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Kenney v. Helix TCS, Inc.

United States Court of Appeals for the Tenth Circuit

September 20, 2019, Filed

No. 18-1105


 [*1108]  SEYMOUR, Circuit Judge.

Plaintiff Robert Kenney is a former employee of Defendant Helix TCS, Inc. ("Helix"), which provides security services for businesses in Colorado's state-sanctioned marijuana industry. Mr. Kenney filed this lawsuit against Helix under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201-219, alleging that Helix misclassified him and similarly situated workers as exempt from the FLSA's overtime obligations. Helix moved to dismiss Mr. Kenney's claim based on the Controlled Substance Act ("CSA"), 21 U.S.C. §801, et seq, arguing that Mr. Kenney's employment activities are in violation of the CSA and are thus not entitled to FLSA protections. The district court denied Helix's motion to dismiss. We affirm.

Between approximately February 2016 and April [**2]  2017, Mr. Kenney worked as a security guard for Helix. Mr. Kenney alleges that he and other similarly situated security guards regularly worked more than forty hours per week. Nevertheless, Helix classified these workers as exempt employees under the FLSA and paid them a salary instead of overtime. Mr. Kenney initiated this action against Helix under the collective action provisions of the FLSA, see 29 U.S.C. § 216(b), contending that Helix misclassified the security guards as exempt employees even though they frequently performed non-exempt job duties. He claims Helix is in violation of 29 U.S.C. § 207(a) by willfully failing to pay overtime.

Helix provides security, inventory control, and compliance services to the marijuana industry in Colorado. Kenney v. Helix TCS, Inc., 284 F. Supp. 3d 1186, 1188 (D. Colo. 2018). Mr. Kenney's job duties at Helix included monitoring security cameras, patrolling assigned locations, investigating and documenting all facility-related incidents, and enforcing client, local, state, and federal policies and regulations. Id. Helix asserts that the FLSA does not apply to workers such as Mr. Kenney because Colorado's recreational marijuana industry is in violation of the Controlled Substances Act. It therefore moved to dismiss Mr. Kenney's FLSA claim for want [**3]  of jurisdiction under Rule 12(b)(1) of the Federal Rules of Civil Procedure or, alternatively, under Rule 12(b)(6) for failure to state a claim.

The district court denied Helix's motion to dismiss and then certified Helix's interlocutory appeal of its order. Exercising jurisdiction pursuant to 28 U.S.C. § 1292(b), we affirm.

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939 F.3d 1106 *; 2019 U.S. App. LEXIS 28498 **; 170 Lab. Cas. (CCH) P36,737; 2019 WL 4557433

ROBERT KENNEY, individually and on behalf of all others similarly situated, Plaintiff - Appellee, v. HELIX TCS, INC., Defendant - Appellant.

Subsequent History: Petition for certiorari filed at, 04/30/2020

Prior History:  [**1] Appeal from the United States District Court for the District of Colorado. (D.C. No. 1:17-CV-01755-CMA-KMT).

Kenney v. Helix TCS, Inc., 284 F. Supp. 3d 1186, 2018 U.S. Dist. LEXIS 7608 (D. Colo., Jan. 5, 2018)


marijuana, exempt, commerce, overtime

Civil Procedure, Jurisdiction, Subject Matter Jurisdiction, Jurisdiction Over Actions, Labor & Employment Law, Wage & Hour Laws, Scope & Definitions, Definition of Employers, Responses, Defenses, Demurrers & Objections, Motions to Dismiss, Motions to Dismiss, Failure to State Claim, Governments, Legislation, Interpretation, Business & Corporate Compliance, Overtime & Work Periods, Administrative Proceedings, Burdens of Proof, Evidence, Burdens of Proof, Allocation, Exemptions, Inferences & Presumptions, Presumptions, Particular Presumptions, Expiration, Repeal & Suspension, Labor & Employment, Labor & Employment Law, Labor & Employment Law, Scope & Definitions, Tax, Criminal Law & Procedure, Criminal Offenses, Controlled Substances, Delivery, Distribution & Sale, Definition of Employees