Westley v. CCK Pizza Company, LLC

          ORDER GRANTING PLAINTIFF'S MOTION FOR FLSA CONDITIONAL CERTIFICATION AND NOTICE AND GRANTING DEFENDANTS' MOTION TO FILE SUR-REPLY AND DIRECTING ITS FILING

          THOMAS L. LUDINGTON UNITED STATES DISTRICT JUDGE

         On November 20, 2018, Plaintiff Paul Westley filed a complaint against Defendants CCK Pizza Company, LLC and Chris Schloemann. ECF No. 1. Plaintiff alleges that Defendants have failed to adequately reimburse Defendants' employees for their labor in violation of the Fair Labor Standards Act (“FLSA”) and the Michigan Wage Law. Id.

         On January 31, 2019, Plaintiff filed a motion for Conditional Certification and Notice pursuant to the FLSA. ECF No. 13. On May 24, 2019, Defendants filed a motion to file sur-reply relating to Plaintiff's motion for FLSA certification and notice. ECF No. 30. For the following reasons, the motions will be granted.

         I.

         A.

         According to Plaintiff's Amended Complaint, ^[1] Defendants CCK Pizza Company (“CCK”) and Chris Schloemann own and operate numerous Domino's pizza franchise stores.^[2] PageID.351. Schloemann is an owner, officer and director of CCK. Id. While in this capacity, Schloemann implemented the pay rate at issue and has overseen and enforced CCK's pay practices. Id.

         Defendants' Domino's stores employ delivery drivers primarily to deliver food items to customers. PageID.352. Defendants require their drivers to maintain and pay for safe, legally-operable, and insured automobiles when delivering the food items. Id. The drivers incur costs for gasoline, vehicle parts and fluids, repair and maintenance services, insurance, depreciation, and other expenses while delivering the food items. Id.

         All of Defendants' delivery drivers were subject to reimbursement for these costs. PageID.355. Since November 20, 2015, ^[3] Defendants have utilized various methods of reimbursement to account for these expenses. PageID.352. Plaintiffs allege that none of Defendants' methods have adequately reimbursed the actual vehicle expenses incurred by the delivery drivers. Id. Plaintiffs therefore allege that Defendants have a flawed reimbursement policy that has resulted in the under reimbursement of all of Defendants' delivery drivers' actual automobile expenses. Id. As a result of the flawed reimbursement policy, the drivers' net wages were allegedly diminished beneath the federal minimum wage requirements as required in the FLSA. PageID.354.

         While employed as a delivery driver with Defendants, Plaintiff was paid a cash wage of $5.75 per hour, plus a tip credit.^[4] Id. The federal minimum wage throughout the duration of Plaintiff's employment by Defendants was $7.25 per hour. 29 U.S.C. § 206(a)(1)(C). During Plaintiff's employment period, he was reimbursed at various rates, with a minimum reimbursement of $.29 per mile. PageID.355. Also during Plaintiff's employment period, the IRS business mileage rate ranged between $.535 and $.56 per mile. Id. The IRS mileage rate provides optional “standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes.” PageID.537. Using the IRS data as a reasonable approximation of Plaintiff's automobile expenses, every mile driven by Plaintiff allegedly decreased his net wages by at least $.245 per mile, or by $.735 per hour. PageID.355. Plaintiff contends that this decrease in net wages diminished his wages beneath the federal minimum wage. PageID.354.

         All of Defendants' delivery drivers allegedly shared similar experiences to those of the Plaintiff: drivers were “subject to the same reimbursement policy; received similar reimbursements; incurred similar automobile expenses; completed deliveries of similar distances and at similar frequencies; and were paid at or near the federal minimum wage before deducting unreimbursed business expenses.” PageID.355. During the entire FLSA statutory period, the IRS business mileage reimbursement rate ranged between $.535 and $.575 per mile. PageID.352. Similarly, companies, like AAA, tasked with studying the cost of owning and operating a vehicle have determined that the average cost doing so ranged between $.571 and $.608 during the statutory period. PageID.352-53. Both figures represent a reasonable approximation of the average cost of owning and operating a vehicle to use for delivering food items. PageID.353. Therefore, the Defendants allegedly failed to reimburse their delivery drivers at a reasonable approximation of the cost of owning and operating a vehicle for the purpose of delivering food items. Id.

         Defendants' low reimbursement rates allegedly were a frequent complaint of delivery drivers, some of whom discussed their concerns with management. PageID.356. However, Defendants continued to reimburse their delivery drivers at a rate lower than the reasonable approximation of automobile expenses, as determined by the data above. Id.

         B.

         Plaintiff's amended complaint presents two counts. Count I alleges that Defendants violated the federal minimum wage as mandated by the Fair Labor Standards Act. PageID.362-65. Count II states that Defendants violated Michigan's minimum wage as mandated by the Michigan Minimum Wage Law. PageID.365-66.

         II.

         Plaintiff seeks conditional class certification and judicial notice of a collective action pursuant to the Fair Labor Standards Act, 29 U.S.C. § 216(b). § 216(b) provides that “an employer who violates the provisions of section 206 or section 207 of this title shall be liable to the employee or employees affected in the amount of their unpaid wages . . . .”^[5] Id.

         Section 216 further provides that an employee may maintain an action against his employer on behalf of himself and other employees who 1) are “similarly situated”, and 2) “consent in writing” to be a part of the collective action. Comer v. Wal-Mart Stores, Inc., 454 F.3d 544, 546 (6^th Cir. 2006) (quoting 29 U.S.C. § 216(b)). If the plaintiff shows that he is similarly situated to the other potential plaintiffs, a court may conditionally certify the collective action by authorizing notice of the action to the potential plaintiffs that seeks their requisite consent to opt into the action. Fisher v. Mich. Bell Telephone Co., 665 F.Supp.2d 819, 824-25 (citing Hoffmann-LaRoche, Inc. v. Sperling, 493 U.S. 165, 167-68 (1989)).

         Whether the proposed class members are similarly situated is analyzed in two stages. The first stage, also called the “notice stage, ” takes place “at the beginning of discovery.” Comer, 454 F.3d at 546. At this stage, the plaintiff “must show only that his position is similar, not identical” to the positions of the other potential plaintiffs to the action. Id. The plaintiff need only make a “modest factual showing” or make “substantial allegations” that he and the other potential plaintiffs were “victims of a common policy or plan that violated the law.” White v. MPW Industrial Services, Inc., 236 F.R.D. 363, 372 (E.D. Tenn. 2006). The courts employ a “fairly lenient standard” when deciding whether plaintiffs are similarly situated. Comer, 454 F.3d at 547. Plaintiff is seeking conditional certification at this first stage.

         The second stage of certification occurs post-discovery. Id. At this stage, the courts employ a “stricter standard” to reexamine whether plaintiffs to the action are similarly situated by evaluating the plaintiffs' factual differences. Id. Using this evidence, the courts will decide whether to finalize the ...