Silverstein v. Massapequa Union Free School District

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

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JOHN BENJAMIN SILVERSTEIN,

Plaintiff,

MEMORANDUM AND ORDER

- against - 18-CV-4360 (RRM) (AKT)

MASSAPEQUA UNION FREE SCHOOL DISTRICT,

NASSU COUNTY BOARD OF COOPERATIVE

EDUCATION SERVICES, and

CONTEMPORARY COMPUTER SERVICE, INC.,

Defendants.

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ROSLYNN R. MAUSKOPF, United States District Judge.

Plaintiff John Benjamin Silverstein brings this action against the Massapequa Union Free

School District (the “District”), the Nassau County Board of Cooperative Education Services

(“BOCES”), and Contemporary Computer Service, Inc. (“CCSI”) (collectively, “Defendants”),

principally alleging an FLSA claim, unspecified employment discrimination and other federal

claims, and numerous state-law claims. All three Defendants now move to dismiss.

For the reasons set forth below, plaintiff will be granted an opportunity to re-plead his

federal claims consistent with the issues discussed in this Memorandum and Order. Should

defendants wish to renew their motions directed at any amended complaint, they shall have the

opportunity to so do after a seeking a pre-motion conference pursuant to the Court’s Individual

Motion Practices and Rules.

I. Background

The following facts are drawn directly from plaintiff’s verified complaint, and must be

assumed to be true for purposes of Defendants’ motions. In 2001, Deputy Superintendent Sulc

(presumably, a District employee) hired Silverstein as a “Network Systems Engineer” as part of

an effort to “get the District up to date with current technology and grow and expand the

District’s technology footprint.” (Compl. at ¶¶ 16–17.) According to Silverstein, Sulc informed

him that he would be an employee of the District and promised him pension and healthcare

benefits, as well as sick leave and vacation time. (Id. at ¶¶ 7, 25.) He was provided a cell phone

and a computer by the District and given an office in the District’s administration building. (Id.

at ¶ 19.) Silverstein believed that he was an employee of the District. (Id. at ¶ 16.)

Silverstein reported his hours on timesheets that were provided by the District and which

he submitted to the District on a weekly basis. (Id. at ¶ 21.) Although Silverstein worked over

40 hours a week, he never received overtime compensation from the District or any other entity.

(Id. at ¶ 20.) However, he received regular raises and never received a negative performance

review. (Id. at ¶ 22.)

From 2001 until sometime in 2007, Silverstein’s work was supervised by Michael

Pavlides, a District employee. (Id. at ¶ 19.) For the first five years of this period, Silverstein was

paid directly by the District. (Id. at ¶ 19.) However, after five years, Pavlides informed

Silverstein that he had to “incorporate” if he “wished to continue to be treated as an employee.”

(Id. at ¶¶ 26–27.) Pavlides also informed Silverstein that he would now receive his paychecks

from BOCES, explaining that auditors had recommended the changes because the District was

eligible for state reimbursement if Silverstein was paid by BOCES. (Id. at ¶¶ 26–27, 31.)

According to Silverstein, Pavlides led him to believe that he was, and would continue to be, an

employee of the District. (Id. at ¶ 31.)

Silverstein “begrudgingly complied,” but only because he feared that he would be fired if

he did not. (Id. at ¶ 30.) Silverstein “did not receive any of the proper documents or

notifications required by the Civil Service Laws regarding the transfer of a position from one

State agency to another.” (Id. at ¶ 30.) In addition, Defendants did not properly withhold taxes

from Silverstein’s paychecks. (Id. at ¶ 33.)

Sometime in 2007, Robert Schilling replaced Pavlides as Silverstein’s supervisor. (Id. at

¶ 34.) On numerous occasions, Schilling “insinuated” that he favored younger workers. (Id. at

¶ 35.) He assigned Silverstein “low level projects,” which had not previously been a normal part

of Silverstein’s duties. (Id. at ¶ 35.)

In June 2014, Silverstein notified Schilling that he had cancer. (Id. at ¶¶ 36, 54.) In a

subsequent meeting, Schilling told Silverstein that he could only keep his job if he took a

$40,000 pay cut. (Id. at ¶¶ 36, 54.) Knowing he needed to maintain his health insurance,

Silverstein agreed. (Id. at ¶ 36.) In July 2015, Schilling reduced Silverstein’s salary by an

additional $10,000. (Id. at ¶¶ 37, 54.) Finally, on January 8, 2016, Schilling terminated

Silverstein. (Id. at ¶¶ 38, 40.) Silverstein, who had never received a “formal negative

performance review,” was never warned that his job was in jeopardy or given a hearing, an

appeal, or any of the procedural protections to which he was entitled under the Civil Service

Laws. (Id. at ¶¶ 38, 40.) Schilling then immediately replaced Silverstein with “an employee half

his age.” (Id. at ¶ 55.) After he was terminated, Silverstein learned that he “was never added to,

and/or received any of the District’s employee benefits including … pension, healthcare, sick

and vacation time, and 401k” benefits. (Id. at ¶ 25.)

II. The Verified Complaint

On or about March 28, 2018, commenced this action in Nassau County Supreme Court

against the District, BOCES, and CCSI. The action was removed to this Court on August 1,

2018. The operative pleading here is the Verified Complaint (Doc. No. 1-1) which was

originally filed in the state court action and which has never been amended. In it, plaintiff

alleges, on information and belief, that Defendants intentionally misclassified him as an

“independent contractor” to “avoid the proper tax withholdings” and to defraud New York State

of unemployment and workers compensation contributions. (Id. at ¶¶ 42–43.) He also alleges,

again on information and belief, that Defendants defrauded him, alleging that he was wrongly

denied unemployment and workers compensation benefits and implying that he paid more in

taxes because he was classified as a “1099” independent contractor and not a District employee.

(Id. at ¶¶ 42–44.)

Although the Verified Complaint names CCSI as a defendant, it contains virtually no

non-conclusory, factual allegations concerning this defendant other than the allegation that CCSI

“is a domestic Corporation that does business in New York.” (Id. at ¶ 10.) The pleading alleges

only that Silverstein “never enter[ed] into a written contract with CCSI or BOCES for his alleged

employment and/or independent contracting services,” and “never had any contact with anyone

from BOCES or CCSI” after he began to receive paychecks from BOCES. (Id. at ¶¶ 31–32.)

The Verified Complaint nonetheless alleges that CCSI aided and abetted and/or conspired with

co-defendants BOCES and the District to conceal Silverstein’s true employment status. (Id. at ¶

29.)

The pleading alleges nine causes of action, only the first of which arguably alleges a

violation of federal law. The first cause of action states that it “arises from Defendants’ willful

violation of the Fair Labor Standards Act … and the New York Labor Law … for failure to pay

overtime Compensation to Plaintiff.” (Id. at ¶ 45.) The first cause of action alleges that

Silverstein “consistently worked over forty (40) hour work weeks,” but never “received any

overtime pay during his time as an employee of the District.” (Id. at ¶ 46.) Silverstein claims the

“District knowingly violated the Fair Labor Standards Act, because Plaintiff’s position is a non-

exempt position” and because the District, which received his daily time sheets, was aware he

was working overtime. (Id.)

The second cause of action sounds in employment discrimination but does not

specifically allege a violation of any federal employment discrimination statute. Rather, this

cause of action alleges, upon information and belief, that Silverstein “was discriminated against

by his direct superior’s [sic] because of his disability and age in violation of the Equality Act and

the Equal Employment Opportunity Commission.” (Id. at ¶ 53.) However, the Verified

Complaint does not provide a citation for the “Equality Act,” and does not allege Silverstein’s

age. While the pleading does allege that Silverstein suffered from some unspecified form of

cancer, it does not allege that his illness rendered him “disabled” as defined in section 3(1) of the

Americans with Disabilities Act of 1990, 42 U.S.C. § 12102(1).

None of the seven remaining causes of action specifically alleges a federal claim, though

three allude to violations of unspecified federal laws. The third cause of action sounds in

ERISA, alleging that Silverstein has never “received the proper benefits of a District employee,

including but not limited to: pension, health care, vacation and sick leave, 401k, and other

benefits provided to all employees of the District.” (Id. at ¶ 59.) The fourth cause of action

principally alleges that Defendants breached their “fiduciary duty to comply with [their] own

policies and laws,” (id. at ¶ 61), but also alleges that Silverstein was “never provided any

documents in violation of State and Federal Education laws ….” (Id. at ¶ 63.) The sixth cause of

action alleges that the District violated “state and federal employment law” and “state and federal

tax law” by terminating him, (id. at ¶¶ 70–71), but does not specify the federal laws which were

allegedly violated.

The four remaining causes of action allege only state-law claims. The fifth cause of

action alleges that the Defendants “intentionally or negligently inflicted emotional distress” on

Silverstein. (Id. at ¶ 66.) The seventh cause of action alleges the breach of some unspecified

“covenant.” (Id. at ¶ 74.) The eighth cause of action alleges conversion of Silverstein’s

overtime wages and “earned benefits,” (id. at ¶ 77), while the ninth cause of action alleges

Silverstein was fraudulently induced to accept a position with Defendants. Silverstein seeks to

recover for “lost wages, back pay, lost benefits, [and] overtime,” and alleges that he is entitled to

“liquidated damages, treble damages, … and Punitive damages,” in addition to the compensatory

damages. (Id. at p. 21.)

III. The Motions to Dismiss

All three Defendants now move to dismiss this action pursuant to Fed. R. Civ. P.

12(b)(6). In its Memorandum of Law in Support of the District’s Motion to Dismiss (Doc. No.

33), the District argues, among other things, that the FLSA, federal employment discrimination

claims, and state-law claims against the District are time-barred; that computer professionals are

not covered by the FLSA’s overtime provisions, and that because plaintiff incorporated, he does

not meet the FLSA’s definition of an employee; that plaintiff failed to exhaust his administrative

remedies before bringing the employment discrimination claims; and that the Verified Complaint

fails to state a claim against the District. CCSI makes the many of same arguments in its

Memorandum of Law in Support of Defendant CCSI’s Motion to Dismiss Plaintiff’s Complaint

(Doc. No. 44), as does BOCES in its Memorandum of Law in Support of its Motion to Dismiss

(Doc. No. 36). However, instead of arguing that plaintiff does not meet the FLSA’s definition of

an employee, CCSI and BOCES argue that the FLSA claim against them fails because plaintiff

has not alleged that they are his employer or a “joint employer.”

Plaintiff has responded to these motions with a nine-page Affirmation in Opposition to

Defendants Order to Show Cause (Doc. No. 59) from counsel, which attaches several exhibits.

In the first six pages of the affirmation, plaintiff’s counsel largely repeats the allegations in the

Verified Complaint. However, counsel states that plaintiff has been receiving his paychecks

from CCSI, not BOCES. The exhibits attached to the affirmation – which cannot be considered

upon the motions to dismiss as they are outside of the pleadings in this case and aver facts that

are not within the personal knowledge of plaintiff’s counsel – also suggest facts that are not

alleged in the Verified Complaint: namely, that plaintiff has been invoicing the District as

“Bensil Enterprises,” a “vendor”; that CCSI is paying Bensil, not plaintiff directly; and that CCSI

has been reporting plaintiff/Bensil’s income to the IRS on a 1099-MISC since at least 2010. The

affirmation addresses only two of the arguments raised by defendants: 1) that the Verified

Complaint is “vague and lacking in detail” and 2) that defendants are not his employer. With

respect to the latter, the affirmation appears to imply that plaintiff has no idea who his employer

actually is, stating: “[T]o state who’s employee or employer or that they do not meet standards

after having provided he [sic] district one of it’s [sic] contractors to improperly list Plaintiff as

his employee makes this argument premature.” (Doc. No. 59, at 8.)

IV. Discussion

A. The FLSA Claim

As noted above, the only claim arguably focused on federal law is brought under the

FLSA. For the reasons discussed below, plaintiff will be granted leave to amend this claim to

address concerns properly raised by defendants.

1. Failure to State a Claim

Defendants are correct in pointing out that the Verified Complaint does not currently

state an FLSA claim. “[I]n order to state a plausible FLSA overtime claim, a plaintiff must

sufficiently allege 40 hours of work in a given workweek as well as some uncompensated time in

excess of the 40 hours.” Lundy v. Catholic Health Sys. of Long Island Inc., 711 F.3d 106, 114

(2d Cir. 2013). The Second Circuit has made it clear that a plaintiff is “required to do more than

repeat the language of the statute.” Dejesus v. HF Mgmt. Servs., LLC, 726 F.3d 85, 89 (2d Cir.

2013). For example, it is insufficient for a plaintiff to allege “that in ‘some or all weeks’ she

worked more than ‘forty hours’ a week without being paid ‘1.5’ times her rate of compensation.”

Id.

In this case, the Verified Complaint alleges only that plaintiff has “consistently worked

over forty (40) hour work weeks,” but has “not received any overtime pay during his time as an

employee of the District.” (Compl. at ¶ 45.) This allegation closely resembles the allegation

found insufficient in Dejesus. Plaintiff must replead in order to set out a valid claim. In so

doing, plaintiff must also address the following issues as well.

2. Employer/Employee

CCSI argues that it is not plaintiff’s “employer” as defined in 29 U.S.C. § 203(d), while

BOCES argues that it is not a “joint employer,” as defined in case law. Similarly, the District

argues that because plaintiff implies that he incorporated at Pavlides’s insistence, he does not

meet the FLSA’s definition of an employee: “an individual employed by an employer.” (Doc.

No. 33 at 11) (quoting 29 U.S.C. § 203(e)(1)). However, as discussed below, these arguments

are not cognizable on a motion to dismiss because they rely on facts outside the pleadings and

ignore plaintiff’s theory that he remained an employee of the District until terminated.

First, the complaint alleges no facts from which the Court can conclude whether or not

CCSI is plaintiff’s employer. Indeed, as noted above, the complaint alleges no facts at all

regarding CCSI. Given that plaintiff is accorded leave to amend his complaint in other respects,

the Court dismisses CCSI without prejudice to amending the complaint to state a claim against

CCSI.

Second, BOCES’s argument essentially casts on plaintiff the duty to plead all the facts

necessary to establish that BOCES is a “joint employer.” On a motion to dismiss, the question is

whether plaintiff has pled facts that establish BOCES is not a joint employer. Plaintiff, who

alleges facts suggesting that the District and BOCES conspired to fraudulently make plaintiff

appear to be an independent contractor of BOCES, has not alleged facts from which one can

determine whether BOCES had formal or functional control. Moreover, since the whole goal of

the alleged scam was to confuse people as to who was plaintiff’s true employer, it would by

inequitable to dismiss plaintiff’s FLSA claim simply because, at this juncture, he is unsure which

entity employed him.

Third, the District is engaging in a selective reading of the complaint. While plaintiff

implies that he “incorporated” at Pavlides’s insistence to create the illusion that he was not a

District employee, he is clearly alleging that he remained a District employee, even though he

may have been paid by checks sent by BOCES to his corporation. In light of plaintiff’s

allegations that the District conspired to disguise the employer-employee relationship, the Court

cannot credit the District’s claims that plaintiff was actually a corporation and an independent

contractor.

3. Exemption

The FLSA has specifically exempts from its coverage:

any employee who is a computer systems analyst, computer

programmer, software engineer, or other similarly skilled worker,

whose primary duty is—

(A) the application of systems analysis techniques and procedures,

including consulting with users, to determine hardware, software,

or system functional specifications;

(B) the design, development, documentation, analysis, creation,

testing, or modification of computer systems or programs,

including prototypes, based on and related to user or system design

specifications;

(C) the design, documentation, testing, creation, or modification of

computer programs related to machine operating systems; or

(D) a combination of duties described in subparagraphs (A), (B),

and (C) the performance of which requires the same level of skills,

and

who, in the case of an employee who is compensated on an hourly

basis, is compensated at a rate of not less than $27.63 an hour.

29 U.S.C. § 213(a)(17). “[A]n employee’s job duties, not his job title, determine whether the

exemption applies.” Clarke v. JPMorgan Chase Bank, N.A., No. 08 Civ. 2400 (CM)(DCF),

2010 WL 1379778, at *16 (S.D.N.Y. Mar. 26, 2010) (emphasis in original) (citing 29 C.F.R. §

541.400). Thus, “[w]hether an employee is exempt is determined by the employee’s actual work

activities, not by the employer’s characterization of those activities through a job title or job

description.” Cooke v. General Dynamics Corp., 993 F. Supp. 56, 61 (D. Conn. 1997).

The complaint in this case alleges little more than plaintiff’s title: “Network Systems

Engineer.” Although the pleading alleges that he contributed to an effort to “get the District up

to date with current technology and grow and expand the District’s technology footprint,”

(Compl. at ¶¶ 16–17), it does not describe his activities with sufficient specificity to allow us to

determine whether he fits within one or more of the categories specified in the statute.

Moreover, while the allegations regarding time sheets suggest that plaintiff is compensated on an

hourly basis, there are no allegations regarding his hourly wage.1 Given the fact-intensive nature

of the exempt employee analysis, the Court cannot determine at this juncture whether defendant

falls under the FLSA exemption.

1 According to exhibits to plaintiff’s affirmation, plaintiff was billing $381.36 per day. While this suggests he was

making over $27.63 per hour, the Court cannot consider these exhibits on a 12(b)(6) motion.

4. Timeliness

“The FLSA provides a two-year statute of limitations on actions to enforce its provisions

unless the violation was willful, in which case the limitations period is three years.” Sharma v.

Burberry Ltd., 52 F. Supp. 3d 443, 461 (E.D.N.Y. 2014) (citing 29 U.S.C. § 255(a)).

Defendants’ statute of limitations argument is predicated on the two-year limitation being

applicable. Defendants reason that since this action was filed in March 2018, any FLSA

violations which occurred before March 2016 would be time-barred. Since plaintiff was

terminated in January 2016, Defendants argue that all his FLSA claims must be untimely.

Defendants’ argument misses a key allegation: the Verified Complaint expressly alleges

a “willful violation.” (Compl. at ¶ 45.) Defendants urge the Court to disregard this, asserting

that this allegation is conclusory. In support of this argument, they cite to cases which hold that

such “conclusory allegations” are insufficient to establish that the three-year limitations period

applies. However, the cases to which they cite involve motions for summary judgment or

default judgment, where the burden was on the plaintiff to establish a willful violation.

Here, plaintiff does not yet have any such burden. Statute of limitations is an affirmative

defense, and dismissal ordinarily can be based on an affirmative defense only when the

complaint itself admits all the elements of the affirmative defense by alleging the factual basis

for those elements. See Shields v. United States Postal Serv., 729 F. App’x 662, 663 (10th Cir.

2018) (summary order). A plaintiff has no burden to allege willfulness in anticipation of a

limitations defense, much less plead facts supporting that allegation. See id. Accordingly, even

if the complaint did not specifically allege a willful violation of the FLSA – which it does – the

Court could not dismiss on the grounds urged by Defendants. There are simply no facts alleged

in the complaint that would permit the Court to find a lack of willfulness.

B. Ostensible Employment Discrimination Claims

In his second cause of action, plaintiff attempts to allege ADA and ADEA claims. He

has not succeeded. Despite being drafted by an attorney, the Verified Complaint mentions only

the “Equality Act,” not any federal employment discrimination statute.2 (Compl. at ¶ 53.)

Equally unclear is plaintiff’s allegation regarding discrimination “in violation of … the Equal

Employment Opportunity Commission.” (Id.) This cause of action is dismissed with leave to

replead.

In addition, the Court notes that, even if properly pled, such claim(s) may ultimately fail

because, as defendants suggest, plaintiff may not have exhausted his administrative remedies.

However, the failure to exhaust argument cannot be raised on a motion to dismiss unless the

complaint alleges facts suggesting a failure to exhaust, and no such facts have been pled here.

The Supreme Court has held that “filing a timely charge of discrimination with the EEOC

is not a jurisdictional prerequisite to suit in federal court, but a requirement that, like a statute of

limitations, is subject to waiver, estoppel, and equitable tolling.” Zipes v. Trans World Airlines,

Inc., 455 U.S. 385, 393 (1982); see also Irwin v. Dep’t of Veterans Affairs, 498 U.S. 89, 95–96

(1990) (holding that timing requirements applicable to Title VII suits against the federal

government are similarly subject to equitable tolling). “[T]he burden of pleading and proving …

exhaustion lies with defendants and operates as an affirmative defense.” Hardaway v. Hartford

Pub. Works Dep't, 879 F.3d 486, 491 (2d Cir. 2018). Since it is an affirmative defense,

exhaustion “can only be a proper basis for a motion to dismiss under Rule 12(b)(6) if failure to

2 The House passed an Equality Act to May 17, 2019 (H.R. 5), which, if enacted, would prohibit discrimination “on

the basis of the sex, sexual orientation, gender identity, or pregnancy, childbirth, or a related medical condition of an

individual, as well as because of sex-based stereotypes.” It is unlikely that plaintiff is referring to this proposed

legislation. One of the defendants suggests that plaintiff is referring to the Equality Act 2010 – the British analogue

to the ADA, the NYSHRL, and the NYCHRL. See Martinez v. Bloomberg LP, 883 F. Supp. 2d 511, 517 (S.D.N.Y.

2012), aff’d, 740 F.3d 211 (2d Cir. 2014).

exhaust appears on the face of the complaint.” Frederic v. NFC Amenity Mgmt., No. 17-CV-

5769 (AJN), 2018 WL 4735715, at *2 (S.D.N.Y. Sept. 28, 2018).

Here, the Verified Complaint does not allege facts suggesting a failure to exhaust. “[A]n

affirmative defense relying on evidence beyond the pleadings is not suitable for resolution under

Rule 12(b)(6).” Id. Should plaintiff properly plead any such claims in an amended complaint,

the Court will address exhaustion if and when appropriate.

C. Other Federal Claims

As noted above, the complaint alludes to other federal claims. Plaintiff may be

attempting to advance an ERISA claim in the third cause of action. The fourth cause of action

alleges that Silverstein was “never provided any documents in violation … Federal Education

laws,” (id. at ¶ 63), and the sixth cause of action alleges that the District violated “federal

employment law” and “federal tax law” by terminating him, (id. at ¶¶ 70–71). However, none of

these vague allusions come close to meeting Rule 8’s notice pleading requirements. As such,

these causes of action are dismissed with leave to replead.

D. State Law Claims

The Court will not rule on the sufficiency of any state law claims pending determination

of whether plaintiff can plead any federal claims. Should plaintiff fail to so do, the Court may

decline to exercise supplemental jurisdiction and dismiss the state-law claims without prejudice

to raising them in state court.

CONCLUSION

Given the deficiencies in the Verified Complaint, plaintiff will be given an opportunity to

re-plead his federal claims consistent with the issues discussed in this Memorandum and Order.

Plaintiff shall file any amended complaint no later than October 18, 2019. Should defendants

wish to renew their motions directed at any amended complaint, they shall have the opportunity

to so do after a seeking a pre-motion conference pursuant to the Court’s Individual Motion

Practices and Rules. Discovery is stayed until further Order of the Court.

SO ORDERED.

Dated: Brooklyn, New York Roslynn R. Mauskopf

September 30, 2019

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ROSLYNN R. MAUSKOPF

United States District Judge