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Williams v. King Bee Delivery, LLC

United States District Court, E.D. Kentucky, Central Division, Lexington

March 14, 2017

CRAIG WILLIAMS, on behalf of himself and all others similarly situated, et al., Plaintiffs,


          Joseph M. Hood Senior U.S. District Judge.


         Plaintiffs Craig Williams, John Williams, and Fred Berry filed this action, on behalf of themselves and all others similarly situated, against Defendants King Bee Delivery, LLC and Bee Line Courier Services, Inc., seeking redress for violations of the Fair Labor Standards Act (“FLSA) and Kentucky Wage and Hour Act (“KWHA”). Plaintiffs now move the Court to conditionally certify their FLSA claim for unpaid overtime wages as a collective action. [DE 32]. Meanwhile, Defendants urge the Court to dismiss Plaintiffs' claim for unlawful deductions in violation of the KWHA. [DE 62]. Both Motions are now fully briefed and ripe for the Court's review. [DE 59, 63, 66, 69]. For the reasons stated herein, both Motions are hereby GRANTED.


         Defendants provide delivery services to pharmacies and hospitals located in Kentucky, Ohio, and Indiana.[1] [DE 58, p. 3, ¶ 13]. As part of their business, Defendants retain delivery drivers to load, transport, and deliver pharmaceuticals and other materials to their clients. [Id.]. Plaintiffs worked as delivery drivers for Defendants, operating out of their Kentucky warehouses.[2] [Id. at p. 2, ¶ 7-10].

         An Independent Contractor Agreement governed the relationship between Plaintiffs and Defendants. [DE 33-1, 33-2, 33-3]. Plaintiffs agreed not to hold themselves out as “employee[s] or partner[s] of [Defendants] or as having authority to represent [Defendants], but only as [] independent delivery contractor[s] to [Defendants] for the purpose of performing this Agreement.” [Id.]. Defendants in turn, relinquished the right to “exercise any direction, control or determination over the manner, means or methods of [Plaintiffs'] activities and objectives in operating [their] business” or restrict Plaintiffs from “being concurrently or subsequently engaged in another delivery service business or other occupation.”[3] [Id. at 6].

         Plaintiffs typically arrived at Defendants' warehouses, along with fifteen to twenty other delivery drivers, between 4:30 a.m. and 4:45 a.m. [DE 33-3, 33-6]. Each driver received a manifest from Defendants, listing the deliveries that they were supposed to make that day and a time window for making each delivery. [Id.]. Plaintiffs then loaded their trucks with the appropriate packages and began their daily routes. [Id.]. They carried GPS trackers with them throughout the day so that Defendants could track their progress. [Id.].

         Defendants did not compensate Plaintiffs based on the number of hours worked. [Id.]. Instead, Plaintiffs received a flat rate per delivery route or a sum based on the number of deliveries made per route.[4] [Id.]. This compensation scheme did not vary when Plaintiffs worked more than forty hours per week, as they often did. [Id.].

         In November 2014, Craig Williams spoke with Rusty Quill, an Operations Managers in Lexington, about his independent contractor classification and showed him a workers'-rights pamphlet produced by Kentucky Jobs for Justice. [Id. at p. 9, ¶ 43-44]. Quill later mailed this pamphlet to Defendants' headquarters in Louisville. [Id.]. On December 2, 2014, Williams discussed this issue with Quill and Jay Baumert, another Operations Manager, via telephone. [Id. at p. 9, ¶ 45]. Williams stated that he would file a complaint with a government agency if Defendants did not begin treating him like an employee. [Id.]. About ten minutes later, Norman Seger, President of Bee Line and Manager of King Bee, contacted Williams and informed him that Defendants would no longer need his services.[5] [Id.].

         On October 14, 2015, Plaintiffs filed the instant action, asserting the following claims: (1) unlawful deductions in violation of the KWHA; (2) unpaid overtime wages in violation of the FLSA; (3) unpaid overtime wages in violation of the KWHA; (4) retaliation in violation of the FLSA on behalf of Craig Williams; (5) discrimination in violation of the FLSA on behalf of Craig Williams; and (6) wrongful discharge in violation of public policy on behalf of Craig Williams. [DE 1].

         Defendants promptly filed a Motion to Dismiss for Failure to State a Claim. [DE 12]. Plaintiffs rendered that Motion moot by filing an Amended Complaint. [DE 23, 26]. Defendants then renewed their Motion to Dismiss. [DE 29]. Shortly thereafter, Plaintiffs filed a Motion for Conditional Certification of a Collective Action. [DE 32]. The Court granted Defendants' request for an extension of time to respond to Plaintiffs' Motion and tolled the FLSA's statute of limitations during until Defendants filed their Response.[6] [DE 40].

         On August 8, 2016, the Court entered a Memorandum Opinion and Order granting in part and denying in part Defendants' Motion to Dismiss. [DE 43]. The Court dismissed Plaintiffs' claim for unlawful deductions in violation of the KWHA, as well as their requests for civil penalties and punitive damages under the FLSA and KWHA. [DE 44]. Plaintiffs then filed a Motion for Leave to File a Second Amended Complaint, which the Court granted. [DE 46, 57, 58]. Defendants responded by filing the instant Motion to Dismiss, again attacking Plaintiffs' unlawful deductions claim. [DE 62]. This Motion to Dismiss is now before the Court for review, along with Plaintiffs' Motion for Conditional Certification. [DE 32, 62]. The Court will evaluate each Motion in turn.

         III. ANALYSIS

         A. Motion for Conditional Certification

         i. The Certification Question

         “Congress enacted the FLSA in 1938 with the goal of ‘protect[ing] all covered workers from substandard wages and oppressive working hours.'” Christopher v. SmithKline Beecham Corp., 132 S.Ct. 2156, 2162 (2012) (quoting Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 739 (1981)); see also 29 U.S.C. § 202(a). Chief among the FLSA's provisions is the overtime wage requirement, which generally obligates “employers to compensate employees for hours in excess of 40 per week at a rate of 1½ times the employees' regular wages.” Id.; see also 29 U.S.C. § 207(a).

         As the above-cited language suggests, “only employees are entitled to overtime and minimum-wage compensation” under the FLSA. Keller v. Miri Microsystems, LLC, 781 F.3d 799, 806 (6th Cir. 2015) (observing that “[t]he FLSA's definition of ‘employee' is strikingly broad”); Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 326 (1992) (noting that the FLSA “stretches the meaning of ‘employee' to cover some parties who might not qualify as such under a strict application of traditional agency law principles”). “Independent contractors do not enjoy [the] FLSA's protections.” Id. However, “[t]he Supreme Court has recognized … that businesses are liable to workers for overtime wages even if the company ‘put[s] … an “independent contractor” label' on a worker whose duties ‘follow[] the usual path of an employee.”[7] Id. (quoting Rutherford Food Corp. v. McComb, 331 U.S. 722, 729 (1947)).

         “[A]ny one or more employees” may seek redress for violations of the FLSA by initiating a collective action “on behalf of himself or themselves and other employees similarly situated.” 29 U.S.C. § 216(b). Similarly situated employees may “opt-into” such suits by “signal[ing] in writing their affirmative consent to participate in the action.” Comer v. Wal-Mart Stores, Inc., 454 F.3d 544, 546 (6th Cir. 2006) (noting that this type of suit “is distinguished from the opt-out approach utilized in class actions under Fed.R.Civ.P. 23”).

         Certification of FLSA collective actions typically proceeds in two phases. Comer, 454 F.3d at 546-47. “[A]t the notice stage, the certification is conditional and by no means final.” Id. (internal quotations omitted). “The plaintiff must show only that his position is similar, not identical, to the positions held by the putative class members.” Id. (internal quotations omitted) (emphasis added). “[T]his determination is made using a fairly lenient standard, and typically results in conditional certification of a representative class.” Id. (stating further that “authorization of notice need only be based on a modest factual showing”) (internal quotations omitted).

         “At the second stage, following discovery, trial courts examine more closely the question of whether particular members of the class are, in fact, similarly situated.” Id. at 547. The final-certification decision depends upon “a variety of factors, including the factual and employment settings of the individual[] plaintiffs, the different defenses to which the plaintiffs may be subject on an individual basis, [and] the degree of fairness and procedural impact of certifying the action as a collective action.” O'Brien v. Ed Donnelly Enter., Inc., 575 F.3d 567, 584 (6th Cir. 2009) (internal quotations omitted), overruled on other grounds by Campbell-Ewald Co. v. Gomez, 136 S.Ct. 663 (2016).

         This case sits at the notice stage of the bifurcated-certification process. Plaintiffs ask the Court to conditionally certify their FLSA claim for unpaid overtime wages as a collective action and order notice of the action to all delivery drivers who were classified as independent contractors while working for Defendants, thereby providing these individuals with an opportunity to participate therein. Plaintiffs argue that such action is appropriate because they are similarly situated to the putative class members, having worked as delivery drivers for Defendants and performed the same basic duties under similar circumstances.

         In support of this proposition, Plaintiffs Craig Williams and John Williams submitted declarations, detailing their daily routine and describing their compensation scheme. [DE 33-3, 33-6]. They insist that other drivers followed a similar routine and received wages on a similar basis, citing conversations that they had with unidentified drivers at Defendants' warehouses. [Id.]. Plaintiffs bolster this assertion with declarations from two opt-in plaintiffs, Kevin Berry and Mark Lafferty, who described a similar experience with Defendants. [DE 33-4, 33-5].

         As a threshold matter, Defendants assert that conditional certification is inappropriate because Plaintiffs were properly classified as independent contractors, and thus, were not entitled to overtime wages under the FLSA. Courts generally do not evaluate the legality of the challenged policy or the applicability of an FLSA exemption at this stage of the certification process. See Bradford v. Logan's Roadhouse, Inc., 137 F.Supp.3d 1064, 1072 (M.D. Tenn. 2015) (“[T]he court does not resolve factual disputes, decide substantive issues going to the ultimate merits, or make credibility determinations” at the notice stage) (internal quotations omitted); Waggoner v. U.S. Bancorp, 110 F.Supp.3d 759, 769 (N.D. Ohio 2015) (“It would be ...

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