Manning v. Boston Medical Center Corp.

United States Court of Appeals
For the First Circuit

Nos. 12-1573, 12-1653

ELIZABETH MANNING ET AL.,

Plaintiffs, Appellants,

v.

BOSTON MEDICAL CENTER CORPORATION;
ELAINE ULLIAN; JAMES CANAVAN,

Defendants, Appellees,

BOSTON REGIONAL MEDICAL CENTER, INC.; BOSTON REGIONAL MEDICAL
CENTER, LLC; BOSTON MEDICAL CENTER 403B RETIREMENT PLAN,

Defendants.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Rya W. Zobel, U.S. District Judge]

Before

Thompson, Stahl, and Lipez,
Circuit Judges.

Guy A. Talia, with whom Patrick J. Solomon and Thomas &
Solomon LLP were on brief, for appellants.
C.J. Eaton, with whom Richard L. Alfred, Kristin G. McGurn,
Jessica M. Schauer, and Seyfarth Shaw LLP were on brief, for
appellees.

August 1, 2013
 LIPEZ, Circuit Judge. Plaintiffs Elizabeth Manning, Lisa

Rivers, Rhonda Williams, and Reva McCarthy bring this wage-and-hour

action against defendants Boston Medical Center Corporation

("BMC"), Elaine Ullian, and James Canavan. Current and former BMC

employees, plaintiffs allege that defendants deprived them of their

wages through the use of timekeeping policies and employment

practices that required them to work through their meal and rest

periods, put in extra work time before and after their regularly

scheduled work shifts, and attend mandatory training sessions. The

complaint asserts causes of action under the Fair Labor Standards

Act ("FLSA") and Massachusetts common law for recovery of their

unpaid wages. Plaintiffs also seek certification of a collective

action pursuant to FLSA § 16(b), 29 U.S.C. § 216(b), and a class

action pursuant to Federal Rule of Civil Procedure 23.

This case began as two separate actions, one in federal

court raising FLSA claims, and another in the Massachusetts

Commonwealth court raising state law claims. Defendants removed

the latter action to federal court. After the two cases were

joined via the filing of a single amended complaint, defendants

moved to dismiss all of the claims, both federal and state, and

sought to strike the class and collective action allegations. The

district court granted defendants' motion in its entirety, and

plaintiffs now appeal.

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 We have seen this case before, albeit with different

parties. As explained in our prior opinions, see Pruell v. Caritas

Christi, 678 F.3d 10 (1st Cir. 2012); Cavallaro v. UMass Memorial

Healthcare, Inc., 678 F.3d 1 (1st Cir. 2012), numerous lawsuits of

this kind have been filed against hospitals across the country, all

alleging similar forms of systematic undercompensation. These

cases, which we have previously dubbed "hospital compensation

cases," assert "that [defendants] require[] unpaid work through

meal-breaks due to an automatic timekeeping deduction, unpaid

preliminary and postliminary work, and unpaid training sessions."

Pruell, 678 F.3d at 13-14. A number of these actions are being

litigated by counsel for plaintiffs in this case. See id. at 11;

Cavallaro, 678 F.3d at 2.

After careful consideration of the numerous arguments

raised on appeal, we vacate the district court's dismissal of the

FLSA claims against BMC and Ullian, as well as the Massachusetts

common law claims for breach of contract, promissory estoppel,

money had and received, unjust enrichment, and conversion. We also

vacate the striking of plaintiffs' class and collective

allegations. We affirm the district court's directive that the

plaintiffs in the two cases file a single consolidated complaint

and, by extension, the district court's assumption of jurisdiction

over the state law claims. We also affirm the dismissal of the

FLSA claims against Canavan, the fraud and negligent

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misrepresentation claims, and the denial of further leave to amend

the complaint.

I.

A. Factual Background

BMC refers to a group of related organizations that

operate a set of healthcare facilities in the Boston area. The two

individual defendants are Elaine Ullian, BMC's former president and

chief executive officer, and James Canavan, BMC's former senior

human resources director. Plaintiffs are three registered nurses

(Manning, Rivers, and Williams) and one administrative assistant

(McCarthy) who worked or currently work for BMC at several of its

locations. They seek to represent a group of over 4,000 people who

were or are currently employed by BMC as hourly workers. This

group includes individuals in a broad range of positions, from

nurses, medical assistants, technicians, and physical therapists,

to administrative staff, custodians, and home health aides.

The crux of plaintiffs' claims is that defendants denied

BMC's workers full compensation for their work through a

combination of unlawful pay practices and timekeeping policies.

The complaint alleges that BMC employees are not properly

compensated for time spent performing work during their regularly

scheduled meal breaks, as well as time spent before and after their

scheduled shifts. The work that employees perform during their

meal breaks and before and after their shifts includes tending to

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patients, doing paperwork, preparing charts, and responding to

phone calls. Employees are often not relieved by other employees

when the time comes for their meal breaks, forcing them to work

during times when they are ostensibly not supposed to be working.

The complaint suggests that BMC consciously takes

advantage of its employees' dedication and commitment to their

patients, knowing that they would not abandon their caregiving

responsibilities simply because their work hours are over or

because they are due to take a meal or rest break.1

A key aspect of plaintiffs' claims is the interaction of

BMC's alleged policies and practices with the company's timekeeping

system. BMC maintains time records using an automated system that

is programmed to deduct time from the employees' paychecks for

meals, breaks, or other noncompensable time. Despite the fact that

plaintiffs spend much of this time performing regular work

responsibilities, the deductions for their meal break time are

automatic. Plaintiffs also allege that they are "not allowed to

1
Attached to the complaint is an article from The New York
Times describing some of the hospital compensation cases. This
article quotes a registered nurse who worked for a hospital in
Pennsylvania:

'Most nurses put the patient first . . . . We often gave
up lunch breaks to see that a patient was taken care of
properly. . . . If you brought your lunch from home or
got food in the cafeteria and took it to the nursing
unit, you would be interrupted by phone calls, by
physicians and family members who wanted to talk to you.
We really did not have an uninterrupted meal break.'

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record all their work performed" before and after their shifts,

and, even when they are permitted to record that time, they are not

compensated "properly."

Additionally, BMC employees are not paid for time spent

during required training sessions. These trainings take place

during regular work hours and cover subjects directly related to

employees' work responsibilities, including new areas of medical

research and procedure as well as instruction on basic protocols

such as administering cardiopulmonary resuscitation ("CPR").

The complaint further states that BMC and the employees'

supervisors are well aware that employees are performing work

without being paid. Employees are often asked to take on

responsibilities during their meal breaks and before and after

their work shifts. The work is performed on BMC's premises during

operational hours, "in full view of the defendants' managers and

supervisors." Plaintiffs also allege that due to staffing

shortages and other industry demands, BMC's management knows that

the tasks they assign require their employees to work through their

meal breaks and before and after their regularly scheduled shifts.

B. Procedural History

As noted, this case began as two separate actions, one

initiated in the District of Massachusetts and the other in the

Commonwealth courts. We recount their respective paths to this

court.

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 1. The Initiation of the Two Actions

Three of the named plaintiffs, Manning, Rivers, and

Williams, filed an action in federal court in September 2009

("Manning I"), alleging claims under the FLSA and other federal

statutes.2 Defendants moved to dismiss all of those claims under

Federal Rule of Civil Procedure 12(b)(6). As to the FLSA claim

specifically, the motion challenged the sufficiency of the

complaint's factual allegations and also contended that because the

then-existing plaintiffs were all union members, the claim was

precluded by the operation of federal labor laws governing the

union-employer relationship, including the National Labor Relations

Act ("NLRA").

Also in September 2009, Manning, Rivers, and Williams

initiated a parallel action in the Massachusetts Commonwealth

courts ("Manning II"). This complaint pled a number of

Massachusetts statutory and common law claims, relying on the same

facts as the federal case. Defendants removed the case to federal

court, contending that all of plaintiffs' claims were completely

preempted by § 301 of the Labor Management Relations Act ("LMRA"),

29 U.S.C. § 185(a), because plaintiffs were union workers covered

by a collective bargaining agreement ("CBA") and their causes of

action were founded directly on or necessarily required the

2
Of the federal claims, only the dismissal of the FLSA claim
is before us on appeal.

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interpretation of the CBA. Defendants then requested consolidation

of Manning I and Manning II under Federal Rule of Civil Procedure

42, and also filed a motion to dismiss the Manning II complaint for

failure to state a claim. Plaintiffs, for their part, sought to

remand Manning II as improperly removed.

On September 16, 2010, the district court held a hearing

on all of the pending motions in Manning I and Manning II. The

court then took the motions under submission and stated that it

would defer ruling on defendants' motion to consolidate the two

actions until it resolved the motions to dismiss, as the dismissal

of the complaints would moot the consolidation request.

In February 2011, the court granted the motion to dismiss

the Manning I complaint, ruling that the facts alleged were

insufficient to state a plausible claim for relief under the FLSA.

The district court stated that the "complaint runs to 25 pages and

158 paragraphs, yet it lacks even the most basic information about

[plaintiffs'] claims." The court observed that among other

deficiencies, the complaint did not identify the defendants for

whom the plaintiffs worked, the plaintiffs' jobs and occupations,

or the amounts of unpaid wages. The court dismissed the FLSA claim

without prejudice and gave plaintiffs leave to amend to correct the

identified deficiencies.

In March 2011, the district court ruled on the motions

pending in Manning II. The court denied plaintiffs' remand motion,

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holding that LMRA complete preemption applied to plaintiffs'

Massachusetts claims, thus converting them into federal causes of

action and rendering the case properly removed. The court also

granted defendants' motion to dismiss the Manning II complaint,

referring to its order dismissing the Manning I complaint and

similarly ruling that the common law claims were insufficiently

pled. The court also observed that BMC's status as a public

charity rendered it statutorily exempt from plaintiffs'

Massachusetts wage-and-hour claims and dismissed them as well.

Plaintiffs were given leave to amend their complaint to plead a

"recharacterized § 301 count" in Manning II.

2. Subsequent Proceedings and the Order Dismissing the
Amended Complaint

Anticipating the filing of amended complaints, the court

held a joint scheduling conference on April 14, 2011, for Manning

I and Manning II. Although we have not been provided with a

transcript of this hearing, the parties agree that the court

directed plaintiffs to file a single complaint containing both

their FLSA and state law claims.3 Plaintiffs responded by filing

3
The district court's order dismissing plaintiffs' amended
complaint suggests otherwise, given the observation that its order
in Manning II directed plaintiffs to file a cause of action under
the LMRA in that case. The court's formal orders on the motions in
Manning I and Manning II do not expressly direct the plaintiffs to
file a single consolidated complaint.
We note, however, that the district court's docket in Manning
I contains an entry dated 4/14/2011, which includes the clerk's
note regarding the joint hearing. This entry states, with emphasis
added: "Amended Pleadings due by 4/29/2011[] (1 complaint)." The

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an amended complaint in Manning I only. This complaint alleged a

cause of action under the FLSA, brought on behalf of all plaintiffs

against all defendants, as well as a number of contract, fraud, and

tort claims pursuant to Massachusetts law brought only on behalf of

BMC employees not covered by a CBA. The complaint added McCarthy,

a nonunion employee, as a plaintiff in order to represent the

nonunionized BMC workers in the putative class. Plaintiffs also

moved for conditional certification and expedited notice under the

FLSA's collective action provisions. Defendants, for their part,

moved to dismiss the amended complaint and further urged the court

to strike the complaint's class and collective action allegations

under Federal Rule of Civil Procedure 12(f). See Fed. R. Civ. P.

12(f) (permitting court to strike "redundant, immaterial,

impertinent, or scandalous matter" from pleading).

In April 2012, the court dismissed the amended complaint

in its entirety. The court concluded that while the pleading had

significantly increased in length, it failed to remedy the problems

the court had identified in the original Manning I and Manning II

complaints. The amended complaint, the court said, contained no

factual matter indicating that defendants had a concrete policy in

place that required BMC employees to work through their meal and

rest breaks, before and after hours, or during their training

reference to "1 complaint" bears out the parties' description of
the court's directive.

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periods. Even assuming that such a policy existed, the complaint

failed to demonstrate that any of BMC's managers or supervisors had

knowledge of plaintiffs' unpaid work. Similarly, the court ruled

that the claims against the individual defendants were insufficient

to make out a plausible claim for relief, and that the plaintiffs'

state common law claims were too conclusory to survive dismissal.

For related reasons, the court granted defendants' motion

to strike the class and collective action allegations. The court

noted that plaintiffs sought to represent numerous BMC employees

who worked in a multitude of different positions. "[T]he existence

of such 'policies,'" the court opined, "across a group of putative

plaintiffs whose job function, hours, and daily tasks share little

to no common ground is simply not plausible."

Finally, the court denied plaintiffs leave to file a

second amended complaint, observing that plaintiffs' counsel had

brought at least five other hospital compensation cases in the

District of Massachusetts alone, and that similar cases against

health care facilities were proliferating throughout the country.

These cases used complaints that were "substantially identical" to

the one at issue in this case, and the court observed that other

district courts had routinely dismissed such complaints as

insufficiently pled. Accordingly, the plaintiffs "have received

the benefit of numerous rulings from federal judges . . . on the

requisites for proper pleadings," and their continuing inability to

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allege a cause of action attested to the futility of further

opportunities to amend.

Having dismissed all claims with prejudice, the court

entered judgment for defendants in Manning I and terminated Manning

II on its docket. Plaintiffs took appeals from both cases. We

consolidated those appeals for the purposes of briefing and

argument.

II.

A. The Sufficiency of the FLSA Allegations

We exercise de novo review over a district court's

dismissal of a complaint under Rule 12(b)(6). Uphoff Figueroa v.

Alejandro, 597 F.3d 423, 429 (1st Cir. 2010). Federal Rule of

Civil Procedure 8(a)(2) requires that the complaint contain "a

short and plain statement of the claim showing that the pleader is

entitled to relief." Such a statement "needs only enough detail to

provide a defendant with 'fair notice of what the . . . claim is

and the grounds upon which it rests.'" Ocasio-Hernández v.

Fortuño-Burset, 640 F.3d 1, 12 (1st Cir. 2011) (quoting Bell

Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)) (internal

quotation marks omitted).

We assess the sufficiency of the complaint's factual

allegations in two steps. First, conclusory allegations that

merely parrot the relevant legal standard are disregarded, as they

are not entitled to the presumption of truth. Id. Second, we

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accept the remaining factual allegations as true and decide if,

drawing all reasonable inferences in plaintiffs' favor, they are

sufficient to show an entitlement to relief. Id. The allegations

must be enough to render the claim plausible: "[w]here a complaint

pleads facts that are 'merely consistent with' a defendant's

liability, it 'stops short of the line between [mere] possibility

and plausibility of entitlement to relief.'" Ashcroft v. Iqbal,

556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 557)

(quotation marks omitted). We appropriately draw on our "judicial

experience and common sense" in evaluating a complaint, id. at 679,

but we may not disregard factual allegations "even if it strikes a

savvy judge that actual proof of those facts is improbable."

Twombly, 550 U.S. at 556. "The relevant question . . . in

assessing plausibility is not whether the complaint makes any

particular factual allegations but, rather, whether 'the complaint

warrant[s] dismissal because it failed in toto to render

plaintiffs' entitlement to relief plausible.'" Rodríguez-Reyes v.

Molina-Rodríguez, 711 F.3d 49, 55 (1st Cir. 2013) (quoting Twombly,

550 U.S. at 569 n.14).

1. The Sufficiency of the FLSA Allegations Against BMC

Plaintiffs seek recovery under the FLSA for unpaid

overtime compensation. The basic elements of a FLSA claim are that

(1) plaintiffs must be employed by the defendants; (2) the work

involved interstate activity; and, most importantly for present

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purposes, (3) plaintiffs "performed work for which they were

under-compensated." Pruell, 678 F.3d at 12. A claim for unpaid

overtime wages must demonstrate that the plaintiffs were employed

"for a workweek longer than forty hours" and that any hours worked

in excess of forty per week were not compensated "at a rate not

less than one and one-half times the regular rate." 29 U.S.C. §

207(a)(1); see also Román v. Maietta Const., Inc., 147 F.3d 71, 75

(1st Cir. 1998).

The parties' arguments about the sufficiency of the

allegations against BMC boil down to three issues: (1) whether the

complaint sufficiently pleads BMC's actual or constructive

knowledge of plaintiffs' undercompensation; (2) whether the facts

alleged make out a claim that plaintiffs performed compensable work

for longer than forty hours per week; and (3) whether each named

plaintiff has sufficiently alleged that she worked compensable

overtime.

a. Knowledge

The FLSA defines the term "employ" as "to suffer or

permit to work." 29 U.S.C. § 203(g). The parties agree that under

this definition, "an employer's actual or imputed knowledge . . .

is a necessary condition to finding the employer suffers or permits

that work." Chao v. Gotham Registry, Inc., 514 F.3d 280, 287 (2d

Cir. 2008); see also Newton v. City of Henderson, 47 F.3d 746, 748

(5th Cir. 1995); Davis v. Food Lion, 792 F.2d 1274, 1276 (4th Cir.

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1986). Actual knowledge is not required; "constructive knowledge

will suffice." Holzapfel v. Town of Newburgh, 145 F.3d 516, 524

(2d Cir. 1998); see also 29 C.F.R. § 785.11 ("Work not requested

but suffered or permitted is work time. . . . The employer knows or

has reason to believe that [the employee] is continuing to work and

the time is working time.").

Here, the complaint relies on a mix of actual knowledge

and constructive knowledge theories. The pleading alleges that the

employees' uncompensated work was performed "on defendants'

premises during operational hours, and in full view of defendants'

managers and supervisors." The pleading further states that

plaintiffs had conversations with their managers about their

uncompensated work. On "a number of occasions," employees directly

questioned BMC managers about the practice of deducting time

automatically from employees' paychecks, and the managers responded

that the employees were "fully paid for their work time."

Additionally, BMC managers regularly set performance deadlines that

required employees to work through their designated breaks. As for

the training sessions, defendants scheduled them to take place

during regular work hours and led the required sessions,

demonstrating that they knew that the trainings were taking place.

Defendants assail these allegations as too vague to

support BMC's knowledge of employees' unpaid work. They argue that

even though the allegations are factual in nature, "some

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allegations, while not stating ultimate legal conclusions, are

nevertheless so threadbare or speculative that they fail to cross

the line between the conclusory and the factual." Peñalbert–Rosa

v. Fortuño–Burset, 631 F.3d 592, 595 (1st Cir. 2011) (citation

omitted) (internal quotation marks omitted). Defendants note that

the pleading is vague about a number of points, such as the

identities and roles of the "managers" with whom plaintiffs spoke

and the frequency and content of these purported interactions.

Rule 8 does not demand this degree of particularity.

Even where direct allegations of knowledge are pled in a conclusory

fashion, defendants' knowledge of unlawful conduct "may be

inferable from other allegations in the complaint." Rodríguez-

Reyes, 711 F.3d at 55; see also Grajales v. P.R. Ports Auth., 682

F.3d 40, 47 (1st Cir. 2012). Boiled down to its essence,

plaintiffs' claim is that the intersection of several BMC

employment practices frequently required them to work through their

scheduled breaks, before and after work hours, and during training

sessions. This work, often required by defendants, was performed

in the open. Although defendants suffered and permitted this work

to take place, they also knew that their automatic timekeeping

system would deduct certain categories of noncompensable time from

the employees' paychecks. Yet defendants did nothing to account

for the extra time worked. These facts, taken in toto, are

sufficient to establish a plausible inference of defendants'

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knowledge. To require that plaintiffs, seeking to represent a

whole class of individuals, describe the specific managers they

talked with, and document, by time, place, and date, the instances

in which they had a relevant conversation with those managers,

would exceed Rule 8's requirement of a "short and plain statement"

making out a claim for relief. See Grajales, 682 F.3d at 47 ("In

connection with a threshold plausibility inquiry, a high degree of

factual specificity is not required."). Here, the complaint

sufficiently pleads that the employees were performing

uncompensated work with defendants' constructive or actual

knowledge.

b. Compensable Work

The Supreme Court has defined "work" under the FLSA 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." Tenn. Coal,

Iron & R.R. Co. v. Muscoda Local No. 123, 321 U.S. 590, 598 (1944);

see also IBP, Inc. v. Alvarez, 546 U.S. 21, 25-30 (2005).

Accordingly, not all activities an employee performs are

necessarily compensable. See Pruell, 678 F.3d at 14 (discussing

regulations excluding certain types of training or activities from

FLSA's definition of work). The determination of whether an

employee's activities constitute "work" depends not on "rigid per

se definitions," but rather "the circumstances of the whole

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activity." Reich v. ConAgra, Inc., 987 F.2d 1357, 1361 (8th Cir.

1993) (citation omitted) (quotation marks omitted); see also Gotham

Registry, 514 F.3d at 286-87 (applying Tennessee Coal test to

determine whether employees engaged in compensable activities).

In affirming the dismissal of a complaint raising similar

allegations, our recent opinion in Pruell observed that "the

amended complaint does not provide examples (let alone estimates as

to the amounts) of such unpaid time for either plaintiff or

describe the nature of the work performed during those times." 678

F.3d at 14. Defendants level a similar contention against this

complaint, asserting that it fails to allege that plaintiffs

engaged in compensable work with sufficient specificity.

While we agree that some of the complaint's allegations

straddle the line between the conclusory and the factual, the

pleading contains enough substantive content to elevate the FLSA

claims above the mere possibility of defendants' liability. As

discussed above, the complaint's gist is that because the

employees' assigned tasks often need to be completed by certain

times, and because of understaffing and lack of relief during meal

and work breaks, BMC employees must frequently complete their

regular working activities during their meal breaks or before and

after their scheduled shifts. For example, Manning and Williams,

who worked as nurses, spent this time charting, performing

administrative tasks, monitoring patients, and providing treatment.

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Rivers, a registered nurse, similarly used this time to assist

patients who had difficulty sleeping. McCarthy, an administrative

assistant, spent her uncompensated time placing and answering phone

calls, drafting correspondence, and filing paperwork.

This work was essentially indistinguishable from work

performed during the employees' regularly scheduled hours and

"[s]uch work from [their] standpoint [was] fungible." Gotham

Registry, 514 F.3d at 286. The fact that this assertion is not

accompanied by a detailed list of each and every activity the

plaintiffs and their fellows performed without compensation does

not mandate the complaint's dismissal. "Work is work, after all,"

id., and we see no reason to demand such exhaustive detail.

c. Overtime Worked

The parties debate whether the complaint properly alleges

that each of the individually named plaintiffs worked more than

forty hours in a given workweek, as required to bring a FLSA

overtime claim. In support of dismissal, defendants rely heavily

on the Second Circuit's recent opinion in Lundy v. Catholic Health

Sys. of Long Island Inc., 711 F.3d 106 (2d Cir. 2013), which is

another hospital compensation case. There, the Second Circuit

carefully examined each named plaintiff's allegations and discussed

the likelihood that he or she worked more than forty hours in a

given week. The Lundy court criticized the complaint's repeated

use of imprecise words such as "occasionally" and "typically" to

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describe the named plaintiffs' work hours. Id. at 114-15. This

vagueness, combined with the fact that the amounts of purportedly

uncompensated time were relatively small, provided "but low-octane

fuel for speculation" that plaintiffs truly had worked enough hours

to be entitled to overtime pay. Id. at 115.

Although defendants characterize the instant complaint as

"strikingly similar" to the pleading at issue in Lundy, a close

reading reveals otherwise. As to two of the four named plaintiffs,

Rivers and McCarthy, the complaint alleges that they were regularly

scheduled for forty-hour/week shifts. Any time that they worked

during meal breaks, before or after their shifts, and in training

periods, would thus entitle them to overtime compensation. A third

plaintiff, Manning, was usually scheduled for thirty-six hour/week

shifts, but "approximately once a month" her shift schedules

resulted in a forty-hour week. Hence, approximately once a month,

the alleged uncompensated time would put her over the numerical

threshold.

The sufficiency of the allegations as to Rhonda Williams,

who was employed by BMC as of the time of the complaint's filing,

presents a closer question. The pleading states that "from January

2004 until 2006," she "typically" was scheduled for forty-hour

workweeks. While this allegation would seem to bring her into the

same category as Rivers and McCarthy, the FLSA imposes a two-year

statute of limitations, extending to three years for willful

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violations. 29 U.S.C. § 255(a). This case was initiated in

September 2009, meaning that Williams was not regularly scheduled

to work forty-hour weeks within either limitations period. From

2006 onward, Williams's "typical[]" schedule was reduced to twenty-

four hours/week, which is plainly insufficient to bring her even

close to the threshold.

Williams also alleges, however, that she was scheduled

for a forty-hour week shift "at least once a year" after her

regular hours changed. During such a week, any hours she worked

above the forty-hour threshold would entitle her to overtime pay.

As noted, the complaint's basic thrust is that defendants' pay

practices continuously required BMC employees to work time for

which they did not receive compensation. This fact supports the

reasonable inference that during any week in which Williams was

scheduled to work forty hours, she also performed at least some

uncompensated work.

Consequently, we conclude that the named plaintiffs,

Williams included, have alleged enough to survive dismissal.

2. The Individual Defendants

The FLSA claims are also directed against two individual

defendants: Elaine Ullian, BMC's president and CEO from 1994 until

2010, and James Canavan, BMC's senior human resources director from

1997 until 2010. FLSA liability attaches to any "employer," which

is defined broadly to include "any person acting directly or

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indirectly in the interest of an employer in relation to an

employee." 29 U.S.C. § 203(d). Courts have generally agreed that

"a corporate officer with operational control of a corporation's

covered enterprise is an employer along with the corporation,

jointly and severally liable . . . for unpaid wages." Donovan v.

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

In Agnew, our seminal case on FLSA individual liability,

we balanced "the shield from personal liability [that] is one of

the major purposes of doing business in a corporate form" against

Congress's clear refusal "to incorporate the common law parameters

of the employer-employee relationship" into the FLSA. Id. at 1513.

Examining the Supreme Court's precedents interpreting the FLSA and

other employment statutes, we noted that they charted a middle

course, applying a context-dependent "economic reality" test that

looked to the totality of the individual's level of involvement

with the corporation's day-to-day operations, as well as their

direct participation in creating or adopting the unlawful pay

practices. Id. at 1513-14. While recognizing the fact-based

nature of this test, we admonished that courts should not apply the

analysis in a manner that would "make any supervisory employee,

even those without any control over the corporation's payroll,

personally liable for the unpaid or deficient wages of other

employees." Id. at 1513.

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 We added substance to the economic reality test in

Baystate Alternative Staffing, Inc. v. Herman, 163 F.3d 668 (1st

Cir. 1998), explaining that

[the] analysis focuse[s] on the role played by
the corporate officers in causing the
corporation to undercompensate employees and
to prefer the payment of other obligations
and/or the retention of profits. In addition
to direct evidence of such a role, other
relevant indicia may exist as well -- for
example, an individual's operational control
over significant aspects of the business and
an individual's ownership interest in the
business. Such indicia, while not
dispositive, are important . . . because they
suggest that an individual controls a
corporation's financial affairs and can cause
the corporation to compensate (or not to
compensate) employees in accordance with the
FLSA.

Id. at 678 (emphasis added) (internal citation omitted). We

cautioned that these indicia must add up to something more than

merely "the exercise of control by a corporate officer or corporate

employee over the 'work situation'" generally, as otherwise "almost

any supervisory or managerial employee of a corporation could be

held personally liable for the unpaid wages of other employees."

Id. at 679; see also Chao v. Hotel Oasis, Inc., 493 F.3d 26, 34

(1st Cir. 2007) (concluding that corporate officer was "not just

any employee with some supervisory control over other employees,"

but rather was "instrumental in causing the corporation to violate

the FLSA" (internal quotation marks omitted)).

-23-
 Our FLSA individual liability cases typically address "a

corporate officer with operational control of a corporation's

covered enterprise," rather than a mere employee. Agnew, 712 F.2d

at 1511 (two individuals who "together were President, Treasurer,

Secretary and sole members of the Board of Directors"); see also

Hotel Oasis, 493 F.3d at 34 ("president of the corporation"). We

have similarly identified an ownership stake as highly probative of

an individual's employer status, see Baystate, 163 F.3d at 678, as

it suggests a high level of dominance over the company's

operations. See Lambert v. Ackerley, 180 F.3d 997, 1012 (9th Cir.

1999) (approving jury instruction that individuals were liable if

they had a "significant ownership interest with operational control

of significant aspects of the corporation's day-to-day functions"

(emphasis added)); Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132,

140 (2d Cir. 1999) ("Because [the defendant] controlled the company

financially, it was no idle threat when he testified that he could

have dissolved the company if [the other defendants] had not

followed his directions."). The company's profits also inure

directly to an individual with an ownership interest, meaning that

the individual "employs" the worker in a very concrete and literal

sense. See Dole v. Elliot Travel & Tours, Inc., 942 F.2d 962, 966

(6th Cir. 1991) (holding individual liable where "the evidence

clearly demonstrates that [individual] was the 'top man' . . . and

the corporation functioned for his profit").

-24-
 This is not to say that the FLSA's definition of employer

excludes those without high executive positions or ownership

interests, as the economic reality test speaks broadly of

individuals who have "operational control over significant aspects

of the business." Baystate, 163 F.3d at 678; see also Lamonica v.

Safe Hurricane Shutters, Inc., 711 F.3d 1299, 1310 (11th Cir. 2013)

(observing that "a supervisor's title does not in itself establish

or preclude his or her liability under the FLSA"). But the case

law's emphasis on ownership and financial control is sensible

because these factors suggest a strong degree of authority over the

corporation's finances and, as a corollary, the ability to "caus[e]

the corporation to undercompensate employees and to prefer the

payment of other obligations and/or the retention of profits."

Baystate, 163 F.3d at 678.

a. Elaine Ullian

Against this backdrop, we turn to the allegations against

Ullian, BMC's former president and CEO. Plaintiffs say that Ullian

"had the authority to, and did, make decisions that concerned the

policies defendants adopted and the implementation of those

policies." They claim that she exercised her dominance over BMC's

operations by coordinating a major merger of several Boston area

hospitals, overseeing the corporation's budget, and setting

company-wide policy. She also was "involved in" a number of major

employment-related decisions, including hiring employees from

-25-
community organizations, reducing jobs and services due to budget

cuts, negotiating with unions, and ensuring that minorities were

represented in BMC's workforce.

These allegations do not say that Ullian possessed any

ownership interest in BMC, which we have identified as a

significant factor in the individual liability analysis.

Nevertheless, her role as BMC's president and chief executive

officer suggests that she was in a position to exert substantial

authority over corporate policy relating to employee wages. See

Hotel Oasis, 493 F.3d at 34 (emphasizing that individual "was the

corporate officer principally in charge of directing employment

practices, [including] requiring employees to attend meetings

unpaid, and setting employees' wages and schedules"). While

allegations reliant solely on Ullian's position within BMC would

not be sufficient to hold her individually liable, the complaint

contains allegations indicating that she "controlled [the

company's] purse-strings or made corporate policy about [its]

compensation practices." Baystate, 163 F.3d at 678.

Specifically, Ullian was involved in an array of

decisions related to managing BMC's finances. For example, she was

involved in the hospital budget and made decisions to allocate

substantial resources to certain projects. Moreover, she was

"involved in the reduction of jobs and services" at BMC due to

budgetary constraints, and was similarly involved in strategic

-26-
decisions to cut staff positions and reduce the company's spending.

These assertions support the notion that Ullian had the authority

to, and did, make critical decisions regarding the allocation of

BMC's resources, thereby buttressing the inference that she had the

type of operational control over the company that would give rise

to individual FLSA liability.

The dissent notes these same factual allegations, but

concludes that they are "merely consistent with" an inference of

liability, Twombly, 550 U.S. at 557, rather than sufficient to

raise a plausible claim. Although the dissent acknowledges that

plaintiffs need not state "particular facts showing that an

individual defendant made a specific decision or took a particular

action that directly caused the plaintiffs' undercompensation," it

criticizes the complaint for failing to show "that the plaintiffs'

compensation was sufficiently within the defendant's bailiwick to

justify holding her personally liable." It also takes issue with

the complaint's lack of allegations "connecting Ullian to any

component of" the timekeeping practices and work and training

requirements that caused the systematic undercompensation.

But "[t]he relevant question . . . in assessing

plausibility is not whether the complaint makes any particular

factual allegations." Rodríguez-Reyes, 711 F.3d at 55. Instead,

we look to whether, "taken in their entirety," the facts alleged

are enough to state a claim. Id. With respect, we believe the

-27-
dissent devalues the familiar process of drawing inferences from

"relevant indicia" of employer status, such as "an individual's

operational control over significant aspects of the business."

Baystate, 163 F.3d at 678.

Even after the complaint's conclusory and generalized

assertions are discarded, the pleading discusses Ullian's

involvement in employment, training, and payroll operations, her

participation in recruiting activities, and decisions she made to

reduce staff due to budget cuts. These allegations describe an

executive who not only possessed, but repeatedly exercised the

authority to establish company-wide policy regarding employment-

related matters and made significant decisions regarding the

allocation of financial resources that directly affected BMC's

employees. These facts denominate concrete actions that had

measurable and immediate impacts on BMC's workforce. Thus, the

complaint raises a plausible inference not only that compensation-

related matters were well within Ullian's bailiwick, but also that

she "control[led the] corporation's financial affairs and . . .

cause[d] the corporation to compensate (or not to compensate)

employees in accordance with the FLSA." Id. at 678.

While specific allegations linking Ullian to BMC's

automated timekeeping system or the practice of working through

meal and rest periods would have further buttressed plaintiffs'

FLSA claim, that kind of direct evidence is not essential to the

-28-
assertion of a plausible claim. Moreover, demanding that type of

allegation is often unrealistic at this stage when "some of the

information needed may be in the control of defendants." Pruell,

678 F.3d at 15.

Importantly, one of our prior opinions found individual

FLSA liability in a nearly identical factual context. In Hotel

Oasis, we deemed the president of the corporation personally liable

because he "had ultimate control over the business's day-to-day

operations." 493 F.3d at 34. The individual in question was the

corporate officer "principally in charge of directing employment

practices, such as hiring and firing employees, requiring employees

to attend meetings unpaid, and setting employees' wages and

schedules." Id. Notably, these facts were sufficient to establish

a claim against the individual regardless of whether he possessed

an ownership interest in company. Id. at 34 n.9. As enumerated

above, the allegations against Ullian hew closely to the facts we

found sufficient to establish individual liability in Hotel Oasis.

Consequently, the dismissal of the FLSA claims against her must be

vacated.

b. Thomas Canavan

The complaint also seeks to hold Canavan, BMC's former

senior human resources director, personally liable for the alleged

FLSA violations. Canavan lacks any ownership interest in BMC, does

not serve as a high-level corporate officer, and is not a member of

-29-
the company's board of directors. Unlike Ullian, he apparently

occupied a position more akin to a senior employee than a corporate

official. Although FLSA's definition of "employer" does not

necessarily exclude senior-level employees, our previous cases have

not yet extended FLSA liability to such an individual.4

In view of the case law's emphasis on individuals with

corporate officer status and/or an ownership stake in the company,

and the lack of any such assertions relating to Canavan, the

allegations as to his involvement in setting and enforcing the

unlawful pay practices at issue become all the more important.

Although there are such allegations against him, they are nothing

more than unadorned assertions that are not supplemented by

specific allegations supporting the inference that Canavan

controlled BMC's purse-strings or made decisions about the

allocation of financial resources. See Baystate, 163 F.3d at 678;

compare Donovan v. Grim Hotel Co., 747 F.2d 966, 971 (5th Cir.

1984) (finding individual liable when "he held their purse-strings

and guided their policies," companies "were part of the . . .

family business," and "functioned for the profit of his family").

As we have detailed, there were such allegations against Ullian.

4
Indeed, plaintiffs have not identified a case where a
circuit court imposed FLSA liability on a human resources manager
who possessed no ownership stake in the company. But see Carpenter
v. Refrigeration Sales Corp., 49 F. Supp. 2d 1028, 1031 (N.D. Ohio
1999) (ruling that head of human resources department was
"employer" under Family and Medical Leave Act).

-30-
Their absence with respect to Canavan undermines any inference of

individual liability.

Similarly, to say, as the complaint does, that Canavan

had some involvement in "maintaining records" or "payroll

functions" is not enough to support a reasonable inference of

liability, given that plaintiffs nowhere assert that there was

anything per se unlawful about taking automatic deductions from

employees' time. If anything, these allegations are merely

consistent with the notion that Canavan was performing his job

functions, rather than engaging in conduct that led to the alleged

violations.

For these reasons, the complaint does not state a claim

against Canavan.

B. The Arbitrability of Plaintiffs' FLSA Claims

Defendants also mount a challenge to the viability of

plaintiffs' FLSA claims based on federal laws governing unions,

including the National Labor Relations Act ("NLRA") and the LMRA.

Although defendants' argument is somewhat hazy, we understand it

this way. LMRA § 301 embodies a strong federal policy in favor of

"protect[ing] the use of arbitration and grievance procedures

common to CBAs." Cavallaro, 678 F.3d at 5. Thus, the LMRA exerts

a strong preemptive effect over state law causes of action "so long

as relief can be provided within the CBA process." Id. at 6. The

FLSA, for its part, permits employers and employees to contract

-31-
about certain terms and conditions of employment, including the

parties' definition of "work," as long as those contractual

provisions remain consistent with the FLSA's provisions and

purposes. Although the LMRA's broad protection of arbitration

focuses on state law claims, defendants maintain that the FLSA

claims similarly should be subject to the federal policy in favor

of arbitrating disputes between employers and union workers

regarding the payment of wages. The best way to do so is to

require the unionized plaintiffs (Manning, Rivers, and Williams) to

arbitrate their FLSA claims before proceeding to federal court.5

This "exhaustion" argument runs aground on well-settled

case law governing the arbitrability of federal statutory claims.6

In O'Brien v. Town of Agawam, 350 F.3d 279 (1st Cir. 2003), we

addressed the argument that the FLSA claims of certain unionized

5
We note that defendants do not address McCarthy, a nonunion
plaintiff whose FLSA claims cannot be covered by a CBA. McCarthy's
FLSA claims would thus appear to remain untouched even if we
accepted defendants' view of the law.
6
Plaintiffs maintain that defendants should have raised this
argument in a cross appeal, because adopting it would alter or
amend the judgment in defendants' favor. To the contrary, the
district court's order dismissed plaintiffs' FLSA claims with
prejudice. Accepting defendants' "exhaustion" argument would cause
the same result -- the dismissal of plaintiffs' FLSA claims with
prejudice. Affirming the dismissal using this reasoning would be
an appropriate exercise of our ability to affirm on any basis
present in the record, and no cross-appeal was necessary to put
this issue before us. See, e.g., United Fire & Cas. Co. v. Boulder
Plaza Residential, LLC, 633 F.3d 951, 958 (10th Cir. 2011); Smith
v. Johnson & Johnson, 593 F.3d 280, 283 n.2 (3d Cir. 2010); Rivero
v. City & Cnty. of San Francisco, 316 F.3d 857, 862 (9th Cir.
2002).

-32-
workers were "barred from federal court because they are

essentially contract claims for unpaid overtime" and therefore

subject to the CBA's grievance and arbitration procedures.7 Id. at

284. We rejected this proposition, observing that "[r]ights

conferred by Congress are conceptually distinct from those created

by private agreement, and there is no authority for the proposition

that rights under the FLSA merge into contractual ones whenever the

two overlap." Id. at 285; see also Gilmer v. Interstate/Johnson

Lane Corp., 500 U.S. 20, 35 (1991) (distinguishing between

"contractual rights under a collective-bargaining agreement and

individual statutory rights").

As a consequence, FLSA claims are not subject to a CBA's

grievance and arbitration procedures simply because they address

similar subject matter or because the CBAs define compensable

"work." Indeed, the state of the law is somewhat unsettled as to

whether a FLSA claim may ever be waived by a CBA.8 Whatever the

7
In a notable omission, both defendants and plaintiffs have
failed to discuss or even cite Agawam in their briefs, despite its
clear applicability to this case.
8
The Supreme Court's opinion in Barrentine v. Arkansas-Best
Freight Sys., Inc., 450 U.S. 728 (1981), contained broad language
strongly suggesting that FLSA claims were never appropriate for
arbitration. Id. at 742-45. But the Court's recent opinion in 14
Penn Plaza LLC v. Pyett, 556 U.S. 247 (2009), held that a provision
requiring the arbitration of statutory age discrimination claims
was enforceable, and indicated that unless a statutory scheme
specifically removed a "particular class of grievances from the
NLRA's broad sweep," a CBA's arbitration clause should be given
full effect. Id. at 257-58. In reaching this conclusion, Pyett
disapproved of Barrentine and similar opinions addressing other

-33-
answer to that question may be, the law is plain on one point: in

order for a CBA to subject a federal statutory claim to

arbitration, any such waiver must be "clear and unmistakable" on

its face. Agawam, 350 F.3d at 285; see also Cavallaro, 678 F.3d at

7. The Supreme Court has repeatedly reaffirmed this rule. See

Pyett, 556 U.S. at 260 (holding that union members' age

discrimination claims must be subject to CBA's arbitration

provisions because CBA "clearly and unmistakably requires

respondents to arbitrate" them); Wright v. Universal Mar. Serv.

Corp., 525 U.S. 70, 80 (1998) (holding that requirement contained

in CBA requiring parties to arbitrate employment discrimination

claims must be clear and unmistakable, and that "less-than-

explicit" waiver was insufficient).9

employment statutes, insofar as they suggested that federal
statutory claims could not be addressed properly through
arbitration. Id. at 265-72.
Pyett strongly indicates that FLSA claims are indeed
arbitrable. Some courts, however, have suggested that the FLSA's
structure and language may distinguish it from the ADEA and other
employment discrimination statutes for these purposes. Compare
Austin v. Owens-Brockway Glass Container, Inc., 78 F.3d 875, 883
n.2 (4th Cir. 1996) (observing that Title VII and Americans with
Disabilities Act contain provisions encouraging arbitration,
whereas FLSA does not), with Kuehner v. Dickinson & Co., 84 F.3d
316, 319 (9th Cir. 1996) (stating that employee was "[u]nable to
identify support in the text or legislative history of the FLSA"
for notion that FLSA excludes certain claims from arbitration). As
we explain, we need not answer that question today.
9
Agawam and the other opinions discussed above defeat
defendants' reliance on Leahy v. City of Chicago, 96 F.3d 228, 232
(7th Cir. 1996). There, a divided panel held that "if the [CBA's]
guarantee of overtime compensation for time worked in excess of
eight hours . . . protects [the plaintiffs'] FLSA rights to

-34-
 As to what kind of provision would work a clear and

unmistakable waiver, we have observed that "[a] broadly-worded

arbitration clause such as one covering 'any dispute concerning or

arising out of the terms and/or conditions of [the CBA] . . . '

will not suffice; rather, something closer to specific enumeration

of the statutory claims to be arbitrated is required." Cavallaro,

678 F.3d at 7 n.7. For example, in Wright, the Court held that the

CBA in that case was not sufficiently lucid when it contained "very

general" clauses requiring arbitration of "'[m]atters under

dispute'" and "'matters affecting wages, hours, and other terms and

conditions of employment,'" without the "explicit incorporation of

statutory antidiscrimination requirements." 525 U.S. at 80-81. In

Agawam, we deemed insufficient arbitration language referring only

to "'grievances,' which in turn [were] defined as allegations that

the Town violated the CBA" without any reference to the

"arbitration of statutory claims, let alone a clear and

unmistakable waiver of a judicial forum for such claims." 350 F.3d

at 285-86.

Here, the defendants cannot point to a single provision

of the relevant CBAs that works a clear and unmistakable waiver of

overtime compensation, then the agreement is a defense to liability
under the FLSA." Id. at 232. The Leahy court held that as long as
the CBA grants workers all the protection the FLSA affords, then
the CBA provides the exclusive means of vindicating the workers'
FLSA rights and their claims must be dismissed. As Agawam
explains, however, this analysis incorrectly conflates contractual
rights with statutory ones. 350 F.3d at 285.

-35-
their FLSA claims. The CBAs' arbitration provisions do contain

general grievance procedures, but define "grievances" as disputes

or concerns arising out of the interpretation of the CBAs

themselves. These provisions do not mention the employees'

statutory claims, much less clearly or unmistakably agree to

subject them to arbitration. Accordingly, nothing in the CBAs can

even be remotely construed to require the plaintiffs to seek

redress for their FLSA claims through the CBA's grievance

processes.

In sum, a well-developed body of precedent dictates that

a CBA's waiver of federal statutory claims must be clear and

unmistakable. No such waiver exists in the CBAs at issue here.

Consequently, the CBAs do not foreclose plaintiffs' claims under

the FLSA.10

10
Contrary to defendants' assertions, the LMRA and its
attendant preemption doctrine do not support the arbitrability of
plaintiffs' FLSA claims. As defendants acknowledge, this body of
law typically addresses the effect of federal labor law upon state
law causes of action and accordingly says little about the proper
relationship between two federal statutory schemes. See Cavallaro,
678 F.3d at 4-5; see also Part II.C.1, infra. The Supreme Court
and our opinion in Agawam have prescribed a different analysis when
it comes to the latter circumstance. In short, defendants'
reliance on LMRA preemption doctrine is simply a rephrasing of
their "waiver" argument, and we accordingly reject it as well.
Similarly unavailing is defendants' reliance on Tamburello v.
Comm-Tract Corp., 67 F.3d 973 (1st Cir. 1995), where we deemed a
RICO claim "preempted" by federal labor law when the claim asserted
a violation of federal labor law as a predicate act. Id. at 976-
78. This case does not implicate Tamburello's unique posture,
however, as here plaintiffs assert statutory rights that exist
wholly independent of the CBA and do not depend upon its
interpretation.

-36-
C. McCarthy's State Common Law Claims

Plaintiffs also challenge the district court's

disposition of their state law claims, asserting that the trial

court erroneously forced a nonunion plaintiff, McCarthy, to join

her state law claims with the federal claims asserted by the other

named plaintiffs, all of whom were union members covered by CBAs.

In the alternative, plaintiffs argue that the district court erred

in dismissing McCarthy's state law claims under Rule 12(b)(6).

1. The Consolidation of McCarthy's Claims with the Union
Plaintiffs' Claims

The state law claims at issue in this case had their

genesis in Manning II, which began in the Commonwealth courts but

was subsequently removed to federal court via LMRA complete

preemption. "'Complete preemption' . . . applies where a

purported state claim either is re-characterized as a federal claim

or . . . is otherwise so related to federal law as to permit the

removal." Cavallaro, 678 F.3d at 4. In the labor context, this

doctrine reaches all "state law claims 'founded directly on rights

created by collective-bargaining agreements' or 'substantially

dependent on analysis of a collective-bargaining agreement.'" Id.

at 5 (quoting Caterpillar Inc. v. Williams, 482 U.S. 386, 394

(1987)). LMRA complete preemption thus transforms a claim pled

under state law into a claim arising under federal labor law,

-37-
thereby establishing a basis for federal jurisdiction and changing

the substantive law governing the claim itself.11 Id. at 5-7.

The three original plaintiffs in Manning II were all

union members, and all asserted state law claims that the district

court found to be substantially dependent on interpreting the CBAs,

rendering them completely preempted. Plaintiffs raise no dispute

with this legal conclusion on appeal.12 Instead, they object to the

district court's directive that the plaintiffs file a single

amended complaint pleading the federal and state law claims that

began as two separate cases in Manning I and Manning II.

Plaintiffs observe that McCarthy, as a nonunion employee not

covered by a CBA, had the ability to raise state law claims that

were not completely preempted by the LMRA. See Pruell v. Caritas

Christi, 645 F.3d 81, 84 (1st Cir. 2011) ("So long as non-union

plaintiffs pursue their own claims or represent others who are also

11
Complete preemption is rooted in § 301 of the LMRA, 29
U.S.C. § 185, which governs "[s]uits for violation of contracts
between an employer and a labor organization representing
employees." Id. § 185(a). Although the LMRA lacks an express
preemption provision, the Supreme Court has construed this
provision as supporting the preemption of state law claims. See
Cavallaro, 678 F.3d at 5 (discussing line of LMRA preemption
opinions).
12
In their reply brief, plaintiffs cite the complaint's
allegation that Rivers joined a union only after having worked at
BMC for approximately five years, and suggest that any claims
arising out of Rivers's pre-union term of employment are not
completely preempted. The failure to argue this issue in their
opening brief dooms any attempt to distinguish Rivers's claims.
See Rubin v. Islamic Republic of Iran, 709 F.3d 49, 54 (1st Cir.
2013).

-38-
not covered by CBAs, that is a state case under state law."). But

bringing McCarthy's claims as a separate action in the Commonwealth

courts, plaintiffs say, would have violated the district court's

directive to file a single consolidated complaint that included the

putative class members' state law claims.

There is no evidence that the district court intended to

preclude McCarthy from pursuing state law claims in state court.

To recap, the three named plaintiffs who initiated both Manning I

and Manning II were all asserted to be union members. At the time

the district court directed plaintiffs to file a single

consolidated complaint, these were the only three plaintiffs in the

case. Thus, the district court understood the case to concern only

plaintiffs who were union members, and plaintiffs cite nothing in

the record showing that the district court was even aware of the

existence of a named plaintiff who had the undisputed ability to

assert nonpreempted state law claims. Based on the circumstances

before it, the district court acted on the reasonable assumption

that if the then-existent plaintiffs wanted to bring any state law

claims, they should be joined with their federal causes of action.

See 28 U.S.C. § 1367(a).

Even if the district court had been made aware of

McCarthy as a plaintiff, exercising supplemental jurisdiction over

her claims would have been more than appropriate, since they were

undisputedly part of the same case or controversy. See Cavallaro,

-39-
678 F.3d at 5. To be sure, the exercise of this jurisdiction was

within the court's discretion, and McCarthy could have moved to

dismiss her particular claims without prejudice. See 28 U.S.C. §

1367(c) (permitting district courts to decline supplemental

jurisdiction in certain enumerated circumstances). But McCarthy

never requested the chance to bring her claims outside federal

court. While the amended complaint includes a footnote stating

that the state law claims were joined to the federal causes of

action per the district court's directive, this vague notation says

only that the plaintiffs "reserve all rights." McCarthy cannot now

complain of the court's failure to address this issue when she did

not put such a request before the court below.

Finally, to the extent that plaintiffs attack the

district court's directive to file a single consolidated complaint,

that contention is meritless. See Sutcliffe Storage & Warehouse

Co. v. United States, 162 F.2d 849, 851 (1st Cir. 1947) (stating

that "district court would be acting quite within its discretion in

taking steps to consolidate or otherwise avoid the duplication of

such closely similar cases, whatever the substantive rights of the

parties").

For these reasons, all of the named plaintiffs' claims,

both federal and state, were properly before the district court.

-40-
 2. The Merits of McCarthy's State Law Claims

The district court grouped the state law claims into

three categories: (1) contract and quasi-contract claims (Counts

II-IV and IX); (2) fraud claims (Counts VII and VIII); and (3)

unjust enrichment, money had and received, and conversion claims

(Counts V, VI and X). To clarify the scope of this appeal, the

district court ruled that insofar as these common law claims sought

to recover overtime pay, they were preempted because they

conflicted with the FLSA's comprehensive remedial scheme. Cf.

Román, 147 F.3d at 76 (addressing preemption of Maine law and

suggesting that "the FLSA is the exclusive remedy for enforcement

of rights created under the FLSA") (internal quotation marks

omitted). The parties do not dispute this proposition. McCarthy's

state law claims are accordingly limited to the recovery of

"straight-time" pay, i.e., unpaid wages for non-overtime hours at

her regular hourly rate.

Plaintiffs challenge the district court's conclusion that

McCarthy's state law claims were pled in too conclusory a fashion

to withstand dismissal. Defendants, for their part, urge us to

adopt the district court's reasoning. In the alternative, they

assert that all the common law claims are precluded or "preempted"

by Massachusetts wage-and-hour statutes. We begin with the

question of whether the Massachusetts wage-and-hour law precludes

-41-
McCarthy's common law claims, and then turn to the sufficiency of

the complaint.

a. The Effect of the Massachusetts Wage-and-Hour
Statutes on the Common Law Claims

Defendants note that the district court dismissed the

original Manning II complaint's statutory Massachusetts wage-and-

hour claims because those statutes exempt "an employee of an

incorporated hospital . . . which is conducted as a public

charity," Mass. Gen. Laws ch. 149, § 148, and "any employee who is

employed . . . in a hospital," id. ch. 151, § 1A(16). Defendants

argue that McCarthy seeks to evade the force of these exemptions by

clothing her statutory claims as contractual ones. They contend

that all of McCarthy's common law claims are premised on the

violation of Massachusetts wage-and-hour statutes, and that those

statutes should be construed to "preempt" any recovery of unpaid

wages through common law causes of action.13

We are not persuaded. When exercising diversity or

supplemental jurisdiction over state law claims, we apply

substantive state law. See Barton v. Clancy, 632 F.3d 9, 17 (1st

Cir. 2011). In doing so, our duty is to "make an informed prophecy

as to the state court's likely stance." Andrew Robinson Int'l,

13
McCarthy contends that we are barred from evaluating whether
Massachusetts wage-and-hour statutes preclude or displace their
common law claims, since doing so would have the effect of
enlarging the judgment in defendants' favor. For the reasons
explained in footnote 6, supra, she is wrong. See Powell v.
Schriver, 175 F.3d 107, 113 (2d Cir. 1999).

-42-
Inc. v. Hartford Fire Ins. Co., 547 F.3d 48, 51 (1st Cir. 2008).

To begin, the Massachusetts courts have noted that duties arising

out of a contract may be distinguished from those imposed by

statute, and the two do not merge simply because they cover similar

subject matter. Indeed, the Massachusetts courts have been clear

that "an existing common law remedy is not to be taken away by

statute unless by direct enactment or necessary implication."

Eyssi v. City of Lawrence, 618 N.E.2d 1358, 1361 (Mass. 1993)

(citation omitted) (internal quotation marks omitted); see also

King v. Viscoloid Co., 106 N.E. 988, 989 (Mass. 1914) (same).

In Salvas v. Wal-Mart Stores, Inc., the Massachusetts

Supreme Judicial Court ("SJC") applied these principles to a claim

on behalf of a group of workers who alleged that their employer had

deprived them of their meal periods without payment. 893 N.E.2d

1187, 1215 (Mass. 2008). There, the plaintiffs pled a cause of

action under Massachusetts General Laws Chapter 149, § 100, for

unpaid meal breaks, as well as a breach of contract claim based on

the same deprivation. Id. Although the statutory claim failed

because the relevant law did not provide for either an express or

an implied private right of action, id. at 1216, the court held

that "[t]he lack of a statutory private right of action presents no

bar to the plaintiffs' claim that [defendant] violated a

contractual duty to provide meal periods to the plaintiff class."

Id. The SJC observed that "[t]o an hourly employee . . . , the

-43-
opportunity to stop work and eat a meal in peace during a busy

workday may constitute a benefit of significant value," which the

parties could bargain for in the course of establishing an

enforceable contract. Id. at 1217. As a consequence, plaintiffs'

inability to avail themselves of a remedy under the wage-and-hour

laws did not preclude a common law claim that sought to vindicate

distinct legal rights.

Salvas closely tracks this case. Although McCarthy

cannot bring statutory wage-and-hour claims against defendants

directly due to BMC's exempt status, that prohibition does not

compel the erasure of her remedies at common law. See Eyssi, 618

N.E.2d at 1361-62 (holding that amendments to workers' compensation

statutes did not bar common law loss of consortium action brought

by spouse or child of police officer).

Seeking to conjure a contrary argument, defendants rely

on two SJC cases that they read for the proposition that "[w]here

a statute has been enacted seemingly to cover the whole subject to

which it relates . . . other provisions of the common law . . . are

thereby superseded." School Comm. of City of Lowell v. City of

Lowell, 164 N.E. 91, 92 (Mass. 1928). But these cases do not sweep

so broadly. For one, Lowell addressed a right that was "wholly the

creature of statute" and that "[did] not exist at common law." Id.

at 93. By contrast, the common law rights plaintiffs seek to

vindicate here have long preceded the Massachusetts wage-and-hour

-44-
laws. The other SJC case defendants cite, School Committee of

Boston v. Reilly, 285 N.E.2d 795 (Mass. 1972), actually undermines

their contentions. There, the SJC considered the relationship

between a criminal statute prohibiting municipal employees from

engaging in strikes or work stoppages, and the terms of a CBA

between the Boston school system and the teachers' union that also

prohibited strikes. Id. at 796. When the teachers' union engaged

in a work stoppage, the school district sued under the CBA and

obtained an injunction. Id. at 797. Rejecting the teachers'

contention that the criminal statutes provided the exclusive remedy

for the union's conduct, the SJC saw nothing that "would warrant

the conclusion that [the criminal statute's] enactment was intended

to restrict previously existing common law remedies for breach of

contract in the employer-employee context." Id. at 798.14

In short, defendants have not identified any persuasive

evidence that the Massachusetts legislature sought to eliminate

longstanding common law causes of action through the wage-and-hour

laws. We therefore conclude that these laws do not preclude

McCarthy from asserting the common law claims pled in this case.

b. The Sufficiency of the State Law Claims

14
Defendants' remaining authorities consist of unpublished
Massachusetts trial court opinions that are either inapposite or
fail to engage with the doctrine described above. We thus see no
reason to adopt their reasoning.

-45-
 We now turn to the sufficiency of the state law claims

under Rule 12(b)(6), grouping them as the district court did into

contract claims, fraud claims, and unjust enrichment claims. As

stated above, the parties are in accord that these claims are for

recovery of "straight-time" pay only.

i. The Contract Claims

McCarthy contends that the district court "misapprehended

that an employer-employee relationship is, at heart, a contractual

one" and that the court erred in ruling that the amended complaint

failed to allege a contract. We agree. While the complaint may

not be larded with detail, the basic claim is clear. The

defendants, by hiring and employing the plaintiffs, "entered into

[] employment contract[s] with [them]." There is no requirement of

greater formality to establish an employment contract. Indeed, "an

informal contract of employment may arise by the simple act of

handing a job applicant a shovel and providing a workplace."

Hishon v. King & Spalding, 467 U.S. 69, 74 (1984).

Per the complaint, the terms of this alleged contract were

similarly straightforward -- McCarthy and her fellows would

"provide their labor and services in a specified role for

defendants, in exchange for an agreed upon hourly pay rate for 'all

hours worked' by plaintiffs." "At a very minimum, an at-will

employment relationship encompasses an agreement by the employee to

perform specified work and an agreement by the employer to pay for

-46-
the work performed." Gasior v. Mass. Gen. Hosp., 846 N.E.2d 1133,

1137 n.7 (Mass. 2006). The heart of the state law claims is that,

through the timekeeping and payroll policies detailed above,

defendants breached the agreements and/or promises to pay all of

the wages due. The complaint also includes allegations stating

that defendants breached the duty of good faith by failing to pay

plaintiffs for their hours worked, and that the employees relied,

to their detriment, on defendants' promises to pay all the wages

owed. While these factual allegations are relatively simple, so

are the elements of a claim sounding in contract. We see no need

to demand more specificity when the core assertion is obvious

enough. Cf. Spears v. Miller, No. 1683, 2006 WL 2808145, at *3

(Mass. App. Div. Sept. 26, 2006) (observing that while "complaint

was silent as to [employees'] precise employment arrangements,"

allegations that employer "employed them" and that employer

"'agreed to pay' them 'legally mandated overtime pay'" were

sufficient to state breach of contract claim).

For these reasons, the dismissal of McCarthy's claims

sounding in contract must be vacated.

ii. The Fraud and Unjust Enrichment Claims

The remaining common law claims may be disposed of more

simply. As an initial matter, we note that McCarthy articulates no

challenge to the district court's conclusion that the fraud claims

did not meet the heightened pleading threshold set by Rule 9(b).

-47-
See Fed. R. Civ. P. 9(b) (requiring that fraud or mistake claims

"state with particularity the circumstances constituting fraud or

mistake"). Although McCarthy contends that the dismissal of the

common law claims should be vacated insofar as it is based on the

complaint's failure to plead knowledge, that pleading defect was

not the basis of the district court's dismissal of the fraud

claims. Due to the failure to provide any developed argumentation

as to why the fraud claims should survive Rule 9(b), we affirm the

dismissal of Count VII, the fraud claim, and Count VIII, the

negligent misrepresentation claim. See Elena v. Municipality of

San Juan, 677 F.3d 1, 8 (1st Cir. 2012) (deeming claim waived on

appeal when plaintiffs "make no attempt at any analysis whatsoever,

let alone developed argument").

By contrast, the district court's dismissal of the unjust

enrichment, money had and received, and conversion claims was based

entirely on its erroneous conclusion that the complaint did not

sufficiently plead that "defendants required or had knowledge of

the work allegedly performed by plaintiffs." See Part II.A.1.a,

supra. Neither the district court nor defendants on appeal have

proffered another basis for affirming the district court's order.

Consequently, the dismissal of the unjust enrichment, conversion,

and money had and received claims should be vacated.

D. Plaintiffs' Class Action and Collective Action Allegations

-48-
 In addition to dismissing plaintiffs' substantive causes of

action, the district court struck the class and collective action

allegations. The amended complaint seeks both certification of a

class action under Federal Rule of Civil Procedure 23 for the

nonunion members' state law claims seeking straight-time pay, and

a collective action under FLSA Section 16(b), 29 U.S.C. § 216(b),

for the plaintiffs' FLSA overtime claims. Although Rule 23 and the

FLSA impose different certification requirements, the district

court used the same reasoning to strike both sets of allegations,

and the parties by and large do not distinguish between the two

regimes. We consequently assume that the same analysis applies to

both.15 For simplicity's sake, we refer to the relevant allegations

as "class action" allegations.

The dispositive question for purposes of this appeal is

whether the complaint pleads the existence of a group of putative

class members whose claims are susceptible of resolution on a

classwide basis. See Wal-Mart Stores, Inc., v. Dukes, 131 S. Ct.

2541, 2551 (2011) (holding that common issue of fact "must be of

15
Conditional certification of a FLSA collective action
requires that the putative plaintiffs be "similarly situated." 29
U.S.C. § 216(b). By contrast, Rule 23 calls for the class to share
common questions of law or fact, Fed. R. Civ. P. 23(a)(2), and if
certification is sought under Rule 23(b)(3), as is typical in wage-
and-hour suits, that common issues predominate over individual
ones, id. 23(b)(3). Although we treat class and collective
certification requirements as the same for the purposes of this
appeal, we do not suggest that this conflation is appropriate in
all circumstances.

-49-
such a nature that it is capable of classwide resolution -– which

means that determination of its truth or falsity will resolve an

issue that is central to the validity of each one of the claims in

one stroke"). The Supreme Court has recognized that "[s]ometimes

the issues are plain enough from the pleadings to determine whether

the interests of the absent parties are fairly encompassed within

the named plaintiff's claim." Gen. Tel. Co. of Sw. v. Falcon, 457

U.S. 147, 160 (1982). If it is obvious from the pleadings that the

proceeding cannot possibly move forward on a classwide basis,

district courts use their authority under Federal Rule of Civil

Procedure 12(f) to delete the complaint's class allegations.16 See,

e.g., Pilgrim v. Universal Health Card, LLC, 660 F.3d 943, 949 (6th

Cir. 2011) (upholding striking of class allegations prior to close

of discovery and motion to certify class).

Nonetheless, courts should exercise caution when striking

class action allegations based solely on the pleadings, for two

reasons. First, while ruling on a motion to strike is committed to

the district court's sound judgment, "such motions are narrow in

scope, disfavored in practice, and not calculated readily to invoke

the court's discretion." Boreri v. Fiat S.p.A., 763 F.2d 17, 23

(1st Cir. 1985). This is so because "striking a portion of a

16
In their reply brief, plaintiffs contend that the FLSA does
not expressly require that the complaint plead the requirements of
a collective action. Because this assertion was raised too late,
we do not pass upon its merits.

-50-
pleading is a drastic remedy and . . . it is often sought by the

movant simply as a dilatory or harassing tactic." 5C Charles Alan

Wright, et. al., Federal Practice & Procedure § 1380 (3d ed. 2011).

Second, courts have repeatedly emphasized that striking class

allegations under Rule 12(f)

is even more disfavored because it requires a
reviewing court to preemptively terminate the class
aspects of . . . litigation, solely on the basis of
what is alleged in the complaint, and before
plaintiffs are permitted to complete the discovery
to which they would otherwise be entitled on
questions relevant to class certification.

Mazzola v. Roomster Corp., 849 F. Supp. 2d 395, 410 (S.D.N.Y. 2012)

(citations omitted) (internal quotation marks omitted); see also

Cholakyan v. Mercedes-Benz USA, LLC, 796 F. Supp. 2d 1220, 1245

(C.D. Cal. 2011) (noting that "it is in fact rare to [strike class

allegations] in advance of a motion for class certification" and

collecting cases). Accordingly, a court should typically await the

development of a factual record before determining whether the case

should move forward on a representative basis.

Here, the district court’s analysis as to the class

allegations was deeply intertwined with its dismissal of

plaintiffs' substantive claims. The court ruled that the facts as

alleged did not suggest the existence of an "official policy" that

applied to "each of the more than 50 discrete occupational classes

plaintiffs claim make up the potential class." What is more, the

district court believed that the existence of such a widespread

-51-
policy across such a diverse group of employees was "simply not

plausible."

As we have explained, however, the core of plaintiffs'

allegations is in fact straightforward -- namely, that through a

combination of timekeeping policies and other human resources

practices, BMC employees were consistently required to work through

their meal breaks and for periods of time before and after their

regular work hours without compensation. This work took place

openly at the hospital's facilities, with the employer's actual or

constructive knowledge. Accepting the complaint's allegations as

true, as we must, these facts support the plausible inference that

this combination of policies affected BMC's employees across the

board, notwithstanding their different roles within the company.

Even if the court had concerns about plaintiffs' ability to

represent such a diverse group of employees, those concerns do not

justify the drastic measure of striking the class allegations in

their entirety. Cf. Twombly, 550 U.S. at 563 n.8 ("[W]hen a

complaint adequately states a claim, it may not be dismissed based

on a district court's assessment that the plaintiff will fail to

find evidentiary support for his allegations or prove his claim to

the satisfaction of the factfinder."). Moreover, the district

court has many tools at its disposal to address concerns regarding

the appropriate contours of the putative class, including

redefining the class during the certification process or creating

-52-
subclasses. Cf. Fengler v. Crouse Health Found., Inc., 595 F.

Supp. 2d 189, 197 (N.D.N.Y. 2009) (granting class certification in

hospital compensation case, but excluding "non-patient care

workers," such as cafeteria workers and security staff, because

plaintiffs failed to show that these employees worked without pay

with hospital administrators' knowledge). Therefore, plaintiffs

should have the chance to prove their assertions through discovery

and a properly-brought motion for class certification.

Defendants suggest that plaintiffs invited the district

court to resolve the class issues on the pleadings when they moved

for conditional certification of a FLSA collective action on behalf

of BMC employees affected by the alleged "meal break deduction

policy." We fail to see how plaintiffs' motion supports striking

the class allegations at this early stage. The mere fact that

plaintiffs raised the issue to the court did not warrant confining

the inquiry to the pleadings alone, and the trial court would have

been well within its discretion to defer ruling on the conditional

certification request until a later stage of the case. See, e.g.,

Perez v. Prime Steak House Rest. Corp., ___ F. Supp. 2d ____, 2013

WL 1635527, at *8 (D.P.R. Apr. 17, 2013). Moreover, plaintiffs

point out that the district court elected not to address the

evidence plaintiffs proffered in support of their motion for

conditional certification. This fact emphasizes the prematurity of

-53-
the district court's decision to strike the class and collective

allegations on the pleadings.

Consequently, we must vacate the court's order striking the

class and collective action allegations from the complaint.

E. Leave to Amend

Finally, plaintiffs request that they be given leave to

correct any deficiencies in the pleading, to the extent that the

district court's dismissal is affirmed. Federal Rule of Civil

Procedure 15(a)(2) states that "[a] court should freely give leave

when justice so requires." This rule does not mean that "a trial

court must mindlessly grant every request for leave to amend."

Aponte–Torres v. Univ. of P.R., 445 F.3d 50, 58 (1st Cir. 2006).

Leave to amend is appropriately denied when, inter alia, "the

request is characterized by 'undue delay, bad faith, futility, [or]

the absence of due diligence on the movant's part.'"

Calderón-Serra v. Wilmington Trust Co., 715 F.3d 14, 19 (1st Cir.

2013) (quoting Palmer v. Champion Mortg., 465 F.3d 24, 30 (1st Cir.

2006)). We review the district court's denial of leave to amend

for abuse of discretion. Platten v. HG Bermuda Exempted Ltd., 437

F.3d 118, 131 (1st Cir. 2006).

Here, we affirm the dismissal of the FLSA claims against

Canavan, as well as the fraud claims. These claims were originally

pled in the two separate complaints that initiated Manning I and

Manning II, respectively. The district court identified a number

-54-
of deficiencies in both of these pleadings, and the amended

complaint now before us represents plaintiffs' attempt to cure

those problems. While the trial judge could certainly have given

plaintiffs yet another try, the court was by no means required to

do so. This is especially true as to the fraud allegations, where

plaintiffs fell far short of meeting the heightened pleading

standard imposed by Rule 9(b). Although the district court was

incorrect to dismiss all of plaintiffs' claims, it was within its

discretion to conclude that the time had arrived to settle the

pleadings.

We also observe that many of the hospital compensation

lawsuits being brought throughout the country, including those

litigated by plaintiffs' counsel in this case, use complaints that

assert the same basic factual allegations and claims raised here.

A number of courts have expressed their frustration with the lack

of detail in these complaints. See Pruell, 678 F.3d at 14 & n.2

(collecting cases and noting district courts' "displeasure" with

their complaints). While these cases may involve complaints that

differ in some respects from the pleading at issue in this case,

the dismissal of many of these similar allegations, including those

written by plaintiffs' counsel here, should have put plaintiffs'

counsel on notice of the necessity of a thorough drafting job.

This circumstance further supports the trial judge’s conclusion

that giving them another chance would have served little purpose.

-55-
 In sum, we must "defer to the district court's hands-on

judgment so long as the record evinces an adequate reason for the

denial." Aponte–Torres, 445 F.3d at 58. Given the facts of this

case we cannot say that denial of further leave to amend was an

abuse of discretion.

III.

For the reasons stated, we vacate the district court's order

in part and affirm it in part. Specifically, we vacate the

dismissal of the FLSA claim against BMC and Ullian (Count I), the

contract claims (Counts II-IV, and IX), and the money had and

received, unjust enrichment, and conversion claims (Counts V, VI,

and X). We also vacate the district court's order striking the

class and collective action allegations.

We affirm the dismissal of the FLSA claims against Canavan

(Count I). We also affirm the district court's exercise of

jurisdiction over the plaintiffs' state law claims, and the court's

directive requiring plaintiffs to file a single consolidated

complaint alleging all their causes of action. Further, we affirm

the dismissal of the fraud and negligent misrepresentation claims

(Counts VII and VIII), and the denial of leave to amend.

The case is remanded for proceedings consistent with this

opinion. The parties are to bear their own costs.

So ordered.

– Dissenting Opinion Follows –

-56-
 STAHL, Circuit Judge, concurring in part and dissenting

in part. I join the court's thorough opinion in all but one

respect. I part ways with my colleagues as to whether the

plaintiffs have stated a claim against Elaine Ullian, BMC's

erstwhile president and CEO. In my view, the plaintiffs' vague,

boilerplate allegations do not nudge their claim against Ullian

across the line from conceivable to plausible. See Bell Atl. Corp.

v. Twombly, 550 U.S. 544, 570 (2007). Thus, I respectfully dissent

from the court's decision on this point.

As the majority explains, our precedents use an "economic

reality" test to gauge whether an individual defendant is the

plaintiff's "employer" for FLSA purposes.17 See Chao v. Hotel

Oasis, Inc., 493 F.3d 26, 34 (1st Cir. 2007); Baystate Alternative

Staffing, Inc. v. Herman, 163 F.3d 668, 678 (1st Cir. 1998);

Donovan v. Agnew, 712 F.2d 1509, 1513 (1st Cir. 1983). This test

"focuse[s] on the role played by the corporate officer[] in causing

the corporation to undercompensate employees." Baystate, 163 F.3d

at 678. "[R]elevant indicia" of employer status include the

defendant's "operational control over significant aspects of the

business" and "ownership interest in the business," if any; these

17
The FLSA defines "employer" to "include[] any person
acting directly or indirectly in the interest of an employer in
relation to an employee and includes a public agency." 29 U.S.C.
§ 203(d). This definition has aptly been called "unhelpful."
Jackson v. Conrad, No. 09-00425, 2010 WL 3852343, at *1 (D.D.C.
Sept. 30, 2010) (quoting Henthorn v. Dep't of Navy, 29 F.3d 682,
684 (D.C. Cir. 1994)) (internal quotation marks omitted).

-57-
factors matter "because they suggest that an individual controls a

corporation's financial affairs and can cause the corporation to

compensate (or not to compensate) employees in accordance with the

FLSA." Id.; see Hotel Oasis, 493 F.3d at 34. This focus on actual

operational control means that "a supervisor's title does not in

itself establish or preclude his or her liability under the FLSA."

Lamonica v. Safe Hurricane Shutters, Inc., 711 F.3d 1299, 1310

(11th Cir. 2013).

Importantly, our cases warn against construing the FLSA

definition of "employer" too broadly when ruling on claims against

individual defendants. See Hotel Oasis, 493 F.3d at 34; Baystate,

163 F.3d at 679; Agnew, 712 F.2d at 1513. In our first encounter

with individual liability under the FLSA, we concluded that "it

should not lightly be inferred that Congress intended to disregard

in this context the shield from personal liability which is one of

the major purposes of doing business in a corporate form." Agnew,

712 F.2d at 1513. We thus eschewed a literal reading of the FLSA's

"broadly inclusive definition of 'employer,'" which would impose

personal liability on "any supervisory employee," and adopted the

economic reality test instead. Id.; see Baystate, 163 F.3d at 679

(reaffirming that "such an expansive application of the definition

of an 'employer' to a personal liability determination pursuant to

the FLSA is untenable"). We should apply that test with this

concern about unbounded liability in mind. See Hotel Oasis, 493

-58-
F.3d at 34 (describing Agnew as "narrowly" deciding that the FLSA

"did not preclude personal liability" for officers with significant

ownership interests and significant day-to-day operational control,

including over compensation of employees, who personally made

decisions leading to undercompensation); Agnew, 712 F.2d at 1513.

One other factor impacts how we must analyze the

plaintiffs' claim against Ullian: this case, unlike Agnew,

Baystate, or Hotel Oasis, was resolved on a motion to dismiss.

Thus, for the plaintiffs' claim against Ullian to proceed, their

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 Twombly, 550

U.S. at 570). Put another way, the complaint's "non-conclusory

factual content," Gianfrancesco v. Town of Wrentham, 712 F.3d 634,

639 (1st Cir. 2013), must allow us to draw the reasonable inference

that Ullian was the plaintiffs' "employer" under the economic

reality test. This inference cannot rest solely on allegations

that, "while not stating ultimate legal conclusions, are

nevertheless so threadbare or speculative that they fail to cross

the line between the conclusory and the factual." Pruell v.

Caritas Christi, 678 F.3d 10, 13 (1st Cir. 2012) (quoting

Peñalbert–Rosa v. Fortuño–Burset, 631 F.3d 592, 595 (1st Cir.

2011)) (internal quotation mark omitted). Here, the plaintiffs'

-59-
claim against Ullian relies on just such "borderline" allegations.

See id.

Most of the allegations against Ullian amount to this:

she was BMC's CEO and had many of the responsibilities one would

expect a CEO to have. The complaint says that Ullian "controlled

significant functions of the business"; "was involved in the budget

for the hospital"; "was involved in regular presentations and

meetings in the community on behalf of" BMC; "had the authority to,

and did, make decisions that concerned the policies defendants

adopted and the implementation of those policies"; "had the

authority to, and did, make decisions that concerned defendants'

operations, including functions related to employment, human

resources, training, payroll, and benefits"; and was actively

involved in recruiting, hiring, and reductions in force due to

budget cuts. Thus, we know that Ullian had many of the high-level

(if vaguely described) responsibilities that a CEO normally has,

but our cases make clear that merely holding a high-level

supervisory or executive position is not enough to trigger

individual FLSA liability. See Agnew, 712 F.2d at 1513; see also

Irizarry v. Catsimatidis, --- F.3d ---, 2013 WL 3388443, at *6 (2d

Cir. July 9, 2013) ("Most circuits . . . [require] that a company

owner, president, or stockholder must have at least some degree of

involvement in the way the company interacts with employees to be

a FLSA 'employer.'"). And many of the allegations that seek to tie

-60-
Ullian to the plaintiffs' employment situation are "nominally cast

in factual terms but [are] so general and conclusory as to amount

merely to an assertion that unspecified facts exist to conform to

the legal blueprint." Menard v. CSX Transp., Inc., 698 F.3d 40, 45

(1st Cir. 2012). For example: "As President and CEO, Elaine Ullian

actively advised defendants' agents on the enforcement of the

illegal policies complained of in this case." It is hard to

imagine what facts underlie this assertion.

Some allegations are more specific: we are told of

Ullian's role in overseeing a merger, constructing a new hospital

building, implementing an electronic records system, setting policy

regarding pharmaceutical and medical device representatives, and

taking part in a rally supporting health-care services for the

underprivileged. Taken together, these allegations plausibly

establish that Ullian "had the authority to manage certain aspects

of the business's operations on a day-to-day basis." Baystate, 163

F.3d at 678. But, in Baystate, that was not enough; we also called

for some indication of "personal responsibility for making

decisions about the conduct of the business that contributed to the

violations of the Act." Id. As the Second Circuit recently put

it:

Evidence that an individual is an owner or
officer of a company, or otherwise makes
corporate decisions that have nothing to do
with an employee's function, is insufficient
to demonstrate 'employer' status. Instead, to
be an 'employer,' an individual defendant must

-61-
 possess control over a company's actual
'operations' in a manner that relates to a
plaintiff's employment.

Irizarry, --- F.3d ---, 2013 WL 3388443, at *8; cf. Patel v. Wargo,

803 F.2d 632, 638 (11th Cir. 1986) (defendant who was both

president and vice president of a corporation, as well as a

director and principal stockholder, was not an employer because he

"did not have operational control of significant aspects of [the

company]'s day-to-day functions, including compensation of

employees or other matters 'in relation to an employee'" (citing

Agnew, 712 F.2d at 1514)).18

The closest the complaint comes to alleging that Ullian

had operational control over plaintiffs' employment and

compensation is in the allegations that she: had the authority to

hire and fire employees; sought to ensure minority representation

in the workforce; was involved in layoffs; and "was involved in the

negotiation with unions, including relating to the unfair labor

practices of nurses." But these fairly broad allegations, even

when read together with the rest of the complaint, see

Ocasio-Hernández v. Fortuno-Burset, 640 F.3d 1, 14 (1st Cir. 2011),

do not create a plausible inference that Ullian played a role "in

causing [BMC] to undercompensate" the plaintiffs, Baystate, 163

18
This is not to suggest that allegations of an individual
defendant's authority over other aspects of a business are
irrelevant to the employer inquiry; they are not. See Irizarry,
2013 WL 3388443, at *8. But neither are they sufficient.

-62-
F.3d at 678. To be sure, I do not think our cases require, at the

pleading stage, particular facts showing that an individual

defendant made a specific decision or took a particular action that

directly caused the plaintiffs' undercompensation. But something

more than boilerplate assertions of "authority" is required; a

complaint must present facts plausibly showing that the plaintiffs'

compensation was sufficiently within the defendant's bailiwick to

justify holding her personally liable.19 Cf. Agnew, 712 F.2d at

1513. Here, I see no such facts. The gist of the plaintiffs'

complaint is that BMC's automated timekeeping system combined with

its inflexible work and training requirements to cause systematic

undercompensation. There are no allegations connecting Ullian to

any component of this regime, let alone establishing that she had

"operational control" over it. See Baystate, 163 F.3d at 678.

Finally, as the majority acknowledges, an individual FLSA

defendant's ownership interest in the business is a major

consideration under our precedents. See Hotel Oasis, 493 F.3d at

34; Agnew, 712 F.2d at 1511-12. Here, there is of course no

allegation that Ullian had any ownership interest in BMC, which is

19
I call the complaint's allegations against Ullian
"boilerplate" not only because of their vagueness but also because
they mirror the allegations made against the individual defendants
in other FLSA suits filed by the plaintiffs' counsel. E.g.,
Amended Complaint at 17-18, Nakahata v. N.Y.-Presbyterian
Healthcare Sys., Inc., 10 CIV. 2661 PAC, 2011 WL 321186 (S.D.N.Y.
Jan. 28, 2011) (No. 10-2661), ECF. No. 39.

-63-
a non-profit organization. Moreover, BMC is a large organization.

All else being equal, BMC's size makes it less plausible that the

president and CEO had a hand in causing the employees'

undercompensation than it would be in, say, a smaller, closely held

company. In sum, given the allegations in the complaint and our

determination that an expansive definition of the term "employer"

in this context is "untenable," Baystate, 163 F.3d at 679, I cannot

conclude that the plaintiffs have stated a claim against Ullian.

I am cognizant that, before discovery, a plaintiff cannot

know everything about a defendant's potentially wrongful conduct,

especially when it comes to the inner workings of a corporate or

institutional defendant. Thus, our post-Twombly cases have

recognized that "'some latitude' may be appropriate where a

plausible claim may be indicated 'based on what is known,' at least

where . . . 'some of the information needed may be in the control

of [the] defendants.'" Menard, 698 F.3d at 45 (alteration in

original) (quoting Pruell, 678 F.3d at 15). But "a plausible

claim" is still required. And Twombly and Iqbal make clear that a

claim is not plausible when the "complaint pleads facts that are

'merely consistent with' a defendant's liability." Iqbal, 556 U.S.

at 678 (quoting Twombly, 550 U.S. at 557). That is what we have

here. It is perhaps possible that Ullian is the plaintiffs'

employer under the FLSA. The allegations in the complaint are

consistent with that possibility. But broad assertions that Ullian

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had authority that might encompass the requisite degree of control

over the plaintiffs' employment do not "raise a reasonable

expectation that discovery will reveal evidence of" liability.

Twombly, 550 U.S. at 556. For that reason, I respectfully dissent

from the court's decision that the plaintiffs have stated a

plausible claim against Ullian. I join the court's opinion in all

other respects.

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