1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 SOUTHERN DISTRICT OF CALIFORNIA 8 9 PRECISION TOXICOLOGY, LLC, Case No. 20-cv-2101-MMA (KSC)
10 Plaintiff, ORDER GRANTING IN PART AND 11 v. DENYING IN PART COUNTER- DEFENDANTS’ MOTION TO 12 LAURA MACRORY, DISMISS 13 Defendant. [Doc. No. 17] 14 LAURA MACRORY, 15 Counter-Complainant, 16 vs. 17 18 PRECISION TOXICOLOGY, LLC, et al., 19 Counter-Defendants. 20 21 22 On October 26, 2020, Plaintiff Precision Toxicology, LLC (“Precision”) initiated 23 this action against Laura MacRory (“MacRory”), alleging violations of California’s 24 Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 et seq., as well as various state 25 law causes of action. See Doc. No. 1. In response, MacRory filed a Counter Complaint 26 against Precision and Nick Simoni (“Simoni”) (collectively, “Counter-Defendants”). See 27 Doc. No. 7. Counter-Defendants filed a motion to dismiss the counterclaims, see Doc. 28 No. 9, prompting MacRory to file a First Amended Counter Complaint, see Doc. No. 10 1 (“FACC”). Counter-Defendants now move to dismiss the twelve counterclaims in the 2 FACC. MacRory filed an opposition, to which Counter-Defendants replied. See Doc. 3 Nos. 22, 23. The Court found the matter suitable for determination on the papers and 4 without oral argument pursuant to Civil Local Rule 7.1.d.1. See Doc. No. 24. For the 5 following reasons, the Court GRANTS IN PART and DENIES IN PART Counter- 6 Defendants’ motion to dismiss. 7 I. BACKGROUND 8 On July 31, 2017, Precision hired MacRory as a Territory Manager for the 9 Houston, Texas area. See FACC at ¶ 18. MacRory’s position was part-time and not to 10 exceed 24 hours per week at $15 per hour. See id. at ¶ 19. MacRory claims, however, 11 that Precision actually required her to work about 60 hours each week and did not pay her 12 for the extra 36 hours. See id. at ¶ 20. She further asserts that when she discussed this 13 with her supervisor, Simoni, he advised her not to tell anyone, “as it was illegal.” Id. at 14 ¶ 21. Between July 2017 and April 2018, MacRory claims to have accrued 15 approximately 1,152 unpaid overtime hours—or $17,280. See id. at ¶ 22. 16 In April 2018, MacRory was promoted to a full-time, salaried employee. See id. at 17 ¶ 25. Precision further promoted MacRory to Senior Territory Manager in October 2019. 18 See id. at ¶ 26. 19 MacRory claims that her problems at Precision persisted after her promotions. For 20 example, MacRory asserts that Precision shorted her on her commission. She states that 21 several times, Precision would take 2% off of her guaranteed 8%. See id. at ¶ 29. 22 MacRory also alleges that Precision hired three new employees to “keep an eye on” her. 23 Id. at ¶ 31. Further, MacRory claims she was promised a bonus in 2018, specifically for 24 “Care Evolve Conversions.” Id. at ¶ 27. According to MacRory, she never received the 25 promised bonus. See id. 26 MacRory asserts she resigned, in part, because of Precision’s treatment of her 27 “Techs.” Id. at ¶ 41. She alleges that Precision Techs were “underappreciated” and, after 28 the COVID-19 outbreak, Precision drastically cut many Techs’ hours. Id. at ¶¶ 37, 41. 1 MacRory further explains that her resignation was also due in part to the COVID-19 2 pandemic. As a result of the outbreak, Precision closed its San Diego facility, but did not 3 provide MacRory—who was living and working in Texas—the option of working 4 remotely. See id. at ¶ 43. Due to MacRory’s autoimmune disorder, she was “constantly 5 in fear” of COVID-19, as she was often visiting hospitals in Houston, a “Code Red 6 COVID Category” location. See id. at ¶ 43. As a result, on October 2, 2020, MacRory 7 emailed Simoni her resignation letter. See id. at ¶ 44. 8 After MacRory resigned, some of Precision’s employees and clients also left. See 9 id. at ¶¶ 48-49. Believing that MacRory unlawfully solicited Precision employees and 10 clients, Precision initiated this action against her. See Doc. No. 1. MacRory brings the 11 following counterclaims: (1) failure to pay minimum wage, 29 U.S.C. § 206 and Tex. 12 Lab. Code § 62.001 et seq.; (2) failure to pay overtime, 29 U.S.C. § 207; (3) “violation of 13 meal and rest period”; (4) failure to furnish wage statements, Tex. Lab. Code § 62.003; 14 (5–6) breach of the implied covenant of good faith and fair dealing; (7) hostile work 15 environment, Tex. Lab. Code § 21 et seq.; (8) constructive termination, Tex. Lab. Code 16 § 21.051; (9) unsafe work conditions, Tex. Lab. Code § 451.001; (10) retaliation, 29 17 U.S.C. § 215(a)(3) and Tex. Lab. Code § 21.005; (11) unjust enrichment; and (12) undue 18 influence. See FACC. 19 II. LEGAL STANDARD 20 A Rule 12(b)(6) motion tests the legal sufficiency of the claims made in a 21 complaint. See Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). A pleading must 22 contain “a short and plain statement of the claim showing that the pleader is entitled to 23 relief . . . .” Fed. R. Civ. P. 8(a)(2). However, plaintiffs must also plead “enough facts to 24 state a claim to relief that is plausible on its face.” Fed. R. Civ. P. 12(b)(6); Bell Atl. 25 Corp. v. Twombly, 550 U.S. 544, 570 (2007). The plausibility standard demands more 26 than “a formulaic recitation of the elements of a cause of action,” or “naked assertions 27 devoid of further factual enhancement.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) 28 (internal quotation marks omitted). Instead, the complaint “must contain allegations of 1 underlying facts sufficient to give fair notice and to enable the opposing party to defend 2 itself effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). 3 In reviewing a motion to dismiss under Rule 12(b)(6), courts must assume the truth 4 of all factual allegations and must construe them in the light most favorable to the 5 nonmoving party. See Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337–38 (9th Cir. 6 1996). The court need not take legal conclusions as true merely because they are cast in 7 the form of factual allegations. See Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir. 8 1987). Similarly, “conclusory allegations of law and unwarranted inferences are not 9 sufficient to defeat a motion to dismiss.” Pareto v. FDIC, 139 F.3d 696, 699 (9th Cir. 10 1998). 11 In determining the propriety of Rule 12(b)(6) dismissal, courts generally may not 12 look beyond the complaint for additional facts. See United States v. Ritchie, 342 F.3d 13 903, 907–08 (9th Cir. 2003). “A court may, however, consider certain materials— 14 documents attached to the complaint, documents incorporated by reference in the 15 complaint, or matters of judicial notice—without converting the motion to dismiss into a 16 motion for summary judgment.” Id.; see also Lee v. City of Los Angeles, 250 F.3d 668, 17 688 (9th Cir. 2001), overruled on other grounds by Galbraith v. County of Santa Clara, 18 307 F.3d 1119, 1125–26 (9th Cir. 2002). 19 III. DISCUSSION 20 Counter-Defendants move to dismiss the FACC in its entirety—which includes 21 twelve causes of action. The Court addresses each in turn. 22 A. Minimum Wage Violation 23 MacRory’s first cause of action is for Precision’s alleged failure to pay her 24 minimum wage. See FACC at 14. In support of her claim, she cites to both the Fair 25 Labor Standards Act (“FLSA”) and Texas law, specifically, the Texas Minimum Wage 26 Act (“TMWA”). See id. at ¶¶ 55-56. Counter-Defendants argue that the TMWA does 27 not apply because MacRory is covered by the FLSA. See Doc. No. 17-1 at 9. In 28 1 response, MacRory argues that while she may not recover under both, she is permitted to 2 plead them as alternative theories. See Doc. No. 22 at 8. 3 It is true that a party is entitled to assert alternative claims. See Fed. R. Civ. P. 4 8(d). However, the Court is not convinced that MacRory pleads this claim in the 5 alternative. To be sure, she asserts that “[t]he failure to pay Ms. MacRory minimum 6 wage violates §206 of the FLSA and §62 of the TMWA.” FACC at ¶ 57 (emphasis 7 added). However, MacRory does not oppose Counter-Defendants’ argument that the 8 FLSA—and therefore not the TMWA—governs. In response, she states that “[w]hile 9 MacRory is not prohibited from pleading this cause of action alternatively under Texas 10 Law, to save the Court’s time and effort, we will only address the FLSA claim, with 11 regards to minimum wage.” Doc. No. 22 at 9. While this statement is not an outright 12 concession, she does not dispute that the TMWA does not apply. That said, the issue of 13 whether MacRory is in fact covered by the FLSA is not yet before the Court. 14 Accordingly, MacRory’s TMWA claim is not subject to dismissal on this basis. While 15 she cannot ultimately recover under both statutory schemes, MacRory may plead claims 16 under the FLSA and Texas labor laws. 17 1. FLSA Minimum Wage Claim 18 The Court first turns to MacRory’s FLSA minimum wage claim. Counter- 19 Defendants argue that her claim is untimely. See Doc. No. 17-1 at 9. The statute of 20 limitations for an FLSA claim is two years. See 29 U.S.C. § 255(a). According to 21 Counter-Defendants, the alleged minimum wage violations ended when MacRory was 22 promoted to a salaried employee—in April 2018. See Doc. No. 17-1 at 10. MacRory 23 does not argue otherwise. Instead, in opposition, MacRory argues that her claim is not 24 untimely because Precision’s actions were willful and thus subject to a three-year statute 25 of limitations. See Doc. No. 22 at 10. 26 MacRory is correct that the statute of limitations for willful FLSA violations is 27 three years. See 29 U.S.C. § 255(a). An FLSA violation “is willful when ‘the employer 28 either knew or showed reckless disregard for . . . whether its conduct was prohibited by 1 the [FLSA.]’” Scalia v. Emplr. Sols. Staffing Grp., Ltd. Liab. Co., 951 F.3d 1097, 1102 2 (9th Cir. 2020) (quoting McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133 (1988)). 3 According to MacRory, she complained that she was not being compensated for her 4 additional hours—thus decreasing her hourly wage—to Simoni. See FACC at ¶ 21. She 5 says “Simoni told her to keep it a secret because it was illegal for her to work overtime 6 and not get paid for it.” Id. at ¶ 21. This is a plausible assertion that Precision knew that 7 it was not paying her minimum wage in compliance with the FLSA, and thus, that the 8 alleged violation was willful. Accordingly, taking MacRory’s allegations as true, her 9 FLSA claims are subject to a three-year statute of limitations. Because her November 17, 10 2020 Counter Complaint is within three years from the claim’s April 2018 accrual, her 11 first cause of action is timely. 12 The Court next turns to the substance of MacRory’s FLSA minimum wage claim. 13 MacRory asserts that Precision violated the FLSA when it “did not pay [her] minimum 14 wage when she worked 36 hours over her 24-hour per week limit (15x24 = 360/60 hours 15 = 6 dollars per hour).” Id. at ¶ 56. So far as the Court can reasonably infer, MacRory 16 claims that from July 2017 to April 2018, she worked 60 hours each week and Precision 17 paid her $360. Thus, her hourly wage was $6. According to the Department of Labor, 18 the federal minimum wage in 2017 and 2018 was $7.25. See 29 U.S.C. § 206(a)(1)(C). 19 Accordingly, MacRory plausibly pleads that she was not paid minimum wage under the 20 FLSA. Therefore, the Court DENIES Precision’s motion to dismiss MacRory’s FLSA 21 minimum wage claim. 22 2. TMWA Minimum Wage Claim 23 As previously explained, the Court will not yet determine whether MacRory is 24 covered by the FMLA or the TMWA. In the event the TMWA applies, the Texas Labor 25 Code provides that employers must pay employees at least the federal minimum wage set 26 by the FLSA. See Tex. Lab. Code § 62.051. Pursuant to section 62.202, TMWA claims 27 “must be brought not later than the second anniversary of the date on which the unpaid 28 wages are due and payable.” Tex. Lab. Code § 62.202. Unlike the FLSA, the Texas 1 Labor Code does not grant plaintiffs an additional year to bring a minimum wage claim if 2 the violation is willful. 3 There appears to be no dispute that Precision’s alleged failure to pay MacRory 4 minimum wage ended when it stopped paying her an hourly wage. MacRory became a 5 salaried, full-time employee in April 2018. See FACC at ¶ 25. To be sure, by 6 MacRory’s own admission, Precision’s alleged failure to adequately compensate her 7 lasted “roughly 8 months until April 2018.” FACC at ¶ 20. Therefore, MacRory had 8 until April 2020 to bring a TMWA claim. MacRory filed her initial Counter Complaint 9 on November 17, 2020. See Doc. No. 7. This was some seven months after the 10 limitations period imposed by Texas Labor Code § 62.202 expired. Therefore, 11 MacRory’s TMWA claim is untimely. Accordingly, the Court GRANTS Precision’s 12 motion and DISMISSES MacRory’s TMWA minimum wage claim. 13 B. Overtime Pay Violation 14 Pursuant to her second cause of action, MacRory asserts that Precision failed to 15 pay her overtime wages as the FLSA requires. See FACC at ¶ 63. Counter-Defendants 16 argue that MacRory’s overtime claim is subject to a two-year statute of limitations and is 17 thus untimely. See Doc. No. 17-1 at 10. For the same reasons explained above, this 18 cause of action is subject to a three-year statute of limitations because MacRory 19 adequately asserts that Precision’s alleged violation was willful.1 See FACC at ¶ 67. 20 Accordingly, MacRory’s second cause of action under the FLSA is not time barred. 21 The FLSA requires employers to pay their employees one- and one-half times their 22 regular wage for all time worked over forty hours in a workweek. See 29 U.S.C. 23 § 207(a)(1). Therefore, “a plaintiff asserting a violation of the FLSA overtime provisions 24 must allege that she worked more than forty hours in a given workweek without being 25 26
27 1 MacRory’s repeated citations to the Texas Civil Practice and Remedies Code’s definition of “malice,” 28 1 compensated for the hours worked in excess of forty during that week.” Landers v. 2 Quality Communs., Inc., 771 F.3d 638, 645 (9th Cir. 2015). 3 In support of this cause of action, MacRory alleges that “requiring her to work in 4 excess of the allowed 24 hours per week, and also in excess of 8 hours per day and in 5 excess of 40 hours per week, without adequate compensation for the overtime work was 6 the result of the actions regularly practiced by Counter-Defendants.” FACC at ¶ 64. 7 Elsewhere in the FACC, MacRory asserts that she accrued 1,152 unpaid overtime hours 8 between July 2017 and April 2018, amounting to $17,280. See id. at ¶ 22. While 9 MacRory approximates the total amount of overtime hours she worked, she fails to 10 “allege facts showing that there was a given week in which he was entitled to but denied 11 minimum wages or overtime wages.” Landers, 771 F.3d at 645. As the Ninth Circuit 12 explained, “[a]lthough plaintiffs in these types of cases cannot be expected to allege ‘with 13 mathematical precision,’ the amount of overtime compensation owed by the employer, 14 they should be able to allege facts demonstrating there was at least one workweek in 15 which they worked in excess of forty hours and were not paid overtime wages.” Id. at 16 646 (quoting DeJesus v. HF Mgmt. Servs., 726 F.3d 85, 90 (2d Cir. 2013)). 17 MacRory’s “allegations fail[] to provide sufficient detail about the length and 18 frequency of [her] unpaid work to support a reasonable inference that [she] worked more 19 than forty hours in a given week.” Id. (internal citation and quotation marks omitted). 20 Accordingly, the Court DISMISSES MacRory’s second cause of action. 21 C. Meal and Rest Period Violation 22 MacRory’s third cause of action is entitled “Meal and Rest Period Violations.” See 23 FACC at 18. Under this cause of action, MacRory asserts that “Counter-Defendants 24 routinely required [her] to work during her breaks without compensation.” Id. at ¶ 70. 25 MacRory fails to identify any statute or case law supporting her entitlement to 26 recover for meal and rest period violations. The FLSA “does not require employers to 27 provide meal or rest periods and the fact that an employer may require an employee to 28 work through a break period does not state a claim under the FLSA so long as the 1 employer properly compensated the employee for that work.” See Gomez v. Mi Cocina 2 Ltd, No. 3:14-CV-2934-P, 2015 U.S. Dist. LEXIS 196010, at *6 (N.D. Tex. Dec. 16, 3 2015) (internal citation and quotation marks omitted); see also id. at *7 (“[T]hey are not 4 entitled to additional compensation for breaks not taken.”). 5 Moreover, despite stating generally that “Texas state law abides by federal law,” 6 FACC at ¶ 69, MacRory does not identify any Texas law providing a separate, 7 independent cause of action for meal and rest period claims. Seemingly recognizing this, 8 MacRory does not oppose Counter-Defendants’ motion on this basis. In her opposition, 9 she makes no reference to, or discussion of, her meal and rest period violation claim. 10 Therefore, MacRory does not adequately plead that she can recover separately for an 11 alleged violation of her meal and rest breaks. To the extent MacRory claims she was not 12 properly compensated for the time she worked during her breaks, this is encompassed 13 within her minimum wage and overtime claims. Accordingly, the Court GRANTS 14 Counter-Defendants’ motion and DISMISSES MacRory’s third cause of action. 15 D. Failure to Furnish Wage Statements 16 Pursuant to her fourth cause of action, MacRory asserts that Precision failed to 17 furnish her wage statements in violation of Texas law. Counter-Defendants argue that 18 because the Texas Labor Code does not apply to employees covered by the FLSA, 19 MacRory cannot recover under Texas law. See Doc. No. 17-1 at 11. As explained 20 above, MacRory is entitled to plead claims arising under both the FLSA and Texas law. 21 That said, Texas law does not provide MacRory a remedy for Precision’s alleged 22 “failure to provide accurate itemized wage statements reflecting, among other things, 23 accurate gross wages earned, accurate method of computation for net wages paid to 24 MacRory and applicable employment tax deductions as required by Texas Labor Code 25 § 64.001-64.003.” FACC at ¶ 77. It is true that Texas Labor Code § 62.003 mandates 26 that employers to furnish written earnings statements at the end of each pay period. See 27 Tex. Lab. Code § 62.003(a). But MacRory incorrectly asserts that Texas Labor Code 28 1 § 64.003 provides a remedy. Nothing in Chapter 64 of the Texas Labor Code refers to 2 the earnings statement requirement. Texas Labor Code § 64.003 provides, in its entirety, 3 4 (a) A holder who under Section 64.002 presents an employer’s evidence of indebtedness and demands redemption is entitled, if the person using the 5 employer’s evidence of indebtedness refuses redemption, to recover from that 6 person:
7 (1) the value of the employer’s evidence of indebtedness; 8 (2) a penalty in an amount equal to 25 percent of the amount due; and 9 10 (3) costs of court and reasonable attorney’s fees.
11 (b) The holder may bring an action under Subsection (a) in the holder’s own 12 name.
13 14 Tex. Lab. Code § 64.003. 15 Counter-Defendants aptly argue that “under Texas law, there are no remedies for a 16 wage statement violation.” Doc. No. 17-1 at 11. In opposition, MacRory merely 17 requotes section 64.003.2 See Doc. No. 22 at 12. Section 64.003 plainly does not 18 provide MacRory a private right of action to recover if Precision violated section 62.003 19 of the Texas Labor Code. And a review of the case law interpretating section 62.003 20 reveals no cases wherein an employee has held her employer civilly liable for a such a 21 violation. Accordingly, MacRory does not plead a claim upon which relief can be 22 granted. The Court therefore GRANTS Counter-Defendants’ motion and DISMISSES 23 MacRory’s fourth cause of action. 24 25 26
27 2 In opposition, MacRory cites to Tex. Lab. Code § 64.403(1). See Doc. No. 22 at 12. There is no 28 1 E. Breach of Implied Covenant of Good Faith and Fair Dealing 2 MacRory’s fifth and six causes of action are for Counter-Defendants’ alleged 3 breaches of the implied covenant of good faith and fair dealing. Under California law, 4 “[e]very contract imposes upon each party a duty of good faith and fair dealing in its 5 performance and enforcement.” Foley v. Interactive Data Corp., 47 Cal. 3d 654, 683 6 (Cal. 1988) (internal quotation marks omitted). “The implied covenant of good faith and 7 fair dealing is that neither party will do anything that will injure the right of the other to 8 receive the benefits of the agreement.” Openshaw v. FedEx Ground Package Sys., 576 F. 9 App’x 685, 687 (9th Cir. 2014) (citing Waller v. Truck Ins. Exch., 11 Cal. 4th 1, 36 (Cal. 10 1995)). “The covenant ‘cannot impose substantive duties or limits on the contracting 11 parties beyond those incorporated in the specific terms of their agreement.’” Openshaw, 12 576 F. App’x at 687 (quoting Guz v. Bechtel Nat. Inc., 24 Cal. 4th 317, 349-50 (Cal. 13 2000)). 14 15 In California, the factual elements necessary to establish a breach of the covenant of good faith and fair dealing are: (1) the parties entered into a 16 contract; (2) the plaintiff fulfilled his obligations under the contract; (3) any 17 conditions precedent to the defendant’s performance occurred; (4) the defendant unfairly interfered with the plaintiff’s rights to receive the benefits 18 of the contract; and (5) the plaintiff was harmed by the defendant’s conduct. 19 20 Rosenfeld v. JPMorgan Chase Bank, N.A., 732 F. Supp. 2d 952, 968 (N.D. Cal. 2010). 21 As to the first element, Precision attached a July 25, 2017 employment contract to 22 its complaint. See Doc. No. 1 at 19–26 (the “Contract”). According to MacRory, “there 23 exists no other agreements (i.e., when MacRory was hired on a full-time, salaried basis or 24 when she was promoted to territory manager).” Doc. No. 22 at 14. MacRory adequately 25 incorporates the Contract by reference in the FACC. See FACC at ¶ 89. Therefore, she 26 sufficiently pleads the first element. Second, MacRory adequately alleges that she 27 fulfilled her obligations under the Contract. Specifically, she says that she “never had 28 refused to conduct her job duties,” id. at ¶ 87, “was always dedicated and worked hard,” 1 id. at ¶ 88, “was able to collect 300 specimens a month consistently,” id. at ¶ 88, and “did 2 all or substantially all of the significant things that the contract with Precision required 3 her to do,” id. at ¶ 102. Third, there are apparently no conditions precedent. 4 Turning to the fourth element, the Court addresses the fifth and sixth causes of 5 action separately. As to the fifth cause of action, MacRory asserts that Precision and 6 Simoni: 7 8 engaged in bad-faith conduct that frustrated Macrory’s rights to the benefits of her employment contract including, but not limited to, misleading Macrory 9 as to how many specimens per 3 months she had to collect in order to obtain 10 full-time status; unnecessarily hiring new employees just to “keep an eye on shady Laura [Ms. Macrory,” which intimidated Macrory and negatively 11 affected Ms. Macrory’s profits in Houston territory due to the new employees’ 12 presence and incompetence; trying to take away Ms. Macrory;s control of the Techs in her offices; drastically cutting her Techs’ hours; endangering Ms. 13 Macrory’s health by asking her to regularly visit hospitals despite COVID-19 14 pandemic; and finally pressuring and fraudulently inducing Ms. Macrory to obtain patients’ medical records for Precision’s audits, which is a HIPPA 15 violation. 16 17 Id. at ¶ 89. She further claims that these actions prevented her from “receiving the 18 benefits under the Agreement, including bonuses, sales and commissions.” Id. at ¶ 92. 19 These allegations are sufficient to surpass Rule 12(b)(6) scrutiny. Heightened 20 specificity is not required under the Federal Rules. See Land O’Lakes, Inc. v. 21 DairyAmerica, Inc., No. 1:15-cv-01937-DAD-MJS, 2017 U.S. Dist. LEXIS 16501, at 22 *21 (E.D. Cal. Feb. 6, 2017) (“While defendants contend that ‘a plaintiff must allege with 23 specificity what provision of the contract the defendant breached,’ such specificity is not 24 required under federal pleading standards.”). MacRory plausibly pleads that Counter- 25 Defendants’ actions, listed above, frustrated her entitlement to bonuses, sales, and 26 commissions due under the Contract. She further claims she was harmed by this. See 27 FACC at ¶ 95. These allegations give Counter-Defendants fair notice of the basis of 28 MacRory’s claim and are thus sufficient to support a cognizable breach of the implied 1 covenant of good faith and fair dealing claim. Accordingly, the Court DENIES Counter- 2 Defendants’ motion to dismiss MacRory’s fifth cause of action. 3 As to her sixth cause of action, MacRory asserts that Counter-Defendants “sent an 4 email about Ms. MacRory’s resignation and alleged violation of the employment 5 agreement along with their federal Complaint against MacRory; they made a statement to 6 all the employees of Precision, regarding their attack on MacRory.” Id. at ¶ 26. 7 MacRory further alleges that “Precision’s employees reasonably understood the email 8 and the attached Complaint to (falsely) signify that MacRory breached the employment 9 contract, engaged in unfair competition, solicited Precision’s employees and clients for 10 her alleged new employer and Precision’s competitor, and cost Precision about $500,000 11 in losses and damages.” Id. According to MacRory, these actions “prevented [her] from 12 receiving the benefits under the contract.” Id. at ¶ 27. 13 This is insufficient to survive a motion to dismiss. MacRory fails to identify any 14 benefit she was entitled to under the Contract, nonetheless that the alleged email 15 frustrated her entitlement to it. The Court is dubious that actions taken after MacRory’s 16 resignation could frustrate her benefits under the Contract. For these alleged actions to 17 form the basis of a breach of the implied covenant of good faith and fair dealing claim, 18 MacRory must plead what benefits she was entitled to after her resignation. Accordingly, 19 the Court GRANTS Counter-Defendants’ motion and DISMISSES MacRory’s sixth 20 causes of action. 21 F. Hostile Work Environment 22 MacRory’s seventh cause of action is against Counter-Defendants for hostile work 23 environment. In support of her claim, MacRory cites to Texas Labor Code § 21.051. 24 That section provides: 25 An employer commits an unlawful employment practice if because of race, 26 color, disability, religion, sex, national origin, or age the employer: 27 28 1 (1) fails or refuses to hire an individual, discharges an individual, or discriminates in any other manner against an individual in connection with 2 compensation or the terms, conditions, or privileges of employment; or 3 (2) limits, segregates, or classifies an employee or applicant for 4 employment in a manner that would deprive or tend to deprive an individual 5 of any employment opportunity or adversely affect in any other manner the status of an employee. 6
7 Tex. Lab. Code § 21.051. 8 Section 21 of the Texas Labor Code was enacted pursuant to the Texas 9 Commission on Human Rights Act (“TCHRA”) to prohibit sex and age discrimination 10 and retaliation by employers. See Donna Indep. Sch. Dist. v. Castillo, No. 13-19-00395- 11 CV, 2020 Tex. App. LEXIS 6404, at *7 (Tex. App. Aug. 13, 2020). 12 [T]he TCHRA provides that certain administrative steps are required before 13 pursuing judicial remedies. Schroeder v. Texas Iron Works, Inc., 813 S.W.2d 14 483, 488 (Tex. 1991). Among these is filing a complaint with the TWC. Afterwards, a judicial complaint may be filed only after the TWC either 15 dismisses the administrative complaint or the TWC fails to resolve the 16 complaint within 180 days. Jones v. Grinnell Corp., 235 F.3d 972, 975 (5th Cir. 2001). 17
18 Gorman v. Verizon Wireless Tex., L.L.C., 753 F.3d 165, 169 (5th Cir. 2014); see also 19 Castillo, 2020 Tex. App. LEXIS 6404, at *10 n.4 (internal citations omitted) (“[t]o 20 exhaust administrative remedies under the TCHRA. a claimant must also: (1) allow the 21 TWC 180 days to dismiss or resolve the complaint . . . .”). Therefore, pursuant to the 22 TCHRA, a plaintiff must exhaust her state administrative remedies and request a right to 23 sue letter from the Texas Commission on Human Rights before filing a civil action. See 24 Jones v. Grinnell Corp., 235 F.3d 972, 975 (5th Cir. 2001). 25 Counter-Defendants argue that MacRory has not obtained a right to sue letter and 26 therefore has failed to exhaust her administrative remedies. In opposition, MacRory 27 explains that she has “cured the requirement” and attached “an application for a ‘right to 28 sue’ letter.” Doc. No. 22 at 15. 1 MacRory is mistaken that she has cured this defect. Her attachment is a complaint 2 to the Texas Workforce Commission Civil Rights Division. This is not a right to sue 3 letter, nor does it inherently establish that she is yet entitled to one. It appears instead 4 that MacRory has just begun pursuing her state administrative remedies. Therefore, they 5 are not exhausted. 6 MacRory is correct that “the failure to receive a Texas right to sue letter is not a 7 jurisdictional defect,” Gorman, 753 F.3d at 170, and therefore can be cured. Once 8 MacRory obtains a right to sue letter she may seek leave to re-plead this claim within 9 sixty days. See Tex. Lab. Code § 21.254. But as of now, her claim is not ripe. 10 Accordingly, the Court GRANTS Counter-Defendants motion and DIMISSES 11 MacRory’s seventh cause of action. 12 G. Constructive Termination 13 MacRory’s eighth cause of action is for constructive termination pursuant to Texas 14 law. See FACC at 31. Counter-Defendants assert that constructive termination is not an 15 independent cause of action. See Doc. No. 17-1 at 17. And they appear to be correct. 16 Under Texas law, “[c]onstructive discharge is not a freestanding cause of action; instead, 17 this concept permits an employee who has quit to demonstrate the required ‘adverse 18 employment action’ necessary for a statutory retaliation claim under section 21.055.” 19 Microsoft Corp. v. Mercieca, 502 S.W.3d 291, 312 (Tex. App. 2016). Similarly, under 20 federal law, constructive discharge appears to be an alternative method of establishing 21 that a plaintiff was “discharged”—an element of a discrimination claim. See Brown v. 22 Bunge Corp., 207 F.3d 776, 782 (5th Cir. 2000) (explaining that “[w]hen an employee 23 resigns, he may satisfy the discharge requirement by proving constructive discharge” in 24 the context of a Title VII discrimination claim). 25 In opposition, MacRory does not argue that constructive termination may be 26 pleaded as an independent cause of action. Instead, she merely reiterates the factors 27 identified by the Fifth Circuit in Brown. See Doc. No. 22 at 17. As noted, Brown 28 discusses constructive termination in the context of a Title VII discrimination claim, not 1 as an independent cause of action. Therefore, MacRory does not state a cognizable claim 2 under Texas or federal law for constructive termination.3 Accordingly, the Court 3 GRANTS Counter-Defendants’ motion and DISMISSES MacRory’s eighth cause of 4 action. 5 H. Unsafe Work Conditions 6 MacRory’s ninth cause of action is against Counter-Defendants pursuant to Texas 7 Labor Code § 451.001 for allegedly unsafe work conditions. MacRory asserts that 8 section 451.001 prohibits discrimination if an employee “has made a complaint about 9 unsafe working conditions . . . .” FACC at ¶ 121. Section 451.001, however, provides: 10 A person may not discharge or in any other manner discriminate against an 11 employee because the employee has: 12 (1) filed a workers’ compensation claim in good faith; 13
14 (2) hired a lawyer to represent the employee in a claim;
15 (3) instituted or caused to be instituted in good faith a proceeding under 16 Subtitle A; or
17 (4) testified or is about to testify in a proceeding under Subtitle A. 18 19 Tex. Lab. Code § 451.001. 20 MacRory’s only factual basis for this claim is that she complained to Counter- 21 Defendants that visiting hospitals during the COVID-19 pandemic created an 22 “unreasonable risk of harm.” See FACC at ¶¶ 121, 124. But as noted, a mere verbal 23 complaint is insufficient under the statute. As Counter-Defendants argue, the FACC is 24 devoid of any information that MacRory has filed a workers’ compensation claim, 25
26 3 In the FACC, MacRory cites to Texas Labor Code § 21.051. See FACC at ¶ 115. To the extent 27 MacRory wishes to bring a claim for discrimination under Texas Labor Code § 21.051, she may plead that any allegedly “unlawful employment practice” was based on her “race, color, disability, religion, 28 1 initiated a proceeding, or otherwise retained counsel to represent her in bringing such a 2 claim, as is required. Nor does MacRory explain that she met one of these conditions.4 3 Accordingly, the Court GRANTS Counter-Defendants’ motion and DISMISSES 4 MacRory’s ninth cause of action pursuant to Texas Labor Code § 451.001. 5 I. Retaliation 6 Tenth, MacRory’s pleads a claim for retaliation under the FLSA or alternatively, 7 Texas law. The Court reiterates that alternative pleading is permissible at this stage. 8 1. FLSA Retaliation Claim 9 The FLSA makes it unlawful for any person: 10 11 to discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be 12 instituted any proceeding under or related to this Act [29 USCS §§ 201 et seq., 13 generally; for full classification, consult USCS Tables volumes], or has testified or is about to testify in any such proceeding, or has served or is about 14 to serve on an industry committee. 15 16 29 USCS § 215(a)(3). In the Ninth Circuit, to adequately plead a retaliation claim under 17 the FLSA, MacRory must assert that: (1) she was engaged in “an activity protected under 18 federal law;” (2) Counter-Defendants “subjected [her] to an adverse employment action;” 19 and (3) the protected activity was a “motivating reason” for the adverse action. Acosta v. 20 Zhao Zeng Hong, 704 F. App’x 661, 664 (9th Cir. 2017) (quoting Avila v. L.A. Police 21 Dep’t, 758 F.3d 1096, 1109 (9th Cir. 2014)). 22 Regarding the first element, “in order to find protection under § 215(a)(3), an 23 employee must actually communicate a complaint to the employer.” Lambert v. 24 Ackerley, 180 F.3d 997, 1007 (9th Cir. 1999). “[L]ess formal and detailed 25 26 27 4 In opposition, MacRory asserts that Texas Labor Code § 411.103 provides the basis for her ninth cause of action. See Doc. No. 22 at 19. MacRory did not plead this claim. Therefore, the court will not 28 1 communications also fit the statutory definition. Id. MacRory asserts that she 2 complained to Counter-Defendants about the alleged FLSA violations. See FACC at 3 ¶ 132. Thus, she adequately pleads that she engaged in a protected activity. Next, 4 MacRory sufficiently alleges adverse employment actions, including: 5 6 unnecessarily hiring new employees just to “keep an eye on shady Laura [Ms. Macrory],” which intimidated Macrory and negatively affected Macrory’s 7 profits in Houston territory due to the new employees’ presence and 8 incompetence; trying to take away Macrory’s control of the Techs in her offices; drastically cutting her Techs’ hours; and endangering Macrory’s 9 health by asking her to regularly visit hospitals despite COVID-19 pandemic. 10 11 Id. And finally, MacRory claims that these actions were taken “after” she made her 12 complaints.5 While the Court agrees with Counter-Defendants that this allegation is bare, 13 it plausibly suggests that her complaints were the motivating factor for the alleged 14 adverse employment actions. See Pac. Shores Props., Ltd. Liab. Co. v. City of Newport 15 Beach, 730 F.3d 1142, 1168 (9th Cir. 2013) (“Causation is an intensely factual question 16 that should typically be resolved by a jury.”). Accordingly, the Court DENIES Counter- 17 Defendants’ motion to dismiss MacRory’s FLSA retaliation claim. 18 2. Texas Retaliation Claim 19 As an initial matter, MacRory cites to the wrong statute in support of her claim. 20 See FACC at ¶ 130 (citing “Texas Labor Code § 21.005(1)-(4)”). Because MacRory is 21 represented by counsel, the Court has no duty to interpret the FACC liberally. Cf. Brown 22 v. Dep’t of Pub. Safety, 446 F. App’x 70, 73 (9th Cir. 2011). Nonetheless, the Court 23 believes this was a typographical error and has determined that the proper statute 24 governing unlawful retaliation is Texas Labor Code § 21.055. Section 21.055 prohibits 25 retaliation by an employer against an employee who has opposed a discriminatory 26
27 5 MacRory did not plead the additional details—further suggesting causation—contained in her 28 1 practice, made or filed a charge, filed a complaint, or testified, assisted, or participated in 2 any manner in an investigation, proceeding, or hearing. See Tex. Lab. Code § 21.055. 3 As explained above, section 21 of the Texas Labor Code has statutory prerequisites prior 4 to pursuing judicial remedies, which MacRory has not met. Accordingly, the Court 5 GRANTS Counter-Defendants’ motion and DISMISSES MacRory’s retaliation claim 6 under Texas law. Once MacRory obtains a right to sue letter, she may seek leave to re- 7 plead this cause of action within sixty days. See Tex. Lab. Code § 21.254. 8 J. Unjust Enrichment 9 MacRory’s eleventh cause of action is for unjust enrichment. In Texas, “[a] party 10 may recover under the unjust enrichment theory when one person has obtained a benefit 11 from another by fraud, duress, or the taking of an undue advantage.” Heldenfels Bros., 12 Inc. v. Corpus Christi, 832 S.W.2d 39, 41 (Tex. 1992). 13 According to MacRory, “Counter-Defendants retained $17,280 in Ms. MacRory’s 14 unpaid overtime wages, in addition to all the missed meal and rest breaks that Ms. 15 MacRory had to sacrifice in order to ‘better’ the company.” FACC at ¶ 139. Counter- 16 Defendants argue that because this claim is based on the alleged wage and overtime 17 violations, it is preempted by the FLSA. See Doc. No. 17-1 at 12. 18 Courts considering the interplay between the FLSA and a Texas state law cause of 19 action for unjust enrichment have repeatedly noted that “[i]t is well-settled that the 20 FLSA’s statutory causes of action are the sole remedies available to a worker for 21 enforcement of rights he or she may have under the FLSA.” Zorilla v. Uber Techs., Inc., 22 No. 4:16-CV-615, 2018 U.S. Dist. LEXIS 232926, at *6-7 (S.D. Tex. Mar. 15, 2018); see 23 also Botello v. COI Telecom, LLC, No. 10-cv-305, 2010 U.S. Dist. LEXIS 99790, at *12 24 (W.D. Tex. Sept. 21, 2010) (holding that the plaintiff’s claim for unjust enrichment was 25 preempted by the FLSA where the claim was predicated on an alleged violation of the 26 FLSA); Guerrero v. JPMorgan Chase & Co., No. 6:09-cv-388, 2010 U.S. Dist. LEXIS 27 9908, at *1–2 (E.D. Tex. Feb. 5, 2010) (holding that the plaintiffs’ FLSA-based quantum 28 meruit, unjust enrichment, and breach of contract claims were precluded by conflict 1 preemption). Accordingly, these courts have dismissed unjust enrichment claims when 2 they are predicated on alleged FLSA violations. See, e.g., Botello, 2010 U.S. Dist. 3 LEXIS 138572, at *3 n.1 (“The Court has previously granted Defendants’ motion to 4 dismiss Plaintiffs’ unjust enrichment claim as it relates to any claim of failure to pay 5 minimum wages or overtime under the FLSA.”). 6 All of MacRory’s factual allegations in the FACC supporting this claim are 7 duplicative of her FLSA claims.6 See FACC at ¶¶ 139–40. Therefore, the Court 8 GRANTS the motion and DISMISSES MacRory’s eleventh cause of action. 9 K. Undue Influence 10 Pursuant to her twelfth cause of action, MacRory brings a claim against Counter- 11 Defendants for undue influence. According to MacRory, 12 Under Texas law, the elements of undue influence are:(1) the existence and 13 exertion of an influence; (2) the effective operation of such influence so as to 14 subvert or overpower the mind of the property owner at the time the instrument was executed; and (3) the execution of an instrument that the 15 property owner would not have executed but for such influence. See 16 Rothermel v. Duncan, 369 S.W.2d 917, 922 (Tex.1963); Fielding v. Tullos, No. 09-17-00203-CV, 2018 WL 4138971, at *7 (Tex. App.—Beaumont Aug. 17 20, 2018, no pet.). 18 19 Id. at ¶ 145. Undue influence, however, is not a cognizable independent cause of action 20 under Texas law. The two Texas cases MacRory cites demonstrate that undue influence 21 is merely a basis to undermine capacity and avoid enforcement of a contract or will. 22 Apparently, MacRory does not disagree. Counter-Defendants seek dismissal of this 23 claim on this basis, see Doc. No. 17-1 at 20, and MacRory does not oppose. There is no 24 25 6 In opposition, MacRory adds that Precision never paid McRory a $9,000 bonus she was “awarded,” 26 and owes her $5,000 in unpaid commissions. See Doc. No. 22 at 13. These new allegations may be independent of the alleged FLSA violations. However, MacRory did not plead them and therefore the 27 Court does not consider them. To the extent that MacRory has an alternative basis—i.e., factual allegations that are not duplicative of the FLSA claims—she may be permitted to amend this cause of 28 1 || will and the only instrument MacRory identifies is the Contract, which she does not plead 2 invalid. The allegation that “Counter-Defendants took advantage of MacRory’s trust 3 ||and unduly influenced her to commit HPPA violations,” FACC at 4 147, is insufficient to 4 || plead that the Contract, or any other instrument not duly pleaded, is unenforceable. 5 || Accordingly, the Court GRANTS Counter-Defendants’ motion and DIMISSES 6 || MacRory’s twelfth cause of action. 7 IV. CONCLUSION 8 For the foregoing reasons, the Court GRANTS IN PART and DENIES IN PART 9 || Counter-Defendants’ motion to dismiss. The Court DIMISSES MacRory’s first 10 || (TMWA claim), second, third, fourth, sixth, seventh, eighth, ninth, tenth (Texas 11 ||retaliation claim), eleventh, and twelfth causes of action. MacRory may file a Second 12 |} Amended Counter Complaint on or before May 24, 2021. Counter-Defendants must then 13 ||respond within the time prescribed by Federal Rule of Civil Procedure 15. 14 IT IS SO ORDERED. 15 || Dated: April 26, 2021 16 paitul Tu - Ll bolls 17 HON. MICHAEL M. ANELLO 18 United States District Judge 19 20 21 22 23 24 25 26 27 28 -21-