United States District Court, E.D. Michigan, Northern Division
PAUL WESTLEY, individually and on behalf of similarly situated persons, Plaintiff,
CCK PIZZA COMPANY, LLC and CHRIS SCHLOEMANN, Defendant.
ORDER GRANTING MOTION AND APPROVING SETTLEMENT
L. LUDINGTON, UNITED STATES DISTRICT JUDGE
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. On June 4, 2019, the motion was granted
because potential plaintiffs were sufficiently similarly
situated for conditional class certification.
subsequently filed a “Motion for Approval of FLSA
Collective Action Settlement and for Attorneys' Fees and
Costs.” ECF No. 51. Plaintiff represents that the
motion is unopposed. For the following reasons, the motion
will be granted.
to Plaintiff's Amended Complaint, Defendants CCK Pizza
Company (“CCK”) and Chris Schloemann own and
operate numerous Domino's Pizza franchise
stores. 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
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 under the FLSA.
Id. at PageID.354.
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.
November 20, 2018, Plaintiff filed his complaint. ECF No. 1.
On January 31, 2019, Plaintiff filed a motion for FLSA
Conditional Certification which the Court granted. ECF Nos.
13, 33. The order provided that potential plaintiffs had to
opt into the class on or before September 25, 2019. Prior to
the close of the opt in period, the parties reached a
settlement agreement. Plaintiff subsequently filed a motion
for approval of the settlement agreement. ECF No. 51. The
motion will be granted.
parties' settlement agreement (“Agreement”)
provides that Defendants will pay Plaintiffs a maximum of
$123, 000, the gross settlement amount. ECF No. 51-2 at
PageID.959. Each Plaintiff that had opted into the lawsuit
will receive a
[P]ro rata share of unreimbursed expenses based on a mileage
reimbursement rate of forty cents ($0.40) per mile for every
mile driven on behalf of CCK Pizza Company, LLC, at any time
since November 20, 2015, pursuant to data provided by
51-2 at PageID.959. The named Plaintiff, Paul Westley, will
receive an incentive award of $5, 000 and Plaintiff's
counsel will receive attorneys' fees up to $33, 000.00.
ECF No. 51-2 at PageID.960.
reviewing a settlement of an FLSA private claim, a court must
scrutinize the proposed settlement for fairness, and
determine whether the settlement is a fair and reasonable
resolution of a bona fide dispute over FLSA
provisions.” Williams v. K&K Assisted Living
LLC, 2016 WL 319596 at *1 (E.D. Mich. Jan. 27, 2016)
(internal quotation marks and ...