assess the motions to dismiss, the Court accepts as true 22 and draws from the allegations in the First Amended Complaint (ECF 5, “FAC”). See Manzarek 23 v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). 24 A. The Bohemian Grove and the Camps 25 The Bohemian Club hosts three of its main annual events to gather members to celebrate 26 the arts at the Bohemian Grove in Monte Rio, California.1 FAC ¶¶ 19, 22. While attending events 27 1 hosted at the Grove, Bohemian Club members stay at one of “more than 100” different “camps.” 2 FAC ¶ 28. 3 Each camp typically has a “captain” who is in charge of the finances, decision making, and 4 operations of the camp including hiring and firing staff such as valets. FAC ¶¶ 28, 31. The camps 5 “collect hundreds of thousands of dollars in member dues, and hire, fire, pay, and dictate nearly 6 every aspect of their valets’ employment.” FAC ¶ 31. The camps “are not independent legal 7 entities making their own hiring decision, but a part of a joint venture as designed by Bohemian 8 Club.” FAC ¶ 58. 9 Because Bohemian Club members include high-level executives, famous artists, and 10 prominent government officials, the Bohemian Club “vets” all individuals who may enter the 11 Grove, including the staff at each camp. FAC ¶¶ 33, 41-43. Bohemian Club also imposes rules on 12 attendees, including camp staff. For example, Bohemian Club places restrictions on the use of 13 communal phones and prohibits camp staff from attending the events put on for its members. 14 FAC ¶¶ 48, 51. The Bohemian Club also requires camp staff to wear badges, prohibits the use of 15 personal phones, and limits camp staff to designated areas. FAC ¶¶ 41, 48, 51. 16 B. Monastery Camp 17 Defendant Monastery Camp, an unincorporated “association of gentlemen,” is one of the 18 more than 100 camps at the Grove. FAC ¶ 29. Monastery Camp is one of the most prestigious 19 and well-known camps at the Grove. FAC ¶ 33. Monastery Camp employed Plaintiff Anthony 20 Gregg as a valet from 2006 to 2022, Plaintiff Shawn Granger as a valet in 2018, and Plaintiff 21 Wallid Saad as a valet from 2015 to 2022. FAC ¶¶ 9-11. William Dawson was the Camp Captain 22 for Monastery and was accordingly in charge of Monastery’s finances and its staff. FAC ¶ 34. 23 Monastery Camp utilized the services of Defendant Pomella LLC to run payroll for its staff. FAC 24 ¶¶ 46, 52, 70. 25 Dawson “directed Plaintiffs to falsify payroll records and to work off-the-clock.” FAC 26 ¶ 34. Plaintiff Anthony Gregg instructed other valets to misrepresent the hours they worked. FAC 27 ¶ 74. Gregg directly communicated with Dawson and described the ways Gregg endeavored to 1 the hours Monastery Camp valets worked on several occasions. See, e.g., FAC ¶ 86. 2 C. Plaintiffs’ Claims and Procedural History 3 Plaintiffs allege a violation of Fair Labor Standards Act (“FLSA”), 29 U.S.C. 201, et seq, 4 along with various California wage and hour state law claims for failure to pay minimum wage, 5 provide meal periods, provide paid rest breaks, pay wages at termination, provide accurate wage 6 statements, California Unfair Business Practices, and a PAGA claim. See FAC. Plaintiffs allege 7 that they worked seven days a week, and approximately 15 hours a day for the duration of the 8 2019, 2021, and 2022 seasons. FAC ¶ 15. 9 Monastery Camp answered the FAC. ECF 32. Bohemian Club and Pomella both filed the 10 now-pending Motions to Dismiss. ECF 34, ECF 35. 11 DISCUSSION 12 A. Legal Standard 13 A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests for the legal 14 sufficiency of the claims alleged in the complaint. Ileto v. Glock, 349 F.3d 1191, 1199-1200 (9th 15 Cir. 2003). Under Federal Rule of Civil Procedure 8, which requires that a complaint include a 16 “short and plain statement of the claim showing that the pleader is entitled to relief,” Fed. R. Civ. 17 P. 8(a)(2), a complaint may be dismissed under Rule 12(b)(6) if the plaintiff fails to state a 18 cognizable legal theory, or has not alleged sufficient facts to support a cognizable legal theory. 19 Somers v. Apple, Inc., 729 F.3d 953, 959 (9th Cir. 2013). 20 While the court is to accept as true all the factual allegations in the complaint, legally 21 conclusory statements, not supported by actual factual allegations, need not be accepted. Ashcroft 22 v. Iqbal, 556 U.S. 662, 678-79 (2009). The complaint must proffer sufficient facts to state a claim 23 for relief that is plausible on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 558-59 24 (2007) (citations and quotations omitted). A claim is facially plausible when the “plaintiff pleads 25 factual content that allows the court to draw the reasonable inference that the defendant is liable 26 for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citation omitted). “[W]here the well-pleaded 27 facts do not permit the court to infer more than the mere possibility of misconduct, the complaint 1 B. Joint Employer Allegations 2 Both Bohemian Club and Pomella argue that Plaintiffs’ first six causes of action, all arising 3 under the California Labor Code or the FLSA, fail because Plaintiffs’ allegations do not support 4 liability against them as joint employers. To be liable for labor violations under both California 5 and federal law, a defendant must be an employer. See Martinez v. Combs, 49 Cal. 4th 35, 49 6 (2010); Bonnette v. Cal. Health and Welfare Agency, 704 F.2d 1465, 1470 (9th Cir. 1983), 7 abrogated on other grounds by Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528 (1985). 8 “The joint employer doctrine recognizes that ‘even where business entities are separate, if they 9 share control of the terms or conditions of an individual’s employment, both companies can 10 qualify as employers.’” Johnson v. Serenity Transp., Inc., No. 15-cv-02004-JSC, 2016 WL 11 270952, at *10 (N.D. Cal. Jan. 22, 2016) (quoting Guitierrez v. Carter Bros. Sec. Servs., LLC, 12 2014 WL 5487793, at *3 (E.D. Cal. Oct. 29, 2014)). “At the pleadings stage, although the 13 ‘plaintiff is not required to conclusively establish that defendants were her joint employers . . . [the 14 plaintiff] must at least allege some facts in support of this legal conclusion.’” Lesnik v. Eisenmann 15 SE, 374 F. Supp. 3d 923, 942 (N.D. Cal. 2019) (citation omitted). The Court analyzes Plaintiffs 16 claims under California law before doing so under FLSA. 17 1. Joint Employer Standard Under California Law 18 To establish a joint employer relationship, a plaintiff must be able to demonstrate that each 19 defendant was able to “(a) exercise control over the wages, hours or working conditions, or (b) to 20 suffer or permit to work, or (c) to engage, thereby creating a common law employment 21 relationship.” Martinez, 49 Cal. 4th at 64. The test is disjunctive: Plaintiffs need only plead facts 22 sufficient to meet one of these tests. See id. The Court considers the sufficiency of the pleading 23 under each of the three tests below. 24 a. Control 25 The first inquiry is whether, as pleaded, Bohemian Club and/or Pomella exercised control 26 over the wages, hours, or working conditions of Plaintiffs. The California Supreme Court has 27 concluded that unless an entity has the power to hire and fire the workers, that entity will not 1 (2014) (declining to find that Domino’s was a joint employer of franchisee’s workers, in part 2 because Domino’s was unable to hire and fire the workers, and despite Domino’s representative’s 3 high level of attention to workers and their work product). Here, Plaintiffs have not alleged that 4 Bohemian Club or Pomella had the power to hire or fire Plaintiffs or any other member of the 5 putative class. Plaintiffs also fail to aver that Bohemian Club or Pomella controlled their wages or 6 hours. Though Plaintiffs note that Bohemian Club expressly encouraged the camps to abide by 7 wage and hour laws, Plaintiffs do not allege that Bohemian Club or Pomella influenced the 8 amount or manner in which they were paid. FAC ¶¶ 44, 45. Plaintiffs, to the contrary, only allege 9 that the camp had the power to “hire, fire, pay, and dictate nearly every aspect of their valets’ 10 employment” (FAC ¶ 31), and they allege that it was a camp captain who proposed to pay them 11 “under the table” (FAC ¶ 80). Further, the FAC does not allege that either Bohemian Club or 12 Pomella controlled when Plaintiffs’ workdays began and ended. 13 Though Plaintiffs allege that “Defendant Bohemian Club exercised substantial, direct, and 14 immediate control over class members’ essential terms and conditions of employment,” FAC ¶ 77, 15 those allegations are conclusory, fall short of the pleading standards, and need not be accepted as 16 true. See Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). Ultimately, the 17 collective allegations against Bohemian Club and Pomella demonstrate that the two entities were 18 not sufficiently involved in the workers’ daily lives to indicate control of working conditions. 19 Plaintiffs’ allegations thus fail to establish that Bohemian Club or Pomella were joint employers 20 under the “control” test. 21 b. Suffer-or-Permit 22 Plaintiffs similarly do not allege sufficient facts to suggest Bohemian Club or Pomella 23 were employers under the “suffer-or-permit” test. The basis for suffer-or-permit liability is “the 24 defendant’s knowledge of and failure to prevent the work from occurring.” Martinez, 49 Cal. 4th 25 at 70 (emphasis in original). Merely receiving the benefit of the work is insufficient to establish 26 liability as an employer under this test. See id.; see also Futrell v. Payday California, Inc., 190 27 Cal. App. 4th 1419, 1434 (2010) (finding no facts supporting suffer-or-permit employer 1 from working). Practically, as with the “control” test discussed above, where a party lacks the 2 power to hire, fire, set wages or hours, or tell employees when and where to report to work, the 3 relationship fails the suffer-or-permit test. See Martinez, 49 Cal. 4th at 70; Futrell, 190 Cal. App. 4 4th at 1434. 5 As discussed above, Plaintiffs have not alleged that Bohemian Club or Pomella had the 6 power to control or prevent Plaintiffs from working. Indeed, the FAC shows the opposite. 7 Plaintiffs allege that Bohemian Club and Pomella could not prevent the work from occurring and 8 that Plaintiffs, particularly Gregg, worked with Dawson, the Monastery Camp Captain, to conceal 9 underreporting of hours worked from Pomella as payroll processor. FAC ¶ 74. The allegations in 10 the FAC thus fall short of showing that Bohemian Club and Pomella were joint employers of 11 Plaintiffs under the suffer-or-permit test. 12 c. Engage 13 Finally, Plaintiffs do not allege sufficient facts to show Bohemian Club and Pomella were 14 their employers under the “engage” test. In this context, “to engage” means to create a common 15 law employment relationship. Martinez, 49 Cal. 4th at 64-65. A common law employment 16 relationship exists where a party reserves the general right to control the “manner and means” of 17 performing the work at issue. S.G. Borello & Sons, Inc. v. Dep’t of Indus. Relations, 48 Cal. 3d 18 341, 350 (1989). California courts consider several factors when evaluating whether an employer- 19 employee relationship exists at common law, including the right to fire the employee at will and:

20 (a) whether the one performing the services is engaged in a distinct occupation or business; (b) the kind of occupation, with reference to 21 whether, in the locality, the work is usually done under the direction of the principle or by a specialist without supervision; (c) the skill 22 required in the particular occupation; (d) whether the principle or the worker supplies the instrumentalities, tools, and the place of work 23 for the person doing the work; (e) the length of time for which the services are to be performed; (f) the method of payment, whether by 24 the time or by the job; (g) whether or not the work is part of the regular business of the principal; and (h) whether or not the parties 25 believe they are creating the relationship of employer-employee. 26 Id. at 350. 27 Plaintiffs do not allege that Bohemian Club or Pomella had the right to fire them at will. 1 “fire, pay, and dictate nearly every aspect of their valets’ employment.” FAC ¶ 31. Beyond this 2 allegation, the FAC is largely silent as to the factors used to assess a common law employment 3 relationship. Plaintiffs assert that Bohemian Club operated as a “joint venture” with Monastery 4 Camp (FAC ¶ 21, 58), but it does not allege that either Bohemian Club or Pomella directed or 5 supervised the Plaintiffs onsite in Monte Rio. Additionally, Plaintiffs do not claim that Bohemian 6 Club or Pomella set their pay. The Court therefore finds that Plaintiffs fail to allege facts 7 sufficient to establish an employer relationship under the “engage” test. See Futrell, 190 Cal. 8 App. 4th at 1435 (finding no common law employment where defendant was unable to hire or fire 9 plaintiff and did not direct or supervise the work). 10 In sum, Plaintiffs fail to plausibly allege an employment relationship with Bohemian Club 11 or Pomella under any formulation of California law. 12 2. Joint Employer under the FLSA 13 In the Ninth Circuit, courts look “in particular to four factors” to determine whether a joint 14 employer relationship exists for purposes of the FLSA: “whether the alleged employer (1) had the 15 power to hire and fire the employees, (2) supervised and controlled employee work schedules or 16 conditions of employment, (3) determined the rate and method of payment, and (4) maintained 17 employment records.” Bonnette, 704 F.2d at 1470 (internal quotation marks omitted). 18 Plaintiffs assert in a conclusory manner that the Bohemian Club and its camps, including 19 Monastery, assert “control” over camp staff by way of requiring background checks, adhering to a 20 certain dress code mandated for the entirety of the Grove, and preventing cell phone and social 21 media usage. However, such general rules are not sufficient to establish control as an employer. 22 See Williams v. Nichols Demos, Inc., No. 18-cv-00884-JSW, 2018 WL 11236757 (N.D. Cal. June 23 20, 2018) (applying the Bonnette test, concluding that the facility was not a joint employer despite 24 it issuing the worker a badge, requiring worker to report to the facility at a specific time, as well as 25 adherence to its dress policy, and sign in and out on facility’s daily attendance sheet). Plaintiffs’ 26 allegations regarding Bohemian Club’s general governing standards for its venue, including 27 having an overall dress code and standards for cell phone usage on the premises, are deficient to 1 Moreover, Plaintiffs have not alleged facts sufficient to establish a joint employer 2 relationship with Bohemian Club or Pomella under any of the Bonnette factors. In fact, the FAC 3 alleges the exact opposite – that only Monastery Camp (and Dawson) had the power to hire and 4 fire Monastery Camp staff (FAC ¶ 31); that Monastery Camp supervised when the Monastery 5 Camp staff worked (id.); and that Monastery Camp (and Dawson) determined the rate of pay and 6 handled staff payments (id. ¶¶ 46, 67-68). It is the camps, like Monastery, that “collect hundreds 7 of thousands of dollars in member dues, and hire, fire, pay, and dictate nearly every aspect of their 8 valets’ employment.” Id. ¶ 31. The FAC does not allege that Bohemian Club or Pomella handle 9 any of these factors. “While [a] plaintiff is not required to conclusively establish that defendants 10 were [their] joint employers at the pleading stage, [the] plaintiff must at least allege some facts in 11 support of this legal conclusion.” Hibbs-Rines v. Seagate Techs., LLC, No. C 08-05430 SI, 2009 12 WL 513496, at *5 (N.D. Cal. Mar. 2, 2009) (citation omitted). Here, as under California law, 13 Plaintiffs fail to plausibly allege a joint employer relationship with Bohemian Club or Pomella. 14 C. Unfair Competition Law 15 Plaintiffs’ seventh cause of action for violation of California’s Unfair Competition Law 16 under Business and Professions Code § 17200, et seq., is completely derivative of Plaintiffs’ 17 claims under the California Labor Code. FAC ¶¶ 201-02. “An employer’s unlawful employment 18 practices, such as . . . failure to pay wages, may form the basis for a UCL claim” under Section 19 17200. Clifford v. Quest Software Inc., 38 Cal. App. 5th 745, 749 (2019). Because the FAC fails 20 to state a claim for violation of the California Labor Code against Bohemian Club and Pomella on 21 a joint employer theory, the FAC likewise fails to state a claim for this cause of action against 22 them. 23 D. Leave to Amend 24 Plaintiffs failed to oppose both Bohemian Club and Pomella’s Motions to Dismiss due to 25 an oversight by counsel. ECF 54. The Court, finding the unopposed motions meritorious for the 26 reasons discussed above, ordered the parties to submit “further briefing addressing only whether” 27 Plaintiffs could amend the FAC to state claims or “whether amendment would be futile,” adding 1 that those briefs must not be “more than three pages.” ECF 57.2 2 Under Federal Rule of Civil Procedure 15(a), leave to amend “shall be freely given when 3 justice so requires.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc). When 4 weighing whether to grant leave to amend, a district court considers: (1) undue delay; (2) bad faith 5 or dilatory motive; (3) repeated failure to cure deficiencies; (4) prejudice to the opposing party; 6 and (5) futility of the amendment. See Foman v. Davis, 371 U.S. 178, 182 (1962). The relevant 7 query at this stage is whether Plaintiffs’ amendment would prove futile. “Under futility analysis, 8 [d]ismissal without leave to amend is only proper if it is clear, upon de novo review, that the 9 complaint could not be saved by any amendment.” United States v. Corinthian Colleges, 655 F.3d 10 984, 995 (9th Cir. 2011) (internal quotation marks and citation omitted). A court should permit 11 amendment “unless it determines that the pleading could not possibly be cured by the allegation of 12 other facts.” Lopez, 203 F.3d at 1130 (internal quotation marks and citation omitted). Where a 13 plaintiff fails to provide new facts that could cure deficiencies, it is proper to deny leave to amend. 14 Krainski, 616 F.3d at 972 (affirming decision to deny leave to amend where plaintiff provided “no 15 new facts that she would include in her complaint to overcome its shortcomings”). 16 Both Bohemian Club and Pomella argue that further amendment of the allegations against 17 them would prove futile because Plaintiffs cannot offer any new allegations that would support 18 liability against them as joint employers. The Court agrees. Plaintiffs’ supplemental briefing fails 19 to identify new facts they would include in an amended pleading to support joint employer 20 liability against Bohemian Club or Pomella. See ECF 60. Plaintiffs instead merely repeat facts 21 already alleged in the FAC. For example, Plaintiffs again state that “Bohemian Club controlled 22 2 The Court earlier admonished Plaintiffs to abide by the Court’s instructions: 23 Contrary to the Court’ s direction, ECF 53, Plaintiffs included argument and submitted evidence going to the merits of Defendants’ 24 motions. ECF 54 and ECF 54-1. Plaintiffs’ inclusion of such argument and materials was specifically disallowed. Counsel is 25 advised to heed the Court instructions or face monetary or other appropriate sanctions. 26 ECF 57 at 1, n.1. Plaintiffs’ submissions at ECF 60 again reached beyond the limited scope of the Court’s instructions. In addition to the briefing, Plaintiffs submitted three declarations and 15 27 exhibits. The Court reviewed and considered these materials, to the extent proper. Nevertheless, 1 the hiring, firing, and even compensation for Plaintiffs’ employment (e.g., prohibiting valets from 2 accepting tips or possessing cell phones),” and they imply Bohemian Club had control over hiring 3 based on its policy of requiring background checks for camp staff. ECF 60 at 2. These allegations 4 are not new, and they do not establish an employment relationship. See, e.g., FAC ¶¶ 41-43; cf. 5 Williams, 2018 WL 11236757, at *5. Plaintiffs’ allegation concerning tips is similarly already in 6 the FAC. FAC ¶ 50 (“Defendant Bohemian Club’s Rules prohibit class members from accepting 7 any compensation in the form of tips.”). Plaintiffs fail to provide any argument or legal support 8 for the premise that a general policy prohibiting tipping of staff constitutes a determination of the 9 rate or method of compensation. See Lesnik, 374 F. Supp. 3d at 947 (“courts have circumscribed” 10 joint employment “by denying employer liability for entities that may be able to influence the 11 treatment of employees but lack the authority to directly control their wages, hours or 12 conditions.”). 13 Plaintiffs additionally allege that Bohemian Club was their joint employer because 14 Bohemian Club “previously paid all three Plaintiff [sic] under a prior class settlement because 15 camp valets like Plaintiffs were already included in a class definition as Bohemian Club 16 employees in Ulucan et al. v. Bohemian Club.” ECF 60 at 2 (referring to Sonoma Sup. Ct., Case 17 No. SCV-268056). In support of this premise, Plaintiff Shawn Granger submits a declaration in 18 which he states that he received payment as part of the class settlement, and he appends a copy of 19 the initial class notice in Ulucan. Granger Decl. ¶¶ 4-5, Ex. L (ECF 60-3 at 2, 6-10). Bohemian 20 Club presents conflicting evidence that Plaintiffs were not class members in Ulucan. See Nabity 21 Decl. ¶¶ 2-10 (ECF 62-1); & Ex. A (ECF 62-1 at 7, Declaration of Desirae Burton of Simpluris, 22 Inc., Ulucan settlement administrator). Neither the declarations from Plaintiffs nor the 23 declarations from Bohemian Club are properly considered by the Court because “district courts 24 may not consider material outside the pleadings when assessing the sufficiency of a complaint 25 under Rule 12(b)(6),” except for judicially noticed materials or materials incorporated by 26 reference. Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 998 (9th Cir. 2018) (citing Lee v. 27 City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001)). To the extent Plaintiffs’ supplemental 1 settlement class (ECF 60 at 3), it falls short. Plaintiffs do not allege that the Ulucan court found 2 || an employment relationship between Bohemian Club and the putative class as a matter of law, and 3 Plaintiffs fail to offer additional facts in support of the premise that Bohemian Club operated as 4 || their employer. 5 In sum, Plaintiffs have not advanced any additional facts they might allege to establish that 6 || Bohemian Club and Pomella can be held liable as joint employers along with Monastery Camp. 7 || Plaintiffs accordingly fail to persuade the Court that amendment would not prove futile. The 8 Court grants dismissal of these two Defendants without leave to amend, and the Court therefore 9 || does not reach Bohemian Club’s alternative motion to dismiss for failure to join a necessary party 10 under Rule 12(b)(7) or its alternative motion to strike class allegations under Rule 12(f). 11 CONCLUSION 12 For the reasons stated above, the Court hereby GRANTS the Motions to Dismiss for 13 failure to state a claim. Plaintiffs have failed to allege sufficient facts to establish joint employer 14 || liability against either Bohemian Club or Pomella, and Plaintiffs fail to identify any new, non- 3 15 frivolous facts that could remedy the shortcomings regarding joint employer liability. a 16 || Accordingly, Bohemian Club and Pomella are DISMISSED WITH PREJUDICE. Plaintiffs 3 17 may file an amended pleading omitting Bohemian Club and Pomella within 28 days from the date 18 of this order. No new claims or Defendants may be added without leave of Court or stipulation of 19 Monastery Camp. 20 IT IS SO ORDERED. 21 Dated: January 19, 2024 22 ff □ (Nnaceh idle ARACELI MARTINEZ-OLGUIN 24 United States District Judge 25 26 27 28