UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

ROBERT RUMPZ,

Plaintiff,

Case No. 09-10971

-vs- HON. AVERN COHN

AMERICAN DRILLING & TESTING, INC.,

a Michigan corporation,

Defendant.

 /

MEMORANDUM AND ORDER DENYING DEFENDANT’S MOTION TO DISMISS

I. Introduction

This is a Fair Labor Standards Act (FLSA) case under 29 U.S.C. § 201 et seq.

with a pendant state law claim. Plaintiff Robert Rumpz (Rumpz) claims that defendant

American Drilling & Testing Inc. (American Drilling), his former employer, failed to

properly compensate him for work performed since 1991. The complaint is in two

counts:

(I) Violation of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq.; and

(II) Violation of the Michigan Minimum Wage Law (MMWL), MCL § 408.381 et

seq.

Now before the Court is American Drilling’s motion for partial dismissal under FED.

R. CIV .P. 12(b)(6). American Drilling asserts that Rumpz’s claims accruing prior to March

16, 2006 are barred by the statutes of limitations and are not subject to a defense of

equitable estoppel. For the reasons that follow, the motion will be denied.
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II. Facts and Procedural History

A. Facts

The following facts are taken from Rumpz’s amended complaint.

Rumpz began working for American Drilling in March 1991 as a driller.

From March 1991 until 1996, American Drilling did not pay Rumpz for waiting

time, vehicle loading time, or travel time between American Drilling’s place of business

and its work sites. Rumpz and other employees objected to American Drilling’s failure

to pay for these activities.

American Drilling’s owner, Harley Corbin (Corbin), told the employees that he

had looked into the matter and that American Drilling’s compensation policy complied

with applicable laws. Rumpz alleges that American Drilling knew its actions violated the

law and Corbin told the employees that it was complying with the law to prevent them

from bringing legal action against it. Rumpz says that, in reliance on American Drilling’s

averments regarding the legality of its compensation policies, he refrained from initiating

legal action against it.

Beginning in 1996 American Drilling paid Rumpz for waiting time, vehicle loading

time, and travel time. However, it did not count this as compensable time for purposes

of calculating Rumpz’s eligibility for overtime compensation. 

Corbin again represented to the employees that American Drilling’s

compensation policy was fully compliant with applicable laws. Rumpz alleges that

American Drilling knew its actions violated the law and Corbin told the employees that it

was complying with the law to prevent them from bringing legal action against it. 

Rumpz says that, in reliance on American Drilling’s averments regarding the legality of
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its compensation policies, he refrained from initiating legal action against them.

B. Procedural History

On March 16, 2009 Rumpz filed a complaint against American Drilling. 

On July 20, 2009 American Drilling filed a motion to dismiss under Fed. R. Civ. P.

12(b)(6) as its first responsive pleading.

On October 23, 2009 the Court issued an order denying in part and staying in

part American Drilling’s motion. (Dkt. 14). The Court found that all of Rumpz’s claims

that had accrued prior to March 16, 2006 would be time barred unless the statutes of

limitations were tolled. The Court also found that the continuing violations doctrine was

not applicable to Rumpz’s claim. Finally, the Court found that the doctrine of equitable

estoppel could provide a basis to toll the statutes of limitations but that Rumpz had

failed to plead facts necessary to establish such a defense. Rumpz was permitted to

file an amended complaint claiming equitable estoppel. The Court also denied

American Drilling’s motion to dismiss with respect to claims accruing after March 16,

2006.

On November 11, 2009 Rumpz filed an amended complaint claiming equitable

estoppel.

On November 20, 2009 American Drilling responded by filing a Motion to Dismiss

Part of Plaintiff’s Claim Under Fed. R. Civ. P. 12(b)(6) asserting that Rumpz had not

adequately pleaded the defense of equitable estoppel. Rumpz responded to the motion

on January 12, 2010. American Drilling has not filed a reply.
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III. STANDARD OF REVIEW

A motion to dismiss pursuant to FED. R. CIV. P. 12(b)(6) tests the sufficiency of a

complaint. To survive a Rule 12(b)(6) motion, the complaint's "factual allegations must be

enough to raise a right to relief above the speculative level on the assumption that all of the

allegations in the complaint are true." Bell Atlantic Corp. v. Twombley, 550 U.S.544, 545

(2007); see also Ass'n of Cleveland Fire Fighters v. City of Cleveland, 502 F.3d 545, 548

(6th Cir. 2007). The court is "not bound to accept as true a legal conclusion couched as a

factual allegation." Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1950 (2009) (internal

quotation marks and citation omitted). Moreover, "[o]nly a complaint that states a plausible

claim for relief survives a motion to dismiss." Id. Thus, "a court considering a motion to

dismiss can choose to begin by identifying pleadings that, because they are no more than

conclusions, are not entitled to the assumption of truth. While legal conclusions can provide

the framework of a complaint, they must be supported by factual allegations. When there

are well-pleaded factual allegations, a court should assume their veracity and then

determine whether they plausibly give rise to an entitlement to relief." Id. In sum, "[t]o

survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted

as true, to state a claim for relief that is plausible on its face." Id. at 1949 (internal quotation

marks and citation omitted). This is a rather rigid test which must be carefully applied.
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For purposes of this motion, the parties agree that statute of limitations and

doctrine of equitable estoppel apply equally to Rumpz’s FLSA and MMWL claims. 

Therefore the Court will only consider Rumpz’s FLSA claim in this motion. 

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IV. FLSA1

A.

Under the FLSA, all hours worked must be compensated. 29 U.S.C. § 206, 207.

An employee who works more than 40 hours in a week must be compensated at a higher

rate for all hours in excess of 40 hours. Id. § 207(a)(2). The FLSA does not define “work.”

It has been defined by the Supreme Court as “physical or mental exertion (whether

burdensome or not) controlled or required by the employer and pursued necessarily and

primarily for the benefit of the employer and his business.” Tennessee Coal, Iron, and

Railroad Co .v. Muscoda Local No. 123, 321 U.S. 590, 598 (1944). When employees are

required to assemble at an employer’s place of business prior to traveling to an off-site

work location certain activities performed prior to arrival at the work site are considered

work under the FLSA. The Sixth Circuit has held that employees must be compensated

for “wait time” at an employer’s place of business if it is “for the employer’s benefit and at

its behest.” Chao v. Akron Insulation and Supply, Inc., 184 Fed. App’x 508, 511 (6th Cir.

2006). Employees must also be compensated for vehicle loading time and for travel time

from an employee’s place of business to work sites. See id. at 510, 512. 

B.

Rumpz’s complaint alleges that, from 1991 to 1996, he was not compensated for

waiting time, for vehicle loading time, or for travel time from American Drilling’s place of

business to the sites where he was assigned to work. The complaint further alleges that
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beginning in 1996 American Drilling paid Rumpz for the waiting time, vehicle loading time,

and travel time, but did not count those hours when calculating his eligibility for overtime

pay. 

Because American Drilling has filed a motion to dismiss pursuant to FED. R. CIV. P.

12(b)(6), the Court must accept Rumpz’s factual allegations as true. Based on the facts

alleged, it is reasonable to infer that Rumpz’s uncompensated and undercompensated

activity was “work” because it was performed for American Drilling’s benefit and at its

behest. Therefore, it is plausible that American Drilling’s compensation policies violated

the FLSA. So long as Rumpz can avoid the application of the statutes of limitations, the

complaint states a claim upon which relief can be granted.

V. Equitable Estoppel

The Court has established that Rumpz’s claims accruing prior to March 16, 2006 will

be time barred unless the statutes of limitations is tolled. The only issue before the Court

is whether Rumpz can rely on the doctrine of equitable estoppel to toll the statutes of

limitations. 

A. The Law

A court may employ equitable estoppel to toll the statute of limitations on a plaintiff’s

cause of action when the defendant took some affirmative action to prevent the plaintiff

from filing his claim in a timely manner. The Sixth Circuit requires the following elements

to support a claim of equitable estoppel:

1) there must be conduct or language amounting to a

misrepresentation of a material fact; 2) the party to be estopped

must be aware of the true facts; 3) the party to be estopped

must intend that the representation be acted on, or the party

asserting the estoppel must reasonably believe that the party to
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be estopped so intends; 4) the party asserting the estoppel

must be unaware of the true facts; and 5) the party asserting the

estoppel must reasonably or justifiably rely on the

representation to his detriment.

Egerer v. Woodland Realty Inc., 556 F.3d 415, 425 (6th Cir. 2009). 

Equitable estoppel focuses first on the conduct of the defendant, who must take

“active steps in preventing the plaintiff from suing in time.” Id.; see also Singletary v.

Continental Illinois National Bank and Trust of Chicago, 9 F.3d 1236, 1240 (7th Cir. 1993)

(“Equitable estoppel suspends the running of the statute of limitations during any period in

which the defendant took active steps to prevent the plaintiff from suing.”). The first three

elements the Egerer test address the steps that a defendant must take. Even if a

defendant takes an active step to prevent the plaintiff from suing in time, the plaintiff’s

conduct is also considered. The plaintiff’s reliance must be reasonable and he must

“demonstrate that his ignorance is not attributable to a lack of due diligence.” Egerer, 556

F.3d at 425.

B. Application 

Rumpz asserts that American Drilling should be equitably estopped from asserting

a statute of limitations defense. He alleges that American Drilling’s owner represented that

he had looked into the matter and that American Drilling’s compensation practices fully

complied with the law. Rumpz further alleges that he relied on this representation in not

enforcing his legal rights at an earlier date. American Drilling asserts that it did not take

and active step preventing Rumpz from suing within the statute of limitations and that

Rumpz did not pursue his claim with due diligence.
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1.

a.

American Drilling asserts that it did not take any active steps to prevent Rumpz

from asserting his rights because he was fully aware of all of the material facts

comprising his claim. Specifically, American Drilling says that Rumpz was aware of the

work that he performed as well as the compensation that it provided for that work. It

asserts that these facts were fully known to Rumpz and did not change over time. 

Because Rumpz was in possession of all of the facts necessary to state a claim under

the FLSA, American Drilling says that none of its actions can be viewed as an active

step preventing Rumpz from bringing his suit.

Despite American Drilling’s assertion, Rumpz can maintain a defense of

equitable estoppel even though he was aware of the facts comprising his claim. As the

Eighth Circuit has noted, equitable estoppel “presupposes the plaintiff’s knowledge of

the facts underlying his or her cause of action.” Dring v. McDonnel Douglas

Corporation, 58 F.3d 1323, 1329 (8th Cir. 1995); see also Dillman v. Combustion

Engineering, 784 F.2d 57, 61 (2d Cir. 1986) (“[E]quitable estoppel is invoked in cases

where the plaintiff knew of the existence of his cause of action but the defendants’

conduct caused him to delay brining his lawsuit.”). Unlike equitable tolling, equitable

estoppel does require that a plaintiff be unable to learn of the facts comprising a cause

of action. Egerer, 556 F.3d at 422. Instead, it depends upon the actions of a defendant

which induced a plaintiff to delay in bringing a claim. Knowledge of the facts supporting

the cause of action does not preclude a finding of equitable estoppel.

Further, American Drilling overstates the active step required to prevent a plaintiff
2

As noted above, a court must accept the truth of a plaintiffs factual allegations

when reviewing a motion to dismiss. To prevail on the merits, Rumpz bears the burden

of proof in convincing the trier of fact that the factual allegations comprising his claim of

equitable estoppel are true. 

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from bringing an action. As Egerer makes clear, all that is required is (1) a

misrepresentation of a material fact, (2) with knowledge of its falsity, (3) and intent to

induce reliance. See id. at 425. It is sufficient for a plaintiff to prove that he was “lulled

or tricked into letting the . . . filing deadline pass.” Dring, 58 F.3d at 1329. Further, the

misrepresentation of a material fact requirement must be construed broadly. Glus v.

Brooklyn Eastern District Terminal, 359 U.S. 231, 235 (1959) (“It is no answer to say, as

respondent does, that the representations alleged were of law and not of fact and

therefore could not justifiably be relied on by petitioner.”). In Glus, the defendant

represented that the relevant statute of limitations was seven years when it was actually

three years. Id. at 231-32. Thus a misstatement of the law, if made knowingly and with

the intent to induce reliance, can be the basis of a claim of equitable estoppel.

b.

b.

The factual allegations in the complaint are sufficient to create a plausible

inference that American Drilling took active steps to prevent Rumpz from suing within

the statute of limitations.2 As stated above, the compensation policies described in the

complaint are sufficient to state a claim under the FLSA. Therefore, Corbin’s alleged

representations that the compensation policies were lawful were both material and

false. While the representations involve legal interpretations, they are not substantially

different from the representation in Glus regarding the length of the statute of limitations. 
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In each case, the defendant made a representation that could affect when and if a

plaintiff would bring a lawsuit.

It is also reasonable to assume that Corbin was aware of the falsity of his

statement. He did not merely represent that the compensation policies were lawful; he

said that he had looked into the matter. Because the compensation policies described

in the complaint were illegal, it is reasonable to assume that Corbin would have learned

of their illegality when he looked into the matter. Thus it is plausible that Corbin was

either aware of the illegality of the compensation policy or failed to look into the matter. 

In either case, he would have known that his statement was false.

Finally, it is plausible that Corbin’s statements were intended to induce reliance

or that Rumpz reasonably believed that they were intended to induce reliance. The

complaint states that Rumpz and other employees objected to the compensation

policies before Corbin made his representations. Corbin’s representations could

reasonably be viewed as a response to the objections. In that context, the most

reasonable purpose of the representations would be to assuage the employees’

concerns and prevent them from taking further action based on their objections. Thus it

is plausible, based on the facts alleged in the complaint, that Corbin’s statements were

either intended to induce action on the part of the employees or could have been

reasonably interpreted to do so by the employees.
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2.

a.

American Drilling also asserts that Rumpz failed to exercise due diligence in

discerning whether he had a cause of action under the FLSA. It asserts that Rumpz

was aware of the material facts related to the compensation policies and had raised

objections to them. In light of his objections, it asserts that due diligence required that

the seek counsel to determine whether he had a cause of action against American

Drilling. 

b.

To the extent that American Drilling asserts that Rumpz was aware that the

compensation policies violated the FLSA, it is incorrect. Accepting the facts alleged in

the complaint as true and drawing reasonable inferences in Rumpz’s favor, it is

plausible that he was unaware that the policy did in fact violate the FLSA. The

complaint affirmatively states that Rumpz was unaware of any violation and nothing in

the complaint contradicts that statement. Rumpz’s knowledge of the facts underlying

his claim does not mean that he should also have been aware that they comprised an

FLSA violation. Rumpz is a driller, not an attorney, and has no expertise related to

labor and unemployment law. Further, his objection to American Drilling’s

compensation policy is fully consistent with his lack of knowledge. At most it suggests

doubt regarding the legality of the compensation policy. However, in light of Rumpz’s

lack of legal experience such doubt is not tantamount to knowledge or awareness of the

illegality of the policy. Thus Rumpz’s assertion that he was unaware is plausible and
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uncontradicted by the other factual assertions in the complaint.

c.

American Drilling’s assertion that Rumpz failed to exercise due diligence also

implies that Rumpz’s reliance on Corbin’s statement was unreasonable. However, it

does not assert that it is per se unreasonable to rely on an employer’s representation

that its actions comply with applicable laws. Because conflicts of interest may arise

between employers and employees on issues of employment law, it may be unwise for

an employee to accept an employer’s representations at face value. However, a

number of courts have permitted employees to maintain a defense of equitable estoppel

after relying on an employer’s representations. E.g., Glus, 359 U.S. 231 (relying on an

employer’s representation regarding the statute of limitations for a Federal Employers’

Liability Act claim); Randle v. City of New Albany, Mississippi, No. 3:05CV74, 2006 WL

2085387 (N.D. Miss. July 25, 2006) (relying on employer’s representations that its

compensation policies complied with the FLSA). 

In this case, Rumpz did not merely rely on Corbin’s opinion that American

Drilling’s compensation policies were lawful. Corbin stated that he had looked into the

matter and determined that the policies were lawful. Rather than stating an opinion,

Corbin’s representation suggested that an objective third party had determined that the

compensation policies were lawful. When an employer’s representations are bolstered

by the apparent authority of an independent third party, it is plausible that reliance on

the representation is both reasonable and justified. 
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3.

The complaint alleges sufficient facts to state a plausible claim that American

Drilling took active steps to prevent Rumpz from bringing an FLSA claim when Corbin

represented that the compensation policies were lawful. Under the circumstances,

Rumpz exercised due diligence in relying on Corbin’s statement. Therefore, Rumpz has

stated a plausible claim that equitable estoppel should be applied to toll the statutes of

limitation on his claims. 

CONCLUSION

For the reasons stated above, American Drilling’s motion for partial dismissal is

DENIED. Rumpz may maintain a defense of equitable estoppel with respect to the

statutes of limitations. 

SO ORDERED.

_____________________________________

Dated: April 8, 2010 S/Avern Cohn 

AVERN COHN

UNITED STATES DISTRICT JUDGE

I hereby certify that a copy of the foregoing document was mailed to the attorneys of

record on this date, April 8, 2010, by electronic and/or ordinary mail.

 S/Julie Owens 

Case Manager, (313) 234-5160