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Westley v. CCK Pizza Co., LLC

United States District Court, E.D. Michigan, Northern Division

August 13, 2019

PAUL WESTLEY, individually and on behalf of similarly situated persons, Plaintiff,
v.
CCK PIZZA COMPANY, LLC and CHRIS SCHLOEMANN, Defendant.

          ORDER GRANTING MOTION TO COMPEL DEPOSITIONS AND DENYING EXPENSES INCLUDING ATTORNEY'S FEES

          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 Jan 31, 2019, Plaintiff filled a motion for conditional certification. On June 4, 2019, the motion was granted based on Plaintiff's showing that potential plaintiffs were sufficiently similarly situated for conditional class certification. In total thirteen additional Plaintiffs have opted into the class. ECF No. 4, 21, 22, 41, and 43.

         On July 1, 2019, Defendants filed a motion to compel the depositions of the named Plaintiff Paul Westley and six opt-in Plaintiffs: (1) Emajean Westley, (2) Jeffrey Bourcier, (3) James Sheufelt, (4) Emily Reilly, (5) Bryan Stevens, and (6) Joshua Heinz.[1] ECF No. 37. For the following reasons the motion will be granted.

         I.

         According to Plaintiff's Amended Complaint, Defendants CCK Pizza Company (“CCK”) and Chris Schloemann own and operate numerous Domino's Pizza franchise stores.[2] ECF No. 19 at 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. Id. at 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. Id. at PageID.355. Since November 20, 2015, Defendants have utilized various methods of reimbursement to account for these expenses. Id. at PageID.352. Plaintiff alleges that none of Defendants' methods have adequately reimbursed the actual vehicle expenses incurred by the delivery drivers. Id. Accordingly, Plaintiff alleges 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. Id. 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. 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. Id. at PageID.355. 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.” Id. 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. Id. at 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.” Id. at PageID.355. During the entire FLSA statutory period, the IRS business mileage reimbursement rate ranged between $.535 and $.575 per mile. Id. at PageID.352. Similarly, companies, like AAA, tasked with studying the cost of owning and operating a vehicle have determined that the average cost of doing so ranged between $.571 and $.608 during the statutory period. Id. at 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. Id. at 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. Id. at 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.

         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 alleges that Defendants violated Michigan's minimum wage as mandated by the Michigan Minimum Wage Law. PageID.365-66.

         II.

         Defendants seek an order compelling depositions from Plaintiff Paul Westley and opt-in Plaintiffs pursuant to Fed.R.Civ.P. 37(a). Rule 37(a) provides:

On notice to other parties and all affected persons, a party may move for an order compelling disclosure or discovery. The motion must include a certification that the movant has in good faith conferred or attempted to confer with the person or party failing to make ...

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