Velasquez v. Universal Protection Service, LLC

Background

Zion M. Velasquez and Rishma Anoop brought a proposed class action and Fair Labor Standards Act collective action against Universal Protection Service, LLC, doing business as Allied Universal. They alleged violations of the Fair Labor Standards Act, the New York Labor Law, and public-works contracts that they claimed made them third-party beneficiaries.

The motion addressed only the New York Labor Law claims under section 195. The plaintiffs alleged that Allied Universal failed to provide required wage notices when they were hired and annually afterward, and provided wage statements that misstated hours worked, overtime rates, and compensation owed. They further alleged that the inaccurate information prevented employees from recognizing and contesting underpayment, delayed payment of proper wages, and caused them to struggle to pay bills or delay or forgo purchases.

Issue and arguments

Allied Universal moved under Federal Rule of Civil Procedure 12(b)(1), which permits dismissal for lack of subject-matter jurisdiction, arguing that the plaintiffs lacked constitutional standing. Standing requires a plaintiff to allege a concrete injury, a connection between that injury and the defendant’s conduct, and a likelihood that a favorable decision would remedy the injury.

Allied Universal argued that the plaintiffs had alleged only technical violations of the wage-document requirements and had not explained specifically how the documents confused or misled them or prevented them from challenging a violation. The plaintiffs relied on their allegations that the deficient notices and statements hindered their ability to determine whether they were underpaid and to seek payment.

Court’s reasoning

The court held that the plaintiffs plausibly alleged an informational injury with a concrete downstream financial consequence. It explained that a statutory violation alone is not automatically an injury, but that inaccurate wage information can support standing when it plausibly prevents an employee from identifying or seeking unpaid wages.

Taking the complaint’s allegations as true and drawing reasonable inferences in the plaintiffs’ favor, the court found a plausible causal connection: inaccurate wage notices and wage statements allegedly prevented the plaintiffs from contesting Allied Universal’s compensation calculations sooner, which allegedly resulted in delayed payment and financial hardship. The court stated that the allegations were relatively sparse but sufficient at the motion-to-dismiss stage, when general factual allegations of injury may suffice.

The court did not reach the plaintiffs’ other theories of standing, including their arguments concerning the risk of harm recognized by the New York Legislature and possible effects on Social Security benefits.

Disposition

Judge Jennifer L. Rochon denied Allied Universal’s motion to dismiss the plaintiffs’ New York Labor Law section 195 claims. The order decided whether the plaintiffs adequately pleaded standing; it did not decide whether Allied Universal ultimately violated the wage-notice or wage-statement requirements or whether the plaintiffs were entitled to damages.