Interface wins dismissal of allegations of FLSA on-call and overtime violations

Client(s) Interface Operations LLC

On July 5, 2017, Jones Day client Interface Operations LLC won dismissal in a Fair Labor Standards Act action filed in the U.S. District Court for the District of Nevada by a group of pilots against Interface and three other defendants. Labeling Interface as an "employer" along with the other defendants, the plaintiffs alleged that the defendants violated the FLSA by failing to pay them overtime in connection with unpaid on-call time. The plaintiffs also alleged that the defendants retaliated against them after the plaintiffs complained that they were owed overtime. The plaintiffs sought over $13 million in damages.

In its motion to dismiss, Interface argued that the 256-paragraph complaint did not allege specific facts to establish that Interface was the employer or joint employer of the plaintiffs for purposes of the FLSA. In particular, Interface argued that the plaintiffs' vague and conclusory allegations against the collective "Defendants" did not establish that Interface employed plaintiffs. Moreover, Interface argued, plaintiffs' lone specific allegation against Interface – that Interface "provides employment support and payroll" to the other defendants – likewise did not give rise to any liability for Interface as an "employer" under the FLSA. The court agreed with Interface.

The court noted that (i) the complaint did not "set forth sufficient facts as to the 'employment support' that Interface provides" that would support a reasonable inference of an employment relationship, (ii) general allegations against all defendants are "insufficient to support a reasonable inference that each defendant is an employer of plaintiffs within the meaning of the FLSA," and (iii) the Ninth Circuit has held that payroll companies are not employers under the FLSA.

By its dismissal, Interface will avoid what is likely to be protracted litigation involving multiple parties and extensive discovery.