Solis v. Gate Gourmet, Inc.

Background

Solis alleged that Gate Gourmet engaged in practices that caused employees to work unrecorded hours and receive unpaid wages. One example was time spent going through security, putting on and removing a uniform and safety equipment, which Solis alleged was uncompensated. Gate Gourmet removed the case to federal court. Solis moved to remand it to state court, and Gate Gourmet moved to dismiss claims and strike certain allegations.

Remand

The court denied Solis’s motion to remand. It held that the Class Action Fairness Act supplied federal jurisdiction because the parties were minimally diverse and the amount in controversy exceeded $5 million. Based on the complaint’s allegations, Gate Gourmet reasonably calculated potential liability using assumptions about unpaid minimum wages and waiting-time penalties. The court stated that those claims alone could involve almost $16 million, and that even more conservative assumptions would exceed the $5 million requirement. The court also overruled Solis’s evidentiary objections.

Claims dismissed

The court dismissed the claim for unreturned deposits and accrued interest under California Labor Code section 404 because the complaint did not provide enough facts describing the alleged violation.

The court dismissed the waiting-time-penalty claim under Labor Code section 203 because that provision applies when an employee is discharged or quits, while the complaint alleged that Solis remained an employee. The court stated that Solis would have leave to reassert the claim if that changed.

The court dismissed the vested-vacation-wages claim under Labor Code section 227.3 because that provision applies to employees who have been terminated.

The court dismissed the claim for untimely wage payments under Labor Code section 204 because that provision does not create a private right of action. This claim was dismissed without leave to amend.

The court dismissed Solis’s claim under California’s Unfair Competition Law, or UCL, because Solis conceded that he had an adequate remedy under another law. The court explained that this was a dismissal for failure to state a claim, not a dismissal for lack of subject-matter jurisdiction. The UCL claim was dismissed without leave to amend.

The court dismissed the claims against Warrick because the complaint did not plausibly allege that she could be held liable as Solis’s employer under California Labor Code section 558.1. The complaint alleged that Warrick was a human-resources director who told employees when to report for work, informed them which hours were compensable, and sometimes rescheduled shifts. The court concluded that these allegations did not show that she could change or make corporate policy and did not support the allegation that she was Gate Gourmet’s alter ego.

Claims and allegations that remain

The court held that the complaint included enough specific allegations to support Solis’s overtime, minimum-wage, and indemnified-expenses claims. Although some allegations were adequately pleaded and others were too generalized, the adequately pleaded allegations plausibly stated claims for relief, so the claims could proceed at this stage. The court denied Gate Gourmet’s request to strike certain allegations because they were not redundant, immaterial, impertinent, or scandalous.

The court also denied Gate Gourmet’s motion to strike the class allegations as premature.

Disposition

The court denied the motion to remand and granted Gate Gourmet’s motion to dismiss in part and denied it in part. The section 204 and UCL claims were dismissed without leave to amend. Solis was given leave to amend the other claims dismissed by the order and had 14 days to file an amended complaint. Alternatively, he could proceed only on the claims that had not been dismissed and later seek permission to add dismissed claims if discovery provided a good-faith basis for doing so.