United States District Court, W.D. Wisconsin
GABRIEL DE LEON, RAMON PENA, and JOSE LUIS RAMIREZ, Plaintiffs,
GRADE A CONSTRUCTION INC., Defendant.
OPINION & ORDER
D. PETERSON District Judge
Gabriel De Leon, Ramon Pena, and Jose Luis Ramirez accuse
their former employer, defendant Grade A Construction, Inc.,
of failing to pay overtime, in violation of the Fair Labor
Standards Act (FLSA) and Wisconsin law, and of failing to pay
the prevailing wage, in violation of Wisconsin law.
Plaintiffs seek to represent an FLSA collective action and a
class action under Wisconsin wage and hour laws.
Grade A moves to sever plaintiffs De Leon and Pena's
claims from plaintiff Ramirez's, Dkt. 19, and to dismiss
or transfer those claims for improper venue, Dkt. 9. The
court will deny Grade A's motions.
evaluating a motion to dismiss for improper venue, the court
considers the complaint's allegations and information
submitted via affidavit. Cont'l Cas. Co. v. Am.
Nat'l Ins. Co., 417 F.3d 727, 733 (7th Cir. 2005).
The court will accept as true the allegations in the
complaint unless information submitted by affidavit
contradicts them. Faulkenberg v. CB Tax Franchise Sys.,
LP, 637 F.3d 801, 809-10 (7th Cir. 2011). The court
resolves all factual disputes and draws all reasonable
inferences in plaintiffs' favor. Id. at 806.
Motions to sever, on the other hand, are not subject to a
strict standard of review. See Bailey v. N. Tr. Co.,
196 F.R.D. 513, 515 (N.D. Ill. 2000) (“In ascertaining
whether a particular factual situation constitutes a single
transaction or occurrence for purposes of Rule 20, a
case-by-case approach is generally pursued because no hard
and fast rules have been established.”). Here, the
facts relevant to the joinder and venue analyses are largely
is a drywall, insulation, and painting contractor, with its
principal place of business in Delafield, Wisconsin, located
in the Eastern District of Wisconsin. Dkt. 11. Grade A hires
two types of employees: people hired directly by Grade A, or
“official Grade A employees”; and people hired by
Grade A through a staffing agency, considered
“borrowed” workers. Grade A pays its official
employees by the hour, including one paid half-hour
lunchbreak per workday, but it does not count the lunchbreaks
towards the 40 hours per week required to initiate overtime
pay (i.e., a standard week runs 42.5 hours). Grade A
“banks” official employees' hours worked in
excess of 42.5 in a given week, meaning the hours are
withheld from that week's paycheck. With Grade A's
permission, the employee can tap these hours to supplement
paychecks for weeks when the employee does not work 42.5
hours. Borrowed workers, on the other hand, are paid on a
piece-rate basis. A piece-rate compensation scheme pays
employees according to the number of measurable units, or
pieces, they complete. Grade A pays its borrowed workers at
the regular piece rate and nothing more, regardless of the
number of hours worked per week.
hired De Leon and Pena as borrowed workers. (Though they
later became official employees, their allegations pertain to
their work as borrowed workers.) The two worked exclusively
on a prevailing wage project located in the Eastern District
of Wisconsin. In their proposed FLSA collective action, De
Leon and Pena seek to represent “[a]ll piece rate
compensated employees of Grade A whom . . . was [sic] paid at
a rate lower than 1.5 times the average wage rate they earned
during the first 40 hours of the workweek, for their hours
worked over 40 each week.” Dkt. 1, ¶ 32.
on the other hand, was an “official Grade A
employee” and thus paid by the hour. Ramirez performed
worked on prevailing wage projects located in the Western
District of Wisconsin. Dkt. 13. For his part in the proposed
FLSA collective action, Ramirez seeks to represent
“[a]ll employees of Grade A whom . . . lost overtime
pay because their hours worked over 42.5 per week were
banked, rather than paid in cash.” Dkt. 1, ¶ 31.
court has subject matter jurisdiction over the FLSA claims
pursuant to 28 U.S.C. § 1331 because they arise under
federal law, and the court may exercise supplemental
jurisdiction over the remaining state law claims pursuant to
28 U.S.C. § 1367, because the state law claims form part
of the same case or controversy.
complaint sets forth only some of the facts relevant to
plaintiffs' claims. Grade A moved to dismiss for improper
venue on the grounds that the complaint did not describe any
events that occurred in the Western District of Wisconsin.
Dkt. 9. Plaintiffs, in response, offered new facts (via
affidavit) that indicate that plaintiff Ramirez's claims
arguably arise from events that took place in this district.
This new information prompted Grade A to change course, and
in lieu of a reply brief, it moved to sever plaintiffs De
Leon and Pena's claims from Ramirez's. Dkt. 19. Once
severed, Grade A contends, the court will need to dismiss or
transfer De Leon and Pena's claims for improper venue.
court will address Grade A's motion to sever first,
followed by whatever venue issues remain.
Motion to sever
people may join in one action as plaintiffs if “they
assert any right to relief . . . arising out of the same
transaction, occurrence, or series of transactions or
occurrences; and any question of law or fact common to all
plaintiffs will arise in the action.” Fed.R.Civ.P.
20(a)(1). Permissive joinder under Rule 20 can create
efficiencies, if employed prudently. If joinder is not
proper, “[o]n motion or on its own, the court may at
any time, on just terms, add or drop a party. The court may
also sever any claim against a party.” Fed.R.Civ.P. 21.
Under Rule 21, the court may sever De Leon and Pena's
claims from Ramirez's if their claims are “discrete
and separate.” Gaffney v. Riverboat Servs. of Ind.,
Inc., 451 F.3d 424, 442 ...