Williams et al v. King Bee Delivery, LLC et al

Filing 43

MEMORANDUM OPINION AND ORDER: Defendants' 29 Motion to Dismiss is GRANTED IN PART and DENIED IN PART. Signed by Judge Joseph M. Hood on 8/8/2016. (STC)cc: COR

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
CRAIG WILLIAMS,
On behalf of himself & all
others similarly situated, et
al.,
Plaintiffs,
v.

KING BEE DELIVERY, LLC, and
BEE LINE COURIER SERVICES,
INC.,

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Action No.
5:15-cv-306-JMH
MEMORANDUM OPINION
AND ORDER

Defendants.
***

***

***

I. Introduction
This matter is before the Court upon Defendants’ motion to
dismiss Plaintiffs’ amended complaint, [DE 29].

Plaintiffs filed

a response in opposition, [DE 30], the Defendants filed a reply,
[DE 41], and the motion is ripe for decision.

The Court has

reviewed the matter and, for the following reasons, Defendants’
Motion to Dismiss will be granted in part and denied in part.
Defendants are in the delivery business and provide delivery
services

for

a

range

of

businesses,

including

hospitals.

Plaintiffs are the individual couriers who load and drive vehicles,
delivering
businesses.

retail

merchandise

Plaintiffs

claim

to

Defendants’

Defendants

have

customers’
unlawfully

misclassified them as independent contractors when, in fact, they

are

Defendants’

employees.

Plaintiffs

contend

this

misclassification constitutes violations of the Federal Labor
Standards Act (“FLSA”), as well as the Kentucky Wage and Hour Act
(“KWHA”), and has deprived them of overtime pay to which they are
entitled.

Additionally, Plaintiffs claim Defendants violated the

Kentucky Act by making deductions from their pay for administrative
fees and equipment that Defendants required Plaintiffs to use in
the course of their jobs.
Defendants contend Plaintiffs’ amended complaint should be
dismissed

in

its

entirety

because

the

allegations

do

not

sufficiently allege that Plaintiffs are Defendants’ employees and,
even if they have, Plaintiffs have failed to state a plausible
claim for unpaid overtime wages or any other relief under FLSA or
the KWHA.

Defendants further argue that some of the relief sought

is unavailable under both the FLSA and the KWHA.
II.
A

motion

Procedure
complaint.

to

12(b)(6)

Standard of Review

dismiss
tests

pursuant
the

to

Federal

sufficiency

of

Rule
the

of

Civil

plaintiff’s

The court views the complaint in the light most

favorable to the plaintiff and “must accept as true well-pleaded
facts set forth in the complaint.”

PR Diamonds, Inc. v. Chandler,

364 F.3d 671, 680 (6th Cir. 2004) (internal quotation omitted).
To survive a motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to “state a claim to relief that
2

is plausible on its face.”

Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)). A claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.
Id.
III. Discussion
While employees are guaranteed overtime and minimum wage
compensation under the FLSA, independent contractors do not enjoy
the Act’s protections.

Keller v. Microsystems, LLC, 781 F.3d 799,

806 (6th Cir. 2015). Plaintiffs claim that the defendants “jointly
require and/or have required” them to sign agreements stating that
they are independent contractors in order to receive work.1

The

Sixth Circuit recognizes, however, that the existence of a contract
is not dispositive with respect to employment relationships, as
“[t]he FLSA is designed to defeat rather than implement contractual
arrangements.”

Imars v. Contractors Mfg. Servs., Inc., 165 F.3d

27, 1998 WL 598778, *5 (6th Cir. Aug. 24, 1998) (citing Real v.
Driscoll Strawberry Assoc., 603 F.2d 748, 755 (9th Cir. 1979)
(“Economic realities, not contractual labels, determine employment
status for the remedial purpose of the FLSA.”)). The Supreme Court

1

Although the plaintiffs did not attach these agreements to their complaint,
the court may consider them without converting the motion to dismiss to a motion
for summary judgment, because the agreements “are referred to in the plaintiff’s
complaint and are central to [the] claim.” Weiner v. Klais & Co., 108 F.3d 86,
89 (6th Cir. 1997).

3

has also recognized that businesses are liable to workers for
overtime wages even if the company has “put . . . an ‘independent
contractor’
employee.

label”

on

a

worker

whose

duties

are

that

of

an

Keller, 781 F.3d at 806–07 (quoting Rutherford Food

Corp. v. McComb, 331 U.S. 722, 729 (1947)).
A. Plaintiffs Allege Sufficient Facts to Support a Reasonable
Inference that They were Employees
The “independent contractor agreements” at issue provide that
the contractor (plaintiff) will remain an independent contractor
and will use his or her independent judgment and discretion for
the most effective and safe manner in conducting delivery services.
The agreement goes on to state that the broker (“Kingbee Delivery,
LLC”) will exercise no direct control over the contractor, nor
over

the

method

or

means

employed

by

the

contractor

in

the

performance of such services, including the selection of routes or
order in which deliveries are made.

Under the terms of the

agreement, the broker has no power as to when the contractor shall
work and the contractor is free to set his own work schedule,
though the contractor is to notify the broker in writing of the
contractor’s designated work schedule to avoid interruptions in
customer service.

The contractor agrees to wear an identification

badge or identifying shirt under certain circumstances.

The terms

of the agreement permit the contractor to concurrently engage in
another delivery service, occupation, or business.

4

The plaintiffs claim that their actual working relationship
with the defendants did not and does not correspond with the terms
of the agreement.

Specifically, Plaintiffs claim the defendants

require them to report to the defendants’ facility in Lexington,
Kentucky by 4:30 a.m., five days per week to unload and sort
merchandise.

Further, they claim that Defendants provide them

with delivery manifests, requiring deliveries to be made at certain
times.

They claim that they are required to wear uniforms and

that they must carry GPS scanners to log their deliveries every
day.

Plaintiffs claim that Defendants use this information to

keep track of Plaintiffs’ progress throughout the day and that
Defendants contact Plaintiffs if Plaintiffs fall behind schedule.
Applying

the

“economic-reality

test,”

the

court

must

determine whether Plaintiffs have articulated a sufficient factual
basis to reasonably infer that the plaintiffs “are those who as a
matter of economic reality are dependent upon the business to which
they render service.” Keller, 781 F.3d at 807 (quotation omitted).
Plaintiffs’ complaint must plead factual content that gives rise
to

more

than

unlawfully.”

a

“sheer

possibility

Iqbal, 556 U.S. at 679.

that

a

defendant

acted

The plausibility standard

is not “akin to a probability requirement,” but it requires more
than a sheer possibility that Plaintiffs are employees, rather
than independent contractors, and that Defendants have committed
a violation of the FLSA or KWHA, as alleged.
5

See id.

In applying the economic-reality test, the Sixth Circuit
considers several factors, including the degree of the alleged
employer’s right to control the manner in which the work is
performed.

Keller, 781 F.3d at 813–14.

Plaintiffs aver that the

Defendants had a great deal of control over the manner in which
their work was performed—from the time they were required to report
to

the

Lexington

facility

deliveries had to be made.

in

the

morning

to

the

times

that

Defendants required Plaintiffs to wear

uniforms and Defendants kept track of Plaintiffs’ work progress
throughout the day through the use of GPS devices.

Additionally,

based on Plaintiffs’ claims for overtime wages, Plaintiffs have
raised a question as to whether Plaintiffs and Defendant had a de
facto

exclusive

relationship,

as

Plaintiffs’

work

schedules

presumably would not have allowed them to perform any outside work
regardless of what their contracts said.
Based

on

the

foregoing,

See id. at 808.

Plaintiffs

have

pled

sufficient

factual content to permit the reasonable inference that they
were/are Defendants’ employees, and not independent contractors.
B. Plaintiffs’ Claim that Defendants were Joint Employers
The court now turns to the issue of Plaintiffs’ purported
joint employment by King Bee and Bee Line.

Defendants, in their

joint motion to dismiss, contend that the Plaintiffs have failed
to make any substantive allegations against Bee Line and have
otherwise failed to demonstrate that any of the alleged wrongful
6

conduct is attributable to Bee Line.

While there is no dispute

that Plaintiffs made deliveries for King Bee, Defendants contend
that Plaintiffs have failed to articulate that they had any type
of working relationship with Bee Line and, thus, the claims against
Bee Line must be dismissed.
Both King Bee and Bee Line are headquartered in Louisville,
Kentucky, and have the same registered agent.

According to the

amended complaint, Bee Line is a listed member/manager in King
Bee’s annual corporate filings.

Additionally, Plaintiffs aver,

“[o]n information and belief, Bee Line owns or controls King Bee’s
operation in Kentucky and the neighboring states.”

Plaintiffs

further contend that all deliveries executed by Plaintiffs have
been “jointly managed and supervised by Bee Line Courier Service
and King Bee Delivery.”

Plaintiffs aver that, in 2013, Bee Line

purchased Regional Express, a courier service for which Plaintiffs
delivered pharmaceuticals.

Plaintiffs go on to claim that the

dispatchers supervising their deliveries were jointly employed by
both King Bee and Bee Line and, that when Plaintiffs called the
dispatch office, they were told they had reached the offices of
Bee

Line.

Finally,

Plaintiffs

contend

that

when

they

made

pharmaceutical deliveries, the deliveries were for King Bee.

When

they made non-pharmaceutical deliveries, they were for Bee Line.
With respect to the non-pharmaceutical deliveries, Plaintiffs were
instructed to inform customers that they were working for Bee Line
7

and the corresponding paperwork indicated that the Plaintiffs
represented Bee Line Courier Service.
The Court finds that Plaintiffs have articulated sufficient
facts to survive Defendants’ motion to dismiss based on the
argument that they are not joint employers.

While the Sixth

Circuit has not articulated a test for identifying a joint employer
for FLSA purposes, it has considered three factors, in the context
of Title VII, in determining whether an entity may be considered
a joint employer: (1) exercise of the authority to hire, fire, and
discipline;

(2)

supervision.

control

over

pay

and

insurance;

(3)

and

See Bacon v. Subway Sandwiches & Salads, LLC, 2015

WL 729632 (E.D. Tenn. 2015).

As discussed above, both Defendants

have the same registered agent and, reportedly, Bee Line owns or
controls King Bee’s operation in Kentucky and the neighboring
states.

Further, Plaintiff avers, King Bee has been listed as a

manager in Bee Line’s corporate filings.

Plaintiffs claim that

they make deliveries for both Defendants, but that the King Bee
deliveries are limited to pharmaceuticals.

The court is convinced

that these facts create a plausible claim that Defendants were
Plaintiffs’ joint employers.
C. Plaintiffs’ Allegations of Overtime Work without Pay
Next,

Defendants

claim

that

Plaintiffs’

claims

must

be

dismissed in their entirety because Plaintiffs have failed to
allege any workweek in which they worked in excess of forty hours
8

for either King Bee or Bee Line.

Because the Plaintiffs’ have

stated a plausible claim that King Bee and Bee Line acted as a
joint employer, the court must consider them jointly.

See 29

C.F.R. § 791.2 (“If the facts establish that the employer is
employed jointly by two or more employers, . . . joint employers
are responsible, both individually and jointly, for compliance
with

all

of

Defendants

the

applicable

allege

that

provisions
Plaintiffs

of

have

the
not

[FLSA].”).
pled,

with

sufficient detail, the length and frequency of their unpaid work
to support a reasonable inference that they worked more than forty
hours in a given week.

Plaintiffs aver, however, that each of

them worked at least 42.5 hours most of the weeks they made
deliveries for Defendants without receiving any overtime pay.

The

amended complaint alleges, in particular, that Plaintiff Craig
Williams regularly worked more than 75 hours per week without
receiving any overtime pay.
perceived

technical

Defendants attempt to seize upon a

deficiency

in

the

pleading,

arguing

that

Plaintiffs fail to specify who they were working for during the
time in question.

It is clear from a logical reading of the

amended

however,

complaint,

what

Plaintiffs

allege—that

they

worked in excess of 40 hours per workweek for Defendants and were
not compensated properly under the FLSA and the KWHA.

While the

independent contractor agreements permitted Plaintiffs to take on
other

jobs,

there

is

no

indication
9

that

Plaintiffs

actually

provided

services

for

anyone

other

than

the

Defendants.

Accordingly, the Court will deny Defendants motion to dismiss this
portion of Plaintiffs’ claims.
D. Unlawful Deduction Claim
Defendants’

next

argument

is

that

Plaintiffs’

unlawful-

deduction claim fails as a matter of law because Plaintiffs
expressly authorized deductions in the Independent Contractor
Agreements.

Kentucky Revised Statutes § 337.060(1) provides that,

generally, an employer may withhold from an employee’s pay “any
portion of an employee’s wage when . . . a deduction is expressly
authorized in writing by the employee to cover insurance premiums,
hospital and medical dues, or other deductions not amounting to a
rebate or deduction from the standard wage arrived at by collective
bargaining or pursuant to wage agreement or statute.”

Section

337.060(2)(e) provides that employers may not deduct for losses
due to damage to property unless such losses are attributable to
an employee’s willful or intentional disregard of the employer’s
interest.

The

Independent

Contractor

Agreements

provide

follows:
CONTRACTOR authorizes BROKER to request deductions from
the CONTRACTORS compensation each pay period where
applicable:
1.
Expediting fees, bond fees, customer loss or damage
claims, or any other expenses incurred by BROKER on
behalf of CONTRACTOR.
2.
Lease expense for the lease of communications
equipment from BROKER.
10

as

3.
Cost for shirts, jackets, hats, ID badges or other
equipment leased or purchased directly from BROKER.
4.
Administration Fee.
The Plaintiffs argue that, although they agreed to these
deductions in writing, they are unlawful because they constitute
rebates or other unlawful deductions under KRS § 337.060(1).
Further, Plaintiffs argue, Defendants imposed deductions that were
related to property damage not caused by any willful or intentional
disregard of Defendants’ interest.

With respect to the damaged

property claim, however, Plaintiffs have provided no supporting
facts whatsoever, and a recital of the elements of the statute
will not do.

Plaintiffs have failed to provide any legal support

or otherwise explain why the other deductions were forbidden under
KRS § 337.060(1), particularly because Plaintiffs’ gave their
written consent.

These conclusory allegations cannot withstand

Defendants’ motion to dismiss and, thus, will be dismissed at this
time.
E. Williams’ Private Cause of Action Under KRS 337.990(9)
In Count V of the Complaint, Plaintiffs allege the Defendants
retaliated against Craig Williams pursuant to KRS 337.990(9) when
they

terminated

him

after

he

complained

about

his

misclassification as an independent contractor and non-payment of
overtime wages.
discharges

or

That provision provides that “[a]ny employer who
in

any

other

manner

discriminates

against

any

employee because the employee has made any complaint . . . that he
11

or she has not been paid wages in accordance with [KRS Chapter
337] shall be assessed a civil penalty. . . .”

Defendants argue

the claim must be dismissed because there is no private right of
action under KRS 337.990(9).
The only portion of the Kentucky Wages and Hours Act that
expressly provides a private right of action is § 337.385, which
states that employers are liable to employees for unpaid wages and
overtime

compensation.

Section

337.990,

titled

“Penalties”

mandates fines, ranging from $100 to $1000, to be enforced by the
Secretary

of

the

Labor

Cabinet.

See

KRS

336.985.

Section

337.990(9) imposes a fine on any employer who discharges or
otherwise discriminates against an employee for complaining that
the employer has violated sections of the KWHA.

Because the Act

itself does not create a private right of action for enforcement
of this provision, the Plaintiffs’ only possible avenue of recovery
is under KRS 446.070, which provides that “[a] person injured by
the violation of any statute may recover from the offender such
damages as he sustained by reason of the violation, although a
penalty or forfeiture is imposed for such violation.”
KRS

446.070

creates

a

private

right

of

action

for

the

violation of any statute, so long as the plaintiff belongs to the
class to be protected by the statute.

State Farm Mutual Auto.

Ins. Co. v. Reeder, 763 S.W.2d 116, 117–18 (Ky. 1988).

A private

right of action generally is not available, however, where the
12

statute “both declares the unlawful act and specifies the civil
remedy to the aggrieved party. . . .”

Ezell v. Christian Cty.,

Ky., 245 F.3d 853, 856 (6th Cir. 2001) (quoting Grzyb v. Evans,
700 S.W.2d 399, 401 (Ky. 1985)).

Taking Plaintiffs’ allegations

as true, there is no doubt they are within the class intended to
be protected by the KWHA.

And while KRS 377.990(9) provides for

a civil penalty, it does not provide a civil remedy to the
aggrieved party, as the civil penalty provides no redress to the
aggrieved

party.

See

Ezell,

245

F.3d

at

856

($100

penalty

prescribed by KRS 179.990 was not a remedy to the aggrieved party
for the purposes of KRS 446.070).

Defendants rely on Benningfield

v. Pettit Environmental, Inc., 183 S.W.3d 567, 571 (Ky. App. 2005),
but the statute at issue there provided administrative procedures
for reinstatement of Benningfield’s job.

The court found that

Benningfield did not have a private right of action under § 446.070
because the administrative procedures constituted a civil remedy.
The Kentucky Wage and Hour Act provides no such remedy for workers
who have suffered retaliation.
Defendants also argue that because KRS 337.385 expressly
provides a private right of action for unpaid wages and overtime
compensation,

the

should be inferred.

Legislature’s

intent

to

exclude

all

others

As the Kentucky Court of Appeals stated in

Reeder, however, it can be assumed that the Kentucky General
Assembly was well aware of KRS 446.070 when it enacted the KWHA.
13

There is no reason that the plain language of these two statutes
cannot be read in harmony.
The Court refuses to obfuscate “the very essence of KRS
446.070, which was enacted specifically so that the mere existence
of a statutory penalty will not bar an individual's right to
private recovery of damages.”

England v. Advance Stores Co. Inc.,

263 F.R.D. 423, 440 (W.D. Ky. 2009).

Accordingly, applying the

law of Grzyb and Reeder, the court finds that KRS 446.070 allows
a private right of action under section 337.990(9) for damages
caused by an employer’s violation of the statute.2

Defendants’

motion to dismiss Williams’ retaliation claim will be denied.
F. Representative Actions Under KRS 337.385
Defendants contend that Kentucky law bars representative
actions under KRS 337.385.

This Court agrees with the decision in

Green, et al. v. Platinum Restaurants Mid-America LLC, 2015 U.S.
Dist. LEXIS 171647 (W.D.K.Y. Feb. 24, 2015) that KRS 337.385 does
not permit suits in a representative capacity and that Rule 23
does not override substantive Kentucky law. The Court will dismiss
Plaintiffs’ claims pursuant to KRS 337.385 insofar as they are in
a representative capacity.
The

question

presented

is

whether

KRS

plaintiffs to sue in a representative capacity.

337.385

allows

“[F]ederal courts

2

 See section G, infra, for a discussion of who may pursue the statutory
penalties pursuant to KRS 337.990. 

14

must apply state law ‘in accordance with the then controlling
decision of the highest state court.’”

Ziegler v. IBP Hog Mkt.,

Inc., 429 F.3d 509, 517 (6th Cir. 2001)(quoting Vandenbark v.
Owens-Illinois Glass Co., 311 U.S. 538, 543 (1941)); see Erie R.R.
v. Tompkins, 304 U.S. 64, 68 (1938).
has not addressed this issue.

The Kentucky Supreme Court

“If the state supreme court has not

yet addressed the issue presented, [the federal court] must predict
how the court would rule by looking to all the available data.
‘Relevant data include decisions of the state appellate courts,
and those decisions should not be disregarded unless we are
presented with persuasive data that the [state] Supreme Court would
decide otherwise.’” Allstate Ins. Co. v. Thrifty Rent-A-Car Sys.,
Inc., 249 F.3d 450, 454 (6th Cir. 2001)(quoting Kingsley Assoc. v.
Moll PlastiCrafters, Inc., 65 F.3d 498, 507 (6th Cir.1995))(other
internal citations omitted).
The Kentucky Court of Appeals has considered this issue twice,
both times ruling that KRS 337.385 does not permit suits in a
representative capacity; however, the Supreme Court of Kentucky
granted review for the most recent case.

See Toyota Motor Mfg.

Kentucky, Inc. v. Kelley, 2013 WL 6046079 (Ky. App. Nov. 15, 2013)
and McCann v. Sullivan Unvi. Sys., 2015 Ky. App. Unpub. LEXIS 862
(Feb. 27, 2015) review granted  by McCann v. Sullivan Univ. Sys.,
2015 Ky. LEXIS 1970 (Ky. Oct. 21, 2015).

15

Thus, the Court finds

limited authoritative value in these cases while the issue is on
appeal to the Supreme Court of Kentucky.
The Court can, however, predict how the Supreme Court of
Kentucky will rule on this question based on the plain language of
the statute at issue.

The statute provides:

(1)

Except as provided in subsection (3) of
this section, any employer who pays any
employee less than wages and overtime
compensation to which such employee is
entitled under or by virtue of KRS
337.020 to 337.285 shall be liable to
such employee affected for the full
amount of such wages and overtime
compensation, less any amount actually
paid to such employee by the employer,
for an additional equal amount as
liquidated damages, and for costs and
such reasonable attorney's fees as may be
allowed by the court.

(2)

If, in any action commenced to recover
such unpaid wages or liquidated damages,
the employer shows to the satisfaction of
the court that the act or omission giving
rise to such action was in good faith and
that he or she had reasonable grounds for
believing that his or her act or omission
was not a violation of KRS 337.020 to
337.285, the court may, in its sound
discretion, award no liquidated damages,
or award any amount thereof not to exceed
the amount specified in this section. Any
agreement between such employee and the
employer to work for less than the
applicable wage rate shall be no defense
to such action. Such action may be
maintained in any court of competent
jurisdiction by any one (1) or more
employees for and in behalf of himself,
herself, or themselves.

16

KRS 337.385 (emphasis added).

This Court agrees entirely

with Judge Heyburn’s analysis of the statute’s language in Green,
et al. v. Platinum Restaurants Mid-America LLC, and could not state
it more succinctly:
The final clause in KRS 337.385(2)—italicized
above—identifies who can sue under the
statute. A natural reading of the sentence is:
(1)

any one employee may maintain an action
for and in behalf of himself;

(2)

any one employee may maintain an action
for an in behalf of herself; or

(3)

any two or more employees may maintain an
action for and in behalf of themselves.

None
of
these
three
readings
supports
Plaintiffs’ position that employees may sue
for and in behalf of other employees similarly
situated. . . . [T]he plain language of the
statute does not allow for a lawsuit in a
representative
capacity.
Absent
other
Kentucky authority, this Court believes that
Kentucky courts are likely to follow the plain
language of the statute.
Green, 2015 U.S. Dist. LEXIS 171647 at 12.
Defendants correctly point out that the Kentucky statute was
modeled after the federal Fair Labor Standards Act (FLSA), but the
Kentucky legislature specifically excluded the words “and other
employees similarly situated” found in the FLSA in the section
authorizing causes of action.

29 U.S.C. § 216(b).

Furthermore,

KRS § 337.385 has been amended three times since its enactment in

17

1974, yet the legislature has never amended the statute to provide
for class or collective actions.
Plaintiffs argue Fed. R. Civ. P. 23 and the Rules Enabling
Act circumvent the state statute and permits them to proceed in a
representative capacity.

The Supreme Court addressed the issue of

whether a plaintiff, in federal court in a diversity action, could
proceed with a Rule 23 class action claim where the New York
statute at issue prohibited penalties in a class action suit.

The

result was a fragmented decision in which four justices dissented.
Four of the remaining justices concurred, holding that Rule 23
applied to state law as applied in federal court, even when “its
effect

is

to

frustrate

a

state

substantive

law

procedural law enacted for substantive purposes).”

(or

a

state

Shady Grove

Orthopedic Associates, P.A. v. Allstate Insurance Company, 559
U.S. 393, 409 (2010).

Justice Stevens wrote a separate opinion,

concurring in part and concurring in the judgment.
Justice Scalia, writing for the plurality, applied a twoprong

test

to

determine

whether

Rule

23

applied:

“first,

determining whether the federal and state rules can be reconciled
(because they answer different questions), and second, if they
cannot, determining whether the Federal Rule runs afoul of § 2072
[of the Rules Enabling Act].”

Shady Grove at 411.

The plurality

and Justice Stevens agreed that the New York state law and Rule 23
were in conflict, but disagreed on how to resolve the second prong
18

of the analysis.

The plurality decided the case based on the fact

that Rule 23 is procedural, while Justice Stevens’s concurrence
stated that the analysis should turn on the procedural nature of
the state law, and when a state procedural rule is “so intertwined
with a state right or remedy that it functions to define the scope
of the state-created right[,]” the federal law cannot preempt the
state statute due to the limitations in the Rules Enabling Act.
Id. at 423; 28 U.S.C. § 2072(a) and (b)(No federal rule of
procedure

shall

“abridge,

enlarge

or

modify

any

substantive

right.”).
“When

a

fragmented

Court

decides

a

case

and

no

single

rationale explaining the result enjoys the assent of five Justices,
the holding of the Court may be viewed as that position taken by
those Members who concurred in the judgments on the narrowest
grounds.”

Marks

v.

United

States,

430

U.S.

188,

193(1977)(citations and internal quotation marks omitted).

While

the Sixth Circuit has not definitively ruled that Justice Stevens’s
concurrence is controlling (see Scola v. Publix Supermarkets,
Inc., 557 F. App’x 458, 462-65 (6th Cir. 2014), in which the
Circuit utilized both the plurality and concurrence approach),
numerous courts that have addressed this issue determined that
Justice Stevens’ concurrence was the most narrow holding, and,
thus, controlling.

See James River Ins. Co. v. Rapid Funding,

LLC, 658 F.3d 1207, 1217 (10 Cir. 2011); Davenport v. Charter
19

Communications, LLC, 35 F.Supp.3d 1040, 1049 (E.D. Mo. 2014); In
re TD Bank, N.A., 2015 WL 8493979 (Dec. 10, 2015); and In re
Packaged Ice Antitrust Litigation, 779 F.Supp.2d 642, 660 (E.D.
Mich. 2011)(“Courts interpreting the Shady Grove decision, and
searching for guidance on this issue, have concluded that Justice
Stevens’

concurrence

is

the

controlling

interpreting courts are bound.”).

opinion

by

which

But see In re Hydroxycut

Marketing and Sales Practices Litigation, 299 F.R.D. 648 (S.D.
Cal. 2014)( “The Court is not convinced that Justice Stevens'
opinion is the ‘logical subset’ of the plurality's or that Stevens'
opinion represents a common denominator. Where there is no such
narrow opinion, the only binding aspect of the splintered decision
is its specific result. Thus, Shady Grove does not provide the
Court with much guidance.”)(internal citation omitted).
For the foregoing reasons, the Court believes the Kentucky
courts are likely to hold that KRS § 337.385 does not permit suits
in a representative action.

The Court is also in agreement with

the cases cited above, that allowing Fed. R. Civ. P. 23 to override
KRS

337.385

clear

exclusion

of

representative

actions

would

“abridge, enlarge or modify” a substantive state right in violation
of

the

Rules

Enabling

Act.

Defendants’

motion

to

dismiss

Plaintiffs’ KRS § 337.385 representative claims will be granted.
G.

Civil Penalties and Punitive Damages
i.

Civil Penalties
20

Defendants argue Plaintiffs have no standing to seek the civil
penalties in KRS 337.990.

The Court agrees.

As the Court noted

in section E, supra, the Secretary of the Labor cabinet is tasked
with enforcing civil penalties in KRS 337.990, pursuant to KRS
336.985.

Plaintiffs “ignore[] the fundamental distinction between

‘penalties’ and ‘remedies.’ The penalty statute, KRS 337.990, is
just that—a statute enacted to impose a punishment upon employers
who violate the protections statutorily created by KRS Chapter
337.

Nowhere in the fourteen subsections of KRS 337.990 is there

any provision for an aggrieved employee to personally recover
damages for an employer's violation of the Kentucky Wages and Hours
Act.”
(W.D.

England v. Advance Stores Co. Inc., 263 F.R.D. 423, 440
Ky.

2009)(internal

citation

omitted)(holding

that

the

plaintiff could not directly recover under KRS 337.990, but could
pursue recovery under KRS 446.070, similar to the case at bar).
Plaintiffs concede the Secretary of Labor is tasked with enforcing
and

compromising

employer.”

“the

amount

of

penalties

imposed

[Pl.’s Opp. to Def.’s Mot. Dis., pg. 38.]

upon

an

Pursuant to

KRS 336.985, only the Secretary of the Labor Cabinet may enforce
the civil penalties in KRS 337.990 against an employer; pursuant
to KRS 446.070, as noted above, a plaintiff may seek to recover
damages caused by the employer’s violation of these sections (not
statutory penalties) where the statute does not otherwise provide
for a private cause of action.

Accordingly, Defendants’ motion to
21

dismiss Plaintiffs’ claims for civil penalties pursuant to KRS
337.990 will be granted.
ii.

Punitive Damages Pursuant to FLSA

Finally,

Defendants

argue

Craig

Williams’

request

for

punitive damages must be dismissed because “neither the FLSA nor
KRS 337.385 permits an award of punitive damages.” [Def.’s Memm.
Supp. Mot. Dis., pg. 37.]
Plaintiff Williams claims he is entitled to punitive damages
for his alleged unlawful, retaliatory termination in violation of
29 U.S.C. § 215(a)(3) and KRS 337.990(9).
the

availability

of

punitive

damages

The Court must analyze
under

each

statute

separately.
29 U.S.C. § 216(b) sets forth the penalties for employers who
engage in retaliatory discharge prohibited by § 215(a)(3):
Any employer who violates the provisions of
section 215(a)(3) of this title shall be
liable for such legal or equitable relief as
may be appropriate to effectuate the purposes
of section 215(a)(3) of this title, including
without limitation employment, reinstatement,
promotion, and the payment of wages lost and
an additional equal amount as liquidated
damages.
29 U.S.C. § 216(b)
There is a split of authority among the circuits as to whether
punitive damages are available under the provision for “legal or
equitable relief,” quoted above.
on this issue.

The Sixth Circuit has not ruled

This Court takes the same approach as the Court
22

in Snapp v. Unlimited Concepts, Inc., 208 F.3d 928 (11th Cir. 2000)
and holds that the retaliation provision of the FLSA does not
provide for punitive damages.
examined

the

plain

language

In Snapp, the Eleventh Circuit
of

the

statute

in

an

effort

to

determine whether punitive damages are within the purposes the
statute seeks to effectuate. The Court noted the statute enumerates
several types of relief that may be available to the plaintiff,
such as “employment, reinstatement, promotion, and the payment of
wages lost and an additional equal amount as liquidated damages”
but does not limit courts to these options.

Id. at 934.

continued, concluding:
Although it is clear that Congress did not
limit a court in retaliation cases to the
enumerated forms of relief, there is something
that all of the relief provided in section
216(b) has in common: it is meant to
compensate the plaintiff. Awards of unpaid
minimum wages, unpaid overtime compensation,
employment, reinstatement, promotion, and the
payment of wages lost all attempt to put the
plaintiff in the place she would have been
absent the employer's misconduct. Even the
liquidated damages provision is compensatory
in nature. “[T]he liquidated damage provision
is not penal in its nature but constitutes
compensation for the retention of a workman's
pay which might result in damages too obscure
and difficult of proof for estimate other than
by liquidated damages.”
Given that the evident purpose of section
216(b) is compensation, we reject plaintiff's
argument that “legal relief” includes punitive
damages.

23

The Court

Snapp v. Unlimited Concepts, Inc., 208 F.3d 928, 934 (11th
Cir. 2000)(quoting Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 707
(1945).

The majority in Snapp noted that Congress provided for

punitive sanctions in the preceding section of the statute, which
subjects any person who violates FLSA’s prohibition on retaliation
to a fine, imprisonment, or both.

See 29 U.S.C. § 216(a).

The Seventh Circuit, by contrast, held that punitive damages
are available under section 216(b) for retaliation claims.

The

Seventh Circuit stated that “legal relief” is a “term commonly
understood to include compensatory and punitive damages.”

Travis

v. Gary Comty. Mental Health Ctr., Inc., 921 F.2d 108, 111 (7th
Cir. 1990).

The Seventh Circuit reasoned that when Congress

amended the remedies language in section 216(b) in 1977 from “an
additional

equal

amount

as

liquidated

damages”

to

“including

without limitation employment, reinstatement or promotion and the
payment of wages lost and an additional equal amount as liquidated
damages[,]” the change was intended to include punitive damages in
the damages “without limitation.”

Id. at 111-12.

The Court

concluded that “Congress could limit these damages, but the 1977
amendment does away with the old limitations without establishing
new ones.

Compensation for emotional distress, and punitive

damages, are appropriate for intentional torts such as retaliatory
discharge.”

Id.

The Eleventh Circuit concluded the opposite,

reasoning that “Congress did not ‘leave out’ punitive sanctions in
24

the FLSA; it merely addressed them in a different manner [in the
fine and imprisonment provided for in section 216(a)].”

Snapp at

939.
This Court finds the reasoning in Snapp persuasive.

In

particular, this Court agrees with the concurring opinion, in which
Judge Carnes notes that criminal sanctions in a statute do not
foreclose the possibility of punitive damages as the majority seems
to suggest.

The concurring opinion agreed with the majority, as

does this Court: Congress could have included punitive damages in
the list of damages but chose not to, but instead solely made broad
compensatory

relief

available

to

plaintiff.

Accordingly,

Plaintiff Williams’ prayer for relief in the form of punitive
damages under the FLSA will be dismissed.
iii.

Punitive Damages Pursuant to KWHA

Plaintiff Williams requests punitive damages for retaliatory
discharge pursuant to KRS 337.990(9).

Defendants cite to one case

in support of their position that the KWHA does not permit an award
of punitive damages.

Plaintiff Williams correctly states that

Defendants’ authority is not on point;3 however, Plaintiff Williams
does not offer any authority to support his position, either.

3 Defendants cite Bowman v. Builder’s Cabinet Supply Co., 2006 WL 2460817 at
*10 (E.D. Ky. Aug. 23, 2006) for the proposition that “punitive damages are
not available under the FLSA or Kentucky’s wage and hour statute.” That
case, however, did not involve a retaliation claim. Plaintiff repeatedly
states he seeks punitive damages pursuant to KRS 337.990(9).

25

Plaintiff

Williams

seeks

punitive

damages

pursuant

to

KRS

337.990(9), which states:
Any employer who discharges or in any other
manner discriminates against any employee
because the employee has made any complaint to
his or her employer, to the commissioner, or
to
the
commissioner's
authorized
representative that he or she has not been
paid wages in accordance with KRS 337.275 and
337.285 or regulations issued thereunder, or
because the employee has caused to be
instituted or is about to cause to be
instituted any proceeding under or related to
KRS 337.385, or because the employee has
testified or is about to testify in any such
proceeding, shall be deemed in violation of
KRS 337.275 to 337.325, KRS 337.345, and KRS
337.385 to 337.405 and shall be assessed a
civil penalty of not less than one hundred
dollars ($100) nor more than one thousand
dollars ($1,000).
KRS 337.990(9).

The plain language of the statute does not permit

an award of punitive damages to a plaintiff.

The Court is unaware

of any case law which has held otherwise, and neither party cited
to any controlling law.4

Based on the plain language of the

4

There is a Court of Appeals of Kentucky case in which the plaintiff alleged
“failure to pay wages/commissions in violation of KRS 337.385, retaliatory
discharge in violation of KRS 337.990(9), and punitive damages[]” at trial.
Burton v. Appriss, Inc., 2016 WL 675807, at *2 (Ky. Ct. App. Feb. 19, 2016).
The trial court granted a directed verdict in favor of the defendant employer
on the retaliatory discharge claim. The Court of Appeals opinion does not
clarify whether the plaintiff in Burton sought punitive damages based on
retaliatory discharge or some other claim; however, it is reasonable for this
Court to assume that once the trial court directed verdict in favor of the
defendant on the retaliation claim, no punitive damages followed, even if the
trial court would have otherwise permitted them under KRS 337.990(9) (and
there is no indication in the opinion whether the trial court intended to
permit an award of punitive damages on that claim). Thus, Burton offers no
guidance to the instant situation.

26

statute, Plaintiff Williams’ prayer for relief in the form of
punitive damages pursuant to KRS 337.990(9) will be dismissed.
IV.

Conclusion

For the foregoing reasons, and the Court being sufficiently
advised, IT IS ORDERED that Defendants Motion to Dismiss be, and
the same hereby is, GRANTED IN PART and DENIED IN PART.
This the 8th day of August, 2016.

27