United States District Court, District of Columbia
MEMORANDUM OPINION AND ORDER
RANDOLPH D. MOSS, UNITED STATES DISTRICT JUDGE.
Alsis Jones, a former employee at two Sala Thai restaurants,
brings this action against both restaurants as well as the
restaurants' owner and accountant. Jones asserts two sets
of claims relating to the restaurants' payroll and tax
reporting practices: First, he contends that the restaurants,
their owner, and the accountant violated the Fair Labor
Standards Act (“FLSA”), 29 U.S.C. § 207, by
failing to pay him overtime wages to which he was entitled.
Second, he alleges that they committed an assortment of
common law torts by falsely reporting to the Internal Revenue
Service (“IRS”) and state tax authorities that he
was paid several thousands of dollars in tips, which, in
fact, he never received. He alleges that these false reports
caused him to incur substantial, unfounded tax liabilities.
move to dismiss all of these claims, as well as a claim that
Jones does not bring but that he alludes to in the background
section of his amended complaint. Dkt. 16. Most notably,
Defendants contend that Jones fails to state a claim under
the FLSA, that his common law claims are preempted by the
FLSA, and that, in any event, his claims are time barred. For
the reasons explained below, the Court will
GRANT in part and DENY in
part Defendants' motion to dismiss.
complaint, Dkt. 14, sets forth the relevant facts, which the
Court must accept as true for purposes of the pending motion.
See Wood v. Moss, --- U.S. ---, 134 S.Ct. 2056,
2065-67 & n.5 (2014).
from Thailand, Jones immigrated to the United States and was
employed at two Sala Thai restaurants in the D.C.
metropolitan area from 2006 to 2008. Dkt. 14 at 4-6 (Am.
Compl. ¶¶ 5, 16). One restaurant was located in the
District of Columbia and was incorporated under D.C. law as
“Green T Group, Inc.” See Dkt. 14-1 at
2; Dkt. 14 at 4-5 (Am. Compl. ¶ 8 & n.3). At some
point after Jones ceased working for Sala Thai, Green T Group
was sold to “Green T Group II, Inc., ” which
continues to do business in the District of Columbia.
See Dkt. 14 at 4-5 (Am. Compl. ¶ 8 & n.3).
According to Jones, Green T Group II is the “successor
in interest” to the original Green T Group.
Id. at 4 (Am. Compl. ¶ 6). The second Sala Thai
restaurant is located in Bethesda, Maryland and is
incorporated under Maryland law as “Ja-Roen-D
Inc.” See Id. at 5 (Am. Compl. ¶ 9); Dkt.
14-1 at 2.
Jones's employment, Green T Group and Ja-Roen-D
(collectively, “Sala Thai”) “shar[ed] the
same employees [and] management.” Dkt. 14 at 4 (Am.
Compl. ¶ 7). Both companies were owned (in whole or in
part) by Pramote Changsila, who “operated the [Sala
Thai restaurants] under his sole control” and was
responsible for “all employment decisions.”
Id. (Am. Compl. ¶¶ 6-7). The companies
also shared “accounting[, ] . . . tax preparation[, ]
and payroll services, ” which were provided by Hans
Ravesteijn. Id. at 4-5 (Am. Compl. ¶¶ 7,
complaint names Changsila, Ravesteijn, and the two Sala Thai
restaurants-Green T Group II and Ja-Roen-D-as defendants.
initially hired Jones to work at the D.C. restaurant as a
“manager.” Id. at 5-6 (Am. Compl. ¶
16). But, although given this title, Jones did not have the
power to hire or fire employees, and “Changsila
required [him] to perform standard labor . . . duties as a
cook, busboy, bartender, waiter or even cashier on a daily
basis.” Id. at 8-9 (Am. Compl. ¶¶
26, 30). Jones also was told that he would “be
compensated every two weeks . . . with a salary in the
approximate amount of $1, 500.00 based on a 40-hour workweek,
” yielding an hourly rate of $18.75 per hour and an
annual salary of “approximately $30,
000.” Id. at 6 (Am. Compl. ¶¶
16, 18). Soon after Jones started, however, Changsila
increased his hours to “70-80 hours” per week and
required him also to work at the Bethesda, Maryland
restaurant. Id. (Am. Compl. ¶ 18). Jones
alleges that despite working more than 70 hours each week, he
“never received more than . . . $1, 500 every two weeks
[in] compensation.” Id. (Am. Compl. ¶
17). Rather, according to Jones, Changsila and Ravesteijn
told him “throughout his . . . employment” that
he was not entitled to overtime wages because he was a
“manager.” Id. at 8 (Am. Compl. ¶
27). Finally, Jones claims that Changsila and Sala Thai
“did not keep records of work hours for any employee,
” id. at 10 (Am. Compl. ¶ 33), nor did
Changsila or Ravesteijn document Jones's compensation,
id. at 8-9 (Am. Compl. ¶ 28).
Tax Reporting Allegations
further alleges that Changsila “individually and
through his agents [Ravesteijn and Sala Thai] willfully and
systematically engaged in ‘wage theft' or
‘payroll fraud.'” Id. at 7 (Am.
Compl. ¶ 23). In particular, Ravesteijn “falsely
and knowingly” prepared tax documents, including W-2
forms, that “misrepresented [Jones's] pay” by
reporting tip income, id. (Am. Compl. ¶ 22),
and Defendants then submitted these false documents to the
IRS and tax authorities in the District of Columbia and
Maryland, id. at 8 (Am. Compl. ¶ 24). Jones
maintains that he “never received any tip[s], ”
and that, in fact, Changsila or Ravesteijn told him that he
was not entitled to receive tips because he was a manager.
Id. at 10-11 (Am. Compl. ¶ 37).
of example, the complaint sets forth detailed allegations
with respect to tax year 2007. According to Jones, Defendants
reported his income for 2007 in multiple W-2s, which, taken
together, falsely indicated that he earned nearly $30, 000 in
tips. Id. at 11 (Am. Compl. ¶¶ 39, 40).
These allegedly fraudulent W-2s had the effect of doubling
his reported income from the $30, 000 or so that he actually
received to the $60, 000 or so that Defendants reported,
leaving Jones with a tax liability of approximately $14, 000.
Id. at 10-12 (Am. Compl. ¶¶ 36, 40). In
support of this allegation, Jones points to a “Wage and
Income Transcript” for the 2007 tax period from the
IRS, which is attached to his complaint. See Id. at
11 (Am. Compl. ¶ 40); Dkt. 14-1. That
“transcript” indicates (1) that Jones was issued
a W-2 from “Green T Group” and a second W-2 from
“Ja-Roen-D;” (2) that he received $32, 907 for
his work at Green T Group ($19, 607 in wages and $13, 300 in
tips); and (3) that he received $28, 610 for his work at
Ja-Roen-D ($18, 610 in wages and $10, 000 in tips). Dkt. 14-1
at 2. In the aggregate, then, the two restaurants reported
that Jones received $61, 517 in compensation ($38, 217 in
wages and $23, 300 in tips).
was unaware of Defendants' “fraudulent accounting
practices, ” Dkt. 14 at 10 (Am. Compl. ¶ 35), and,
indeed, he was affirmatively misled by Changsila, who told
him between 2009 and 2013 that “the additional income
[in the form of tips] . . . was an IRS or accounting
mistake” and that Changsila and Ravesteijn “were
working with the taxing authorities . . . to correct the
situation[, ] [which] had been complicated by the sale of one
. . . of the Sala Thai restaurants, ” id. at
12 (Am. Compl. ¶ 47). For several years, Jones
apparently believed Changsila and expected that Defendants
would fix the purported mistake. Id. at 12 (Am.
Compl. ¶ 48). Meanwhile, because an outstanding tax
liability would have impaired his ability to bring his minor
daughter from Thailand to the United States, Jones “had
no choice but to enter into a payment plan . . . to pay the
taxes until the issue was cleared up by the
defendants.” Id. at 12- 13 (Am. Compl. ¶
49). He completed the five-year plan in 2015. Id. at
11-12 (Am. Compl. ¶¶ 40, 48). At some point in
early 2014, Jones asked Changsila to remedy the reporting
error with the IRS. Id. at 13 (Am. Compl. ¶
51). Changsila “felt insulted and became angry and
threatened [him].” Id. (Am. Compl. ¶ 51).
When Jones requested Sala Thai's records on tips from
Changsila, he “was told that no accounting records
exist[ed]” due to the sale of one of the restaurants.
Id. (Am. Compl. ¶ 52).
retained counsel in February 2014, id. at 13-14 (Am.
Compl. ¶ 54), and his attorney sent a letter to
Changsila complaining about the reporting error, see
Dkt. 14-2 at 2-3 (letter from Athan Tsimpedes to Ja-Roen-D).
In response, Changsila allegedly “sent a relative to
[Jones's] [place of] employment, ” which Jones
interpreted as a “veiled threat” intended to
“intimidat[e]” him and to discourage him
“from taking legal action.” Dkt. 14 at 13-14 (Am.
Compl. ¶ 54). In addition, counsel for Sala Thai wrote
to Jones's lawyer, asserting that Sala Thai was “at
a loss to understand the allegations your letter
raises;” that the “separate
incorporat[ion]” of the two Sala Thai restaurants
“probably account[ed] for [Jones's]
confusion;” that the description of the facts contained
in the letter from Jones's counsel was
“inaccurate;” and that Sala Thai had “no
knowledge of any incorrect payroll check being issued to your
client.” Dkt. 14-3 at 2-3. That letter closed by
requesting that Jones's counsel provide copies of
“his tax returns and any IRS audit or assessment notice
so the years in question can be researched to see what
paychecks are at issue, and how the withholding tax
computations were prepared incorrectly, as you
contend.” Id. at 3. Jones's lawyer
responded by providing additional details about Jones's
allegations and threatening to bring suit in the absence of a
resolution of the dispute. Dkt. 14-4 at 2-3.
filed this action in July 2015. See Dkt. 1. After
Defendants moved to dismiss for failure to state a claim,
Dkt. 8, Jones filed an amended complaint, Dkt. 14. The
now-operative complaint asserts seven claims. Jones first
alleges that Defendants intentionally violated the FLSA, 29
U.S.C. § 207, by “fail[ing] and refus[ing] to
compensate” him for overtime work (Count I). Dkt. 14 at
19-20 (Am. Compl. ¶¶ 82-84). By his calculations,
Defendants owe him approximately $67, 500 (or, if treble
damages are available, $202, 500). Id. at 6 (Am.
Compl. ¶ 19). Jones also seeks to pursue his FLSA claim
as a “collective action on behalf of himself and all
other similarly situated individuals” who worked for
Sala Thai from 2007 to the present, a class that he estimates
would comprise at least forty individuals. Id. at
18-19 (Am. Compl. ¶¶ 71-76). On behalf of the
putative class, Jones seeks damages for “all unpaid
overtime wages” as well as “an equal amount in
liquidated damages.” Id. at 20 (Am. Compl.
Count I Prayer).
complaint also asserts six common law claims based on the
alleged fraudulent tax reporting scheme. He brings the first
four of those claims against Changsila and Ravesteijn,
including claims for (1) intentional misrepresentation (Count
II); (2) constructive fraud (Count III); (3) fraudulent
concealment (Count IV); and (4) aiding and abetting (Count
V). Id. at 20-22 (Am. Compl. ¶¶ 85-108).
And he asserts his final two claims against all four
defendants, including claims for (5) an accounting (Count
VI), and (6) unjust enrichment (Count VII). Id. at
22-23 (Am. Compl. ¶¶ 109-117).
have moved to dismiss for failure to state a claim. Dkt. 16.
They first contend that the complaint fails adequately to
allege that Jones was eligible for overtime compensation
under the FLSA or that Green T Group II and Ravesteijn were
his “employers.” Dkt. 16-1 at 6-11. Second,
Defendants take issue with references to the Racketeer
Influenced and Corrupt Organizations Act
(“RICO”), 18 U.S.C. §§ 1962, 1964,
found in the background section of the complaint; recognizing
that Jones does not invoke RICO in any of the substantive
counts of his complaint, Defendants nonetheless, out of an
abundance of caution, move to dismiss any RICO claim that he
might be deemed to have brought. Dkt. 16-1 at 11-20. Third,
Defendants argue that the FLSA preempts Jones's common
law claims. Id. at 5-6. Finally, they maintain that
all of Jones's claims are time barred. Id. at
survive a motion to dismiss, a complaint “must contain
sufficient factual matter, accepted as true, to ‘state
a claim to relief that is plausible on its face.'”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)). A claim is plausible if the plaintiff pleads
“factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Id. Although
“detailed factual allegations” are not required,
the complaint must contain “more than labels and
conclusions, [or] a formulaic recitation of the elements of a
cause of action.” Twombly, 550 U.S. at 555.
The Court must “assume [the] veracity” of
“well-pleaded factual allegations, ”
Iqbal, 556 U.S. at 679, and must “grant [the]
plaintiff the benefit of all inferences that can be derived
from the facts alleged, ” Sparrow v. ...