United States District Court, D. Kansas
James Hose, on behalf of himself and all other persons similarly situated, Plaintiff,
Henry Industries, Inc., Defendants.
MEMORANDUM AND ORDER
J. THOMAS MARTEN, District Judge.
Plaintiff James Hose works for Henry Industries, Inc., which coordinates with various pharmaceutical companies for delivery services. Hose has brought the present Fair Labor Standards Act (FLSA) claim on behalf of himself and other Henry drivers, alleging that the drivers are employers of Henry, that the routinely work in excess of 40 hours per week, but receive no overtime compensation. Henry contends that the drivers, some of whom are retained by intermediary contractors, are independent contractors rather than employees. The matter is before the court on the plaintiff's motion for conditional certification of the drivers as a class.
The FLSA was designed to guarantee fair compensation for employment. Barrentine v. Arkansas-Best Freight System, 450 U.S. 728, 741 (1981). To further this goal, workers may commence collective actions to gain fair compensation for overtime work. 29 U.S.C. § 216(b). The court administrates such collective actions to further "the legitimate goal of avoiding a multiplicity of duplicative suits and setting cutoff dates to expedite disposition of the action." Hoffman-La Roche, Inc. v. Sperling, 493 U.S. 165, 172 (1989).
In the Tenth Circuit, courts consider FLSA class actions under a two-step approach. First, the court conditionally certifies the class, based on a modest factual showing that the class is similarly situated. Only during the second step, after the conduct of additional discovery, does the court decide whether to decertify the provisional class. It is at this second stage that the court considers "(1) disparate factual and employment settings of the individual plaintiffs; (2) the various defenses available to defendant which appear to be individual to each plaintiff; (3) fairness and procedural considerations; and (4) whether plaintiffs made the [proper] filings." Thiessen v. Gen. Elec. Capital Corp., 267 F.3d 1095, 1103 (10th Cir.2001).
The court notes as an initial matter that much of the defendant's response to the motion for conditional certification appears relevant to the second stage of the certification inquiry, or even the ultimate merits of the plaintiff's FLSA claim. Thus, in nearly two dozen instances, the defendant disputes a factual allegation of the plaintiff as "controverted, " citing some opposing evidence. In some of these instances, the defendant further asserts that the allegations of the plaintiff are"not properly supported by the record, " because the underlying authority "is nothing more than his Second Amended Complaint." (Dkt. 54, at 7, 9).
This mistakes the standard applicable to first-stage, conditional certification. Conditional certification simply requires the presence of "substantial allegations that the putative class members were together the victims of a single decision, policy or plan." Thiessen, 267 F.3d at 1102. Whether there are in fact substantial allegations of a uniform plan or policy, "the court can consider the substantial allegations of the complaint along with any supporting affidavits or declarations." Folger v. Medicalodges, Inc., 2014 WL 2885363, at *3 (D. Kan. June 25, 2014) (emphasis added, citing cases). In making the decision as to conditional certification, "the court does not weigh evidence, resolve factual disputes, or rule on the merits of plaintiffs' claims." Id.
Defendant further cites Judge Belot's decision in Folger to dispute the proposition that "the Court is not permitted to weigh the evidence at this stage in the litigation." (Dkt. 54, at 32 n. 10). But Judge Belot, as set forth above, most explicitly agrees with the proposition - the court does not weigh evidence.
The portions of Folger cited by Henry merely establish that, if substantial discovery has occurred, the court may consider the results of such discovery for the purposes of deciding whether a company-wide policy exists. 2014 WL 2885363 at *3. The court still does not weigh evidence, and still considers the allegations advanced in the complaint. Id. (citing Swartz v. D-J Engineering, No. 12-1029, 2013 WL 5348585, *5 (D.Kan. Sept. 24, 2013). See also Barnwell v. Corrections Corp., No. 08-2151-JWL, 2008 WL 5157476, at *5 (D.Kan. Dec. 9, 2008); Gieseke v. First Horizon Home Loan Corp., 408 F.Supp.2d 1164, 1166 (D.Kan.2006))).
Further, Folger reflects an unusual occurrence in FLSA certification cases. There, most or all of the eleven opt-in plaintiffs supporting the claim of unpaid meal time had been deposed. Here, only limited discovery has occurred. There has been little or no discovery relating to the opt-in plaintiffs. The only deposition featured in the record before the court is that Brett Henry, the chief executive officer of the defendant.
The court finds that it may properly take into account both the allegations in the complaint and the evidence otherwise before the court. The court does not reach factual conclusions in the event of a factual controversy, and only determines the existence of a substantial allegation by the plaintiff.
Headquartered in Wichita, Kansas, Henry provides third party logistics services, warehousing services, and distribution services for clients with delivery needs. These clients, primarily pharmaceutical companies, are located throughout the nation. Henry operates through facilities in twenty five cities in eleven states. Policies are implemented on a company-wide basis.
Henry stresses that, in addition to individual persons, it also contracts with corporations and limited liability companies, and that some of these contractors are not themselves drivers, but intermediaries who in turn engage the actual drivers.
Henry uniformly treats all of its drivers as independent contractors, regardless of individual circumstances. The company gives all drivers a document addressing "Frequently Asked Questions" from independent contractors.
After the present action was filed, in October and November 2013, Henry held two-day training sessions on the classification of drivers as independent contractors. The sessions were intended to ensure that managers knew of the factors distinguishing independent contractors and employees. The classes, which included a mock question and answer session, were intended to apply to all drivers, regardless of location. Henry gave its managers a document highlighting best practices and "key rephrasing" of job duties. These training materials also indicate drivers are uniformly classified as independent contractors.
In its Response, Henry agrees that it uniformly considers all of its contractors to be independent contractors, not employees. It also agrees that it held a two-day training session for account managers to discuss the distinction between employees and independent contractors. However, it stresses that the training simply involved providing "neutral training materials used to demonstrate the distinction between an employee and independent contractor" (Dkt. 54, at 7).
Again, however, at this stage, the court does not address the validity of the training or how it affects the merits of plaintiff's FLSA claim. Indeed, the uniform training sessions are an indicator that Henry employed a uniform policy with respect to the drivers, and is therefore relevant to whether the drivers' positions are substantially similar.
Because Henry classifies all drivers as independent contractors, it does not pay drivers extra for overtime.
Hose worked for Henry as a driver from April 15, 2013 until December 27, 2013.
Drivers routinely work in excess of 40 hours per week while performing duties for defendant.
Plaintiff alleges that the drivers were "titled... as drivers, " implying that the defendant used this term. The cited evidence - the deposition of Hose and the affidavits of the three opt-in plaintiffs - does not support the allegation. In Hose's deposition, he merely identifies the standard form Cartage Agreement he signed, which refers to him as "Contractor." The three affidavits all simply recite that affiant "worked as a delivery driver for Defendant Henry Industries" for a particular time period, without any indication that Henry titled or termed them as drivers.
The plaintiff alleges that the schedules imposed require the drivers to routinely work more than 40 hours a week. Some of the evidence cited by plaintiff does not support the allegation. That is, plaintiff cites the affidavits of Jones and Beard, but their affidavits only state that each individually routinely worked more than 40 per week; they make no representations about the schedules of other drivers.
However, the plaintiff relies also on his assertions to this effect in the Second Amended Complaint. As the court noted earlier, allegations in a complaint may properly be taken into account in deciding whether to approve conditional certification.
Evidence from the three opt-in driver plaintiffs indicates that drivers perform similar duties, using their personal vehicles to perform distribution and delivery services for Hose's customers. Hose's further allegation that "[a]ll" drivers perform "identical" duties is not supported in the evidence.
Henry stresses that the actual services performed by the drivers differ, and may take the form of "line hauling" (carrying bulk freight), typical route deliveries based on a customer's schedule, and "stat" or special deliveries required by a customer.
Henry requires its contractors (whether drivers or contractors who in turn employ drivers) to sign a uniform Cartage Agreement. The cartage agreement contains twenty numbered sections, set forth in largely boilerplate terms, governing:
Engagement of Contractor
Manner of Performance of ...