Huff v. Canterbury Park Holding Corporation

Background

Danny Huff alleged that Canterbury Park Holding Corporation employed him from March 2012 until terminating him on March 3, 2022. His duties included supervising casino-games employees and completing projects. He alleged that he worked from home on attendance tracking and other projects, recorded the time in personal logs, and was not paid for approximately 1,100 of about 1,500 hours spent on those projects.

Huff sent Canterbury a demand for unpaid wages under the Minnesota Fair Labor Standards Act and filed a wage claim with the Minnesota Department of Labor and Industry. The agency closed the claim without taking action. Huff and Canterbury then signed two settlement agreements: one for $25,500 and another for $7,500. Both agreements included releases covering known and unknown wage-related and employment-related claims, except that the court later concluded the releases could not waive Huff’s Fair Labor Standards Act claims without following the statute’s requirements.

Motions and proposed amendment

Huff moved for leave to file a second amended complaint. He proposed adding Mary O’Brien, Canterbury’s outside counsel; Ballard Spahr LLP, the law firm employing O’Brien; Randall Sampson, Canterbury’s President and Chief Executive Officer; and Mary Fleming, Canterbury’s Vice President of Human Relations.

The proposed claims included retaliation under the federal Fair Labor Standards Act, the Minnesota Fair Labor Standards Act, and unspecified state labor laws; unlawful interference with future employment; fraudulent misrepresentation; and breach of a third-party contract.

The court denied leave to amend because all proposed amendments would be futile, meaning the proposed complaint could not survive a motion to dismiss. For the proposed federal Fair Labor Standards Act retaliation claims against O’Brien and Ballard Spahr, the court found no allegations that either acted as Huff’s employer under the statute. The allegations described O’Brien as negotiating for Canterbury after Huff’s employment ended and described Ballard Spahr primarily as O’Brien’s employer.

As to Sampson and Fleming, the court found that Huff alleged only participation in post-employment settlement negotiations and, as to Fleming, knowledge of and requests concerning Huff’s work. Those allegations did not identify an adverse employment action—a job-related action causing a material disadvantage—or a causal connection between protected activity and such an action.

The court also rejected the proposed non-Fair Labor Standards Act claims. It treated the settlement agreements as part of the pleadings because Huff attached them to his complaints and sought a declaration that they were invalid. The court concluded that the agreements were knowingly and voluntarily entered after detailed negotiations, time for review, and notice that Huff could consult an attorney. It rejected Huff’s arguments involving fraud, omission of facts, misrepresentation about Department of Labor approval, contract integration, the Older Workers Benefit Protection Act, protected reporting rights, inadequate consideration, the amount of wages received, and allegedly unexecutable contract conditions. The court concluded that the releases applied to the proposed non-Fair Labor Standards Act claims against Canterbury and the proposed defendants.

Motion to dismiss

Canterbury moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal for failure to state a legally sufficient claim, and Rule 12(b)(5), which concerns insufficient service of process.

For the non-Fair Labor Standards Act claims, the court held that the release was apparent from the complaint and its attached agreements. Because the court found no valid basis to avoid the releases, it granted Canterbury’s motion to dismiss those claims for failure to state a claim.

The court separately considered Huff’s Fair Labor Standards Act retaliation allegations. Huff identified three alleged adverse actions: permanent exclusion from Canterbury’s premises, failure to rehire him, and withholding wages. The court held that the permanent-exclusion provisions were part of a negotiated settlement and therefore could not serve as the alleged retaliatory action. It found no allegation that Huff applied for another Canterbury position after his termination, so the failure-to-rehire allegation did not identify a material employment disadvantage. Finally, the wage withholding allegedly occurred before Huff filed his wage complaint, meaning Huff did not allege that the protected complaint caused the withholding. The court therefore held that the retaliation claims failed to state a claim.

Canterbury also asked the court to approve or enforce the agreements’ release of Fair Labor Standards Act claims. The court noted that the Court of Appeals for the Eighth Circuit had not resolved whether judicial approval is required for all settlements of those claims. Because Huff’s Fair Labor Standards Act claims already failed to state a claim, the court declined to address that issue.

As to service, the court noted that the parties had not addressed the effect of a waiver of service filed on September 6, 2022. Because the case was being dismissed on another ground, the court denied Canterbury’s Rule 12(b)(5) motion as moot.

Disposition

The order denied Huff’s motion to amend pleadings. It granted in part and denied in part Canterbury’s motion to dismiss: the motion to dismiss for failure to state a claim was granted, and the motion to dismiss for insufficient service of process was denied as moot. The court dismissed Huff’s first amended complaint without prejudice and directed that judgment be entered accordingly.