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 federal and state overtime wage claims brought by an employee classified as a former Assistant Manager.[i]

Background

Plaintiff Alexa Onate Melecio filed suit individually and on behalf of all others similarly situated (also known as a class action) against Defendants Neshaminy SW, LLC d/b/a Saladworks, and Ohran G. Veli (collectively “Saladworks”) alleging among other things that Saladworks willfully misclassified employees as “Assistant Manager,” which made them 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 over forty (40) hours per workweek.[ii]

Saladworks filed a Motion to Dismiss the claims, arguing that the case should be dismissed because the Plaintiff was the only Assistant Manager at her location of employment, which was the only location under its ownership.  Saladworks thus asserted there can be no collective action with just one member. However, the Plaintiff alleged that Defendant Neshaminy owned nine Saladworks locations in Pennsylvania and New Jersey, suggesting other assistant managers were subject to the same unlawful practice by Defendants.

Decision

The Court noted that “disposition of a Motion to Dismiss collective action allegations would proceed similar to a class action under [Fed.R.Civ. P.] 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] The trial judge held  that at the motion to dismiss stage the Court must take the plaintiff’s allegations as true; therefore, the Defendant’s arguments supporting dismissal failed. The Court stated: “[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]

Saladworks also contended that the Court should not exercise supplemental jurisdiction over plaintiff’s state law claims due to the complexity of the state law issues. The Court agreed with Plaintiff and found 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 against the court’s supplemental jurisdiction, arguing 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. While the court acknowledged the argument, it was unpersuaded that the disparity would be so great as to alter the nature of the suit. The court stated 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 such as “assistant manager” 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 classification of employees as exempt could expose an employer to liability, including potential collective or class actions allegations. In order to reduce the risk and help ensure compliance with the law, employers should consider reviewing job responsibilities and comporting them to employee job classifications, while maintaining thorough documentation in support of 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.