Pozo v. Bluemercury, Inc.

Background

Richard Pozo brought a proposed class action on behalf of himself and other BlueMercury employees in New York who allegedly spent more than 25% of their time performing physical labor. Pozo worked for BlueMercury as a Sales Associate from November 2019 through October 2020. He alleged that more than 25% of his job responsibilities involved stocking, lifting, carrying, organizing merchandise, cleaning, and handling shipments. He claimed that BlueMercury paid him every two weeks instead of weekly, violating New York Labor Law § 191, and that the delay caused him to lose the time value of his wages.

BlueMercury moved to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Rule 12(b)(1) concerns the court’s authority to hear a case, while Rule 12(b)(6) tests whether the complaint alleges enough facts to state a legally plausible claim. BlueMercury also moved to stay, or pause, the case while an appeal in a related state-court matter was pending and moved to strike Pozo’s class allegations.

Standing

The court denied the Rule 12(b)(1) motion. It held that Pozo adequately alleged an injury because the loss of the use of money during a payment delay is a concrete financial harm. The court stated that Pozo did not need to allege that he had a specific plan for investing, earning interest on, or otherwise using the delayed wages.

Private Right of Action

The court rejected BlueMercury’s argument that New York Labor Law §§ 191(1)(a) and 198(1-a) do not allow an employee to sue over untimely wage payments. The court concluded that it was required to follow the First Department’s decision in Vega v. CM & Associates Construction Management, LLC, which held that § 198(1-a) provides a private right of action for violations of § 191. The court found that BlueMercury had not provided persuasive evidence that New York’s highest court would reject that interpretation.

Failure to Plead Manual-Worker Status

The court nevertheless granted the Rule 12(b)(6) motion. New York Labor Law § 191 generally requires manual workers to be paid weekly. The New York Department of Labor interprets “manual worker” to include employees who spend more than 25% of their working time performing physical labor. The court agreed that the tasks Pozo described could qualify as physical labor.

The complaint did not adequately allege how much of Pozo’s working time he spent on those tasks, as opposed to selling merchandise. Alleging that more than 25% of his “job responsibilities” involved physical tasks was not the same as alleging that he spent more than 25% of his working time performing physical labor. The court therefore found that Pozo had not plausibly alleged that he was a manual worker. The dismissal was granted with leave to file an amended complaint.

Stay Request

The court denied BlueMercury’s request to stay the case pending the appeal in Grant v. Global Aircraft Dispatch, Inc. Although the court recognized that continuing discovery could be expensive for BlueMercury, it found that the outcome of Grant would not necessarily decide whether employees have a private right of action under New York Labor Law § 191. The court concluded that Pozo’s interest in moving forward outweighed BlueMercury’s interest in waiting.

Class Allegations

The court denied BlueMercury’s motion to strike the class allegations. It found that the challenge to whether the proposed class was an impermissible “fail-safe” class—a class defined by whether its members ultimately prevail—was better addressed during class certification, after discovery. The court also noted that the proposed class definition was ambiguous, including because it used “and/or,” and urged Pozo to clarify it if he amended the complaint.

Disposition

The court denied BlueMercury’s motions under Rule 12(b)(1), to stay the proceedings, and to strike the class allegations. It granted BlueMercury’s Rule 12(b)(6) motion and allowed Pozo to amend. The court ordered Pozo to file an amended complaint by August 18, 2023, stating that the case would otherwise be dismissed.