United States District Court for the District of Columbia
February 26, 2004.
MARJORIE FUDALI Plaintiff
PIVOTAL CORPORATION, Defendant
The opinion of the court was delivered by: EMMET SULLIVAN, District Judge
Plaintiff Marjorie Fudali was, at the time of the events giving rise
to the instant action, an employee of Defendant Pivotal Corporation
("Pivotal"), a Washington state corporation registered to do business in
the District of Columbia.*fn1 Plaintiff was hired by Pivotal in May
2000, and was employed as a Senior Sales Executive with a starting base
salary of $85,000, plus commissions. Compl. ¶ 5. After numerous
disputes with Pivotal as to her responsibilities and compensation, as
well as a change in Pivotal management, plaintiff resigned from Pivotal
June 4, 2002. Plaintiff then commenced this action to recover commission
payments she asserts Pivotal still owes her.
Plaintiff originally alleged two causes of action: violation of the
D.C. Wage and Hour Law, D.C. Code § 32-1001, et seq. (2003)("B.C.
Wage Law") and breach of contract. Plaintiff's claims are based on
defendant's alleged failure to pay plaintiff "commissions and other
compensation." Compl. ¶ 7. Both parties concede that upon her
resignation plaintiff received her final paycheck and was reimbursed for
unpaid vacation; the main dispute is whether any commission payments are
still owed. Compl. ¶¶ 28, 29.
Pending before the Court are defendant's Motion to Dismiss Count I of
the Complaint and plaintiff's Motion for Leave to File a First Amended
Complaint. Upon careful consideration of the motions, the responses and
replies thereto, as well as the governing statutory and case law, and for
the following reasons, it is by the Court hereby
ORDERED that defendant's Motion to Dismiss Count I of the Complaint is
GRANTED; and it is
FURTHER ORDERED that plaintiff's Motion for Leave to File a First
Amended Complaint is GRANTED IN PART and DENIED IN PART.
I. Motion to Dismiss Count I of the Original Complaint
Defendant argues that plaintiff has failed to state a claim under the
District of Columbia Wage and Hour Law, D.C. Code § 32-1001 et seq.,
and thus Count I of the Complaint must be dismissed pursuant to FED. R.
CIV. P. 12(b)(6). The Court will not grant a motion to dismiss for
failure to state a claim pursuant to Federal Rule of Civil Procedure
12(b)(6) "unless it appears beyond doubt that the plaintiff can prove no
set of facts in support of his claim which would entitle him to relief."
Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Kowal v. MCI Communications
Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994). Accordingly, at this stage of
the proceedings, the Court accepts as true all of the complaint's factual
allegations. See Does v. United States Dep't of Justice, 753 F.2d 1092,
1102 (D.C. Cir. 1985). Plaintiff is entitled to "the benefit of all
inferences that can be derived from the facts alleged." Kowal, 16 F.3d at
Defendant argues that plaintiff's claim is precluded under the Act
because (1) plaintiff alleged that she was a "Senior Sales Executive,"
placing her squarely within § 32-1004(a)'s exclusion of "bona fide
executives" from D.C. Wage Law protection, and (2) plaintiff was paid
approximately eight times the minimum wage, placing her entirely outside
the Act's purview.
In response to the motion to dismiss, plaintiff makes no attempt to
defend Count I as pleaded, but rather states that she
mis-cited the statutory provision of the D.C. Code
which forms the basis for her statutory wage claim. In
particular, Plaintiff cited to section 32-1001 et
seq. [D.C. Wage and Hour Law] as the statutory basis
for Count I of her Complaint rather than section
32-1301 et seq. [B.C. Wage Payment and Collection
Law]. Plaintiff, by separate motion, has sought leave
of the Court to file a First Amended Complaint to
address this error in her pleading.
Pl.'s Opp. to Def.'s Mot. to Dismiss Count I at 1.
As evidenced by plaintiff's response to the Motion to Dismiss Count I,
and plaintiff's subsequent attempt to amend Count I of the Complaint to
reflect a new statutory cause of action, it is clear that plaintiff
simply cannot state a claim under the B.C. Wage and Hour Act. While not
overtly agreeing to dismiss the original Count I, plaintiff has in effect
conceded that she cannot state a claim under the B.C. Wage and Hour Law.
This implied concession is borne out by an examination of the statute,
which quite clearly confines itself to minimum wage issues and thus
precludes plaintiff's claim. See B.C. Code § 32-1001(a) (stating that
the policy of the subchapter to ensure the elimination of the payment of
wages not "sufficient to provide adequate maintenance and to protect
health."). To ensure that minimum wages are paid to B.C. employees, the
Act establishes a private right of action against "[a]ny employer who
employee less than the wage to which that employee is entitled under this
subchapter." B.C. Code § 32-1012(a) (emphasis added). Given that the
only wages an employee is entitled to under the Act are minimum wages,
plaintiff's admission that she was paid over $85,000 per year at all
relevant times clearly places her outside of the class of people
contemplated by the Act.*fn2 D.C. Code § 32-1003(a)(establishing the
minimum wage). Thus, both because plaintiff fails to defend Count I, and
because plaintiff's admitted salary places her outside of the Act's
protections, the Motion to Bismiss Count I for failure to state a claim
should be granted.
II. Plaintiff's Motion for Leave to File First Amended Complaint
Plaintiff seeks to amend the Complaint in three respects: (1) to change
the statutory basis of Count I to B.C. Code § 32-1301, et seq, rather
than the originally pled B.C. Code § 32-1001,
et seq; (2) to clarify that Pivotal Corporation is a Washington state
corporation rather than, as stated in the original Complaint, a Canadian
corporation;*fn3 and (3) to make clear that plaintiff was a senior sales
person with Defendant, rather than an "executive." Mem. of P. & A. in
Supp. of Pl.'s Mot. to File First Am. Compl. at 1. Plaintiff argues that
her proposed amendment to Count I of the Complaint falls within the
classic realm of cases where leave to amend should be "freely given."
See FED.R.CIV.P. 15(a) (leave to amend pleadings "shall be freely given
when justice so requires"); see also Foman v. Davis, 371 U.S. 178, 182
(1962) (leave to amend should be freely given absent enumerated
circumstances). This case does not, plaintiff avers, fall into the
"limited circumstances" that warrant a court's refusal to grant leave to
amend-namely "undue delay, bad faith on the part of the moving party, or
undue prejudice to the opposing party." Pl.'s Mem. of P. & A. in
Supp. of Pl.'s Mot. to File First Am. Compl. at 2 (quoting Sinclair v.
Kliendienst, 645 F.2d 1080, 1085 (D.C. Cir. 1981)); see also Atchinson
v. District of Columbia, 73 F.3d 418, 425-26 (D.C. Cir. 1996) (listing
these same reasons as ones that may warrant a
court's denial of leave to amend). Defendant does not allege that
plaintiff is acting in bad faith in seeking leave to amend,*fn4 but
counters that "FED. R. CIV. P. 15(a) and D.C. Circuit precedent do not
compel the grant of leave to amend a complaint in every instance." Def.'s
Opp. to Mot. to Amend Compl. at 3 (quoting Nat'l Wrestling Coaches Ass'n.
v. U.S. Dep't. of Educ., 263 F. Supp.2d 82, 103 (D.D.C. 2003)). Defendant
argues that plaintiff cannot state a claim under either § 32-1001
(original Complaint) or § 32-1301 (Amended Complaint), rendering the
proposed amendment fufile and necessitating denial of leave to amend. See
Nat'l Wrestling Coaches Ass'n., 263 F. Supp.2d at 103 ("Courts may deny a
motion to amend a complaint as fufile . . . if the proposed claim would
not survive a motion to dismiss.") (internal citations omitted).
Thus, the central question is whether plaintiff can state a claim under
the newly asserted statutory basis-the B.C. Payment of Wages Act, D.C.
Code § 32-1301 ("Wage Payment Act"). The Wage Payment Act "requires
employers to bimonthly pay their employees 'all wages earned' . . . and
provides a cause of action for employees to recover 'unpaid wages.'"
Marsans v. Communications Workers of Am., 1989 WL 43831, *7 (D.D.C. Apr.
19, 1989) (internal citations omitted). Defendant's argument that
amendment is fufile is two-fold: (1) that plaintiff is not covered by the
Act because she is an "executive" falling within the exception enumerated
in § 32-1301(2); and (2) that plaintiff's dispute is not covered
under the Act due to the exception for disputed claim amounts in §
32-1304. Both arguments are considered below.
1. Befendant's Argument that Plaintiff is an Executive Fails at
This Stage of Litigation
Defendant is correct that if plaintiff is an "executive" she falls
outside the protections of the Wage Payment Act. See § 32-1301(2)
(excluding "bona fide executives" from the definition of "employee" under
the Act, and thus excluding executives from coverage). However, at this
stage of litigation it is unclear
if plaintiff is in fact an "executive." To show that plaintiff was an
executive, defendant relies solely on the fact that the Amended Complaint
states that plaintiff held the title of "Senior Sales Executive" and
carried business cards that read "Global Business Director." Def.'s Opp.
to Mot. to Amend Compl. at 5 (quoting Am. Compl. ¶ 8). However,
plaintiff maintains that she was a salesperson, not an executive, and that
her business cards labeled her a director "for the sole reason that
Pivotal management wanted customers to believe that [plaintiff's]
position in the company was at a higher level." Am. Compl. ¶¶ 5, 8.
Defendant's complete reliance on plaintiff's job title, without more,
cannot defeat plaintiff's allegation that she was a salesperson, rather
than an executive. Under well-settled law, the central inquiry in
determining an employee's position is an evaluation of what duties she
actually performs, not simply what her title infers. See, e.g., Harris
v. District of Columbia, 741 F. Supp. 254, 259 (D.D.C. 1990) ("[D]eciding
whether an employee is exempt [under labor laws as a bona fide executive]
must be a voyage through fact-bound waters. Although there are a great
many stars of law to navigate by, the course turns on the facts of an
employee's job duties.") (emphasis added). At this stage of
litigation, defendant lacks the benefit of discovery and thus cannot meet
its burden of putting forth factual proof that plaintiff's actual duties
and responsibilities were those of an executive. As such, defendant's
argument that plaintiff's job position precludes a claim under the Act
does not establish the futility of amendment and cannot defeat
plaintiff's motion to amend Count I.
2. Defendant's Argument that Plaintiff's Dispute is Not Covered
Under the Act is Persuasive
Defendant also argues that the D.C. Wage Payment Act does not apply to
"disputes over the amount of wages due to an employee, nor does it expose
an employer to liability under the act for failing to pay disputed
wages." Def.'s Opp. to Mot. to Amend Compl. at 4 (first emphasis in the
original, second emphasis added). Specifically, defendant argues that
D.C. Code § 32-1304 provides that when there is a dispute over the
amount of wages owed, as there is here, an employer must pay an employee
only the undisputed amount to comply with the Act. Since plaintiff admits
that she was paid her final paycheck and reimbursed for unused vacation,
defendant concludes that it has paid the amount of wages not in dispute,
and therefore is not
liable under the Act for the disputed commission payments at issue.
Section 32-1304 provides:
In case of a bona fide dispute concerning the amount
of wages due, the employer shall give written notice
to the employee of the amount of wages which he
concedes to be due, and shall pay such amount, without
condition, within the time required by . . . 32-1302
and 32-1303; provided, however, that acceptance by the
employee of any payment made hereunder shall not
constitute a release as to the balance of his claim.
Payment in accordance with this section shall
constitute payment for the purposes of complying with
§§ 32-1302 and 32-1303, only if there exists a bona
fide dispute concerning the amount of wages due.
D.C. Code § 1304 (emphasis added). Defendant relies on the last
sentence ("Payment in accordance . . .") as evidence that its payments to
plaintiff have satisfied the Act's requirements; in defendant's view,
payment of the final paycheck satisfied any D.C. Wage Payment Act
obligation. Plaintiff counters that the previous sentence controls; that
the language "acceptance by the employee of any payment made hereunder
shall not constitute a release as to the balance of his claim" indicates
that plaintiff still has a claim under the Act, regardless of the fact
that plaintiff has accepted payment of the wages that are not disputed.
In her Reply to Defendant's Opposition to the Motion to Amend,
plaintiff raises-for the first time-an advisory opinion
that she sought from the D.C. Department of Employment Services,
which rendered an opinion on the interpretation of § 32-1304. D.C.
Dep't of Employment Servs., Legal Opinion Regarding D.C. Official Code
§ 32-1304 (August 5, 2003) ("Opinion"). The Opinion supports
plaintiff's interpretation of the statute, concluding that an employee's
acceptance of partial payment "whereby the employer concedes such amount
is due and owing to claimant, does not foreclose the employee from
pursuing the balance of his claim for wages [under the statute], even
though a bona fide dispute exists concerning the balance of wages due and
owing on the claim. . . ." Opinion at 2. Not surprisingly, plaintiff
argues that this interpretation should be afforded "great" deference.
Pl.'s Reply to Def.'s Opp. to Mot. to Amend Compl. at 2.
As an initial matter, plaintiff's assertion that the Opinion is
entitled to great weight is simply false. Supreme Court precedent and the
law of the Circuit make clear that an agency opinion letter is not
afforded Chevron-style deference. See, e.g., Christensen v. Harris
County, 529 U.S. 576, 587 (2000) (finding unpersuasive an agency's
interpretation of a statute, and holding "[i]nterpretations such as those
in opinion letters . . . do not warrant Chevron-style deference . . .
Instead, interpretations contained in formats such as opinion letters
'entitled to respect' . . . but only to the extent that those
interpretations have the 'power to persuade.'") (internal citations
omitted); see also Federal Election Commission v. National Rifle Ass'n of
Am., 254 F.3d 173, 186 (D.C. Cir. 2001) (noting that "virtually every
relevant post-Christensen decision has declined to give Chevron deference
to just this type [an agency opinion letter] of informal agency action.")
(collecting cases). As defendant correctly argues, this Opinion offered
by plaintiff does not "reflect an actual case or controversy brought
before the agency for review or adjudication," nor does it "result from
an adjudicative or rulemaking process;" rather, it is simply a
"non-binding advisory opinion based on some set of 'facts' which
plaintiff provided." Def.'s Reply in Opp. to Mot. to Amend Compl. at 3. As
such, the Opinion does not warrant great deference.
Thus, the Opinion is only "entitled to respect" if it has "the power to
persuade." The Court finds that the Opinion lacks such persuasive power,
as a common sense reading of the statutory section confirms defendant's
interpretation. Section 32-1304 specifically contemplates the precise
situation in the present case: wages that both sides admit are due have
been paid (here, plaintiff's last paycheck), and those wages in dispute
been paid (here, commission payments). The section goes on to spell out
that those wages that are conceded to be due must be made within the time
requirements of the Act, set out in § 32-1302 and 32-1303, and a
timely payment of those conceded wages "shall constitute payment for
purposes of complying with § 32-1302 and 32-1303." D.C. Code §
32-1304 (emphasis added). Thus, defendant's timely payment of the final
paycheck and reimbursement for unused vacation-the undisputed wages
due-constitute the payment that relieves it of liability under the Act.
Plaintiff's argument that she still has a claim under the Act defies
logic, as § 32-1304 would be rendered completely unnecessary if
payment of the non-disputed amount did not constitute full compliance
with the Act. The Act as a whole is designed to ensure employees receive
timely payments of wages owed to them; § 32-1304 carves out an
exception that allows employers to refuse to pay disputed wages and still
remain in compliance with the Act. Under plaintiff's reading, an employer
would be forced to pay disputed wages in order to be in compliance, which
would be the result if the 32-1304 exception for disputed wages did
not exist. It is therefore clear that
§ 32-1304 functions as an exception (for disputed wages) to the
requirement that all wages be paid.
Finally, plaintiff retains the right to pursue a claim for the disputed
wages under her contract claim. This right to proceed under another cause
of action, which plaintiff mistakenly argues to be a right to continue to
proceed under the Act, is explicitly contemplated by § 32-1304: "the
acceptance by the employee of any payment made hereunder shall not
constitute a release as to the balance of his claim." Plaintiff can thus
proceed with an action for the payment of the commissions under her
Thus, plaintiff is unable to state a claim under the D.C. Wage Payment
Act, rendering her attempt to include this Act as a cause of action in
her Amended Complaint fufile. Plaintiff's Motion for Leave to Amend Count
I is denied, with the limited exception of permitting plaintiff to amend
the Complaint to correct Pivotal Corp.'s location.
For the reasons stated herein, it is by the Court hereby
ORDERED that defendant's Motion to Dismiss Count I of the Complaint is
GRANTED; and it is
FURTHER ORDERED that plaintiff's Motion for Leave to File a First
Amended Complaint is GRANTED IN PART and DENIED IN PART;
specifically, plaintiff is granted leave to amend the Complaint to
correct the defendant's location, but is denied leave to make any other
amendments; and it is
FURTHER ORDERED that an Initial Scheduling Conference will be held on
March 12, 2004, at 10:30 a.m. in Courtroom One. The Court will issue a
separate Order pertaining to the Initial Scheduling Conference.