Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_17-cv-06027/USCOURTS-cand-3_17-cv-06027-1/pdf.json

Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 29:201 Fair Labor Standards Act

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

ADRIAN MORRIS, individually and on

behalf of all others similarly situated,

Plaintiff,

 v.

FIDELITY INVESTMENTS, FMR LLC,

and FIDELITY BROKERAGE SERVICES

LLC,

Defendants. /

No. C 17-06027 WHA

ORDER GRANTING IN PART

MOTION TO DISMISS

INTRODUCTION

In this wage-and-hour dispute, defendant moves to dismiss pursuant to FRCP 12(b)(6). 

For the reasons below, the motion is GRANTED IN PART AND DENIED IN PART.

STATEMENT

From 2015 to 2017, plaintiff Adrian Morris worked as a financial representative for

defendant Fidelity Brokerage Services LLC and participated in the company’s quarterly-bonus,

student-loan-repayment, and fitness-reimbursement programs. According to plaintiff, defendants

failed to consider compensation paid under these programs when calculating her pay rate for

overtime purposes, and also failed to provide wage statements that complied with California law. 

In October 2017, plaintiff initiated this action under the Fair Labor Standards Act and

California Labor Code against defendants Fidelity Brokerage Services, Fidelity Investments, and

FMR LLC, alleging that defendants jointly employed her and constituted an integrated

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enterprise. FMR now moves to dismiss on the ground that plaintiff fails to plead that FMR or

Fidelity Investments were plaintiff’s employer (Dkt. Nos. 34, 38). 

ANALYSIS

1. DEFENDANT FMR LLC.

Each of plaintiff’s claims for relief can only be brought against her employer. Futrell v.

Payday Cal., Inc., 190 Cal. App. 4th 1419, 1428–29 (2010). It is uncontested that Fidelity

Brokerage Services was plaintiff’s employer. Plaintiff argues that FMR can also be held liable

as plaintiff’s joint employer. 

To determine whether or not a defendant is an employer under the FLSA, our court of

appeals applies a four-factor “economic reality” test which considers whether the employer: (1)

had the power to hire and fire the employee, (2) supervised and controlled the employee’s work

schedule or conditions of employment, (3) determined the rate and method of payment, and (4)

maintained employment records. Bonnette v. Cal. Health & Welfare Agency, 704 F.2d 1465,

1470 (9th Cir. 1983), abrogated on other grounds by Garcia v. San Antonio Metro. Transit

Auth., 469 U.S. 528 (1985). Similarly, under California law, courts look to whether a defendant: 

(i) exercised control over the plaintiff’s wages, hours, or working conditions; (ii) suffered or

permitted the plaintiff to work; or (iii) engaged her, thereby creating a common law employment

relationship. Martinez v. Combs, 49 Cal. 4th 35, 64 (2010). 

Here, plaintiff has adequately alleged that FMR was her joint employer under federal and

California law. Plaintiff’s offer letter explicitly identified FMR as her “employer.” Moreover,

plaintiff alleges that she signed an employment agreement with FMR. From these facts, it is

plausible that FMR both had the power to hire plaintiff and controlled the conditions of

plaintiff’s work. The complaint accordingly pleads sufficient facts to establish joint employer

status under the Bonnette factors and the standards set forth in Martinez.

FMR cites several decisions, none of which compel a different result. In Doe I v.

Wal-Mart Stores, Inc., 572 F.3d 677, 683 (9th Cir. 2009), our court of appeals found that the

plaintiffs — employees of suppliers that sold goods to Wal-Mart — failed to plead facts to

support the conclusion that Wal-Mart was also the plaintiffs’ employer. Although the plaintiffs

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alleged that Wal-Mart contracted with the suppliers regarding “common buyer-seller contract

terms,” these supply contract terms did not constitute an “immediate level of ‘day-to-day’

control over the supplier’s employees so as to create an employment relationship.” Id. at 683. 

Here, by contrast, plaintiff and FMR directly entered into an employment agreement and FMR’s

own documents describe it as plaintiff’s employer.

These key factual allegations were also absent in Adedapoidle-Tyehimba v. Crunch, LLC,

No. 13-cv-00225, 2013 WL 4082137 (N.D. Cal. Aug. 9, 2013) (Judge William Orrick), Orosa v.

Therakos, Inc., No. 11-cv-2143, 2011 WL 3667485 (N.D. Cal. Aug. 22, 2011) (Judge Edward

Chen), and Johnson v. Serenity Transportation, Inc., 141 F. Supp. 3d 974 (N.D. Cal. 2015)

(Magistrate Judge Jacqueline Corley), the district court decisions on which FMR primarily

relies. In Johnson, for example, the plaintiffs were drivers for a mortuary transportation

company which would assign the plaintiffs to work with funeral and other end-of-life service

providers. Although the service-provider defendants had promulgated policies for the drivers to

follow, the allegations in the complaint demonstrated that the defendants “plainly [had] no hiring

authority.” Here, by contrast, plaintiff’s employment offer letter specifically stated that FMR

was her employer. 

Citing Dianda v. PDEI, Inc., 377 F. App’x. 676 (9th Cir. 2010), FMR argues that labels

in employment forms are insufficient to establish an employer-employee relationship. Dianda,

however, did not address factual allegations at the pleading stage but instead upheld a dismissal

on summary judgment. Our court of appeals explained that “[t]he parties’ label is not dispositive

and will be ignored if their actual conduct establishes a different relationship.” Id. at 678

(emphasis added). Although the plaintiff’s pay stub and W-2 form identified the defendant as

the plaintiff’s employer, Dianda concluded that the plaintiff failed to establish an employment

relationship because the plaintiff had admitted that the defendant did not tell him how to do his

job, did not hire or terminate him, and never communicated with him in any way. Ibid. Dianda

accordingly does not stand for the proposition that courts should always turn a blind eye to how

a defendant characterizes itself in its own documents. Rather, it instructs that labels should be

ignored if the economic reality of the parties’ relationship contradicts that label. Given the early

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 At the Court’s request, the parties brought copies of plaintiff’s offer letter and employment

agreement to the hearing on FMR’s motion. It is astounding how clearly FMR held itself out as plaintiff’s

employer in these documents. In any event, this order finds that the facts currently alleged in the complaint

adequately show that FMR was plaintiff’s employer. 

2

 FMR requests judicial notice of two trademark registrations recorded with the United States Patent

and Trademark Office (Dkt. No. 39). These documents are public records, the authenticity of which is capable

of accurate and ready determination by sources whose accuracy cannot be reasonably questioned. The request

is unopposed and is accordingly GRANTED. 

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stage of these proceedings, where the allegations in the complaint must be accepted as true,

FMR’s reliance on Dianda is misplaced. 

This order recognizes that the “economic reality” of an employment situation determines

whether an employer-employee relationship exists. On summary judgment or at trial, the fact

that FMR held itself out as plaintiff’s “employer” will not carry the day if FMR establishes a

different relationship. Today, however, we are only at the pleading stage. Importantly, this is

not a situation in which a plaintiff merely placed her own label on the parties’ relationship. 

Where a defendant has signed a letter specifically naming itself as the plaintiff’s employer, and

has directly entered into an employment agreement with the plaintiff, factual allegations to that

effect sufficiently support a conclusion that the defendant was the plaintiff’s employer. On a

motion under FRCP 12(b)(6), a defendant in an employment case cannot avoid its own flat-out

admission of an employment relationship by imposing a standard of proof that is appropriate on

summary judgment. By pleading that FMR held itself out as plaintiff’s employer in FMR’s own

documents, plaintiff can hold FMR to answer. Through discovery, FMR may obtain evidence

demonstrating that the descriptions contained in plaintiff’s offer letter and employment

agreement were merely mistakes. Should such facts arise, FMR may promptly bring a motion

for summary judgment. But for now, FMR’s motion to dismiss the claims against it is DENIED.

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2. DEFENDANT FIDELITY INVESTMENTS.

Plaintiff does not dispute that “Fidelity Investments” is a licensed trade name and not a

legal entity. At the hearing on the motion to dismiss, plaintiff’s counsel confirmed that plaintiff

only wanted to bring this lawsuit against defendants Fidelity Brokerage Services and FMR. 

FMR’s motion to dismiss Fidelity Investments from this action is accordingly GRANTED.

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CONCLUSION

For the foregoing reasons, FMR’s motion to dismiss is GRANTED IN PART AND DENIED

IN PART. The claims against Fidelity Investments are dismissed, but FMR remains a defendant

in this case. 

IT IS SO ORDERED.

Dated: June 1, 2018. 

WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

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