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Blair v. Transam Trucking, Inc.

United States District Court, D. Kansas

March 28, 2018

LARRY BLAIR and CHARLIE DAVIS, On Behalf of Themselves and All Other Persons Similarly Situated, Plaintiffs,
v.
TRANSAM TRUCKING, INC., Defendant.

          MEMORANDUM AND ORDER

          ERIC F. MELGREN, NITED STATES DISTRICT JUDGE.

         In 2009, Plaintiffs Blair and Davis, on behalf of themselves and all other persons similarly situated, filed suit alleging that Defendant TransAm Trucking, Inc. (“TransAm”) violated the Fair Labor Standards Act (“FLSA”) and the Kansas Wage Payment Act (“KWPA”). Plaintiffs bring this action as a collective action under the FLSA for minimum wage violations, and as a Rule 23 class action for KWPA violations. Plaintiffs, who are truck drivers, allege that TransAm failed to pay them minimum wages and made improper deductions from their paychecks.

         This action has been ongoing for nearly a decade. Plaintiffs have amended the complaint twice, and the scheduling order has been revised six times. The final pretrial conference was eventually held on June 22, 2017, and the Pretrial Order (Doc. 433) was entered the following day.

         Plaintiffs state three claims in the Pretrial Order, which supersedes all previous pleadings. Plaintiffs' first claim is a collective action brought under the FLSA's minimum wage provision, 29 U.S.C. § 206 by the two Named Plaintiffs and approximately 1, 928 opt-in Plaintiffs. Plaintiffs assert that TransAm has misclassified the FLSA class members as “independent contractors” because the opt-in Plaintiffs were “employees” pursuant to the application of the “economic realities” test for employee status under the FLSA, and that Defendant failed to pay them wages in the amount of at least the applicable federal minimum hourly wage for all hours worked in the relevant weekly pay periods.

         Plaintiffs' second claim is a Rule 23 class action brought under the KWPA by the two Named Plaintiffs and an approximate 8, 691 members class. Plaintiffs allege that TransAm has misclassified the Rule 23 KWPA class members as “independent contractors” because the Plaintiffs were “employees” pursuant to the application of the “right to control” test for employee status under the KWPA, and TransAm failed to pay them wages in the amount of at least the applicable federal minimum wage for all hours worked during numerous weekly pay periods, and such unpaid minimum wages constituted “wages due” under the KWPA.

         Plaintiffs' third claim is also brought by the Rule 23 KWPA class. Plaintiffs again allege that TransAm has misclassified them as “independent contractors” because they were “employees” under the KWPA, and TransAm improperly deducted banking fees from the Plaintiffs' wages and thereby failed to pay the Plaintiffs all “wages due” in violation of the KWPA.

         There are fourteen motions that are now pending before this Court. The Court will address the parties' motions in five different sections and will set forth the applicable parties, facts, and law in each respective section.[1] In the first Section, the Court will address TransAm's motion for judgment on the pleadings. In Section II, the Court will address TransAm's motion to decertify the FLSA collective action. In Section III, the Court will address TransAm's motion to decertify the Rule 23 class. In Section IV, the Court will address both parties' motions for summary judgment. And finally, in Section V, the Court will address the remaining motions.

         The Court has received extensive briefing on these motions, and deems oral argument unnecessary.

         I. TransAm's Motion for Judgment on the Pleadings

         A. Factual and Procedural Background

         In the Pretrial Order, TransAm included an affirmative defense that it believed Plaintiffs' second claim fails to state a claim upon which relief could be granted, and included a motion for judgment on the pleadings as an additional motion TransAm intended to file before the dispositive-motion deadline.[2] Plaintiffs did not object. The pleadings are now closed, and trial is set to begin on June 19, 2018.

         TransAm's motion raises two issues. The first issue is whether unpaid “wages in the amount of at least the applicable federal minimum wage” are recoverable as “wages due” under the KWPA. Assuming that such a claim may be brought under the KWPA, the second issue becomes whether the claim is preempted by the FLSA. For the reasons explained below, the Court concludes that under Kansas law, the KWPA does not provide a cause of action for the recovery of state or federal minimum wages. And to the extent that the KWPA could be interpreted to allow a claim for unpaid federal minimum wages, it is preempted by the FLSA.

         B. Legal Standard

         Under Federal Rule of Civil Procedure 12(c), a party may move for judgment on the pleadings after the pleadings are closed as long as the motion is made early enough not to delay trial.[3] The standard for dismissal under Rule 12(c) is the same as a dismissal under Rule 12(b)(6).[4]So to survive a motion for judgment on the pleadings, a complaint must present factual allegations, assumed to be true, that “raise a right to relief above the speculative level, ” and must contain “enough facts to state a claim to relief that is plausible on its face.”[5] All reasonable inferences from the pleadings are granted in favor of the non-moving party.[6] Judgment on the pleadings is appropriate when “the moving party has clearly established that no material issue of fact remains to be resolved and the party is entitled to judgment as a matter of law.”[7]

         C. Discussion

         In Count II of the Second Amended Complaint, Plaintiffs allege that “Defendant has had a policy and practice of violating K.S.A. § 44-314(d) by refusing to allow its Leased Drivers to receive all of their ‘wages due' by refusing to pay them minimum wages as required by the FLSA and by making improper deductions from their wages.”[8] As outlined in the Pretrial Order, Plaintiffs reiterate this claim verbatim in their “factual contentions” section, but modify the claim slightly in their “legal claims” section.[9] There, Plaintiffs claim that TransAm violated the KWPA when it failed to pay Plaintiffs “wages in the amount of at least the applicable federal minimum wage for all hours worked during relevant weekly pay periods, and such unpaid minimum wages constituted ‘wages due' under the KWPA.”[10] Regardless, it is clear that Plaintiffs are using the KWPA as a vehicle to recover FLSA-mandated minimum wages.

         TransAm now argues that “minimum wages as required by the FLSA” are not recoverable as “wages due” under the KWPA. According to TransAm, a Kansas state law claim for minimum wages must be brought under the Kansas Minimum Wage Maximum Hours Law (the “KMWMHL”). However, as TransAm points out, the KMWMHL expressly exempts employers covered by the FLSA, therefore Plaintiffs in the Rule 23 class are not entitled to recover FLSA-mandated minimum wages. Plaintiffs counter that multiple cases in this District “have found that the KWPA is not preempted by the FLSA, ” and that the Kansas Supreme Court has held “that unpaid [overtime] wages pursuant to the FLSA constituted wages due under the KWPA and nothing in the FLSA suggests that violations of its minimum wage requirements are treated differently than overtime.”[11]

         As the issues raised in this motion implicate federal and state wage-and-hour laws, the Court will begin with an overview of the applicable laws. Next, the Court will address whether FLSA-mandated minimum wages are recoverable as “wages due” under the KWPA. Assuming that such a claim may be brought under the KWPA, the Court will then address whether the claim is preempted by the FLSA.

         1. The FLSA and Kansas Wage Laws

         The FLSA, enacted by Congress in 1938, protects employees by prescribing the minimum and overtime wages that employers must pay. The parties do not dispute that TransAm is an employer subject to the FLSA.[12] The federal minimum wage has been $7.25 per hour since 2007.[13]

         The FLSA provides a private right of action to recover for violations, including a suit by “one or more employees for and in behalf of himself or themselves and other employees similarly situated.”[14] “In 1947, Congress amended this provision to require that a plaintiff in a FLSA suit ‘give his consent in writing to become such a party and such consent is filed in the court in which such action is brought.' ”[15] In other words, similarly situated plaintiffs must affirmatively “opt in” to become a party to a FLSA “collective action.”[16]

         Many states, such as Kansas, have also enacted their own wage laws. In Kansas, the KMWMHL “is the state counterpart” to the FLSA and applies to claims for unpaid minimum and overtime wages.[17] However, the KMWMHL explicitly provides that it “shall not apply to any employers and employees who are covered under the provisions of the [FLSA] . . . .”[18] Just like the FLSA, the KMWMHL requires employers to pay to each employee wages at $7.25 an hour.[19]

         Kansas also has enacted the KWPA, which requires employers to pay employees all “wages due” to the employee at least once per month.[20] As explained by the Kansas Supreme Court:

The KWPA controls several aspects of wages and benefits for the Kansas worker that are not covered by the [FLSA]. The KWPA governs when wages must be paid, the manner in which they must be paid, and the circumstances in which wages can be withheld. The KWPA also requires employers to provide certain notice requirements with respect to the payment of wages and the provision of benefits. It provides for remedies and penalties for violation of its requirements. Notably, the KWPA does not contain any express provision relating to the payment of overtime, which is typically pursued under a FLSA claim.[21]

         Nor does the KWPA contain any express provision relating to the payment of minimum wages, or the minimum rate of pay an employer must pay its employees.[22] Unlike the KMWMHL, the KWPA does not exempt employers covered by the FLSA.[23]

         Group actions based on Kansas wage laws are not brought in federal courts as “collective actions.” Instead, they are governed by Rule 23 of the Federal Rules of Civil Procedure. Under Rule 23, suits may be filed as “class actions” on behalf of putative classes so long as certain prerequisites are met.[24] After class certification under Rule 23(b)(3), the court provides notice to putative class members, providing information about the class action and granting them an opportunity to exclude themselves or “opt-out” of the class.[25] The class members will be bound by the final judgment unless they choose to opt-out.[26]

         Here, in Count I, Plaintiffs claimed that TransAm violated the FLSA's minimum wage provisions “by failing to pay the Plaintiffs and other similarly situated Leased Drivers a minimum hourly wage during numerous applicable pay periods.” After the collective action was conditionally certified on August 20, 2015, approximately 1, 928 opt-in Plaintiffs filed consents to join the collective action. In Count II, Plaintiffs claimed that TransAm has had a policy and practice of violating the KWPA, specifically K.S.A. § 44-314(d), “by refusing to allow its Leased Drivers to receive all of their ‘wages due' by refusing to pay them minimum wages as required by the FLSA . . . .” After the class was conditionally certified under Rule 23, notice was sent to putative class members, granting them an opportunity to opt-out. The class currently consists of approximately 8, 691 members.

         Both Count I and Count II seek damages for TransAm's alleged failure to pay Plaintiffs minimum wages under the FLSA. This is known as a “hybrid action, ” a recent trend that has “troubled district courts across the country because of the inherent conflict between the opt-in requirement of FLSA collective actions and the opt-out provisions of Rule 23(b)(3) class actions.”[27]

         2. The KWPA Does Not Support a Claim for FLSA Minimum Wage Damages

         The first issue to resolve is whether the KWPA supports a FLSA minimum wages claim against a FLSA-covered employer for failing to pay the employee all “wages due.” As the Court is construing a Kansas statute, it must be given the meaning it would have in the Kansas courts.[28]Unfortunately, there are no decisions of the Kansas Supreme Court, or of lower courts in Kansas, addressing this specific issue. The Court must therefore attempt to predict the interpretation that would be given the statute by the Kansas courts, “based on its language, on the decisions of other state appellate courts, and on the evident purposes of the statute.”[29]

         The plain language of K.S.A. § 44-314(a) states: “[e]very employer shall pay all wages due to the employees of the employer at least once during each calendar month, on regular paydays designated in advance by the employer.” The KWPA defines “wages, ” as “compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission or other basis less authorized withholding and deductions.”[30] And the italicized language, “or other basis, ” has been defined by the Kansas Department of Labor to include:

all agreed compensation for services for which the conditions required for entitlement, eligibility, accrual or earning have been met by the employee. Such compensation may include, but is not limited to, profit sharing, fringe benefits, or compensation due as a result of services performed under an employment contract that has a wage rate required or implied by state or federal law. Conditions subsequent to such entitlement, eligibility, accrual or earning resulting in a forfeiture or loss of such earned wage shall be ineffective and unenforceable.[31]

         Applying these definitions, Kansas appellate courts have consistently held that “wages” are determined by the “employment contract and employer policies.”[32] But the Kansas courts have not explicitly addressed whether the KWPA contemplates compensation owed because of statutory rights-not contractual rights-such as the KMWMHL or the FLSA's minimum wage provisions. Based on the existing case law, and the evident purposes of the KWPA, the Court joins the majority of this District and concludes that minimum wages are not recoverable under the KWPA.

         a. The Kansas Supreme Court did not hold that unpaid minimum wages constitute “wages due” under the KWPA

         In their entire argument, Plaintiffs cite just one Kansas case-Elkins v. Showcase, Inc.[33]- for the proposition that unpaid minimum wages pursuant to the FLSA constitute “wages due” for the purposes of the KWPA. In Elkins, a waiter brought a KWPA claim for “back wages” owed under “an employment agreement” which provided payment at $2.01 per hour with the employer “claiming full legal tip credit” of $1.34 per hour.[34] In addition, the employer utilized a “tip pooling system” whereby the employer would deduct from the tipped employees' daily tips an amount equal to 6% of each employee's total daily sales (not tips), pool that money, and then pay nontipped employees from the pool.[35] As a result, the employer withheld 72% of the tips earned by the waiter.[36] The waiter did not provide written authorization for the 6% deduction.[37]

         At the administrative level, the administrative hearing officer concluded that the employer violated the K.S.A. § 44-319, which provided at the time:

(a) No. employer may deduct, withhold or divert any portion of an employee's wages unless: (1) The employer is required or empowered to do so by state or federal law; . . . . (3) the employer has a signed authorization by the employee for deductions for a lawful purpose accruing to the benefit of the employee.[38]

         In reaching this conclusion, the administrative hearing officer concluded that the employer's “system of deduction for tip pooling does not conform to requirements of the FLSA which places a generally acceptable limit of fifteen percent (15%) of reported tips as the maximum amount an employer may divert into a tip pool.”[39]

         The first issue raised on appeal was whether the state administrative hearing officer had jurisdiction to determine violations of the FLSA. The Elkins Court held that the hearing officer did in fact have jurisdiction under the KWPA to determine whether the waiter's wages had wrongfully been withheld by the employer.[40] As the waiter successfully argued, the hearing officer was required to determine whether the employer violated § 44-319, “which provides, in substance, that no employer may withhold, deduct, or divert any portion of an employee's wages unless the employer is required or empowered to do so by state or federal law.”[41] Thus, the Court noted, “the provisions of the FLSA are material only if an issue arises whether an employer is empowered by that act to withhold any portion of an employee's wages.”[42] Indeed, the hearing officer only considered the FLSA to determine whether the employer had authority to withhold 72% of the waiter's tips.[43]

         The employer then argued that the hearing officer erred in concluding that the amounts paid into the tip pool were “wages” under the KWPA. The Court agreed with the officer's determination that the amounts paid into the tip pool were “wages” under the KWPA.[44] “Wages” include “all agreed compensation for services including . . . fringe benefits for which the conditions required for entitlement . . . have been met by the employee.”[45] The employer argued that the waiter “knew of the tip pooling arrangement when he was hired and further that this tip pool was a condition precedent to the receipt of any amounts due to the plaintiff.”[46] According to the employer, the waiter did not have a right to compensation from the tip pool until it was paid out according to the terms of the employment contract.

         The Elkins Court disagreed:

The respondent took advantage of the tip credit allowed under the Fair Labor Standards Act to meet its minimum wage obligation. 29 U.S.C. § 203(m) provides that for an employer to take advantage of tips being included within the calculation of the minimum wage rate, the tips must be retained by the employee or pooled among employees who customarily and regularly receive tips. Respondent's argument that the employee had no right to compensation from the tip pool until it was paid out is clearly contrary within the meaning of the above section.[47]

         Thus, the Court affirmed the administrative hearing officer's judgment.

         In the present case, Plaintiffs suggest that under Elkins, a KWPA claim is not limited to “wages due” pursuant to the agreement of the parties, but it may encompass “wages due” pursuant to the minimum wage provisions of the FLSA. The Court disagrees with this interpretation for two reasons.

         First, Elkins cannot be read to support the proposition that “wages due” encompasses more than the wages due pursuant to the agreement of the parties. Elkins did not, at any point, address the KWPA's “wages due” provision (§ 44-314), which requires the employer to “pay all wages due” to its employees.[48] Rather, Elkins addressed § 44-319, which provides that an employer may not “withhold, deduct or divert any portion of an employee's wages.”[49] This distinction is important, because the “wages” disputed in Elkins were tips, paid by customers. The Court noted that when an employee receives a tip, “customers, not the employer, have made the additional payment of a fringe benefit to the employee of the employer for receiving a standard of service.”[50]Thus, the KWPA's mandate for the employer to “pay all wages due”[51] to the employee does not apply to tips; those wages are paid by customers. However, tips are still “wages, ” so an employer can run afoul of § 44-319 by withholding, deducting, or diverting an employee's earned tips.[52]This does not mean, as Plaintiffs assert, that “every employer shall pay[53] any additional wages beyond those agreed to by the parties.[54]

         Second, Elkins does not suggest that the requirement to pay all “wages due” encompasses “wages due” pursuant to the minimum wage provisions of the FLSA. Elkins in no way suggests that the waiter was ever paid less than the federal minimum wage. The minimum wage at the time was $3.35 per hour.[55] The waiter was paid $2.01 per hour with the employer “claiming full legal tip credit” of $1.34 per hour.[56] In other words, so long as the waiter received at least $1.34 per hour in tips, the employer complied with the FLSA. The waiter in Elkins claimed that he was entitled to all the tips he received (which averaged $38.88 per day).[57] He did not claim that the tips he ultimately received (which averaged $10.96 per day) caused him to be paid less than the federal minimum wage.

         Moreover, the Elkins Court only discussed the FLSA in determining “whether an employer is empowered by that act to withhold any portion of an employee's wages.”[58] Again, the issue was whether the employer was authorized by the FLSA to deduct a portion of the waiter's tips under § 44-319.[59] Section 44-319 permits deductions from an employee's wages if the employer is “empowered to do so” by federal law.[60] Under the FLSA at the time, an employer was not empowered to deduct from a tipped employee's tips if the employer also took advantage of the FLSA's tip credit.[61] But employers that chose not to take the tip credit would have been empowered to do so.[62] The FLSA was only implicated in Elkins because § 44-319 expressly incorporates federal law in determining whether an employer may make a deduction or not. Section 44-314, which mandates that an employer must “pay all wages due” to its employees, does not reference federal law for determining what “wages” are “due.”[63]

         Thus, Elkins offers no support for Plaintiffs' claim for minimum wages as “wages due” under the KWPA. And Plaintiffs have provided no additional Kansas cases, nor has the Court located any, suggesting that “wages due” encompasses the FLSA's minimum wage provisions.[64]

         b. Four cases from this District have concluded that the KWPA does not support a claim for unpaid overtime or minimum wages

         In addition to Elkins, the parties cite to cases from this District that have ruled on this issue. The majority of cases from this District have held that a claim for minimum wages cannot be brought as a claim for “wages due” under the KWPA.

         In Spears v. Mid-America Waffles, Inc., [65] Judge Murguia held that plaintiffs could not bring a claim under the KWPA for “failing to pay minimum wages.”[66] Judge Murguia agreed with defendants that “plaintiffs cannot proceed with a claim under the KWPA because any claim for failing to pay minimum wages in Kansas falls under the [KMWMHL]-not the KWPA.”[67] “And plaintiffs cannot state a claim under the KMWMHL because it is not applicable to employers and employees covered by the FLSA.”[68] Accordingly, Judge Murguia denied plaintiffs' motion to amend the complaint to bring a KWPA claim because it would be futile.[69]

         Next, in Wheaton v. Hinz JJ, LLC, [70] Judge Rogers followed Spears, holding that “a plaintiff may only assert a claim under FLSA because Kansas law allows minimum wage violations to be pursued under the KMWMHL alone, which specifically exempts FLSA-covered employers.”[71] In doing so, Judge Rogers concluded that “[t]his case is distinguishable from Elkins because, unlike this case, there was no allegation in Elkins that the restaurant employer failed to pay minimum wage.”[72]

         And in Larson v. FGX International, Inc., [73] Judge Marten held that the KWPA is “not a proper mechanism” for asserting minimum wage and overtime claims.[74] Judge Marten noted that, “under Kansas law, non-FLSA overtime and minimum wage claims are brought through the KMWMHL, ” not the KWPA.[75] And, when the employer is covered by the FLSA, claims for minimum or overtime wages must be brought under the FLSA.[76]

         And one additional case has been decided since the parties submitted their briefs. In McGowan v. Genesis Health Clubs Management, Inc., [77] Judge Crabtree held that “plaintiff's KWPA claim for overtime violations fails to state a plausible claim for relief because Kansas law precludes state statutory claims to recover overtime wages against FLSA-covered employers, like defendant.”[78]

         c. Three cases from this District have allowed a KWPA claim for minimum or overtimes wages to proceed

         Plaintiffs respond that “multiple better-reasoned cases in this District have found that the KWPA is not preempted by the FLSA.”[79] But as TransAm pointed out in its reply, preemption is only one of the two issues. If the KWPA does not support a cause of action for the recovery of unpaid minimum wages, then the claim cannot proceed and the preemption analysis would not be necessary. For this proposition, Plaintiffs rely solely on Elkins. Regardless, the Court has considered the cases from this District cited by Plaintiffs. The Court does not find them to be persuasive.

         First, in Veale v. Sprint Corp., [80] the defendant argued that the plaintiff's KWPA claim for overtime should be dismissed because the KWPA does not provide a substantive cause of action to seek overtime wages.[81] Judge Van Bebber disagreed because the KWPA requires employers to pay an employee's “earned wages, ” and allowed the claim to proceed.[82] Recently, Judge Crabtree declined to follow Veale, noting that “[t]he court never addressed-and it doesn't appear that defendant ever argued-that the KMWMHL governed plaintiff's claim for overtime wages and precluded such a claim if the defendant was covered by the FLSA.”[83] The Court agrees with Judge Crabtree. McGowan provided a more thorough analysis than Veale did, because McGowan specifically addressed the argument that the KMWMHL exempts the employer from liability for Plaintiffs' minimum wage claim under the KWPA, [84] while Veale did not.[85]

         The other two cases cited by Plaintiffs are Tarcha v. Rockhurst University Continuing Education Center, Inc.[86] and Rukavitsyn v. Sokolov Dental Laboratories, Inc.[87] The Court finds these cases unpersuasive for two reasons. First, both cases relied on Veale to reach the conclusion that a plaintiff can seek damages under the KWPA for overtime “wages due” based on the FLSA.[88]However, the Veale Court was presented with a conclusory argument and thus declined to undertake a deeper analysis of the issue, while the Spears Court did. This Court finds Spears, which concluded that a minimum wage claim cannot be brought under the KWPA, to be more persuasive than Veale, which reached the opposite conclusion. And because Tarcha and Rukavitsyn relied on Veale without considering Spears, [89] this Court also finds Tarcha and Rukavitsyn to be unpersuasive.

         Second, both of these cases relied on yet another case-Garcia v. Tyson Foods, Inc.[90]- for the proposition that a plaintiff could use the FLSA to support a KWPA claim for unpaid overtime compensation.[91] But Garcia does not actually support this conclusion, because “Garcia did not involve allegations of unpaid overtime compensation.”[92] Rather, the plaintiffs in Garcia alleged that the employer did not pay them for time they spent at work donning, doffing, and walking.[93] Judge Lungstrum held that plaintiffs could assert KWPA claims based on these allegations “to recover non-overtime wages owed but not paid by [the employer].”[94] In footnote 15 of the opinion, Judge Lungstrum explained that plaintiffs-who had not opted to join the FLSA class-could not seek to recover overtime wages under the KWPA because “employers like [defendant] who are covered by the FLSA are expressly exempted from Kansas' overtime statute”-the KMWMHL.[95] “Thus, permitting plaintiffs to recover overtime wages from [defendant] under the KWPA is incompatible with the exemption provision of the KMWMHL and would undermine the integrity of Kansas' wage and hour statutory scheme as a whole.”[96]

         Tarcha and Rukavitsyn reason that footnote 15 analyzed whether the plaintiffs who had not opted to join the FLSA class could state viable claims under the KMWMHL.[97] This Court respectfully disagrees because the overall issue addressed in footnote 15 was whether plaintiffs could seek damages under the KWPA “for ‘all time, ' including overtime.”[98] Footnote 15 held that plaintiffs could not bring a KWPA claim for overtime wages against FLSA-covered employers.[99]The obvious implication of this holding is that Kansas explicitly exempts FLSA-covered employers from the KMWMHL's minimum and overtime wage provisions, and plaintiffs cannot avoid this restriction by bringing those same claims under the KWPA.[100]

         Accordingly, the three cases cited by Plaintiffs are not persuasive. The Court elects to follow the holdings reached in Spears, Wheaton, Larson, and McGowan.

         d. Legislative History and Canons of Construction

         The Court agrees with the majority of this District: FLSA minimum and overtime wages are not recoverable as “wages due” under the KWPA. “And, it predicts that the Kansas Supreme Court-if presented with this issue-would reach the same conclusion as these cases.”[101] Again, the Kansas Supreme Court has already explained the full extent of the KWPA:

The KWPA governs when wages must be paid, the manner in which they must be paid, and the circumstances in which wages can be withheld. The KWPA also requires employers to provide certain notice requirements with respect to the payment of wages and the provision of benefits. It provides for remedies and penalties for violation of its requirements. Notably, the KWPA does not contain any express provision relating to the payment of overtime, which is typically pursued under a FLSA claim.[102]

         Nor does the KWPA contain a provision relating to the payment of minimum wages. This is because, when the KWPA was enacted, the FLSA already governed minimum wage rates and established a private cause of action. The KWPA, however, “controls several aspects of wages and benefits for the Kansas worker that are not covered by the [FLSA].”[103] Indeed, “[t]he KWPA's primary concern was to protect low income workers who were shorted, docked, or cheated out of pay for services performed.”[104] Plaintiffs have cited no authority, nor has the Court lcoated any, suggesting that the KWPA was intended to guarantee a minimum rate of pay for those services.[105]

The KWPA, therefore, was not intended to provide a separate means to recover for FLSA violations, but to provide workers with a means to recover for violations not covered by the FLSA. Thus, the KWPA provides a statutory mechanism for “enforcing an employment contract, ”[106] but “it does not enhance contractual remedies for those who enter into agreements with parties who happen to be their employers.”[107] In essence, the requirement to pay all “wages due” is a breach of contract provision.[108] The KWPA allows employees to enforce their contractual rights to wages owed pursuant to the parties' agreement. It does not allow employees to enforce other statutory rights, such as the right to a minimum wage.

         Furthermore, the relevant canons of construction demonstrate that the KMWMHL controls all state-law minimum and overtime wage claims. As the Kansas Supreme Court explained in Chelsea Plaza Homes, Inc. v. Moore, [109] “[i]t is a cardinal rule of law that statutes complete in themselves, relating to a specific thing, take precedence over general statutes or over other statutes which deal only incidentally with the same question, or which might be construed to relate to it.”[110]And when “there is a conflict between a statute dealing generally with a subject, and another dealing specifically with a certain phase of it, the specific legislation controls in a proper case.”[111]

         In Chelsea Plaza Homes, Inc., the defendant-tenant proceeded to trial on her counterclaim, alleging violation of the Residential Landlord Tenant Act (“RLTA”) and the Kansas Consumer Protection Act (“KCPA”).[112] The counterclaim sought $2, 000 in damages pursuant to the KCPA, K.S.A. § 50-636, for each of three alleged violations of the RLTA. The three alleged violations of the RLTA pertained to three paragraphs contained within the lease agreement. Each of the RLTA violations “was averred to be a deceptive practice proscribed by K.S.A. 50-626(B)(8)” of the KCPA.[113] At conclusion of the trial, the district court concluded that “no violation of the [KCPA] was proven.”

         On appeal, the Kansas Supreme Court first resolved “a significant issue inherent in the case.” The Court recognized that “the counterclaim is the result of a hybridization of the [RLTA] and the [KCPA], ” and explained:

Specific alleged violations of the RLTA are used as the deceptive practices of the [KCPA]. The reason for this is clear. The RLTA permits only the recovery of Actual damages by a tenant, and those only when the prohibited provisions are deliberately used by the landlord (K.S.A. 58-2547); whereas, the [KCPA], for deceptive acts or practices (K.S.A. 50-626(B)(8)), permits recovery of actual damages or $2000, whichever is greater, plus reasonable attorneys' fees (K.S.A. 50-634 and 636 (now 1978 Supp.)). We must initially determine whether the [RLTA] is a complete and specific act which takes precedence over the [KCPA] in the area to which it pertains.[114]

         In analyzing the two Acts, the Court noted that the KCPA governed all “consumer transactions, ” which was defined broadly.[115] In fact, the KCPA was “clearly broad enough to include all leases of real estate.” The RLTA, on the other hand, was enacted to govern “the more substantive aspects of landlord-tenant relationships, ” and only encompassed landlord-tenant transactions.[116]

         Thus, the Court determined, the KCPA covered a very broad area of transactions; whereas, the RLTA covered “one very specific small area of transactions, and is complete within itself for that area.”[117] Invoking the more-specific-statute rule of construction, the Court held that “for all transactions within its purview the [RLTA] controls and preempts the field. The attempted hybridization of the two acts herein has resulted in a sterile hybrid which is not viable, let alone capable of reproducing itself.”[118] Because the counterclaim should have been brought under the RLTA-not the KCPA-the trial court did not err in determining that there was no violation of the KCPA.[119]

         Here, the general statute-the KWPA-is in conflict with the specific statute dealing with the same subject-the KMWMHL. Chelsea Plaza Homes is directly on point. There, plaintiffs' claim was brought under the KCPA, which broadly encompasses all “consumer transactions, ” even though the allegations only concerned “landlord-tenant transactions” and fell directly within the purview of the narrower RLTA. Here, Plaintiffs' claim is brought under the KWPA, which broadly encompasses all “wages due, ” even though the allegations only concern unpaid “minimum wages” and fall directly within the purview of the narrower KMWMHL. And, just like the RLTA in Chelsea Plaza Homes, the KMWMHL is “complete in itself.” It provides obligations, rights, and importantly, a remedy for minimum wage violations-employees may bring an action in state court to recover the full amount of unpaid minimum wages, as well as costs and reasonable attorney fees.[120] Accordingly, for all transactions within the KMWMHL's purview the KMWMHL controls and preempts the field.[121]

         Thus, Plaintiffs “may only assert a claim under [the] FLSA because Kansas law allows minimum wage violations to be pursued under the KMWMHL alone, which specifically exempts FLSA-covered employers.”[122] Since there appears to be no dispute that Plaintiffs and TransAm are covered by the FLSA, Plaintiffs' claim for unpaid minimum wages must be dismissed.

         3. Regardless, Plaintiffs' Claim Under the KWPA is Preempted

         Furthermore, “to the extent that the KWPA could be interpreted as a mechanism for asserting FLSA-based claims for minimum or overtime wages, it would be preempted by §§ 206 and 207 of the FLSA.”[123] “As a general rule, state law claims attempting to assert causes of action expressly provided for by federal statute are preempted.”[124] Federal law preempts state law “where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress” (“conflict preemption”).[125] In these cases, the state law will be nullified “to the extent that it actually conflicts with federal law.”[126] “[A]ny state law, however clearly within a State's acknowledged power, which interferes with or is contrary to federal law, must yield.”[127] For example, the Tenth Circuit has previously held that state common law causes of action for retaliatory discharge are precluded where an adequate statutory remedy exists under the FLSA.[128]

         a. Differences between the FLSA and the KWPA

         Here, the FLSA and the KWPA have similar goals.[129] However, an important difference between the statutes is that the FLSA establishes the amount of wages an employer must pay its employees, while the KWPA does not. “Rather than providing substantive rights, the KWPA provides a mechanism for recovering wages due.”[130]

         In addition, the FLSA specifically includes an “opt-in” provision to join a representative while the KWPA does not. Under the FLSA, “[n]o employee shall be a party plaintiff to any [collective] action unless he gives his consent in writing to become such a party and such consent is filed in court . . . .”[131] The FLSA's “opt-in” requirement was added to “strike a balance to maintain employees' rights but curb the number of lawsuits.”[132]

         b. Plaintiffs' KWPA claim is duplicative of Plaintiffs' FLSA claim and therefore preempted by the FLSA

         The Tenth Circuit has not directly addressed whether the FLSA preempts state-law wage claims that would allow plaintiffs to pursue a Rule 23 class action and a FLSA collective action simultaneously. Although the FLSA allows states to impose a higher minimum wage, it does not explicitly authorize states to create alternative remedies for FLSA violations.[133]

         However, the Fourth Circuit has held that the FLSA preempts state law claims that “depend on establishing that [the defendant] violated the FLSA.”[134] In Anderson, plaintiffs brought claims for breach of contract, negligence, and fraud-claims that provided remedies that were more generous than those provided in the FLSA enforcement scheme.[135] These “state claims all depend[ed] on establishing that [defendant] violated the FLSA . . . .”[136] The Fourth Circuit explained that “ ‘the mere existence of a federal regulatory or enforcement scheme'-even if the scheme is an appreciably detailed one-‘does not by itself imply preemption of state remedies.' ”[137] Yet, the court concluded that the FLSA contains “an unusually elaborate enforcement scheme, ” and this enforcement scheme provides the exclusive remedy for enforcing the Act.[138] The court reasoned that § 216(b)-(c) contains “special feature[s] that would be rendered superfluous if workers were able to circumvent that scheme while pursuing their FLSA rights.”[139] Accordingly, the FLSA preempted the duplicative state law claims.

         However, some courts have held that the FLSA did not preempt state-law wage claims when the state law provided additional rights not guaranteed by the FLSA.[140] Take one of this Court's prior opinions for example. In Tommey v. Computer Sciences Corp., [141] the plaintiff brought quantum meruit and unjust enrichment claims under Kansas common law alongside a FLSA claim for unpaid overtime wages. This Court noted that some courts have allowed a claim for unjust enrichment or quantum meruit to proceed when the claim seeks something more than what the FLSA can provide-such as regular wages not paid at the contracted rate or “gap time” wages. The Court held that plaintiff's complaint contained sufficient facts to encompass a quantum meruit claim for unpaid “gap time” wages. As plaintiff was seeking more than what she was entitlted to under the FLSA, the Court allowed her quantum meruit claim to proceed. However, the Court dismissed the claim to the extent she was seeking to recover overtime wages.[142] And with regards to the unjust enrichment claim, this Court dismissed the claim because the allegations were “duplicative of Plaintiff's FLSA claim and therefore preempted by Plaintiff's FLSA claim.”[143]

         Thus, the FLSA does not preempt a state-law claim when the state statute provides more substantive rights than the FLSA. But, with the exception of one Northern District of Iowa case, “courts that have directly considered the preemption issue have found that the FLSA preempts duplicative state-law claims.”[144]

         Such is the case here. Plaintiffs claim they were “employees, ” misclassified as “independent contractors, ” and not paid wages in the amount of “at least the applicable federal minimum wage for all hours worked during relevant weekly pay periods, and such unpaid minimum wages constituted ‘wages due' under the KWPA.” The KWPA does not provide any substantive rights; it merely provides a mechanism to recover wages that are due.[145] Thus, Plaintiffs' KWPA claim for minimum wages is duplicative of the FLSA claim. Plaintiffs are not seeking anything more than what the FLSA provides.

         The Court agrees with the Fourth Circuit's reasoning that allowing Plaintiffs to use procedures other than those established in § 216(b) would render that section superfluous.[146] In particular, by using the KWPA to enforce their FLSA rights, Plaintiffs nullify § 216(b)'s opt-in procedure. As enacted, the FLSA did not require FLSA collective action plaintiffs to affirmatively opt in.[147] But in 1947, Congress amended the FLSA because the Act was being “interpreted judicially in disregard of long-established customs, practices, and contracts between employers and employees, thereby creating wholly unexpected liabilities . . . upon employers” and that if such interpretations of the Act were to continue, “the payment of such liabilities would bring about financial ruin of many employers . . . .”[148] The opt-in requirement was thus included to seek “a balance between protecting employees and shielding employers from excessive liability.”[149] As a KWPA claim brought under Rule 23 does not require plaintiffs to affirmatively opt in, the Rule 23 class is much larger than the FLSA class.[150] The KWPA therefore “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.”[151]

         D. Conclusion

         Plaintiffs “may only assert a claim under [the] FLSA because Kansas law allows minimum wage violations to be pursued under the KMWMHL alone, which specifically exempts FLSA-covered employers.”[152] Since there appears to be no dispute that Plaintiffs and TransAm are covered by the FLSA, Plaintiffs' claim for unpaid minimum wages must be dismissed.

         Further, “to the extent that the KWPA could be interpreted as a mechanism for asserting FLSA-based claims for minimum or overtime wages, it would be preempted by §§ 206 and 207 of the FLSA.”[153] TransAm is thus entitled to judgment as a matter of law on Plaintiffs' KWPA claim for minimum wages.

         II. TransAm's Motion to Decertify the FLSA Class (Doc. 447)

         A. Factual and Procedural Background

         Plaintiffs' first claim is brought under the FLSA's minimum wage provision, 29 U.S.C. § 206. Plaintiffs assert that TransAm misclassified the Plaintiffs in the opt-in FLSA collective action as “independent contractors” because the Plaintiffs were “employees” pursuant to the application of the “economic realities” test for employee status under the FLSA, and that Defendant failed to pay the opt-in Plaintiffs wages in the amount of at least the applicable federal minimum hourly wage for all hours worked in the relevant weekly pay periods.

         This Court conditionally certified the collective action on August 20, 2015.[154] In so doing, the Court concluded that the Leased Drivers were “similarly situated” and were “together the victims of a single decision, policy or plan” for purposes of the FLSA:

Plaintiffs maintain that potential class members are similarly situated because they all received the same training, were provided with the same handbook of policies, and entered into the same independent contractor and equipment lease agreements. They all were paid under similar per-mileage pay policies by TransAm. They all had essentially the same job duties of driving to make deliveries. They all were classified as independent contractors. And they all were prohibited from driving for anyone other than TransAm.[155]

         The conditionally certified FLSA class was defined as: “[d]rivers who were classified by Defendant as independent contractors and who leased trucks from TransAm Leasing, Inc. and performed driving work between November 5, 2008 to [August 20, 2015].”[156] After notice was sent out, approximately 1, 928 individuals opted in to the collective action (referred to in this section as “Leased Drivers”).

         Through the course of discovery, TransAm took the deposition of 52 Leased Drivers. Additionally, Plaintiffs' designated experts conducted a survey of the Leased Drivers that “contains 27 straight forward questions that go to TransAm's ability to control various tasks and economic realities of the driver, and whether or not TransAm encouraged drivers to become Leased Drivers rather than employee drivers, all of which are relevant and material to the issue of whether the Leased Drivers are actually employees of TransAm.”[157] These questions included:

(1) whether they applied to work as an employee (company driver) or independent contractor;
(2) whether they were told they would have to wait before they could start work if they wanted to be a company driver;
(3) whether TransAm encouraged them to be an independent contractor instead of a company driver;
(4) whether they felt pressured to sign the “independent contractor” and truck leasing agreements in order to get a job;
(5) whether TransAm encouraged them to become an independent contractor with promises of greater earnings and miles;
(6) whether they tried to switch back to become a company driver but were refused by TransAm;
(7) whether TransAm gave them time to consider the documents before signing up as an independent contractor;
(8) whether the contractor and leasing documents were easy to read understand;
(9) their amount of prior experience prior to driving for TransAm;
(10) whether they put any money down to reduce monthly payments at the time of signing the documents to become an independent contractor;
(11) whether they were able to negotiate the terms of the agreements;
(12) whether TransAm allowed them to use their truck to haul loads for third parties;
(13) whether they had information available about “more desirable or higher paying loads” available to them when TransAm assigned a load;

         (14) whether they received any negative consequences if they refused a load;

(15) whether they relied on TransAm to provide insurance;
(16) whether TransAm placed a Drive Cam in their truck to monitor them;
(17) whether TransAm monitored their truck location and speed via GPS;
(18) whether TransAm required them to have maintenance and repairs done by TransAM;
(19) whether TransAm prohibited mechanical or cosmetic modification of the truck;
(20) whether TransAM required them to submit truck for inspections;
(21) whether TransAm intervened due to a delivery problem and took their load away by sending another truck and driver;
(22) whether TransAm allowed them to advertise or market their independent services;
(23) whether they were able to negotiate freight rates with TransAm;
(24) whether they attempted to hire a driver to work for them;
(25) if “yes” to 24, whether TransAm exercised control and required its approval over who they could hire;
(26) whether TransAm specified a time of pickup and delivery on loads; and
(27) whether TransAm mandated the maximum speeds they could drive.[158]

         The 477 respondents were only able to offer a unanimous response to one question: they all answered that they did not put any money down to reduce weekly payments when they signed their independent contractor and lease agreement.[159] Thus, having reviewed the discovery, TransAm now argues that there are numerous significant distinctions between the Leased Drivers. TransAm contends: “[g]iven that a liability determination under the FLSA, as well as TransAm's defenses in this matter, will depend upon the varying reported experiences by the drivers on the misclassification issue, as well as a weekly individualized analysis as to whether liability exists, it is clear continued certification of the opt-in collective action is inappropriate.”[160] Therefore, TransAm argues, the Court should decertify the collective action.

         In response, Plaintiffs argue that the factual distinctions between the Leased Drivers identified by TransAm have no bearing on the central facts that bind the Leased Drivers together and constitute their commonly shared legal basis as “employees” under the FLSA: their economic dependence on TransAm. Plaintiffs also argue that the fact that damages would need to be calculated on a week-by-week basis for each Leased Driver is no basis for decertification.

         B. Discussion

         The FLSA permits legal action against any employer “by any one or more employees for and in behalf of himself or themselves and other employees similarly situated.”[161] Unlike class actions under Federal Rule of Civil Procedure 23(b)(3), a collective action brought under § 216(b) of the FLSA includes only those similarly situated individuals who opt in to the class.[162] But the FLSA does not define what it means to be “similarly situated.” Instead, the Tenth Circuit has approved an ad-hoc, two-step approach to § 216(b) certification claims.[163] The ad-hoc approach employs a two-step analysis for determining whether putative opt-in plaintiffs are similarly situated to the named plaintiffs.[164]

         First, in the initial “notice stage, ” the court “determines whether a collective action should be certified for purposes of sending notice of the action to potential class members.”[165] The notice stage “require[s] nothing more than substantial allegations that the putative class members were together the victims of a single decision, policy, or plan.”[166] The standard for conditional certification at the notice stage is lenient and typically results in certification for the purpose of notifying potential plaintiffs.[167]

         During the second stage, which occurs at the conclusion of discovery, a defendant typically files a motion to decertify the collective action.[168] Upon ruling on a motion to decertify, “the court then makes a second determination, utilizing a stricter standard of ‘similarly situated.' ”[169] In determining whether plaintiffs are similarly situated, “a court reviews several factors, including (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; [and] (3) fairness and procedural considerations.”[170] The decision whether to decertify a collective action is within the District Court's discretion.[171]

         1. Plaintiffs' factual and employment settings are not similar

         “With respect to the first factor, courts have held general allegations of an overarching policy to be insufficient-instead requiring ‘substantial evidence of a single decision, policy or plan.' ”[172] “The court will compare the named plaintiffs with the opt-ins, and evaluate the similarities and dissimilarities in employment responsibilities and circumstances.”[173] Here, Plaintiffs claim that TransAm misclassified the Leased Drivers as independent contractors and failed to pay them the minimum wage as required by the FLSA.[174] However, in determining whether there exists substantial evidence of a “single decision, policy or plan, ” the fact that the Leased Drivers were classified as “independent contractors” is irrelevant.[175] In other words, the Court must determine whether the Leased Drivers' experiences were similar enough to say that they shared a factual nexus regarding their status as “employees.” “Decertification will be granted where the claimants' responsibilities and duties were so varying that it cannot be said they share a factual nexus based on a particular policy or practice.”[176]

         The parties agree that the test for determining whether the Leased Drivers are employees is the “economic realities” test, which employs a non-exhaustive list of six factors.[177] These six factors are: (1) the degree of control exerted by the alleged employer over the worker; (2) the worker's opportunity for profit or loss; (3) the worker's investment in the business; (4) the permanence of the working relationship; (5) the degree of skill required to perform the work; and (6) the extent to which the work is an integral part of the alleged employer's business.[178] It also “includes inquiries into whether the alleged employer has the power to hire and fire employees, supervises and controls employee work schedules or conditions of employment, determines the rate and method of payment, and maintains employment records.”[179] “None of the factors alone is dispositive; instead, the court must employ a totality-of-the-circumstances approach.”[180]Additionally, “[t]he focal point in deciding whether an individual is an employee is whether the individual is economically dependent on the business to which he renders service, or is, as a matter of economic fact, in business for himself.”[181]

         With the economic realities test in mind, the Court must assess whether the Leased Drivers are similarly situated such that a collective action would be appropriate in this instance. However, the Court's task is not to consider the merits of whether the economic realities test is satisfied, but rather to decide whether the factual and employment settings of the Leased Drivers are similar. As demonstrated below, the Leased Drivers are not “similarly situated” because the “economic realities” test necessitates a “totality of the circumstances” approach to determine whether it has been satisfied. The relevant facts that must be considered under the “economic realities” test widely vary between Leased Drivers, and thus, the “totality of the circumstances” is unique to each Leased Driver. Accordingly, the Leased Drivers' disparate factual and employment settings weigh in favor of decertification.[182]

         a. Degree of control exerted by TransAm was unique to each Leased Driver

         The first factor considers the nature and degree of the alleged employer's control as to the manner in which the work is to be performed. Stated another way, the finder of fact must determine whether the Leased Drivers have the independence “which characterizes a person conducting their own business.”[183] For example, in a case from the Tenth Circuit, the employer exerted control consistent with employee status where: the workers were told when to report to work, when to take breaks, on what portion of the project they will be working, and when their workday ends; and the workers were prevented from offering services to third parties while working on a project for the employer.[184]

         Here, Plaintiffs are not “similarly situated” with respect to this factor. Plaintiffs' “economic control” survey and the Leased Drivers' deposition testimony demonstrate that TransAm exerted varying degrees of control over the Leased Drivers, and this factor cannot be analyzed with collective evidence.

         Plaintiffs identify certain facts in arguing that TransAm exerted sufficient control over the Leased Drivers to weigh in favor of “employee” status. But the record shows that, while these facts may be true for some Leased Drivers, these facts do not apply to many others. For example, the evidence varies widely with respect to whether TransAm: (1) unilaterally dictated the terms of the truck lease and independent contractor agreements (“ICAs”);[185] (2) required Leased Drivers to use a computer system with instructions regarding routes, fuel usage, and driving speeds;[186] (3) controlled Leased Drivers' truck operating speeds;[187] (4) controlled all load assignments;[188] (5) prohibited Leased Drivers from modifying their trucks;[189] (6) placed restrictions on Leased Drivers' ability to hire employees/assistants;[190] (7) controlled Leased Drivers' access to funds in their “maintenance Savings” accounts for truck maintenance;[191] (8) and required Leased Drivers to obtain approval from TransAm upon at least 8 days' notice to take time off work.[192]

         Although Plaintiffs' survey shows Leased Drivers were “similarly situated” in some respects, [193] TransAm asserts that all 27 questions “are relevant and material” to the economic control TransAm exerted. Yet most of Plaintiffs' survey questions received non-uniform responses (less than 95% agreement).[194] For example, 41% of respondent Leased Drivers answered that TransAm monitored them in their trucks via camera, but 59% answered that they were not monitored.[195]

         Moreover, there are many pertinent “control” questions that Plaintiffs' survey does not account for, and deposition testimony shows that Leased Drivers are not “similarly situated” with respect to these facts, either. Some Leased Drivers testified that they could choose when and where they would have maintenance performed on their trucks, [196] while others testified that TransAm dictated where maintenance had to be done.[197] And Leased Drivers offered similarly conflicting testimony over whether TransAm's “fuel optimizer” and PrePass programs were optional, and whether they could choose their own fuel locations.[198]

         In this case, the factual similarities are far outweighed by the distinctions between the Leased Drivers. Accordingly, TransAm exerted more control over some Leased Drivers than others, making it impossible to analyze the “control” factor of the economic realities test for the class with collective evidence.[199]

         b. Leased Drivers' opportunity for profit and loss varied significantly

         The second factor of the economic realities test considers the alleged employee's opportunity for profit or loss. As Plaintiffs note, there are a number of similarities concerning the Leased Drivers' opportunities for profit or loss: they were all paid under similar per-mileage pay policies by TransAm; Leased Drivers could not negotiate the rate to haul a load;[200] and Leased Drivers were all responsible for their own maintenance costs. Thus, according to Plaintiffs, there is no need to perform an individual analysis of this factor with respect to each individual Leased Driver.

         Despite these similarities, the disparities amongst the Leased Drivers are more significant. Perhaps most notably, some Leased Drivers-including both of the Named Plaintiffs-hired one or more employees to drive for them.[201] The Leased Drivers who chose to hire employees had full discretion to choose how much to pay their employees, and they were responsible for their employees' wages and tax withholdings. This would weigh in favor of “independent contractor” status under the FLSA.[202] Yet other Leased Drivers did not have employees and drove their trucks themselves, which would weigh in favor of “employee” status. And there were also some Leased Drivers that hired a “team driver” and split driving duties with their partner. This reflects widely-varying opportunities for profit or loss amongst the Leased Drivers.

         The flexibility afforded Leased Drivers in determining the number of hours that they work is also relevant in determining whether an individual had opportunities for profit or loss.[203] But they reported varying degrees of flexibility. As mentioned above, some felt that they were entirely dependent on TransAm to assign them sufficient miles, they could not turn down a load without repercussion, and they were restricted in their ability to take home time. Some Leased Drivers, however, testified that they had significant freedom in choosing the loads they wished to accept, they could turn down undesirable loads, and they could take time off whenever they wished. Additionally, some Leased Drivers testified that they voluntarily agreed to drive over the holidays in exchange for a cash incentive payment, [204] while others indicated they did not receive the cash incentive as promised.[205]

         Furthermore, the Leased Drivers offered varying reports regarding the duties they performed to receive compensation. Some simply drove for TransAm. At least one Leased Driver, however, made visits to truck driving schools about once a month, for which he earned about $35, 000 from TransAm.[206] But this opportunity was not available to everybody, as one Leased Driver offered to make school visits but TransAm never took him up on the offer.[207] Similarly, some Leased Drivers earned extra pay by serving as a driver coach, [208] while others said they “absolutely” would not coach for privacy reasons.[209]

         Accordingly, the Leased Drivers are not “similarly situated” with respect to their opportunities for profit or loss. It would be necessary to perform individual inquiries into each of the Leased Drivers to determine whether their individual opportunities for profit or loss weighed in favor of “employee” or “independent contractor” status.

         c. Leased Drivers reported varying levels of investments in the business

         Although largely unaddressed by the parties, the third factor used to determine whether a worker qualifies as an “employee” is the worker's investment in the business. “The investment ‘which must be considered as a factor is the amount of large capital expenditures, such as risk capital and capital investments, not negligible items, or labor itself.' ”[210] “This factor ‘is interrelated to the profit and loss consideration.' ”[211] “In making a finding on this factor, it is appropriate to compare the worker's individual investment to the employer's investment in the overall operation.”[212]

         Here, the Leased Drivers' individual investments differed. The Leased Drivers either: (1) leased a truck from TransAm Leasing without an option to purchase the truck; (2) leased a truck from TransAm with the option to purchase; (3) leased multiple trucks and hired employees to drive for them; or (4) purchased their own truck from a third party.[213]

         Because the Leased Drivers have all made differing levels of investments into their businesses, it would not be possible to perform a uniform analysis on the entire class. Accordingly, the Leased Drivers are not “similarly situated” with respect to their investments in the business.

         d. Permanence of the working relationship varied amongst Leased Drivers

         “Independent contractors” generally “have fixed employment periods and transfer from place to place as particular work is offered to them, whereas ‘employees' usually work for only one employer and such relationship is continuous and of indefinite duration.”[214] Again, the evidence relevant in applying this factor varies for each Leased Driver. Some drove for TransAm for a year or less, while others drove for TransAm for many years.[215] And Leased Drivers signed ICAs for six-month, one-year, two-year, and even five-year terms.[216] Just like the first three factors, this factor cannot be analyzed without individualized evidence.

         e. Degree of skill required and extent to which the work is an integral part of the employer's business

         Although the final two factors have largely been unaddressed by the parties, the Court notes that these factors could likely be satisfied with representative evidence. The degree of skill required to perform the duties seems to be uniform amongst the class. And it seems possible to collectively determine whether or not the Leased Drivers' work was an integral part of TransAm's business. Thus, the Leased Drivers are “similarly situated” with respect to these two factors.

         f. The Leased Drivers are not “similarly situated”

         Despite the disparities noted above, Plaintiffs contend that disparate work experiences are not enough to decertify, and that there would need to be substantive disparities that would impact the overall application of the economic realities test between the members of the collective action. In particular, Plaintiffs argue that the following facts do not serve as a basis for decertification: (1) some Leased Drivers hired employees;[217] (2) the Leased Drivers were not uniformly punished for declining load assignments, had varying degrees of freedom to take home time, and had varying opportunities to work over the Christmas Holidays, make presentations at driving schools, and to serve as driving coaches;[218] (3) differences relating to fuel and work efficiency;[219] (4) differences between the length of leases and option to purchase terms;[220] and (5) differences as to whether the Leased Drivers bought insurance from TransAm or another source.[221]

         It may be true that any one of these facts, by itself, would not serve as an independent basis for decertification. However, these disparities-when viewed collectively-become substantive, such that the Court would be required to “conduct an individualized analysis of each putative plaintiff before it could be satisfied that each one fell under the auspices of the FLSA.”[222] This is true because the “economic realities” test requires a totality-of-the-circumstances approach, and none of the factors are dispositive.[223]

         But in this case, the totality-of-the-circumstances is unique to each individual Leased Driver. Many Leased Drivers exhibited characteristics that weigh in favor of “employee status.” For example, some Leased Drivers had no bargaining power; were provided equipment by TransAm; were assigned loads by TransAm and were not free to turn any down; had their driving speed limited by TransAm; could not take time off when they desired; were prohibited from modifying their trucks; and were directed by TransAm when and where to get fuel, maintenance, and repairs. But there were many other Leased Drivers that exhibited characteristics that weigh in favor of “independent contractor” status. Some Leased Drivers hired their own employees; purchased their own truck(s); were free to turn down loads or find more preferable routes; were not speed-restricted; took a vacation whenever they wanted, for as long as they desired; modified their trucks and placed advertising outside; and were not restricted in where they could get fuel, maintenance, or repairs. Thus, it cannot be said categorically that every Leased Driver falls (or does not fall) under the auspices of the FLSA. Nor can it be said categorically that all Leased Drivers are “economically dependent” on TransAm or that each Leased Driver is “in business for himself.”[224]

         Essentially, Plaintiffs are arguing that there are no substantive differences between the Leased Drivers, therefore the Leased Drivers are “similarly situated” as a matter of law. But their argument is belied by the very nature of the fact-specific, totality-of-the-circumstances approach that is required by the “economic realities” test. “[I]t is not what the [workers] could have done that counts, but as a matter of economic reality what they actually do that is dispositive.”[225] And here, the Leased Drivers' experiences-what they actually did-varied greatly which would require individual analyses. Accordingly, the Leased Drivers are not “similarly situated” with respect to their employment and factual settings.

         2. Various defenses available to TransAm supports decertifying the class

         In deciding whether to decertify a collective action, the Court must next consider whether an employer's defense(s) can be addressed on a class-wide basis.[226] Courts have granted motions for decertification based on this factor because individualized defenses inhibit the efficiency of proceedings on a collective basis.[227] Indeed, this Court previously held that this factor warranted decertification when “Defendants' defenses as to each Plaintiff [were] . . . highly individualized” such that Defendants would “be required to call hundreds of Plaintiffs to testify as to their claims . . . .”[228] “Nevertheless, it is within the Court's discretion as to ‘whether the potential defenses would make the class unmanageable.' ”[229]

         TransAm argues that there are three defenses that cannot be addressed on a class-wide basis: liability, damages, and statute of limitations.

         a. Liability

         TransAm anticipates arguing that some, if not all, of the Leased Drivers were properly classified as “independent contractors” and therefore exempt from the FLSA's minimum wage provisions. As discussed in detail above, whether an individual was in fact an “employee” or an “independent contractor” is determined by applying all six factors of the “economic realities” test. Two of these factors can be analyzed collectively: degree of skill required to perform the work, and extent to which the work is an integral part of the employer's business. However, Plaintiffs' appear to give these factors the least weight. In arguing for summary judgment on the Leased Drivers' status as “employees” under the FLSA, Plaintiffs devote much of their argument to the first four factors.[230] And Plaintiffs are not “similarly situated” with respect to these four factors.

         TransAm's liability is therefore premised on a test of which four of the six factors cannot be analyzed with collective evidence. To argue that some (or all) of the Leased Drivers were not “employees” under the FLSA, TransAm would be required to introduce individualized evidence. This would cause the proceedings to “devolve into numerous mini-trials, causing the jury to evaluate testimony from countless witnesses and other evidence that is unique to particular Plaintiffs, and thus incompatible with collective actions.”[231] “Available defenses and procedural fairness go hand-in-hand, as the efficiency gained by holding one trial as opposed to many cannot be obtained at the expense of a defendant's due process rights.”[232]

         Thus, TransAm's inability to offer its liability defense on a class-wide basis ...


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