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Davis v. Omnicare, Inc.

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

December 3, 2019

DANIEL DAVIS, individually and on behalf of himself and all others similarly situated, Plaintiff,
OMNICARE, INC., et al., Defendants.

          OPINION & ORDER


         Daniel Davis (Plaintiff) initiated this putative collective action against Defendant Omnicare, Inc. and three of its subsidiary pharmacies[1] (together “Defendants” or “Omnicare”) on behalf of himself and other Act Fast Delivery (Act Fast) workers. DE 1 (Complaint). Plaintiff claims violations of state and federal wage laws[2] as well as unjust enrichment. Id. at 11-12. Davis alleges Defendants-despite contracting with a third-party (Act Fast) for delivery services and nominally classifying Plaintiffs (or Act Fast) as independent contractors-jointly employed (as defined by statute) Plaintiffs as delivery drivers for their medical products. Id. at 6-7. Plaintiff pursues recovery for unpaid wages, unlawful deductions, and unreimbursed expenses. Id. at 11- 13.

         The Court, finding that the pleadings framed plausible claims for relief, previously denied Defendants' Rule 12(c) motion. DE 23 (Op. & Order). Per the Court's schedule, DE 44, Plaintiff now pursues conditional certification of an FLSA collective and seeks authorization of notice to potential members. See DE 51 (Motion). Plaintiff's motion-fully briefed, see DE 55 (Response), DE 56 (Reply), DE 60-2 & 60-3 (Surreply and Exhibit)[3]-stands ripe for review.

         I. BACKGROUND

         The Court, applying the Plaintiff-favorable, Rule 12 standard, previously outlined the relevant factual backdrop:

In 2012, the named Omnicare subsidiaries, and others, contracted with Act Fast Delivery (Act Fast) for “Courier Services, ” to wit “delivery of high intrinsic value pharmaceuticals, including controlled substances and other drugs[.]” DE 4-2, at 2 (2012 Agreement). In 2017, CVS Pharmacy, Inc., individually “and on behalf of its subsidiaries and affiliates, including Omnicare, ”6 executed a substantially similar agreement for Act Fast's delivery services. DE 4-1 (2017 Agreement).7
[FN 6: All named Defendants are in the chain of CVS subsidiaries. See supra note 1.]
[FN 7: The Court refers to the 2012 and 2017 Agreements collectively as the “Courier Agreements.”]
From 2014 through 2017, Plaintiff, nominally an Act Fast driver, delivered Omnicare products from Omnicare facilities to Omnicare customers on an Omnicare-set schedule via Omnicare-mandated routes using Omnicare gear. DE 1, at ¶¶ 21, 30. Defendants also required Davis to be on call during regularly scheduled periods to make Defendant-directed “stat runs, which are individual deliveries . . . on an expedited, emergency, and ad hoc basis.” Id. at ¶ 26. Act Fast's Courier Services provided an integral link between Defendants' supply of delivery-only products and demand from nursing homes and other medical facilities. Id. at ¶ 15. Per Plaintiff, Omnicare is Act Fast's largest, indeed its sustaining customer. Id. at ¶¶ 19, 32(c). Plaintiff alleges that Defendants, through the Courier Agreements and in practice, maintained sufficient control over Act Fast employees such that Defendants (along with Act Fast) jointly employed him under state and federal wage law.
Davis claims the flat fees he received for deliveries effectively were below minimum wage and failed to compensate him for overtime. He alleges further impermissible wage deductions and omitted reimbursements. DE 1, at ¶ 39. Though Davis claims Act Fast directly underpaid him, he contends that Act Fast acted for Defendants' benefit and on their behalf. Id. at ¶ 32(b). Plaintiff alleges that Defendants, as his joint employers, are jointly and severally liable for all underpayments. Id. at 7. Specifically, Davis seeks: unpaid minimum wages, unpaid overtime, unreimbursed vehicle costs, unlawful deductions, unlawful expenses, and unpaid payroll deductions under 29 U.S.C. § 216 and KRS 337.385, DE 1, at ¶¶ 49-51 (Count I), and, alternatively, unpaid payroll deductions under KRS 337.060, DE 1, at ¶¶ 52-53 (Count II). Davis also seeks restitution to the extent Defendants, through underpayment, were unjustly enriched by improperly shifting costs and expenses to Plaintiff. DE 1, at ¶¶ 54-55 (Count III).

DE 23 at 2-3. Davis pleaded that his FLSA[4] claims “are typical of the [proposed] class members[, ]” in that Plaintiff “was subject to the same common scheme regarding underpayment, failure to reimburse kickbacks, Unlawful Deductions, Unlawful Expenses and lack of Required Deductions as the members of the class.” DE 1 at ¶ 44. Davis, here, seeks conditional certification of a collective defined as:

All current and former delivery drivers and dispatchers classified as independent contractors who performed work for Defendants and were based at a distribution center located in Ashland, Beattyville or Lexington, Kentucky during the three-year period before the filing of the Complaint up to the date the Court authorizes notice.

DE 51-1 at 5. In support, Plaintiff attaches his own affidavit (DE 51-2), as well as affidavits of former Act Fast Dispatcher Brian Alberts (DE 51-3), and former Act Fast Drivers William Eckler (DE 51-4) and Edna K. Narragon (DE 51-5).[5] Generally, the DE 51-affidavit suite coincides with and lends support to Davis's pleaded allegations.


         The Sixth Circuit outlines the applicable, bifurcated certification framework:

Section 216(b) of the FLSA allows similarly situated employees to recover compensation from their employer in “opt-in” class action litigation. 29 U.S.C. § 216(b). See also Comer v. Wal-Mart Stores, Inc., 454 F.3d 544, 546 (6th Cir. 2006). District courts determine whether plaintiffs are similarly situated in a two-step process, the first at the beginning of discovery and the second after all class plaintiffs have decided whether to opt-in and discovery has concluded. Comer, 454 F.3d at 546. District courts use a “fairly lenient standard” that “typically results in conditional certification of a representative class” when determining whether plaintiffs are similarly situated during the first stage of the class certification process. Id. at 547 (citation and internal quotation marks omitted). . . .
At the second stage of the class certification process, district courts apply a “stricter standard” and more closely examine “the question of whether particular members of the class are, in fact, similarly situated.” Id. Lead plaintiffs “bear the burden of showing that the opt-in plaintiffs are similarly situated to the lead plaintiffs.” [O'Brien v. Ed Donnelly Enterprises, Inc., 575 F.3d 567, 584 (6th Cir. 2009), abrogated on other grounds by Campbell-Ewald Co. v. Gomez, 136 S.Ct. 663 (2016).]

White v. Baptist Mem'l Health Care Corp., 699 F.3d 869, 877 (6th Cir. 2012). Davis, here, seeks only notice-stage certification. This “conditional and by no means final” certification requires only a “modest factual showing” that the plaintiff's position is “similar, not identical, to the positions held by the putative class members.” Comer, 454 F.3d at 546-57 (citations omitted). To be sure, Defendants strenuously advocate for a more demanding standard. See DE 55 at 6-7. Defendants point the Court to various district court decisions that have, on the facts and postures presented in those cases, set a “higher standard of proof” or applied a “more exacting review[.]” See Id. at 7 (collecting cases). This Court, for several reasons, finds the Sixth Circuit's published endorsement of the lenient notice-stage standard controlling.

         First, Defendants cite to no Circuit precedent approving a modified or “modest plus” rubric.

         Second, as the Court of Appeals often explains:

“Congress passed the FLSA with broad remedial intent” to address “unfair method[s] of competition in commerce” that cause “labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers.” Keller v. Miri Microsystems LLC, 781 F.3d 799, 806 (6th Cir. 2015); 29 U.S.C. § 202(a). The provisions of the statute are “remedial and humanitarian in purpose, ” and “must not be interpreted or applied in a narrow, grudging manner.” Herman v. Fabri-Centers of Am., Inc., 308 F.3d 580, 585 (6th Cir. 2002)[.]

Monroe v. FTS USA, LLC, 860 F.3d 389, 396-97 (6th Cir. 2017) (explaining that “Courts typically bifurcate certification” and that “a more exacting standard” is appropriate “[o]nce discovery has concluded”), cert. denied, 138 S.Ct. 980 (2018). The tolerant Comer standard is teleologically consistent with the FLSA and the specific notice[6] goal of initial certification. Third, the heightened burden at the second stage renders fleeting any minimal prejudice arising from an initial certification of a class that a court, under more stringent latterly review, finds dissimilarly situated.[7]See Frye v. Baptist Mem'l Hosp., Inc., 495 Fed.Appx. 669, 671 (6th Cir. 2012) (discussing “stricter standard” applicable to final certification). The Court, at this stage, thus opts for the Circuit-sanctioned route and applies the “fairly lenient standard” that “typically results in conditional certification[.]” Comer, 454 F.3d at 546; see also Given v. Love's Travel Stops & Country Stores, Inc., No. 1:17-CV-1266, 2018 WL 925996, at *2 (M.D. Pa. Feb. 16, 2018) (finding “application of a higher step-one burden . . . inappropriate”); Freeman v. MedStar Health Inc., 187 F.Supp.3d 19, 29 (D.D.C. 2016) (finding no basis for heightened standard “in the text of the FLSA or in the” related precedent); Waggoner v. U.S. Bancorp, 110 F.Supp.3d 759, 766 (N.D. Ohio 2015) (rejecting “‘modest plus' standard of review”).

         Accordingly, to justify initial certification, Davis had to offer a “modest factual showing” that “his position is similar, not identical, to the positions held by the putative class members.” Comer, 454 F.3d at 547 (citation and quotation marks omitted).


         A. Generally

         The FLSA does not explicitly define “similarly situated.” 29 U.S.C. § 216(b). Textually and logically, the relevant similitude for proposed collective members must be with respect to “liability prescribed in the” FLSA. Id. That is, Davis and the putative class members need be “similarly situated” with regard to federal wage claims against Defendants. As a baseline, then, the Court begins with Plaintiff's FLSA claims, i.e., how Davis is, as to Defendants' alleged FLSA liability, “situated.” The crux of Plaintiff's theory is that “Defendants misclassified [Act Fast] Drivers as independent contractors as [ ] part of a fraudulent scheme to avoid their wage payment obligations[.]” DE 1 at ¶ 29. Per the complaint, Davis claims, as “typical of the class members[, ]” that Defendants' “standard Driver payment policy” led to “systemic underpayment” as well as “failure to reimburse kickbacks, Unlawful Deductions, Unlawful Expenses and lack of Required Deductions[.]” See Id. at ¶¶ 41-44. Plaintiff, by affidavit, avers, in relevant part, that he: (1) was “incorrectly classified as an independent contractor, ” (2) “did not receive overtime pay” when “required to work . . . more than” 40 hours per week; (3) “was required to use [his] personal vehicle in making deliveries” and “had to pay for gas and all other expenses” related to using his personal vehicle; (4) “was paid a [non-negotiable] flat fee per route”; and (5) “in some weeks . . . did not receive the minimum wage . . ., especially considering” the unreimbursed gas and vehicle expenses. Davis Aff. at 2-3.

         As to the proposed class, Davis generally reports, via hearsay, [8] that other drivers were: (A) “classified as independent contractors”; (B) “did not receive any overtime pay” for weekly hours worked over 40; (C) “not reimbursed for any of their expenses in driving their personal vehicles to make deliveries”; (D) and “paid in the same manner” as Davis. Id. The sworn statements of three other former Act Fast workers uniformly support Davis's contentions as to underpayment.[9]All of the affiants allege that Omnicare exercised significant control over Act Fast Drivers' day- to-day conduct.[10]

         Plaintiff, here, needed a modest showing of similarity, not conclusive proof of identity. The Court finds that Davis, under the applicable lenient standard, has shown sufficient similarity between himself and other Act Fast Drivers to justify certification of some collective. However, the Court also finds Davis's proposed scope overbroad. Thus, the Court grants initial certification, with limitations.


         Plaintiff has not shown that former Act Fast dispatchers are, with respect to the pending FLSA claims, similarly situated. Davis's pleaded collective claims exhibit a near complete focus on alleged underpayment of Drivers, not dispatchers. See, e.g., DE 1 at ¶ 42 (“Defendants' standard Driver payment policy”). Indeed, the pleading defines “Plaintiffs and members of the putative class” as, “collectively, Drivers[.]” Id. at ¶ 22 (emphasis added). Further and foundationally, for this wage case, Davis contends that Drivers were paid on a different basis than dispatchers, i.e., per route versus per hour. Compare DE 51-1 at 10 ¶ 3 (“Dispatchers were paid on a per hour basis.”), with DE 1 at ¶ 41 (alleging as a “common question[ ] of law and fact to the class” that “Drivers were paid different amounts for different routes, ” but “all such routes underpaid each Driver as a result of [Defendants'] common scheme.”), and Heibel v. U.S. Bank Nat. Ass'n, No. 2:11-CV-00593, 2012 WL 4463771, at *5 (S.D. Ohio Sept. 27, 2012) (conditionally certified collective members “performed the same basic duties and were compensated in the same manner”).

         Additionally, Plaintiff's claims turn on the theory that Defendants exercised such “control” over Drivers' day-to-day work that Omnicare was, as a statutory matter and with Act Fast, the Drivers' joint employers. See, e.g., DE 1 at ¶¶ 1, 21, 30, 32. The complaint allegations as to such control over dispatchers are thin to non-existent. Also, a significant component of Plaintiff's case theory concerns Defendants' alleged failure to reimburse expenses related to personal vehicle use. Id. at ¶ 41 (claiming a “common scheme of systematic underpayment and lack of reimbursement of kickbacks”). The Court sees no such claim as to dispatchers. See generally Alberts Aff. Finally, Plaintiff's own “Consent to Opt In” shows Davis's agreement to pursue FLSA claims in this action for “work performed while employed” only “as a delivery driver[.]” DE 42-1 at 1.[11] Davis, despite the lenient standard, fails to show that Act Fast dispatchers were “similarly situated” in too many critical respects.[12]

         In short, Plaintiff, from complaint filing to date, has principally pegged the collective claims to Defendants' alleged control over and underpayment of Act Fast Drivers. See, e.g., DE 51-1 at 10 ¶ 2 (“piecemeal nature of the work”); id. (“had to pay for gas and all expenses . . . in making deliveries”); id. at 11 ¶ 9 (“failed to pay . . . Class Members for mandated waiting time before, between, and after assigned deliveries”). Davis's references to his dispatching role appear as afterthoughts and, more importantly, stand unlinked to a developed theory of liability for dispatch work. See, e.g., DE ¶ 2 (“Davis also dispatched drivers[.]” (emphasis added)). As to any dispatcher-based FLSA claims, the Court finds Davis's similarity showing insufficient and excludes that sub-category from the initially certified collective.

         Temporal Limit

         Additionally, Plaintiff has not shown that Act Fast Drivers who received their last Act Fast paycheck more than 3 years before this Order and who have not yet filed a written opt-in consent are similarly situated. Plaintiff proposes inclusion of Drivers employed “during the three-year period before the filing of the Complaint up to the date the Court authorizes notice.” DE 51-1 at 5. Davis's proposal includes individuals that are distinct in one critical respect: any Driver that did not have an Act Fast “regular payday” within 3 years of this Order, and that has not yet filed a written consent, has no viable FLSA claim. Hughes v. Region VII Area Agency on Aging, 542 F.3d 169, 187 (6th Cir. 2008).[13]

         Per the Circuit,

An FLSA plaintiff generally has two years to file suit, but the statute of limitations increases to three years if the claim consists of a “willful violation.” 29 U.S.C. § 255(a) . . . . An FLSA cause of action accrues “at each regular payday immediately following the work period during which the services were rendered for which the wage or overtime compensation is claimed.” Hughes, 542 F.3d at 187 (citations omitted). To bring a collective FLSA action, a plaintiff must file a written consent to opt-in to the collective action. 29 U.S.C. § 216(b) (allowing an aggrieved employee to bring a collective FLSA action against the employer, provided that “[n]o employee shall be a party plaintiff to any such action unless he gives his consent in writing to become ...

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