Myers v. Gilead Sciences, Inc.

Background

Amelia Myers and Fatoumata Barry Yapo brought a proposed class action against their former employers, Gilead Sciences, Inc. and Kite Pharma, Inc. They alleged that the defendants used an incorrect regular rate of pay to calculate overtime. According to the complaint, the defendants did not include incentive awards and Gilead restricted stock units in that rate, which resulted in underpaid overtime.

The plaintiffs asserted California Labor Code, California Unfair Competition Law, and Private Attorneys General Act claims for California workers. They also asserted a Fair Labor Standards Act claim for current and former non-exempt employees in any state. The defendants moved to dismiss the amended complaint and asked the court to stay any claims that survived dismissal.

Motion to Stay

The defendants asked the court to stay the case under the Colorado River doctrine because of a related state-court action, Herman Pappoe v. Kite Pharma, Inc., No. 24STCV02259 (L.A. Super. Ct.). The court found the cases substantially similar because they involved the same defendants, overlapping proposed classes, and the same basic allegation that the defendants failed to include restricted stock units in employees’ regular rates of pay.

The court concluded that the Colorado River factors favored staying the state-law claims. In particular, allowing both cases to proceed at the same time created a risk of duplicated efforts and inconsistent results. The state case could address the identical state-law claims, and it was filed earlier and had proceeded farther than this federal case.

The court reached a different conclusion for the Fair Labor Standards Act claim. The state case did not include a federal claim, and the plaintiffs in this case were not named parties in that action. A stay could also delay the interests of proposed collective members outside California, whose claims were not implicated by the state case. The court therefore found that the defendants had not shown the extraordinary circumstances required to stay the federal claim.

Motion to Dismiss

The defendants argued that the Fair Labor Standards Act claim failed because the plaintiffs did not identify a specific workweek in which they worked overtime and were not fully paid. The court explained that wage claims must meet the ordinary pleading requirement of providing enough facts to make the claim plausible, but they do not have to satisfy a special, heightened pleading standard.

The court found that the plaintiffs alleged that they worked more than 40 hours per week, were non-exempt from overtime requirements, worked overtime, and were not paid correctly because supplemental remuneration was excluded from their regular rates. Although the allegations were not especially detailed, the court held that they were sufficient at the pleading stage. Whether the alleged underpayment actually occurred remained a factual question for a later stage.

Disposition

The court granted in part and denied in part the defendants’ motion to dismiss and/or stay. It granted the motion to stay the plaintiffs’ state-law claims pending further proceedings in the related state-court action. It denied the motion to stay the Fair Labor Standards Act claim and denied the motion to dismiss that claim. It denied as moot the motion to dismiss the state-law claims. If the stay is lifted, the defendants may revive their motion to dismiss those claims. The parties were ordered to meet and confer and submit a joint proposed case schedule within 21 days.