Sao v. Pro-Tech Products Inc.

          ORDER

          Honorable John J. Tuchi, United States District Judge

         At issue is Plaintiff James Sao's Motion for Judgment on the Pleadings (Doc. 11), to which Defendants filed a Response (Doc. 14) and Plaintiff filed a Reply (Doc. 15). The Court resolves the Motion without oral argument. See LRCiv 7.2(f). For the reasons that follow, the Court grants Plaintiff's Motion in part and denies it in part.

         I. BACKGROUND

         Defendant Pro-Tech Products, Inc. (“Pro-Tech”) produces residential and commercial roofing systems. (Doc. 2, Answer ¶ 36.) Defendant Randall Winter is a director and officer of Pro-Tech. (Answer ¶ 19.) Plaintiff worked for Pro-Tech for one week, from August 12-16, 2019. (Doc 1, Compl. ¶ 9; Answer ¶¶ 9, 37.) Defendants allege that, although Plaintiff “began employment as a laborer with . . . Pro-Tech, ” the week consisted solely of training, of which Plaintiff was the primary beneficiary. (Answer ¶¶ 37-38.)

         After one week, “Plaintiff decided the job was not for him” and did not return to work for Pro-Tech. (Compl. ¶ 40.) Plaintiff did not receive wages on the next regular payday. (Answer ¶ 44.) When Plaintiff addressed the non-payment with Defendants, they informed Plaintiff that he had executed an Employment Contract, wherein he “voluntarily agreed” that if he left the job within 90 days of his start date, he would forfeit one week's pay due to the “expense and time consumption of training new employees.” (Answer ¶ 45.)

         Plaintiff's attorneys then sent Defendants a demand letter. (Answer ¶ 46.) On September 16, Defendants delivered a check to Plaintiff's attorneys in the “full amount of wages due to Plaintiff” less withholdings. (Answer ¶ 47.) Two days later, Plaintiff's counsel informed Defendants' counsel that Plaintiff had rejected the check. (Compl. ¶ 48; Answer ¶ 48.)

         Plaintiff alleges three claims against Defendants: (1) failure to pay minimum wages in violation of the Federal Labor Standards Act (FLSA), 29 U.S.C. § 206; (2) failure to pay minimum wages in violation of the Arizona Minimum Wage Statute (AMWS), A.R.S. § 23-364(g); and (3) failure to timely pay wages under the Arizona Wage Statute (AWS), A.R.S. § 23-353. Defendants raise multiple affirmative defenses in their Answer, including lack of subject matter jurisdiction due to mootness of Plaintiff's claims; failure to state a claim for the same reason; satisfaction; good faith; the right of setoff; and waiver and consent. Plaintiff now moves for judgment on the pleadings on all counts, arguing that Defendants admitted each element of each claim and that none of Defendants' alleged affirmative defenses apply.

         II. LEGAL STANDARD

         Under Federal Rule of Civil Procedure 12(c), “a party may move for judgment on the pleadings” after the pleadings are closed “but early enough not to delay trial.” The legal standards governing Rules 12(c) and 12(b)(6) are “functionally identical, ” as both permit challenges directed at the legal sufficiency of the other party's allegations. Cafasso, U.S. ex rel. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1054 n.4 (9th Cir. 2011). A judgment on the pleadings is proper only when there are no issues of material fact, and the moving party is entitled to judgment as a matter of law. Gen. Conference Corp. of Seventh-Day Adventists v. Seventh-Day Adventist Congregational Church, 887 F.2d 228, 230 (9th Cir. 1989). Stated another way, a motion for judgment on the pleadings will not be granted unless it appears “beyond doubt that the [non-moving party] can prove no set of facts in support of his claim which would entitle him to relief.” Enron Oil Trading & Transp. Co. v. Walbrook Ins. Co., 132 F.3d 526, 529 (9th Cir. 1997).

         In assessing a motion for judgment on the pleadings, all allegations of fact by the party opposing the motion are accepted as true and are construed in the light most favorable to that party. Seventh-Day Adventists, 887 F.2d at 230. “As a result, a plaintiff is not entitled to judgment on the pleadings when the answer raises issues of fact that, if proved, would defeat recovery.” Id. A plaintiff's uncontested allegations, to which the defendant had an opportunity to respond, are also taken as true. United States v. Brown, No. CV-18-04213-PHX-DLR, 2019 WL 5549174, at *2 (D. Ariz. Oct. 28, 2019). Finally, a plaintiff's motion for judgment on the pleadings may be granted only if all defenses raised in the answer are legally insufficient. Qwest Commc'ns Corp. v. City of Berkeley, 208 F.R.D. 288, 291 (N.D. Cal. 2002).

         III. ANALYSIS

         A. FLSA Claim

         The FLSA provides that “[e]very employer shall pay to each of his [covered] employees” a minimum wage. 29 U.S.C. § 206(a). An employer who violates this provision “shall be liable to the employee or employees affected in the amount of their unpaid minimum wages . . . and an additional equal amount as liquidated damages.” 29 U.S.C. § 216(b). When assessing liquidated damages, “[d]ouble damages are the norm.” Chao v. A-One Med. Servs., Inc., 346 F.3d 908, 920 (9th Cir. 2003).

         To prevail on his FLSA claim, Plaintiff must prove that (1) he was employed by Defendants during the relevant period; (2) he was a covered employee; and (3) Defendants failed to pay him a minimum wage. Quinonez v. Reliable Auto Glass, LLC, No. CV-12-000452-PHX-GMS, 2012 WL 2848426, at *2 (D. Ariz. July 11, 2012); see also Zorich v. Long Beach Fire Dept. & Ambulance Serv., Inc., 118 F.3d 682, 684 (9th Cir. 1997). Plaintiff argues Defendants admitted factual allegations in the Answer that prove all three elements.

         1. Employer-Employee Relationship

         First, Plaintiff asserts that both Pro-Tech and Winter were Plaintiff's employers within the meaning of the FLSA. “Courts have adopted an expansive interpretation of the definitions of ‘employer' and ‘employee' under the FLSA, in order to effectuate the broad remedial purposes of the Act.” Real v. Driscoll Strawberry Assocs., Inc., 603 F.2d 748, 754 (9th Cir. 1979). An employer is “any person acting directly or indirectly in the interest of an employer in relation to an employee.” 29 U.S.C. § 203(d). An employee is “any individual employed by an employer, ” and to employ means to “suffer or permit to work.” 29 U.S.C. § 203(e), (g). Whether a party is an employer within the meaning of the FLSA is a question of law. Torres-Lopez v. May, 111 F.3d 633, 638 (9th Cir. 1997).

         The Answer admits the following factual allegations:

• Plaintiff “was a full-time employee of Defendants” for the week of August 12-19, 2019;

• Plaintiff was an employee of Defendants as defined by the FLSA, the AMWS, and the AWS;

• Pro-Tech was Plaintiff's employer as defined by the FLSA, the AMWS; and the AWS;

• “Pro-Tech Products employed Plaintiff;”

• Plaintiff “began employment as a laborer with Defendant Pro-Tech . . . on August 12, 2019.”

(Answer ¶¶ 9-12, 14-16, 20, 37.)

         To all these allegations however, Defendants added “the clarification that Plaintiff was a trainee and the primary beneficiary of the first week training.” (Answer ¶¶ 9-12.) While the Response fails to develop this argument or even contest Plaintiff's argument that Defendants were his employers, the Court will evaluate Defendants' claim that Plaintiff was a trainee and the primary beneficiary of the training week.

         The employee-trainee distinction was first articulated in Walling v. Portland Terminal Co., 330 U.S. 148, 152 (1947). The Court held that railroad workers who received “practical training” to become yard brakemen were not employees under the FLSA. The railroad company provided the workers instruction and a certificate at the end of the training period, which qualified the workers to earn compensation for future work. The Court likened the railroad's instruction to that which a school or vocational setting would provide, where it ...