Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_08-cv-00152/USCOURTS-casd-3_08-cv-00152-0/pdf.json

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

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

CONCEPCION JIMENEZ, on behalf

of herself and all others similarly

situated,

Plaintiff,

CASE NO. 08-CV-0152 W (WMC)

ORDER GRANTING-IN-PART

AND DENYING-IN-PART

DEFENDANTS’ MOTION TO

DISMISS PLAINTIFF’S

COMPLAINT PURSUANT TO

RULE 12(b)(6) AND RULE

12(b)(1) (Doc. Nos. 11, 12)

vs.

JP MORGAN CHASE & CO., et. al.,

Defendants.

On January 24, 2008 Plaintiff Concepcion Jimenez (“Plaintiff”), on behalf of

herself and all others similarly situated, commenced this class action against Defendants

JP Morgan Chase & Co. et. al. (“JP Morgan” or “Defendants”) alleging various

violations of federal and state labor laws. (Doc. No. 1.) Pending before the Court is

Defendants’ motion to dismiss Plaintiff’s Complaint for failure to state a claim and lack

of standing. (Doc. Nos. 11, 12.) The Court takes the matter under submission and

without oral argument. See S.D. Cal. Civ. R. 7.1(d)(1). For the following reasons, the

Court GRANTS-IN-PART and DENIES-IN-PART Defendants’ motion.

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I. BACKGROUND

Plaintiff Concepcion Jimenez, a California resident, worked as a Loan Officer for

Defendants JP Morgan Chase & Co, et. al. (Compl. ¶ 33.) Defendants are a collection

of affiliated banks which provide loan products and financial services across the country.

(Id. ¶¶ 34–38.) 

In summer 2007, Plaintiff’s employment with Defendant was terminated. (Mills

Decl. Ex. 3 at 10 [hereinafter “Release Agreement”].) In exchange for severance pay and

benefits, Plaintiff signed a “Release Agreement” (“Release”) that, subject to certain

exceptions, released Defendants from any and all claims and waiver protections under

federal, state, local and common law. (Id. at 8.) One exception, however, preserved

Plaintiff’s right to bring a federal Fair Labor Standards Act (“FLSA”) claim for

Defendants’ failure to pay minimum wages or overtime. (Id.) 

Under the Release Agreement’s terms, Plaintiff agreed not to file a lawsuit on any

released claims and promised not to participate in a class or collective action against JP

Morgan. (Id. at 8–9.) Furthermore, Plaintiff represented that Defendants had paid all

compensation owed to her, including overtime, as of the Release date. (Id.) 

Before signing, Defendants allowed Plaintiff forty-five days to consider the Release

Agreement, and Plaintiff was offered an additional seven days to revoke acceptance

after signing. (Id. at 10.) Plaintiff attested that she signed the Release knowingly and

voluntarily, and acknowledged that Defendants advised her to discuss the Release with

her own attorney. (Id.)

On January 24, 2008 Plaintiff, on behalf of herself and all others similarly situated,

commenced this class action against Defendants JP Morgan Chase & Co. et. al. alleging

various violations of federal and state labor laws. (Doc. No. 1.) Plaintiff alleges that

while she worked at JP Morgan, Defendants had a policy and practice of: (1) refusing

to pay overtime compensation to Loan Officers who worked in excess of eight hours per

day and/or forty hours per week, (2) failing to provide Loan Officers with all required

meal and rest breaks, (3) failing to reimburse work-related expenses, (4) failing to

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Unless otherwise stated, all references to “Rule” shall be to the Federal Rules of Civil

Procedure.

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maintain accurate records of hours worked and wages paid, and (5) failing to pay all

wages upon cessation of employment. (Id. ¶ 9.) Plaintiff seeks damages on her behalf,

and also seeks to certify a Federal Rule of Civil Procedure1

 23 “opt-out” class action and

a FLSA “opt-in” collective action for other “similarly situated” plaintiffs. (Id. Prayer for

Relief.) 

On April 3, 2008 Defendants moved to dismiss Plaintiff’s Complaint under Rules

12(b)(1) and 12(b)(6), arguing that Plaintiff’s Complaint failed to state a claim, that

Plaintiff lacked standing, and that the Court lacked jurisdiction to provide Plaintiff with

redress. (Doc. No. 12.) On April 22, 2008, per an extension, Plaintiff filed her

Opposition brief. (Doc. No. 13.) On May 1, 2008 Defendants filed their Reply. (Doc.

No. 17.)

II. LEGAL STANDARD

Rule 12(b)(6) permits the court to dismiss a complaint, or a count therein, for

failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). A

motion to dismiss under this rule tests the complaint’s sufficiency. See N. Star Int’l v.

Ariz. Corp. Comm’n, 720 F.2d 578, 581 (9th Cir. 1983). Dismissal of a claim according

to this rule is proper only in “extraordinary” cases. United States v. Redwood City, 640

F.2d 963, 966 (9th Cir. 1981). 

A complaint may be dismissed as a matter of law for two reasons: (1) lack of a

cognizable legal theory, or (2) insufficient facts under a cognizable theory. Robertson

v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984). As the Supreme

Court recently explained, “[w]hile a complaint attacked by a Rule 12(b)(6) motion to

dismiss does not need detailed factual allegations, a plaintiff’s obligation to provide the

‘grounds’ of his ‘entitlement to relief’ requires more than labels and conclusions, and a

formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v.

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Twombly, 127 S. Ct. 1955, 1964 (2007). Rather, the allegations in the complaint “must

be enough to raise a right to relief above the speculative level.” Id. at 1964–65. All

material allegations in the complaint, “even if doubtful in fact,” are assumed to be true,

id., and the court must “construe them in the light most favorable to the nonmoving

party,” Gompper v. VISX, Inc., 298 F.3d 893, 895 (9th Cir. 2002). In other words, the

court construes the complaint and all reasonable inferences in the plaintiff’s favor.

Walleri v. Fed. Home Loan Bank of Seattle, 83 F.3d 1575, 1580 (9th Cir. 1996).

Rule 12(b)(1) provides that a court may dismiss a claim for “lack of jurisdiction

over the subject matter[.]” Fed. R. Civ. P. 12(b)(1). Although the defendant is the

moving party in a motion to dismiss, the plaintiff is the party invoking the court’s

jurisdiction. Therefore, the plaintiff bears the burden of proof on the necessary

jurisdictional facts. McCauley v. Ford Motor Co., 264 F.3d 952, 957 (9th Cir. 2001).

“Unlike a Rule 12(b)(6) motion, a Rule 12(b)(1) motion can attack the substance

of a complaint’s jurisdictional allegations despite their formal sufficiency, and in so doing

rely on affidavits or any other evidence properly before the court.” St. Clair v. City of

Chico, 880 F.2d 199, 201 (9th Cir. 1989) (citing Thornhill Publishing Co. v. General

Tel. & Elec. Corp., 594 F.2d 730, 733 (9th Cir. 1979)); see also Marriot Intern., Inc. v.

Mitsui Trust & Banking Co., Ltd., 13 F. Supp. 2d 1059, 1061 (9th. Cir. 1998).

III. DISCUSSION

A. Plaintiff’s State Law Wage and Hour Claims Are Barred By the 

Release Agreement

Defendants argue that because Plaintiff voluntarily signed the Release Agreement

in exchange for severance pay, she cannot now bring claims against JP Morgan that were

previously released. (Defs.’ Mot. 6–8.) Moreover, Defendants argue, Plaintiff

covenanted not to file a lawsuit. (Id.)

Plaintiff, in response, contends that the Release Agreement is illegal and

unenforceable as a matter of law and public policy. (Pl.’s Opp’n 5–11.) Specifically,

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Because neither Plaintiff nor Defendants question the authenticity of the Release Agreement attached to Defendants’ Rule 12(b)(6) motion, the Court properly considers the Release Agreement although not included within the “four corners” of Plaintiff’s Complaint. See Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994), overruled on other grounds by Galbraith v. County of Santa Clara, 307 F.3d 1119, 1127 (9th Cir. 2002).

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Plaintiff argues that the Release Agreement was “confusing” and that Plaintiff had “little

choice” but to sign it in order to receive her severance package.2

 (Id. 6–7.)

Furthermore, Plaintiff argues, California Labor Code section 206.5 prohibits an

employee from releasing wage and hour claims unless the employer first pays those

claims. (Id. 8–11.) 

California law strongly favors the settlement of disputes and the enforcement of

releases. See In re Marriage of Hasso, 280 Cal. Rptr. 919, 925 (Cal. Ct. App. 1991);

Stambaugh v. Superior Court, 132 Cal. Rptr. 843, 846 (Cal. Ct. App. 1976). However,

California Labor Code section 206.5 states:

No Employer shall require the execution of any release of any claim or

right on account of wages due, or to become due, or made as an advance

on wages to be earned, unless payment of such wages has been made. Any

release required or executed in violation of the provisions of this section

shall be null and void as between the employer and the employee and the

violation of the provisions of this section shall be a misdemeanor.

Courts construing section 206.5 have concluded that, upon termination of an

employee’s services, the employer is bound to pay the employee all wages conceded to

be due, and can require no condition in connection with this payment. Sullivan v. Del

Conte Masonry Co., 48 Cal. Rptr. 160, 163 (Cal. Ct. App. 1965). However, the statute

only bars conditions (like releases) where an employer concedes that wages are due; that

is, nothing prevents the release of wage and hour claims where a bona fide dispute exists

over whether wages are in fact due. Reynov v. ADP Claims Serv. Group, Inc., No. C

06-2056 CW, 2007 U.S. Dist. LEXIS 31631 (N.D.Cal. April 30, 2007) (analyzing

legislative history and Sullivan, 48 Cal. Rptr. at 163) (emphasis added). 

As a threshold issue, the Court finds that the Release Agreement is not confusing

and clearly distinguishes what rights and obligations Plaintiff released, and what rights

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and obligations Plaintiff retained. Additionally, this appears to be a typical situation

where Plaintiff agreed to release certain claims in exchange for severance benefits not

otherwise earned. See, e.g., Fox v. Rodel, Inc., 1999 U.S. Dist. LEXIS 12246, at *21–22

(D.Del. July 14, 1999) (approving of litigation carve-out provision in employee release

agreement). At any rate, Plaintiff has not made any legally cognizable arguments that

Defendants procured the Release Agreement by fraud or by procedurally or

substantively unconscionable means. Therefore, because the Release is otherwise valid,

the Court next turns to whether section 206.5 prevents its enforcement.

California Labor Code section 206.5 does not bar enforcement of Plaintiff’s

Release. This is because nowhere does Plaintiff allege that Defendants concede that

wages were due, but that Defendants forced Plaintiff to release her wage claims in

exchange for some other benefit. By contrast, Plaintiff’s Release admits “I agree that

[Defendants have] paid me all compensation (including without limitation all salary,

bonus, incentive and overtime payments) that I have earned on or before the date I sign

below....” (Defs.’ Mot. 7.) Even if, at the time Plaintiff executed the Release in

exchange for severance benefits, Plaintiff and Defendants disagreed over whether

Plaintiff was owed additional overtime, nothing prevents an employer and employee

from compromising a bona fide dispute over wages. See Reynov, 2007 U.S. Dist. LEXIS

31631, at *9 (holding that where a bona fide dispute exists, overtime pay cannot be

considered “concededly due”).

Although Plaintiff cites much California law emphasizing the sanctity of wages

and overtime compensation, (Pl.’s Opp’n 8–9), nowhere does Plaintiff allege section

206.5's threshold requirement—that Defendants conceded that they owed outstanding

wages. Plaintiff generally argues that “by Defendants [sic] own admission, Plaintiff was

entitled to overtime wages.” However, Defendants only admit to classifying Plaintiff as

non-exempt and, in some prior instances, paying her overtime; this does not concede

a failure to pay additional overtime wages due. If anything, Plaintiff has already conceded

that Defendants have paid her all wages due. (Release Agreement 9 (“I agree that

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Additionally, Defendants argue that “it is Defendants’ position in this lawsuit that [Plaintiff] has been paid all wages due to her.” (Defs.’ Reply 6 n.1.) 

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Plaintiff has also cited a few additional cases: Order, Zheng v. Siebel Systems, Inc., Civ.

No. 435601 at 7–8 (Cal. Sup. Ct. County of San Mateo May 31, 2006); Warner v. Experian Information Solutions, Inc., No. BC362599 at 7 (Cal. Sup. Ct. County of Los Angeles Sept. 21, 2007); Kelley v. Pacific Telesis Group, No. 97-cv-02729 CW (N.D.Cal. July 25, 2000). Unfortunately, Plaintiff does not attach any of this unpublished authority to her motion or cite to any electronic database where this authority might be found. Despite the Court’s best efforts in locating the Zheng and Warner cases, searches in both LexisNexis and Westlaw were

conducted without success. Similarly, the Kelley order was not available on the Northern

District of California’s PACER site. Accordingly, the Court could not gauge the effectiveness of Plaintiff’s analysis.

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[Defendants have] paid me all compensation...).) At the very least, the parties have a

bona fide dispute over whether Defendants accurately compensated Plaintiff for each

hour of her employment at JP Morgan.3

 This disagreement renders California Labor

Code section 206.5 irrelevant. See, e.g., Reid v. Overland Machine Products, 359 P.2d

251, 253 (Cal. 1961) (“An employer and employee may of course compromise a bona

fide dispute over wages...”).4

Because Plaintiff does not allege that she was forced to release her state wage and

hour claims as a condition for Defendants paying some portion of wages concededly

owed to her, California Labor Code section 206.5 does not bar enforcement of the

clause releasing “any claims under any federal, state or local law...” (Release Agreement

8.) Thus, the Release Agreement prevents Plaintiff from bringing any state wage and

hour claims. Accordingly, the Court DISMISSES WITHOUT PREJUDICE Plaintiff’s

second (overtime), third (meal breaks), fourth (rest breaks), fifth (civil penalty), sixth

(record keeping), seventh (business expense) and eighth (unfair competition) claims.

See Reynov, 2007 U.S. Dist. LEXIS 31631, at *11 (“Because the release [plaintiff]

signed is legally enforceable, [plaintiff’s] claims for compensation for overtime, waiting

time, meal and rest periods and civil penalties must fail. Likewise, his... cause of action

alleging that [defendant] engaged in unfair business practices must be dismissed.”);

see also Simel v. JP Morgan Chase, 2007 U.S. Dist. LEXIS 18693, at *12 (S.D.N.Y. Mar.

19, 2007) (discussing courts’ reluctance in extending the FLSA’s expressed limitation

of waiver to other statutory rights). 

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B. Plaintiff’s Federal FLSA Claim

I. Waiver

Defendants argue that Plaintiff, by signing the Release Agreement, waived her

ability to proceed with a FLSA collective action. (Defs.’ Mot. 8–9.) Plaintiff, in

response, contends that FLSA rights are unwaivable and cannot be abridged by

contract. (Pl.’s Opp’n 11–12.) Both parties are correct.

For the purposes of this Rule 12(b)(6) motion, it suffices to say that while

individual FLSA rights cannot be waived, Barrentine v. Arkansas-Best Freight Sys., 450

U.S. 728, 740 (1981), it is clear that a party may waive the right to bring a collective

FLSA action. See Horenstein v. Mortgage Market, Inc., 9 Fed. Appx. 618, 619 (9th

Cir. 2001) (holding that plaintiffs who knowingly signed an arbitration agreement

abandoned their right to enforce their FLSA claims as part of a class action). From the

information before the Court, it appears that Plaintiff has probably waived her right to

bring a class or collective action under Rule 23 and/or the FLSA. However, the Court

need not decide that issue today—this question is best answered at the class certification

stage. 

Under Rule 12(b)(6), the Court must decide whether the facts, as alleged, support

any valid claim entitling plaintiff to relief—even if that claim is not necessarily the one

intended by plaintiff. Haddock v. Board of Dental Examiners of Calif., 777 F.2d 462,

464 (9th Cir. 1985). Here, the Release Agreement specifically carves out the right to

bring an individual FLSA claim for failure to pay overtime, and by construing Plaintiff’s

Complaint in the most favorable light the Court concludes that Plaintiff has stated an

individual claim for overtime wages under the FLSA. (See Compl. ¶¶ 51–57.) Under

Rule 12(b)(6)’s lenient standard, the fact that Plaintiff also alleges the (potentially

waived) right to proceed collectively is not fatal to her individual claim. Whether or not

Plaintiff can proceed collectively or represent a class will be decided at a later stage of

this litigation.

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ii. Standing

Defendants argue that Plaintiff lacks standing to pursue her claims because she

was eligible for and received overtime compensation. (Defs.’ Mot. 10–13.) Plaintiff

contends, in response, that regardless of her classification she did not receive wages,

including overtime wages, for all hours worked in excess of forty per workweek and/or

eight per day. (Pl.’s Opp’n 14.)

Because standing is a jurisdictional issue, federal courts treat motions to dismiss

for lack of standing under Rule 12(b)(1). See Alliance for Environmental Renewal, Inc.

v. Pyramid Crossgates, Co., 436 F.3d 82, 88 n.6 (2d Cir. 2006). In resolving a Rule

12(b)(1) motion, the Court is not limited to the Complaint’s allegations, but may

consider extrinsic evidence in determining whether Plaintiff lacks standing. Roberts v.

Corrothers, 812 F.2d 1173, 177 (9th Cir. 1997). 

A plaintiff must satisfy three elements in order to have standing to bring a claim:

(1) she must have suffered an injury in fact that is (a) concrete and particularized and

(b) actual or imminent; (2) there must be a causal connection between the injury and

the conduct complained of; and (3) it must be likely that the injury will be redressed by

a favorable decision. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). The

burden of proof rests with Plaintiff. Stock West, Inc. v. Confederate Tribes of Colville

Reservation, 873 F.2d 1221, 1225 (9th Cir. 1989).

The standing issue is a messy one for Plaintiff, Defendants and the Court because

it appears that Plaintiff’s boilerplate collective/class action complaint fails to

competently reflect Plaintiff’s particular, individual grievances. For instance, the bulk

of Plaintiff’s Complaint implies that Plaintiff, and other similarly situated Loan Officers,

were mis-classified as “exempt” employees and denied any overtime and FLSA-provided

benefits. (See Compl. ¶¶ 11, 13, 18–22, 24, 33, 54, 60.) However, the parties’ moving

papers and declarations agree that Plaintiff was actually a non-exempt employee who

in fact received, at times, some overtime compensation. (Defs.’ Mot. 13; Mills Decl. Ex.

2; Pl.’s Opp’n 14; Jimenez Decl. ¶¶ 5, 7, 14.) Indeed, Plaintiff’s Opposition re-frames her

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This standing analysis is also consistent with a liberal analysis under Rule 12(b)(6), where the test is whether the facts, as alleged, support any valid claim entitling plaintiff to relief—even if that claim is not necessarily the one intended by plaintiff. Haddock v. Board of Dental Examiners of Calif., 777 F.2d 462, 464 (9th Cir. 1985). 

6

The Court declines to decide Defendants’ arguments that Plaintiff lacks standing to pursue injunctive relief and that Plaintiff does not have standing to pursue her class claims.

The inquiries under Rule 12(b)(6) or Rule 12(b)(1) is whether Plaintiff alleges facts sufficient

to prove standing and state a cause of action; a prayer for an improper remedy is not grounds to grant either motion. Doe v. United States Dept. of Justice, 753 F.2d 1092, 1104 (D.C. Cir. 1985). Additionally, Plaintiff’s suitability to represent a class will be determined at the certification stage. From the information before the Court, however, Plaintiff appears to be an unlikely candidate to represent overtime claims for any class of JP Morgan Loan Officers, given the differences in job duties and necessity of individual evidence. See Trinh v. JPMorgan Chase & Co., No. 07-CV-1666 W (WMC), 2008 U.S. Dist. LEXIS 33016, at *8–*18 (S.D.Cal. April 22, 2008). 

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argument under the theory that Defendants failed to compensate her for all time worked

over forty hours, rather than any time. (Pl.’s Opp’n 14.)5

 

Considering Plaintiff’s Complaint and declarations, the Court concludes that

Plaintiff has met her burden in proving that she has standing to press an individual

FLSA claim. Although her Complaint spends much time alleging away any applicable

exemptions on behalf of Plaintiff and the putative class, the Court gives Plaintiff every

benefit of the doubt and finds these allegations merely irrelevant, rather than

inconsistent. (See Compl. ¶¶ 11-25.) Regardless, Plaintiff presents allegations that she

was not fully compensated for all hours worked in excess of forty per week and eight per

day—this is enough to state an individual FLSA claim. Contrary to Defendants’

assertions, evidence that Plaintiff received some overtime pay does not mean she

received all overtime pay due to her; at any rate, analyzing pay stubs and overtime

records is not appropriate at this stage of the litigation.

Because Plaintiff generally alleges that she suffered injury when Defendant failed

to pay her overtime, the Court would potentially be able to provide redress under the

FLSA if Plaintiff presented evidence proving her allegations. Thus, Plaintiff has

technically met the standing requirements for bringing an individual FLSA claim.6

Accordingly, the Court DENIES Defendants’ motion to dismiss Plaintiff’s first cause of

action.

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IV. CONCLUSION

Because Plaintiff voluntarily signed a Release Agreement in exchange for

severance benefits, Plaintiff has waived her right to bring almost all state or federal

claims against Defendants JP Morgan Chase & Co. et. al. California Labor Code section

206.5 does not bar enforcement of the Release Agreement because Defendants never

conceded that Plaintiff was due any more compensation over what was previously paid.

However inelegantly drafted, Plaintiff has alleged sufficient facts to plead an

individual FLSA claim for overtime wages. Although Plaintiff’s prospects of bringing a

collective/class action on behalf of “similarly situated” individuals appear dim, the Court

declines to decide these issues under the instant Rule 12(b)(6) motion. For the above

reasons, the Court GRANTS-IN-PART and DENIES-IN-PART Defendants’ motion

to dismiss under Rule 12(b)(6) and Rule 12(b)(1). Plaintiff’s second through eighth

claims are DISMISSED WITHOUT PREJUDICE. 

IT IS SO ORDERED.

DATED: May 8, 2008

Hon. Thomas J. Whelan

United States District Judge

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