United States District Court, E.D. North Carolina, Western Division
BRANDON KELLY on behalf of himself and all others similarly situated, Plaintiff,
HOSPITALITY VENTURES LLC doing business as Umstead Hotel and Spa, SAS INSTITUTE INC., NC CULINARY VENTURES LLC doing business as An Asian Cuisine, and ANN B. GOODNIGHT, Defendants.
W. FLANAGAN UNITED STATES DISTRICT JUDGE
matter is before the court on plaintiff's motion to amend
complaint (DE 37). The motion has been briefed fully, and the
issues raised are ripe for ruling. For the following reasons,
plaintiff's motion is granted in part and denied in part.
OF THE CASE
commenced this action on February 21, 2017, asserting claims
against defendants under the Fair Labor Standards Act (FLSA)
and the North Carolina Wage and Hour Act (NCWHA), based upon
their alleged failure to pay plaintiff adequate wages and
overtime compensation, as well as alleged acts of
retaliation, during plaintiff's work as a server at a
restaurant in Cary, North Carolina, named An Asian Cuisine
(“An” or the “restaurant”). Plaintiff
seeks damages for unpaid minimum wages; overtime
compensation; liquidated and statutory damages; further
damages and other relief for retaliation; as well as fees,
costs, and interest. On February 22, 2017, plaintiff filed a
consent to join suit by another former server at the
restaurant, Wai Man Tom (“Tom”), as a party
plaintiff in collective action under the FLSA. Defendants
Hospitality Ventures LLC doing business as Umstead Hotel and
Spa (“Umstead”), SAS Institute Inc.
(“SAS”), and NC Culinary Ventures LLC doing
business as An (collectively, the “entity
defendants”), filed an answer on March 31, 2017.
Goodnight filed a motion to dismiss the same date, asserting
that plaintiff fails to state a claim against her, on the
basis that plaintiff does not allege that defendant Goodnight
was an employer or plaintiff under the FLSA or NCWHA.
Plaintiff responded in opposition to the motion on April 20,
April 26, 2017, plaintiff filed an emergency motion for
hearing, referencing “alarming circumstances brought to
their attention by counsel for Defendants on the morning of
April 26, 2017.” (DE 25). The court set hearing for the
afternoon of April 27, 2017. That day, defendants filed a
notice describing certain emails that counsel for defendants
received “from an unknown person about this action,
” purportedly sent from “Kathy Hanrahan, ”
(“Hanrahan”), an editor for WRAL Television in
Raleigh, North Carolina. (DE 27 at 1-2). Defendants noted
that Hanrahan “denies sending the emails and she has
contacted the Federal Bureau of Investigation
(“FBI”) about the misuse of her identity, ”
and defendants asserted that the emails raise issue as to
whether probable cause exists that a federal criminal offense
has been committed. (Id. at 2).
court held telephonic hearing on April 27, 2017, wherein
plaintiff's counsel expressed concern that
defendants' counsel may have “committed an ethical
violation . . . of the North Carolina Rules of Professional
Conduct by communicating with a party that they know was
represented by counsel.” (DE 29 at 6). Plaintiff's
counsel also expressed concern, inter alia, that defendants
may have retaliated against plaintiff, in violation of §
15(a)(3) of the FLSA, by causing Hanrahan to report to FBI.
(DE 29 at 10). After hearing the perspective of plaintiff and
defendants' counsel, the court suggested that
“plaintiff['s] counsel seek the guidance of the
North Carolina State Bar, ” and the court invited the
parties to submit a consent motion regarding scheduling.
(Id. at 22)
17, 2017, plaintiff filed the instant motion to amend
complaint, proposing to make three main categories of changes
discussed further herein:
1. Amendments to which defendants do not object, including
substitution of proposed plaintiff Tom as named plaintiff and
designation of plaintiff as an opt-in plaintiff under the
2. Additional allegations regarding defendant Goodnight.
3. Additional allegation that defendants “contacted law
enforcement, and/or threatened to pursue criminal charges,
against Opt-In Plaintiff Kelly, in an effort to pressure him
to voluntarily dismiss this lawsuit, and/or have his counsel
withdraw from the matter, in order to retaliate against him
for this lawsuit.” (DE 38-2).
19, 2017, by consent order, the court held in abeyance ruling
on defendant Goodnight's motion to dismiss until the
court entered an order on the motion to amend. The court also
extended the deadline for filing a discovery plan until 15
days from the date of the court's order on the motion to
6, 2017, plaintiff filed a motion for disqualification of
defendants' counsel (the “motion to
disqualify”) “for numerous violations of the
North Carolina Rules of Professional Conduct.” (DE 41).
In support of the motion to disqualify, plaintiff noted that
the violations had been subject of grievances filed with the
North Carolina State Bar (see DE 42 at 8; DE 42-5),
and that such violations included alleged “retaliatory
threats” to pursue criminal charges, pressure to cause
plaintiff to voluntarily dismiss the lawsuit, and to have
counsel withdraw from the matter. (DE 42 at
19-22). Defendant's responded in opposition to
the motion to disqualify, and plaintiff replied.
August 7, 2017, defendants filed a supplemental memorandum in
opposition to the motion to disqualify, attaching letters
from the North Carolina State Bar dismissing the grievances
filed against defendants' counsel, in which the North
Carolina State Bar stated that “there was not probable
to believe that you violated the Rules of Professional
Conduct.” (DE 56; DE 56-1; DE 56-2;DE 56-3;DE 56-4;DE
56-5). On August 9, 2017, the court denied by margin order
the motion to disqualify.
OF ALLEGED FACTS
facts alleged in the complaint and proposed amended complaint
as pertinent to the instant motion may be summarized as
follows. The restaurant operated in Cary, North Carolina,
between 2004 and January, 2017. During its operation, the
restaurant offered customers “a fine dining experience
with authentic Asian cuisine.” (DE 38-1 ¶ 16).
Plaintiff worked at the restaurant as an hourly server from
approximately 2010 to January 2017, and proposed plaintiff
Tom worked at the restaurant as an hourly server from
approximately May 2012 to ...