Muhammad v. Alto Pharmacy LLC

Background

Afiyfah Muhammad, Darwin Wilson, Dominique Skinner, and opt-in plaintiff Venezia Mendoza sued Alto Pharmacy LLC on behalf of themselves and a proposed class and collective. They alleged that Alto misclassified them as independent contractors even though they were actually employees. Their claims arose under the Fair Labor Standards Act and New York Labor Law.

The plaintiffs alleged that they worked as delivery drivers or prescription couriers at Alto’s Park Avenue location. They claimed that they regularly worked six days per week, often totaling approximately 48 to 60 hours per week, but were paid a flat rate of $21.50 per hour rather than overtime at one-and-a-half times their regular rate. They also alleged unpaid time between shifts, waiting time, unpaid breaks, withheld tips, unpaid spread-of-hours pay, inaccurate wage statements, and missing wage notices.

Alto moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which concerns whether a complaint states a legally sufficient claim, and Rule 12(b)(2), which concerns personal jurisdiction over a defendant. Alto assumed for purposes of the motion that the plaintiffs were employees. The plaintiffs conceded that they did not have a federal minimum-wage claim and that the court lacked personal jurisdiction over claims by delivery drivers and couriers who worked outside New York.

Court’s Analysis

The court held that the plaintiffs plausibly alleged an overtime claim under the Fair Labor Standards Act. They alleged a regular schedule resulting in at least approximately 48 hours of work per week, payment at $21.50 per hour for all hours worked, and no additional half-time premium for hours over 40. Muhammad also identified weeks in November 2022 and May 2024 in which she allegedly worked more than 40 hours without receiving overtime pay. The court stated that the complaint did not need to provide a week-by-week account of every hour worked.

Because the federal overtime claim survived, the court found Alto’s request to decline supplemental jurisdiction over the New York wage claims moot. The court did not decide whether the plaintiffs plausibly alleged that they were employees because Alto’s motion assumed employee status.

The court separately considered the plaintiffs’ claims under New York’s Wage Theft Prevention Act for allegedly missing wage notices and improper wage statements. It held that the plaintiffs alleged only statutory violations and did not allege a tangible or concrete injury resulting from those violations. The court therefore concluded that the plaintiffs lacked standing to bring those claims in federal court.

Disposition

The court granted in part and denied in part Alto’s motion to dismiss. It dismissed the Second Cause of Action, alleging failure to pay minimum wages under the Fair Labor Standards Act, with prejudice. It dismissed the Fifth Cause of Action, alleging failure to provide statutory wage notices and statements under the Wage Theft Prevention Act, without prejudice. The motion was otherwise denied.

The proposed class and collective claims were limited to individuals who worked for Alto in New York, consistent with the plaintiffs’ clarification responding to the motion. The court also directed the plaintiffs to provide Alto with a proposed second amended complaint by September 11, 2024, and directed the parties to report by September 18, 2024, whether they agreed to its filing and, if necessary, propose a briefing schedule.

Judge Katharine H. Parker signed the opinion and order on September 4, 2024.