Harris et al v. Express Courier International, Inc.
MEMORANDUM OPINION AND ORDER granting 24 Motion to Certify Collective Action. Signed by Honorable Timothy L. Brooks on September 19, 2016. (src)
IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
JAMES HARRIS; RICK KETCHAM; and
ADAM MANSKE, Each Individually
and on Behalf of Others Similarly Situated
Case No. 5:16-CV-05033
EXPRESS COURIER INTERNATIONAL, INC.
MEMORANDUM OPINION AND ORDER
Before the Court are Plaintiffs' Motion for Conditional Certification of Collective
Action , for Disclosure of Potential Opt-in Plaintiffs' Contact Information , and to Send Courtapproved Notices (Doc. 24) and Brief in Support (Doc. 25); Defendant's Response in
Opposition (Doc. 30) and Brief in Support (Doc. 31 ); and Plaintiffs' Reply (Doc. 32). The
Court held a hearing on Plaintiffs' Motion for Conditional Certification on July 14, 2016, with
counsel and representatives from the parties present for oral argument on the Motion. As
explained in further detail in this Order, Plaintiffs' Motion (Doc. 30) is GRANTED.
Plaintiffs James Harris, Rick Ketcham , and Aaron Manske , on behalf of themselves
and others similarly situated , move the Court for conditional certification of a collective
action pursuant to the Fair Labor Standards Act ("FLSA"), 29 U.S.C . § 216(b) . The FLSA
is a federal statute governing minimum wages , maximum hours worked , and overtime
compensation . The statute allows an action to be brought "by any one or more employees
for and in behalf of himself or themselves and other employees similarly situated. " 29
U.S.C . § 216(b). This type of lawsuit requires that each potential plaintiff "opt in, " or "give
his consent in writing to become such a party" to a collective claim for unpaid wages. Id.
Plaintiffs are former drivers/couriers of Defendant Express Courier International ,
Inc., doing business as LSO Final Mile ("LSO"). LSO is a company that facilitates the
delivery of products for the medical , financial , and retail industries, through the work of
drivers/couriers who actually perform these deliveries. LSO offers same-day, on-demand ,
and scheduled delivery services in ten different states. According to Plaintiffs, LSO has
misclassified its drivers/couriers as independent contractors, when they really should be
classified and paid as employees , and LSO has failed to pay their drivers/couriers overtime
compensation for all hours worked over 40 per week.
Plaintiffs ask the Court to
conditionally certify the following FLSA class:
Each individual who (a) worked for Express Courier International, Inc.
("Express"), as a driver, courier, or owner-operator any time after
February 11 , 2013, (b) never subcontracted any of his or her work for
Express, and (c) contracted directly with Express under Express's
standard "Owner-Operator Agreement."
In the Motion , Plaintiffs argue that they share with their fellow LSO drivers/couriers
the following characteristics: (1) they were uniformly classified by LSO as independent
contractors and were not paid overtime compensation ; (2) they were required to sign the
same "Owner-Operator Agreement"-which states that drivers/couriers are considered
independent contractors- before they were permitted to make deliveries for the company;
(3) they were subject to the same corporate-level policies , procedures , and training
programs ; (4) they were subject to a common policy of local control ; and (5) they were
subject to common policies regarding pay.1 According to Plaintiffs, LSO's "common
LSO's counsel agreed during the Rule 16 case management hearing held on May 19,
2016 , that drivers/couriers are generally paid on a per-stop basis, but that some individuals
policies" include : (1) requiring all drivers/couriers to use communication equipment
compatible with LSO's operating system , (2)testing drivers/carriers randomly for drugs and
alcohol , (3) requiring drivers/couriers to obtain written permission from LSO before driving
for other carriers, (4) requiring drivers to wear photo ID badges and follow a dress code,
(5) checking drivers'/couriers' motor vehicle reports annually, (6) requiring drivers to keep
their vehicles clean , and (7) requ iring drivers to cede any authority they might have
otherwise had to LSO to investigate any delays, shortages, misdeliveries, and claims
related to lost, damaged , or contaminated loads.
For its part, LSO denies that it has wrongly classified its drivers/couriers at its
locations , as LSO believes they are independent contractors, not employees. Further, LSO
contends that its drivers/couriers are not similarly situated to one another, such that it
would be inefficient and inappropriate to group them into a single class for collective action
purposes. LSO points out that drivers/couriers possess "a kaleidoscope of differences .. .
that are not capable of resolution in a 'one size fits all ' basis. " (Doc. 31 , p. 7). LSO also
believes that if the Court conditionally certified Plaintiff's proposed class, the Court would
be required to engage in an individualized analysis of each class member's case. This is
because , according to LSO , its drivers/couriers differ as to: (1) how they are compensated ,
depending on the customer/route and difficulty/sensitivity of the work, (2) whether they
have negotiated with LSO to receive a different payment plan , usually in the case in which
the driver is responsible for making regular stops on a predetermined route. See Hearing
Transcript, Doc. 26 , p. 31. In such a situation , a driver may have negotiated payment for
the entire multi-stop route , rather than for each stop on the route . Otherwise , however,
LS O's counsel believes that drivers/couriers nationwide are paid per stop . These per-stop
payments are intended to cover all costs involved in vehicle maintenance and gas
purchases, regardless of the fact that the vehicles used by the drivers/couriers to make
their deliveries vary widely. Id. at p. 34.
have successfully negotiated their own compensation plans with the company or not, (3)
whether they personally perform deliveries or hire others to do so for them , (4) whether
they incorporate or operate as sole proprietorships, (5) which type of vehicles they drive
and whether they invest in equipment for their vehicles , and (6) the degree of interaction
they have with LSO management. In addition , LSO points out that all drivers/couriers
decide for themselves when they will work, what deliveries they will make, and what sorts
of customers they will have.
LSO devotes significant attention in its briefing to explaining how its delivery
operations function from location to location.
It explains, for example, that a driver
performing delivery services in Paducah , Kentucky, would arrive at an LSO warehouse
staffed by LSO employees and would operate a cargo van to deliver products during a set
delivery window to hospitals and drug stores. By contrast, a driver in Greenville, South
Carolina , would arrive at a secure building that is not staffed by LSO employees and would
input a code to gain access to the building . The Greenville driver would then load the
deliveries onto whatever vehicle he felt was appropriate, and then contact each customer
to schedule the delivery time . See Doc. 31 , p. 12.
LSO also points out that it would be very difficult to calculate classwide damages
without receiving individual testimony from each driver/courier, as some individuals work
part-time , while others work full-time , and they each maintain their own records of how
many hours they have driven for the company. Moreover, LSO disagrees that it provides
any standardized training to its drivers/couriers, or that it imposes a uniform dress code on
drivers/couriers nationwide. LSO's final argument is that many of its company policies
applicable to drivers/couriers are only in place to meet governmental regulations regarding
motor carrier safety (for example, the random drug and alcohol screenings and the motor
vehicle report checks). Therefore , LSO maintains that these cannot be considered true
"company policies" for purposes of evaluating whether potential class members are
similarly situated .
II. LEGAL STANDARD
The Eighth Circuit has not yet announced standards that district courts must use in
evaluating collective actions pursuant to the FLSA. Resendiz-Ramirez v. P&H Forestry,
LLC, 515 F. Supp. 2d 937, 940 (W.D. Ark. 2007). In the absence of such guidance ,
numerous district courts in this Circuit, including this Court, have approved of the
procedures announced in the Fifth Circuit case of Mooney v. Aramco Services Co., which
establishes a two-step process for certifying a collective action. 4 F.3d 1207, 1212 (5th Cir.
1995) overruled on other grounds by Desert Palace, Inc. v. Costa , 539 U.S. 90 (2003);
Aaron v. Summit Health and Rehab., LLC, 2014 WL 1095829, at *2 (W.D. Ark. Mar. 19,
2014) (citing Mooney for the prevailing approach used by federal courts in certifying
collective actions); Garrison v. ConAgra Packaged Foods, LLC, 2013 WL 1247649, at *1
(E.D. Ark. Mar. 27 , 2013) (same); Shackleford v. Cargill Meat Solutions Corp. , 2013 WL
209052 , at *1 (W.D . Mo. Jan. 17, 2013) (same); Burch v. Qwest Commc'ns Int'/, Inc. , 677
F. Supp . 2d 1101 , 1114 (D. Minn. 2009) (same).
The two-step process described in Mooney involves a progressively more rigorous
analysis as to whether a putative class of plaintiffs is "similarly situated ," as described in
§ 216(b) of the FLSA, and thus suited for the collective action model as a means of
efficiently litigating their claims. Mooney labels the first step in the inquiry as the "notice
stage" and the second step as the "decertification stage ," as follows:
The first determination is made at the so-called "notice stage ." At the notice
stage , the district court makes a decision-usually based only on the
pleadings and any affidavits wh ich have been submitted-whether notice of
the action should be given to potential class members.
Because the Court has minimal evidence , this determination is made using
a fairly lenient standard , and typically results in "conditional certification" of
a representative class . If the district court "conditionally certifies" the class,
putative class members are given notice and the opportunity to "opt-in ." The
action proceeds as a representative action throughout discovery.
The second determination is typically precipitated by a motion for
"decertification" by the defendant usually filed after discovery is largely
complete and the matter is ready for trial. At this stage , the court has much
more information on which to base its decision , and makes a factual
determination on the similarly situated question. If the claimants are similarly
situated , the district court allows the representative action to proceed to trial.
If the claimants are not similarly situated , the district court decertifies the
class , and the opt-in plaintiffs are dismissed without prejudice. The class
representatives-i .e. the original plaintiffs-proceed to trial on their individual
54 F.3d at 1213-14.
Plaintiff's Motion for Conditional Certification now comes before the Court at the
preliminary "notice stage." Accordingly, the Court is tasked with the job of identifying
whether, prior to taking discovery in the case and after considering only the pleadings and
affidavits , conditional certification of a class of similarly situated employees is appropriate .
Courts have acknowledged that "[t]he sole consequence of conditional certification
is the sending of court-approved written notice to employees ... ." Id. At the notice stage ,
a pla intiff must only make "a modest factual showing sufficient to demonstrate that she and
potential plaintiffs together were victims of a common policy or plan that violated the law. "
Garrison , 2013 WL 1247649, at *2. While the burden of proof borne by the plaintiffs at this
stage is relatively low, "some identifiable facts or legal nexus must bind the claims so that
hearing the cases together promotes judicial efficiency." Jost v. Commonwealth Land Title
Ins. Co. , 2009 WL 211943 , at *2 (E .D. Mo. Jan. 27 , 2009) (quoting Barron v. Henry Cnty.
Sch. Sys., 242 F. Supp. 2d 1096, 1103 (M.D. Ala. 2003)).
The inquiry is made somewhat complicated by the fact that the term "similarly
situated" is not defined in the FLSA. District courts in this Circuit have therefore considered
a variety of factors-no single one of which is dispositive-in determining whether plaintiffs
and proposed class members are similarly situated at the notice stage, including: (1)
whether they hold the same job title; (2) whether they work or worked in the same
geographic location ; (3) whether the alleged violations occurred during the same time
period ; (4) whether they were subjected to the same policies and practices established in
the same manner by the same decision-maker; and (5) the extent to which the acts
constituting the alleged violations are similar. Watson v. Surf-Frac Wellhead Equip. Co.,
Inc. , 2012 WL 5185869 , at *1 (E.D. Ark. Oct. 18, 2012) (citing Grayson v. K Mart Corp. , 79
F.3d 1086 (11th Cir.1996)).
Having reviewed Plaintiffs' Motion in light of the relevant standards and applicable
factors , the Court finds that they have met their burden of demonstrating they are similarly
situated to a potential class of drivers/couriers working for LSO. Although drivers/couriers
may differ in working part-time instead of full-time , or choosing to drive energy-efficient
Priuses over gas-guzzling box trucks, they all share a number of similarities. They hold the
same job title , work for LSO locations throughout the Southeast, work under the same
policies and practices enforced by the company, and are or were subject to the same
alleged violations of law during the same period of time. LSO drivers/couriers are generally
paid on a per-stop basis, regardless of individual gas or vehicle-maintenance expenses,
and all must sign the same contract agreeing they are independent contractors. They are
considered and treated by LSO as independent contractors for purposes of determining
wages and overtime compensation , and they all perform essentially the same job , i.e.,
picking up products from warehouses/secure storage locations and delivering them by
vehicle to customers.
In response to LSO 's argument that drivers/couriers are properly classified as
independent contractors and not employees , Plaintiffs respond that, for purposes of
conditional certification , they need not prove the merits of their FLSA claims at this time .
The Court agrees that requiring Plaintiffs at the certification stage to prove that they were
misclassified as independent contractors according to the "economic realities" test-which
LSO explained extensively in its briefing-prematurely delves into the merits of Plaintiffs'
claims. See Bouaphakeo v. Tyson Foods, Inc., 564 F. Supp . 2d 870 , 893 (N.D. Iowa 2008)
(observing that during the initial "notice stage ," when less information is before the court,
plaintiffs need only demonstrate a "factual basis," a "colorable basis," or "substantial
allegations" to show that they and potential collective-action members were subject to a
company-wide decision , plan , or policy that violated the FLSA) . Whether or not LSO
actually violated the FLSA by improperly misclassifying its drivers/couriers is a subject that
must be left for summary judgment or trial. Discovery could also help determine whether
the practices and policies employed at LSO's 56 locations vary to such a degree that
reducing the size and boundaries of the class or decertifying the class altogether might be
warranted at some point in the future.
Turning now to the question of whether Plaintiffs have sufficiently demonstrated that
there are drivers/couriers interested in joining the litigation in significant numbers, such as
to justify a collective action rather than several individual actions , the Court observes that
other district courts in the Eighth Circuit and elsewhere are split as to whether plaintiffs
must affirmatively demonstrate such interest. See Helmert v. Butterball, LLC, 2009 WL
5066759 , at *4-5 (E.D . Ark. Dec. 15, 2009) (collecting cases). The Court will not decide
the issue one way or the other at this time , but will simply observe that if Plaintiffs were
required at the notice stage to produce some evidence that others wished to join the class,
Plaintiff James Harris's affidavit (Doc. 24-10) satisfies that burden . In his affidavit, he
identifies eight drivers/couriers by name who worked with him at the Springdale , Arkansas
branch of LSO and were subject to the same company policies and method of pay.
Further, LSO's counsel stated during the case management hearing that there are
approximately 4,000 to 5,000 LSO drivers/couriers spread throughout the company, all of
whom worked for LSO during the three-year class period . See Doc. 26 , p. 31 . If even a
fraction of these thousands of drivers/couriers are interested in opting into a collective
action , this number would favor utilizing a collective-action model over several individual
Finally, with respect to the issue of whether damages in this case may be too factintensive and individualized to allow for straightforward calculation on a class-wide basis ,
the Court finds that it need not resolve this issue at the conditional-certification stage . In
general , the calculation of damages should not be considered in the same context as the
Court's decision on whether to exercise its discretionary authority to issue notice to a
proposed class . Even though damages may be difficult to calculate, there remains the
possibility that they may be approximated or determined by some standardized measure.
See, e.g., Lopez v. Tyson Foods, 2008 WL 3485289 , at *10 (D. Neb. Aug. 7, 2008); In re
AM Int'/, Inc. Sec. Litig. , 108 F.R.D . 190, 196 (S.D.N.Y. 1985) ("It is well established that
individual questions with respect to damages will not defeat class certification ... unless
that issue creates a conflict which goes to the heart of the lawsuit. ").
In light of the findings of the Court set forth above , IT IS HEREBY ORDERED that
Plaintiffs' Motion for Conditional Certification of Collective Action , for Disclosure of Potential
Opt-in Plaintiffs' Contact Information, and to Send Court-approved Notices (Doc. 24) is
GRANTED as follows :
A class, as defined in this Order, is conditionally certified as a collective
action pursuant to 29 U.S.C. § 216(b).
The proposed notice for mailing (Doc. 24-1 ), consent to join for mailing (Doc.
24-2) , notice for emailing (Doc. 24-3), consent to join for emailing (Doc. 244), and follow-up postcard (Doc. 24-5) are all approved as to form and
content, and Plaintiffs are granted leave to send the above documents to
each putative class member in the manner contemplated by the Motion (Doc.
Defendant is ordered to produce to Plaintiffs' counsel within 21 days of the
entry of this Order, in an electronically manipulable format , the names, last
known mailing addresses, and any and all known email addresses
associated with all those individuals who worked for Express Courier
International, lnc./LSO Final Mile as drivers, couriers, or owner-operators any
time after February 11 , 2013; never subcontracted any of their work for
Express/LSO; and contracted during the relevant time period directly with
Express/LSO under the company's standard "Owner-Operator Agreement. "
IT IS FURTHER ORDERED that the opt-in period shall last for a period of 90 days ,
to begin three days after the date Defendant produces the names and contact information
for the putative class members.
IT IS FURTHER ORDERED that Defendant is not required to send notices, consent
forms, or copies of the most recent complaint to any company-sponsored email addresses
used by drivers/couriers, as proposed by Plaintiffs in their Motion. See Doc. 24, ~ J.
IT IS FURTHER ORDERED that a Case Management Order will be issued
separately, which will set forth a briefing schedule for both decertification of the collective
action and certification of a proposed Rule 23 class.
IT IS SO ORDERED on this
11~ day of September, 2
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