On April 23, 2025, Judge Kelley Brisbon Hodge of the United States District Court for the Eastern District of Pennsylvania denied a Saladworks franchise owner’s Motion to Dismiss claims brought by an employee classified as a former Assistant Manager.[i]

Background

Plaintiff Alexa Onate Melecio filed a lawsuit, individually and on behalf of all others similarly situated, against Defendants Neshaminy SW, LLC d/b/a Saladworks, and Ohran G. Veli (collectively “Neshaminy”) alleging, inter alia, that Defendants willfully misclassified employees as an “Assistant Manager” and therefore exempt from overtime pay under the Fair Labor Standards Act (FLSA). Plaintiff contended that she and other assistant managers were entitled to unpaid overtime compensation at a rate of 1.5 times their regular rate of pay for all hours worked more than forty (40) per workweek.[ii]

Defendants filed a Motion to Dismiss the claims, arguing that the case should be dismissed because Onate Melecio was the only assistant manager at the Langhorne location, the only location under its ownership, thus asserting there can be no collective action with just one member. However, Onate Melecio alleged that Neshaminy owned nine Saladworks locations in Pennsylvania and New Jersey, suggesting that other assistant managers were subject to the same unlawful practice.

Decision

The Court noted that disposition of a Motion to Dismiss collective action allegations would proceed like a class action under Rule 23, “where the Third Circuit has routinely concluded that making a determination on class action certification is premature at the motion to dismiss stage.”[iii] Judge Hodge stated that at the motion stage, the Court must take the plaintiff’s allegations as true, rendering the defendant’s arguments unavailing. The Court stated that: “[o]nly when no amount of discovery or time will allow a plaintiff to resolve deficiencies in class certification under the FLSA, will a motion to strike collective action allegations or dismissal based on collective action grounds be granted.”[iv]

Due to the complexity of state law issues, Neshaminy also contended that the Court should not exercise supplemental jurisdiction over the state law claims. However, Judge Hodge agreed with the plaintiff, Onate Melecio, that supplemental jurisdiction was proper because the state law and FLSA claims were part of the same controversy and did not involve any novel or complex issues.[v]

The franchisee Defendants further argued that the distinction between an FLSA opt-in collective action and a state law opt-out class would create a significant disparity in the number of class members versus the collective. Judge Hodge acknowledged this argument but was unpersuaded that the disparity would be so great as to alter the nature of the suit. She noted that with only nine stores in question, the potential number of opt-in and opt-out plaintiffs would not substantially alter the nature of the suit, and there was insufficient information to conclude otherwise.[vi]

Conclusion

A critical takeaway for employers is that a title does not necessarily determine job exemption status under the FLSA. Beyond a title alone, companies should recognize that an employee’s duties and salary must meet the criteria in the Labor Department’s regulations. The improper misclassification of employees as exempt could expose an employer to liability with potential collective or class actions allegations, such as those that Onate Melecio filed. To lessen risk, employers should review actual job responsibilities, maintain thorough documentation to support employee job classifications, and ensure compliance with the law.

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Sources

[i] Melecio v. Neshaminy SW, LLC, No. CV 24-1608, 2025 WL 1186853 (E.D. Pa. Apr. 23, 2025)

[ii] Id. at *1.

[iii] Id. at *2.

[iv] Id. at *2 .

[v] Id. at *3.

[vi] Id. at *3.