Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-arwd-2_05-cv-02160/USCOURTS-arwd-2_05-cv-02160-0/pdf.json

Parties Involved:
Carco Capital Corporation
Defendant
Carco Carriage Corporation
Counter Claimant
Carl Corley
Defendant
Vicky Corley
Counter Defendant
Gina Rankin
Plaintiff

Document Text:

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IN THE UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF ARKANSAS

FORT SMITH DIVISION

VICKY CORLEY and

GINA RANKIN PLAINTIFFS

v. Case No. 05-2160

CARCO CAPITAL CORPORATION,

CARCO CARRIAGE CORPORATION, and

CARL CORLEY DEFENDANTS

ORDER

Now on the 10th day of July, 2006, comes on for

consideration the Motion to Dismiss (doc. #2) and Motion to

Dismiss Plaintiff’s Amended Complaint (doc. #11) of separate

defendants, Carco Capital Corporation and Carl Corley. The

Court, having reviewed the pleadings of the parties, and all

other matters of relevance before it, and being well and

sufficiently advised, finds and orders as follows with respect

thereto: 

1. The plaintiffs, Vicky Corley and Gina Rankin,

originally filed this action on November 17, 2005 against the

separate defendants, Carco Capital Corporation (“Capital”) and

Carl Corley (“Corley”). The original complaint asserted claims

of violations of the federal Equal Pay Act, Title VII of the

United States Code, and Arkansas Law. 

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2. Capital and Corley filed their Motion to Dismiss (doc.

#2) on December 6, 2005. However, the plaintiffs eventually

sought and received leave of the Court to file an amended

complaint and their Amended Complaint was filed on January 12,

2006. In light of the foregoing, the original Motion to Dismiss

(doc. #2) is now moot and will be denied as such. 

3. The Amended Complaint (hereinafter “complaint”) seeks

relief under the federal Equal Pay Act and Arkansas state law

but, unlike the original complaint, does not seek relief under

Title VII of the United States Code. In addition, as amended,

the complaint adds -- as an additional defendant -- Carco

Carriage Corporation (“Carriage”). 

4. In their Motion to Dismiss Plaintiff’s Amended

Complaint (doc. #11) filed on January 26, 2006, Capital and

Corley move to dismiss the plaintiffs’ amended complaint. 

The plaintiffs have responded to the motion and deny that

the amended complaint should be dismissed. 

5. Plaintiffs assert violations of the Equal Pay Act and

Arkansas Code Annotated § 11-4-601 et seq and allege that their

rights have been violated under these provisions of law.

Specifically, they contend that defendants have engaged in

“unequal pay practices” by paying the plaintiffs “less wages than

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other employees of the opposite sex, despite the fact that they

were performing equal work on jobs requiring equal skill, effort,

and responsibility” and under similar working conditions.

Amended Complaint, § 7. 

In their motion, Capital and Corley argue that the complaint

should be dismissed, as to them, under Rule 12(b)(6) of the

Federal Rules of Civil Procedure for the following reasons:

* The plaintiffs were employees of Carriage for the

entirety of their employment; and, were not

employees of either Capital or Corley.

* The allegations contained in plaintiffs’ complaint

as against Corley are an improper attempt to

pierce the corporate veil. 

* And, with respect to the allegations against

Corley, separate plaintiff, Vicky Corley, has

waived her right to bring this action by virtue of

a Waiver and Covenant Not to Sue executed in

November of 1997. 

6. Rule 12(b)(6) of the Federal Rules of Civil Procedure

allows for dismissal for failure to state a claim upon which

relief can be granted. When ruling on a motion to dismiss under

Rule 12(b)(6) of the Federal Rules of Civil Procedure, a district

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court “must accept the allegations contained in the complaint as

true and all reasonable inferences from the complaint must be

drawn in favor of the nonmoving party.” Young v. City of St.

Charles, 244 F.3d 623, 627 (8th Cir. 2001). Although dismissal

for failure to state a claim can only be granted when it appears

beyond a reasonable doubt that plaintiff can prove no set of

facts in support of a claim entitling him to relief, “dismissal

under Rule 12(b)(6) serves to eliminate actions which are fatally

flawed in their legal premises and deigned to fail, thereby

sparing litigants the burden of unnecessary pretrial and trial

activity.” Young, 244 F.3d at 627. 

(a) First, Capital and Corley argue that the complaint

should be dismissed because neither Capital nor Corley were the

actual employer of the plaintiffs and, therefore, neither should

be held liable for the alleged equal pay violations asserted in

the complaint. 

Plaintiffs counter this contention by pointing out that the

definition of “employer” -- for purposes of the applicable

statues -- is broader than that applicable under the common law

and, therefore, includes both Capital and Corley 

The Equal Pay Act (a part of the Fair Labor Standards Act),

29 U.S.C. § 206, prohibits wage discrimination by an employer

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subject to the provisions of that section. 29 U.S.C. § 206(b).

Similarly, Arkansas Code Annotated § 11-4-601 provides that “no

employer shall discriminate against any employee in the matter of

wages or compensation solely on the basis of the sex of the

employee.” 

The definition of “employer” for the purposes of the

applicable federal law is contained in 29 U.S.C. § 203(d): 

“‘Employer’ includes any person acting directly or

indirectly in the interest of an employer in relation

to an employee . . .’” 

Similarly, the applicable Arkansas law [Ark. Code Ann. § 11-

4-607(2)] defines “employer” as:

 “any person, natural or artificial, acting in the

interest of an employer directly or indirectly.” 

Capital and Corley argue that Carriage was the actual

employer of the plaintiffs and that they cannot prove otherwise. 

However, plaintiffs point to the following facts set forth

in the complaint to support their argument that Capital and

Corley are proper defendants:

* Capital held 100% of the stock of Carriage;

* Capital had ultimate authority over all aspects of

Carriage;

* Corley is the Chairman of the Board for Carriage;

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* Corley is a shareholder in Capital;

* Corley is the primary person in charge of operations

for both Capital and Carriage;

* Corley dominates the administration of both of the

corporations; is empowered to act on behalf of both

corporations when dealing with employees; had

supervisory authority over the plaintiffs while

employees; and had ultimate authority to set, alter,

and/or terminate plaintiffs’ salaries. 

* Capital and Carriage are operated out of the same

building; 

* Capital and Carriage have common management, common

control of employees, and common ownership and/or

financial control;

* Capital and Carriage have a close interrelationship of

operations. Amended Complaint, § 6. 

In the Court’s view, the statutory definitions of “employer”

under the applicable statutes include persons or entities other

than those denominated as such in relevant paperwork.

Additionally, the statutory definitions contemplate -- or at

least allow for -- several simultaneous employers who may be

responsible for compliance with the law. Darby v. Bratch, 287

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The Eighth Circuit Court of Appeals has implicitly recognized that the Fair Labor Standards Act permits suits 1

against employers in their individual capacities. See Darby v. Bratch, 287 F.3d 673, 681 (8 Cir. 2002); Rockney v. th

Blohorn, 877 F.2d 637, 642-43 (8 Cir. 1989). th

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F.3d 673, 681 (8 Cir. 2002); Chao v. Bauerly, LLC, 2005 WL th

1923716 (D.Minn. Aug. 11, 2005); Brown v. L&P Indus., LLC, 2005

WL 3503637 (E.D. Ark. December 21, 2005). “Economic reality,”

rather than “common law concepts of agency” controls when

identifying the employer under the applicable statutes. Brown,

2005 WL 3503637 (citing Donovan v. Agnew, 712 F.2d 1509, 1510

(1 Cir. 1983)). st

Although the issue has not been specifically ruled on by the

Eighth Circuit Court of Appeals , some district courts within 1

the Eighth Circuit -- as well as other sister circuits -- have

recognized that the Fair Labor Standards Act contemplates

individual liability for corporate officers or others with

operational control. Chao v. Bauerly, LLC, 2005 WL 1923716

(D.Minn. Aug. 11, 2005); Brown v. L&P Indus., LLC, 2005 WL

3503637 (E.D. Ark. December 21, 2005). See also Dole v. Elliott

Travel & Tours, 942 F.2d 962, 965-66 (6 Cir. 1991); Donovan v. th

Agnew, 712 F.2d 1509, 1511 (1 Cir. 1983). st

In light of applicable law and viewing the allegations

contained in the complaint as true as required by Rule 12(b)(6),

the Court concludes that the argument of Capital and Corley that

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the complaint should be dismissed because neither were the

plaintiffs’ actual employer must fail. See Young v. City of St.

Charles, 244 F.3d 623, 627 (8th Cir. 2001) (“all reasonable

inferences from the complaint must be drawn in favor of the

nonmoving party”). 

(b) Alternatively, separate defendant Corley argues that

the claims of Vicky Corley should be dismissed because Vicky

Corley waived her right to bring this action against separate

defendant Corley by virtue of a Waiver and Covenant Not to Sue

(“Waiver”) executed in November of 1997. 

Plaintiffs resist this argument and contend that the

Waiver “reflects that its intention was to prevent Plaintiff

Corley from suing Carco Carriage Corporation, Carl Corley, and/or

Chris Corley for acts ‘arising as a consequence of my [Plaintiff

Corley] personal relationship with any co-employee of Carco

Carriage Corporation and, specifically, Chris Corley.’”

Plaintiffs’ Response Brief, p. 6. 

The Court must also reject this alternative argument. The

Waiver relied upon was attached to the defendants’ motion to

dismiss -- and, therefore, is “outside the pleadings.” Under

Rule 12(b)(6), the Court is obliged to decide a motion to dismiss

with reference only to the pleadings and attachments thereto.

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This ruling is without prejudice on the point should Corley

desire to raise the issue again by way of a motion for summary

judgment pursuant to Rule 56.

7. Based on the foregoing, separate defendants’ Motion to

Dismiss Plaintiff’s Amended Complaint (doc. #11) is DENIED. 

IT IS, THEREFORE, ORDERED that separate defendants’ Motion

to Dismiss (doc. #2) is moot, and is therefore, denied as such;

IT IS, FURTHER, ORDERED that separate defendants’ Motion to

Dismiss Plaintiff’s Amended Complaint (doc. #11) is denied. 

IT IS SO ORDERED. 

/s/ Jimm Larry Hendren

UNITED STATES DISTRICT JUDGE

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