NOLL v. FLOWERS FOODS INC et al
Filing
262
SUMMARY JUDGMENT ORDER granting in part and denying in part 224 Defendants' Motion for Partial Summary Judgment; denying 230 Plaintiffs' Motion for Partial Summary Judgment By JUDGE LANCE E. WALKER. (CJD)
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 1 of 33
PageID #: 7722
UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
TIMOTHY NOLL, individually and,
on behalf of similarly situated
individuals,
)
)
)
)
Plaintiff,
)
)
v.
)
)
FLOWERS FOODS INC, LEPAGE
)
BAKERIES PARK STREET, LLC., and )
CK SALES CO., LLC,
)
)
Defendants
)
1:15-cv-00493-LEW
SUMMARY JUDGMENT ORDER
Plaintiff Timothy Noll, on behalf of himself and similarly situated individuals
(“Plaintiffs”) filed suit against Flowers Foods Inc., Lepage Bakeries Park Street, LLC, and
CK Sales Co., LLC, (“Defendants”), claiming Defendants misclassified Plaintiffs as
independent contractors. Plaintiffs allege the classification is contrived, and that
Defendants have failed to pay them overtime as required by the Fair Labor Standards Act
(“FLSA”) and analogous provisions of Maine state law. Plaintiffs seek damages and
equitable relief.
Now pending are Defendants’ Motion for Partial Summary Judgment (ECF No.
224) and Plaintiffs’ Motion for Partial Summary Judgment (ECF No. 230). Through their
motion, Defendants primarily seek judgment as a matter of law on certain claims based on
the motor carrier and outside sales exemptions to the overtime laws, and dismissal of
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 2 of 33
PageID #: 7723
certain individual Plaintiffs. For their part, Plaintiffs seek dismissal of Defendants’ FLSA
outside sales exemption defense, and a finding that a three-year limitation period and
liquidated damages are appropriate on the FLSA claim.
For the reasons discussed below, Plaintiffs’ motion is denied, and Defendants’
motion is granted in part and denied in part.
LEGISLATIVE BACKDROP
In 1938, Congress passed the Fair Labor Standards Act (“FLSA”), now codified, as
amended, at 29 U.S.C. Ch. 8, §§ 201-219. Congress enacted the FLSA “with the goal of
‘protect[ing] all covered workers from substandard wages and oppressive working hours.’”
Christopher v. SmithKline Beecham Corp., 567 U.S. 142, 147 (2012) (quoting Barrentine
v. Arkansas–Best Freight Sys., Inc., 450 U.S. 728, 739 (1981); see also 29 U.S.C. § 202(a).
Among the FLSA’s provisions is the requirement that employers “compensate
employees for hours in excess of 40 hours per week at a rate of 1 1/2 times the employees’
regular wages.” Hall v. U.S. Cargo & Courier Serv., LLC, 299 F. Supp. 3d 888, 894 (S.D.
Ohio 2018) (quoting Christopher, supra, and citing 29 U.S.C. § 207(a)). This is the federal
“overtime pay” requirement that employers and employees are familiar with to this day.
The FLSA confers the right to receive overtime pay on “employees,” not on all workers
generally. 29 U.S.C. § 207(a). Independent contractors, for example, are not covered. Nor
are employees in a host of occupations, such as school teachers, agricultural and fishery
workers, telephone switchboard operators, certain computer programmers, border patrol
agents, and others whom Congress has exempted from the benefit of federal overtime law.
Id. § 213. Whether a given worker is a covered employee entitled to overtime is a case-
2
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 3 of 33
PageID #: 7724
specific inquiry. Bolduc v. Nat’l Semiconductor Corp., 35 F. Supp. 2d 106, 114 (D. Me.
1998); Hart v. Rick’s Cabaret Int’l, Inc., 967 F. Supp. 2d 901, 912 (S.D.N.Y. 2013).
The FLSA provides workers who believe they have been denied overtime
compensation the right to bring a civil action in a federal or state court of competent
jurisdiction. 29 U.S.C. § 216(b). FLSA plaintiffs often include workers who contend they
have been “misclassified” as something other than an employee (most commonly, an
independent contractor), and that, by rights, they should be compensated as employees
based on the economic reality of their working relationship with the employer. In general,
“[w]here the work done, in its essence, follows the usual path of an employee, putting on
an ‘independent contractor’ label does not take the worker from the protection of the Act.”
Rutherford Food Corp. v. McComb, 331 U.S. 722, 729 (1947). Workers who succeed in
proving an employer misclassified them may be able to recover an award of unpaid
overtime wages and additional remedies, including liquidated damages in an amount equal
to the unpaid overtime wages. 29 U.S.C. § 216(b). Maine law is to like effect. See Me.
Rev. Stat. (“M.R.S.”), tit. 26, ch.7.
This case presents a paradigmatic “misclassification” claim. Plaintiffs allege an
employment contract with all three Defendants, Complaint ¶¶ 7 – 9, to perform work
described in distributor agreements that, Plaintiffs say, misclassify them as independent
contractors. Plaintiffs contend the distributor agreements misclassify them so that the
Flowers Foods enterprise can avoid the expense of paying overtime compensation for work
that cannot be completed in a 40-hour work week.
3
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 4 of 33
PageID #: 7725
SUMMARY JUDGMENT FACTS 1
Defendant Flowers Foods, Inc., is a publicly traded corporation that operates
nationally in the baked foods category. Defendant Lepage Bakeries Park Street, LLC, is
a wholly-owned subsidiary of Flowers Foods. Defendant CK Sales Co., LLC, is a whollyowned subsidiary of Lepage Bakeries. Through the subsidiaries that make up its corporate
tree (including additional subsidiaries other than those named here as defendants), Flowers
Foods produces fresh breads, buns, rolls, and snack cakes and distributes these products to
retail and foodservice customers throughout the United States. Plaintiffs’ participation in
this enterprise involves the Maine-based “direct-store-delivery” segment of Defendants’
business, part of Defendants’ nationwide bakery network involving “a highly developed
reciprocal baking system (where bakeries can produce for [their] market[s] and th[ose] of
other bakeries within the direct-store-delivery network).” Flowers Foods SEC Form 10-K
at 5 (ECF No. 231-1).
Flowers Foods extended its network into Maine in 2012, with its acquisition of
Lepage Bakeries. Starting in the fall of 2013, Flowers Foods—through its subsidiaries
Lepage Bakeries and CK Sales—began selling 2 franchised distribution rights and, when it
1
The summary judgment facts are drawn from the parties’ stipulations, if any, and from their statements of
material facts submitted in accordance with Local Rule 56. The Court will adopt a statement of fact if it is
admitted by the opposing party and is material to the dispute. If a statement is denied or qualified by the
opposing party, or if an evidentiary objection is raised concerning the record evidence cited in support of a
statement, the Court will review those portions of the summary judgment record cited by the parties, and
will accept, for summary judgment purposes, the factual assertion that is most favorable to the party
opposing the entry of summary judgment, provided that the record material cited in support of the assertion
is of evidentiary quality and is capable of supporting the party’s assertion, either directly or through
reasonable inference. D. Me. Loc. R. 56; Boudreau v. Lussier, 901 F.3d 65, 69 (1st Cir. 2018).
2
The terms of sale are not clear from the summary judgment papers. However, through the agreements
Plaintiffs acquired ownership interest in distribution rights in their territories, and may sell the same, subject
to a right of first refusal held by CK Sales. Sample Distributor Agreement § 15.1.
4
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 5 of 33
PageID #: 7726
retained a new distributor, it did so through distributor agreements with CK Sales. The
agreements entitle Plaintiffs to sell and distribute Defendants’ branded products in
Plaintiffs’ respective geographic territories in Maine. Sample Distributor Agreement (ECF
No. 225-2). An “essential term” of the agreement is that distributors are understood to be
“common law independent contractor[s].” Id. § 16.1.
In addition to classifying distributors as independent contractors, the distributor
agreements assign each distributor a defined geographic area, making the distributor
responsible for sales, deliveries, and service within that area. The distributor agreements
also include stipulations regarding the working relationship between each distributor and,
nominally, CK Sales. For example, CK Sales may change the “terms and prices” of their
sales to distributors “at any time”; distributors must use their “best efforts to develop and
maximize” sales of “authorized products” in accordance with “good industry practice,” and
“cooperate” with marketing and sales efforts; CK Sales has the right to “solicit and drop
delivery accounts, in whole or in part” from the distributors’ territory for “legitimate
business reasons”; CK Sales will determine the warehouse location where distributors
collect product; distributors must provide their own delivery trucks; deliveries need not be
“conducted personally,” so that distributors are “free to engage” outside assistance; CK
Sales may terminate the agreement if the distributor “fails to perform [the] obligations
under this Agreement”; and CK Sales may issue notices where it finds a distributor to be
in breach of the agreement. Sample Distributor Agreement at 3 – 17.
Per the agreements, Plaintiffs earn money by “purchasing” product at a specified
discount and “selling” it at a higher price to customer stores. For major accounts, however,
5
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 6 of 33
PageID #: 7727
Defendants control both the price at which Plaintiffs buy and the price at which they sell
products. To fulfill their obligations, Plaintiffs submit orders to LePage Bakeries on behalf
of their customers’ accounts, pick up the products from designated LePage warehouses
shortly after the products arrive, drive the products to customers’ locations, deliver
products to the shelves in customers’ stores, and periodically manage the inventory of
products (“stock”) at those stores to ensure a steady supply of fresh product.
3
Plaintiffs and Defendants track orders and deliveries using handheld computers
issued by Defendants, who maintain a database generated by the computers. On a weekly
basis, Defendants “settle” accounts for each Plaintiff based on the margin established by
the prices at which Defendants sell products to Plaintiffs and the sale price established for
the products at the customer stores, subject to certain “chargebacks, credits and
adjustments.” Sample Distributor Agreement § 8.1. Because distributors’ earnings are
determined largely by the difference between the amount of sales to customers, Plaintiffs’
income is primarily a function of the volume of products sold to customers.
The parties dispute the extent to which distributors can impact the total volume of
sales in their territories through their own efforts, but it is undisputed that the overwhelming
majority of product is sold to the large, chain retailers who are Defendants’ primary
accounts. Plaintiffs have testified that, for each existing customer account, Defendants
compile a “suggested order,” listing recommended products, prices, and volumes, and
upload the suggested order onto the handheld computer. Pls.’ Statement ¶ 30. On the one
3
Plaintiffs are permitted to return stale product to LePage and receive a credit to their account so that
Plaintiffs are not financially responsible for product that expires before it is sold at the large chain accounts.
6
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 7 of 33
PageID #: 7728
hand, several Plaintiffs—including Noll, Dore, Swedberg, Burns, Lucey, Veilleux, and
Curran—indicated they felt they had some degree of control over the content of the orders,
and could or did change the orders, including by trying to independently increase sales in
their territories. See Defs.’ Statement ¶¶ 13 – 22. Other Plaintiffs, however, have indicated
Defendants leave them little to no discretion to deviate from the suggested orders preloaded
on their handheld computers. Pls.’ Responsive Statement ¶ 17. The parties also paint
contrasting pictures of Plaintiffs’ ability to add new customers through independent sales
activity. Some Plaintiffs have added new accounts through their own efforts, but others
testified they were not permitted to do so.
In the aggregate, approximately 95 percent of total sales are generated by large chain
accounts like Hannaford and Walmart, which accounts acquire products on a credit basis
through separate agreements with Defendants. Pls.’ Statement ¶ 42. The parties agree that
Defendants have primary responsibility for setting the terms for pricing, products, and
volumes, as well as setting delivery expectations and customer requirements, for these
large accounts. By contrast, distributors exercise greater influence over their small cash
accounts, which include restaurants and smaller grocery outlets and convenience stores.
Plaintiffs’ deposition testimony indicates there is variation among distributors’ dayto-day schedules and work experience. For example, some distributors hire assistants to
help with their routes, though many do not. While most personally service their routes,
their contention that they are controlled is not a function of Defendants telling them what
to do and when to do it, but rather a function of the significant expectations set by
Defendants’ service requirements and customer expectations.
7
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 8 of 33
PageID #: 7729
Plaintiff Noll has described the typical schedule of a typical day on his route. Noll
Dep. at 80. So has opt-in Plaintiff Landry, who observed that not everyone picks up their
morning order at the same time (he begins his day at 4:00 a.m.). Landry opined that
schedules depend in part on customers, and not everyone gets an early start like he does.
Landry Dep. at 46 (ECF No. 226-4). Curran says his days vary in length, and he likes to
“get three or four little stops done” before his major account. Curran Dep. at 55. Dore
acknowledged that he could make his own schedule during the day, but that customer
expectations necessarily impose limitations. For example, he would not deliver to a
restaurant during its lunch-time rush and a major account might “get after you” if you arrive
too late in the day. Dore Dep. at 122 (ECF No. 255-9).
All Plaintiffs who are members of the FLSA opt-in collective action have stated that
their obligations to Defendants regularly require them to work beyond 40 hours per week,
but those hours varied significantly among Plaintiffs.
Pursuant to the distributor agreements, Plaintiffs purchase and insure their own
delivery trucks. These trucks have a “gross vehicle weight rating” or “gross vehicle
weight” that exceeds 10,001 pounds. Plaintiffs’ delivery routes are entirely intrastate.
Although many of the products distributed by Plaintiffs are produced in bakeries located
in Maine, a steady stream of products distributed by Plaintiffs are produced in bakeries
located outside of Maine. 4 The out-of-state bakeries, components of the Flowers Foods
4
Defendants cite the declaration of Gilbert Michael Brock, a Vice President of Sales for Lepage Bakeries,
as evidence that several products Plaintiffs deliver are baked out-of-state. Specifically, Mr. Brock declares:
A number of products ordered by CK Sales Distributors … are produced by bakeries
outside the State of Maine. The products produced by these out-of-state bakeries include
… Country Kitchen, Barowsky’s, Nature’s Own, Wonder Bread and TastyKake.
8
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 9 of 33
PageID #: 7730
network, ship their products to Lepage Bakeries facilities according to the product orders
Plaintiffs relay through Lepage Bakeries. Products shipped to Lepage remain with Lepage
for a matter of hours (occasionally as many as 48 hours) before Lepage employees ship
them to the warehouses where Plaintiffs pick them up for distribution.
5
In this way,
although Plaintiffs drive intrastate routes, they carry products that move in interstate
commerce based on recurring customer orders.
Plaintiffs make deliveries five days a week, and on the other two days of the week
they perform “recalls” or “pull ups” (two alternative names for the same thing) to adjust
the stock on the shelves in the major customers’ stores. Some Plaintiffs use personal
vehicles once or twice a week to perform “pull ups” or “recalls.” These personal vehicles
weigh less than 10,001 pounds. During pull ups, Plaintiffs will sometimes (the frequency
is not demonstrated) pull out-of-code product from the market and replace it with new
inventory. They may also deliver product in response to notification that a customer
“requires additional product to get through the day.” Gilbert Dep. at 174 (ECF No. 237-3)
Defs.’ Statement ¶ 28 (ECF No. 225); Brock Decl. ¶ 9 (ECF No. 229-4). Plaintiffs argue I should strike
Mr. Brock’s declaration because it does not indicate what proportion of the products distributed by Plaintiffs
moved in interstate commerce. Pls.’ Response to Defs.’ Statement ¶ 28 (ECF No. 245). However, they
have not persuasively demonstrated that it would matter, legally, that most of the products they distribute
are baked in Maine. The fact that the deliveries include products shipped in from outside the state is material
to the application of the Motor Carrier Act exemption, because the transportation of interstate products
informs that issue. There are no requirements that an employee work exclusively, or mostly, with products
transported in interstate commerce. Levinson v. Spector Motor Serv., 330 U.S. 649, 674–75 (1947) (“It is
the character of the activities rather than the proportion of either the employee’s time or of his activities
that determines the actual need for the [Secretary of Transportation]’s power to establish reasonable
requirements with respect to qualifications, maximum hours of service, safety of operation and
equipment.”); Crooker v. Sexton Motors, Inc., 469 F.2d 206, 209 (1st Cir. 1972).
5
Defendant Lepage Bakeries is registered with the U.S. Department of Transportation as a motor private
carrier, with DOT Number 94424.
9
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 10 of 33
PageID #: 7731
(cited by Plaintiffs in support of their statement that distributors “occasionally deliver
additional product, using their personal vehicles”); Pls.’ Statement ¶ 31 (ECF No. 238). 6
Opt-in Plaintiff Ernest Dore testified that he uses a personal vehicle “not that often”
to deliver product, but has done so when his delivery truck broke down or when, on
occasion, a customer called him to report the stock of a particular product was about to run
out. Dore Dep. at 171; Defs.’ Statement ¶ 34 (ECF No. 225). Opt-in Plaintiff Normand
Belanger testified he used his 2008 Isuzu box truck for his two weekly pull ups at his
Walmart account, if he needed to deliver product on those days. If he did not need to
deliver product, he used his personal vehicle. Belanger Dep. at 97 (ECF No. 226-6); see
also Stipulation ¶ 3 (ECF No. 229) (Isuzu reference is a box truck reference). Opt-in
Plaintiff Richard Curran testified he uses a “personal truck” for recalls at Hannaford, but it
is not evident from the deposition transcript excerpt that he delivers any product to
Hannaford when he performs recalls. Curran Dep. at 118 – 120 (ECF No. 226-3).
According to Curran, on recall days he does not deliver product but rather “retrieve[s] stuff
from the back room o[f] [his] major stop.” Id. at 55. Plaintiffs also admit Defendants’
assertion that Opt-in Plaintiff Clifford Cyr used a personal vehicle only to commute to
customers on Wednesdays and Sundays, but not to deliver product. Defs.’ Statement ¶ 33;
Pls.’ Responsive Statement ¶ 33; Cyr Dep. at 104 – 105 (ECF No. 226-7). Plaintiff
6
Certain of Plaintiffs’ accounts, most notably Hannaford’s and Walmart, require shelf and display attention
every day, including “restocking,” if necessary. But two days per week these duties involve less-intensive
“pull ups” or “recalls” to adjust the shelves. Pls.’ Statement ¶ 31; Defs.’ Responsive Statement ¶ 31 (ECF
No. 242). Plaintiffs have cited the deposition testimony of Jerry Gilbert, evidently someone who exercises
some manner of managerial oversight for one of the Defendants (the deposition excerpt does not include
Mr. Gilbert’s title). Mr. Gilbert testified that distributors can be expected to deliver some product even on
the pull up or recall days, but he did not address the issue of personal vehicle usage. Gilbert Dep. at 174 –
175 (ECF No. 237-3).
10
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 11 of 33
PageID #: 7732
Timothy Noll testified that he and his daughter used personal vehicles for pull ups at his
Hannaford’s account, but he described the pull up days as non-delivery days and stated that
they never used the personal vehicles to deliver product. Noll Dep. at 43 – 54 (ECF No.
225-4). Opt-in Plaintiff Paul Masse testified that he has only ever delivered product using
his personal vehicle for “emergencies,” and described one occasion when he used his
personal pickup truck during a major snowstorm. Masse Dep. at 60 – 61 (ECF No. 2268).
PLAINTIFFS’ CLAIMS
The Complaint (ECF No. 1) contains four counts:
Count I – a collective claim for violation of the overtime provision of the Fair
Labor Standards Act, 29 U.S.C. § 207, in which it is alleged that “Plaintiff
and the FLSA Collective Class routinely drive or drove their personal
vehicles for work,” and that they, “either regularly or from time to time,
worked more than 40 hours per week, but did not receive overtime pay,”
Complaint ¶¶ 60, 62;
Count II – a claim requesting a declaratory judgment that Defendants have
misclassified Plaintiffs as independent contractors, Complaint ¶ 68;
Count III – a claim for all statutory and equitable remedies purportedly
available to Plaintiff and the Rule 23 Class based on alleged violations of 26
M.R.S. §§ 591-A and 1043(11)(E), Complaint ¶¶ 70 – 72; and
Count IV – a claim for non-payment of wages on behalf of Plaintiff and the
Rule 23 Class, pursuant to 26 M.R.S. §§ 621, 621-A, 629, and 664, and for
other relief purportedly available pursuant to 26 M.R.S. § 622.
DISCUSSION
Summary judgment is appropriate “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a). As cautioned by the Supreme Court, “the mere existence of
11
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 12 of 33
PageID #: 7733
some alleged factual dispute between the parties will not defeat an otherwise properly
supported motion for summary judgment; the requirement is that there be no genuine issue
of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). A
material fact is one that has the potential to determine the outcome of the litigation. Id. at
248; Oahn Nguyen Chung v. StudentCity.com, Inc., 854 F.3d 97, 101 (1st Cir. 2017). To
raise a genuine issue of material fact, the party opposing summary judgment must
demonstrate that the record contains evidence that would permit the finder of fact to resolve
the material issues in its favor. See Triangle Trading Co. v. Robroy Indus., Inc., 200 F.3d
1, 2 (1st Cir. 1999) (“Unless the party opposing a motion for summary judgment can
identify a genuine issue as to a material fact, the motion may end the case.”).
The parties’ motions offer up for resolution, principally, the following two
questions:
(A) Do the undisputed facts call for application of the federal or state outside
sales exemptions to federal and state overtime law, or have Plaintiffs raised
genuine issues of material fact that might negate the exemptions.
(B) Do the undisputed facts call for application of the Motor Carrier Act
(MCA) exemptions to federal and state overtime law and, if so, have
Plaintiffs raised genuine issues of material fact regarding the Technical
Corrections Act exception to the MCA exemptions.
As the moving party, Defendants bear the burden of establishing they are entitled to
the exemptions. Meacham v. Knolls Atomic Power Lab., 554 U.S. 84, 91 – 92 (2008);
Marzuq v. Cadete Enters., 807 F.3d 431, 438 (1st Cir. 2015). Although Plaintiffs urge me
to interpret the federal exemptions narrowly and against the Defendants, citing De Jesus–
Rentas v. Baxter Pharmacy Services Corp., 400 F.3d 72, 74 (1st Cir. 2005), the Supreme
12
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 13 of 33
PageID #: 7734
Court has held that “[b]ecause the FLSA gives no ‘textual indication’ that its exemptions
should be construed narrowly, there is no reason to give [them] anything other than a fair
(rather than a ‘narrow’) interpretation.” Encino Motorcars, LLC v. Navarro, 138 S. Ct.
1134, 1142 (2018); Sec’y of Labor v. Timberline S., LLC, 925 F.3d 838, 850 (6th Cir. 2019).
I therefore give the federal exemptions their fair interpretation as indicated by the text of
the statute.
When discussing the exemptions, I will accept, for purposes of the summary
judgment analysis only, that Plaintiffs will be able to persuade the finder of fact that they
are employees rather than independent contractors. This approach is necessary and
appropriate because Defendants’ motion does not challenge Plaintiffs’ contention that they
are common law employees and because it is essential to Plaintiffs’ claims that they
ultimately succeed in proving their employee status.
A. OUTSIDE SALES EXEMPTIONS
Defendants argue Plaintiffs are exempt from overtime compensation under the
FLSA’s “outside sales” exemption, 29 U.S.C. § 213(a)(1), and a related provision of Maine
law, 26 M.R.S. § 663(3)(C). I conclude that there is a genuine issue whether the federal
outside sales exemption applies, but that the undisputed evidence calls for application of
the state law exemption.
1. FLSA Outside Sales Exemption
The FLSA exempts from overtime an employee working “in the capacity of outside
salesman.” 29 U.S.C. § 213(a). An outside salesman is one “whose primary duty is making
sales within the meaning of section 3(k) of the [FLSA]” and is “customarily and regularly
13
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 14 of 33
PageID #: 7735
engaged away from the employer’s place of business in performing such primary duty.”
29 C.F.R. § 541.500. Department of Labor regulations include a regulation devoted to
“drivers who sell,” but, frankly, the regulation raises as many questions as it answers. See
29 C.F.R. § 541.504. Another regulation advises that the “determination of an employee’s
primary duty must be based on all the facts in a particular case, with the major emphasis
on the character of the employee’s job as a whole.” 29 C.F.R. § 541.700(a). One must also
consider what it means to perform sales activity. The FLSA defines “sale” or “sell” to
include “any sale, exchange, contract to sell, consignment for sale, shipment for sale, or
other disposition.” 29 U.S.C. § 203(k).
Having considered the applicable factors outlined in 29 C.F.R. § 541.504(b), I
conclude that the record does not contain sufficient information on the factors, the factors
are inapplicable, or the factors do not conclusively determine whether “making sales” is
Plaintiffs’ primary duty. Thus, summary judgment is not appropriate on the federal outside
sales exemption.
2. Maine’s Outside Sales Exemption
Under Maine law, employers are exempted from paying overtime to “[e]mployees
whose earnings are derived, in whole or part, from sales commissions and whose hours and
places of employment are not substantially controlled by the employer.” 26 M.R.S.
§663(3)(C). Maine’s exemption differs in two significant ways from the exemption found
in the FLSA. First, Maine requires that employees’ earnings be “derived in whole or part
from sales commissions,” unlike the FLSA which exempts employees “whose primary
duty is making sales.” Second, Maine law requires that “hours and places of employment
14
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 15 of 33
PageID #: 7736
are not substantially controlled by the employer,” rather than requiring that employees be
“customarily and regularly engaged away from the employer’s place of business.”
Compare 29 C.F.R. § 541.500 with 26 M.R.S. § 663(3)(C).
a. Earnings derived from sales commissions
To be entitled to judgment under Maine’s outside sales exemption, Defendants must
demonstrate the absence of a genuine issue of material fact on both requirements of
Maine’s statutory exemption. The first—that the employees’ earnings be derived, in whole
or in part, from sales commissions—is not defined elsewhere in the statute. Maine’s rules
of statutory interpretation require that words in a statute be given “their plain, common,
and ordinary meaning.” Palmieri v. Nynex Long Distance Co., 437 F.3d 111, 116 (1st Cir.
2006). “Commission,” as it is commonly understood, means “[a] fee paid to an agent or
employee for a particular transaction, usually as a percentage of the money received from
the transaction.” Black’s Law Dictionary 286 (8th ed.).
According to Plaintiffs, they do not earn commissions on sales because they are not
principally involved in solicitation of sales, given that they are not trained to perform sales
activity, sales to the major chain accounts are overseen by others, distributor sales activity
is not monitored or evaluated, and some distributors are instructed not to discuss sales with
their chain accounts. Pls.’ Opposition at 27; Pls.’ Motion for Partial Summary J. at 3 – 7.
The question is whether Plaintiffs, if regarded as employees, would also be
regarded, as a matter of law, as receiving compensation based, in whole or in part, on sales
commissions. The undisputed evidence demonstrates that regardless of whether Plaintiffs
comprise a sales force, Defendants pay Plaintiffs a commission based on the net sales
15
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 16 of 33
PageID #: 7737
occurring in Plaintiffs’ territories. That is, Plaintiffs’ compensation is derived from an
accounting process that affords them a fee measured by the volume of sales in their
territories. For purposes of Maine law, sales commissions are “in part” how Plaintiffs
receive their compensation.
b. Defendants’ control over employees’ hours and places of employment
The undisputed evidence also satisfies the second element of the Maine outside sales
exemption; the requirement that Defendants do not “substantially” control the “hours and
places of [Plaintiffs’] employment.” 26 M.R.S. § 663(3)(C). Although the Maine statute
does not define these terms, the First Circuit has interpreted the relevant language. Giving
the words their “plain, common, and ordinary meaning,” the Circuit interpreted “control”
to mean “exercise restraining or directing influence over” or “have power over.” Palmieri,
437 F.3d at 116.
The Circuit clarified that “[s]ubstantially,” the adverb modifying
“control,” means “considerable in quantity” or “significantly great.” Id. Effectively, the
Circuit “confine[d] the reach of substantial control to those situations in which the
employer actually articulates specified work hours and locations.” Id. In Palmieri, that
meant a plaintiff who did not have to work “for a set number of hours,” or in a particular
location, and was given “substantial latitude to work as he saw fit” was not “substantially
control[led]” under § 663. Id.
Plaintiffs have as much control, if not more, over where and when they work than
the plaintiff in Palmieri. For example, Plaintiffs are not required to personally service their
territories, and can hire others to perform their deliveries and pull ups. Some Plaintiffs
even own multiple territories and engage others on a full-time basis to operate the
16
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 17 of 33
PageID #: 7738
territories. And regardless of how Plaintiffs structure their businesses, each distributor
determines his or her own hours, including start times and total hours worked, subject to
ordinary scheduling constraints imposed by the customers and the demands of the work
itself (rather than Defendants).
Plaintiffs respond that their work days are set by Defendants, including the need to
perform pull ups on off days, and that Defendants require Plaintiffs to obtain permission to
change the days they service the national or chain accounts. Pls.’ Additional Stmt. of
Material Facts ¶ 13. No doubt, Defendants set the general framework for Plaintiffs’
employment, but they do not substantially control hours and places of employment. The
summary judgment record is clear that as long as Plaintiffs make their deliveries they can
do so on their own schedule, and in whatever order they please. Defendants have no control
over who performs these deliveries, or over Plaintiffs’ schedules, meaning they exercise
even less control than the defendant-employer in Palmieri. Because there are no disputed
material facts surrounding whether Defendants control Plaintiffs’ hours and places of work
Defendants have shown they do not have the “substantial[] control” required under Maine
law.
Because Defendants have met their burden on both elements of Maine’s outside
sales exemption, § 663(3)(C), I grant Defendants motion for judgment as a matter of law
on Count IV. 7
7
Defendants also move for judgment as a matter of law against the Rule 23 class based on Maine’s perishable food
exemption to overtime protections, 26 M.R.S. § 664(3)(F). Simply stated, because the finder of fact could conclude
that Plaintiffs load product but do not “pack” product (because product is pre-packaged), the perishable foods
exemption does not negate Plaintiffs’ state law overtime claim. Nevertheless, the point is immaterial given application
of the Maine outside sales exemption.
17
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 18 of 33
PageID #: 7739
B. MOTOR CARRIER ACT EXEMPTIONS
Defendants contend they are exempt from the overtime pay requirements of the
FLSA because Plaintiffs’ job duties affect the safety of operation of commercial motor
vehicles in the transportation of passengers or property in interstate commerce and,
therefore, Plaintiffs’ working hours are subject to regulation by the Secretary of
Transportation under the Motor Carrier Act (“MCA”). See 29 U.S.C. § 213(b)(1); 49
U.S.C. § 31502. While Plaintiffs do not dispute that their distribution activity affects the
safety of operation of commercial motor vehicles in transportation, they do dispute that
Defendants qualify as motor private carriers and employ Plaintiffs to engage in interstate
commerce. In the event they lose these arguments, Plaintiff argue their work activity falls
under the Technical Corrections Act (“TCA”) exception to the MCA exemption.
1.
The MCA Exemption
This case involves one MCA exemption existing in federal law and another existing
in state law. Because Maine law tracks federal law this discussion is limited to the federal
exemption. 8
The FLSA provides an exemption from its overtime requirements for “any
employee with respect to whom the Secretary of Transportation has power to establish
qualifications and maximum hours of service pursuant to the provisions of section 31502
of Title 49 [the Motor Carrier Act].” 29 U.S.C. § 213(b). The MCA identifies the types
8
Maine’s gloss on the MCA exemption requires an additional finding that the driver not be paid hourly.
26 M.R.S. §664(3)(K). Otherwise, Maine’s exemption is identical to the exemption in federal law. See
Smith v. Schwann’s Home Service, Inc., No. 2:13-cv-231, 2014 WL 6679129, *27-30 (D. Me. Nov. 25,
2014) (analyzing federal and state MCA exemptions under federal law). The parties agree that Plaintiffs
are not paid hourly.
18
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 19 of 33
PageID #: 7740
of carriers over whom the Secretary has jurisdiction, including those defined in 49 U.S.C.
§ 13501, and it provides that the Secretary has authority to prescribe the “qualifications
and maximum hours of service of employees of . . . a motor carrier,” id. § 31502(b)(1), or
“motor private carrier,” id. § 31502(b)(2). See also 49 U.S.C. § 31136(a) (calling on the
Secretary of Transportation to prescribe safety regulations for commercial motor vehicles).
An employee’s transportation activity may come within the Secretary of Transportation’s
power to regulate, even if the Secretary has not yet found a need to exercise that power.
Southland Gasoline Co. v. Bayley, 319 U.S. 44, 47 – 48 (1943).
To escape FLSA liability based on the MCA exemption, an employer must show it
qualifies for the exemption. Timberline, 925 F.3d at 850. Here, that burden requires a
showing that Defendants, assuming they employ Plaintiffs, are motor private carriers, and
that Plaintiffs’ work involves “the safety of operation of [commercial 9] motor vehicles in
the transportation on the public highways of passengers or property in interstate or foreign
commerce within the meaning of the Motor Carrier Act.” 29 C.F.R. § 782.2(a).
The MCA defines “motor private carrier” as a person “transporting property by
motor vehicle when: (A) the transportation is as provided in section 13501 of this Title
9
The need for a “commercial” vehicle is in reference to the Secretary’s authority to regulate the hours of
those who operate motor vehicles having “a gross vehicle weight rating or gross vehicle weight of at least
10,001 pounds.” 49 U.S.C. § 31132(1)(A). On August 10, 2005, Congress enacted the Safe, Accountable,
Flexible, Efficient Transportation Equity Act: A Legacy for Users (“SAFETEA–LU”). Pub. L. No. 109–
59, 119 Stat. 1144. SAFETEA-LU amended the definition of “motor private carrier” to mean “a person,
other than a motor carrier, transporting property by commercial motor vehicle[.]” 49 U.S.C. § 13102(15)
(2005). The term “commercial motor vehicle” is elsewhere defined as a “self-propelled or towed vehicle
used on the highways in interstate commerce to transport passengers or property, if the vehicle has a gross
vehicle rating or gross vehicle weight of at least 10,001 pounds, whichever is greater.” Id. at § 31132(1)(A).
It is undisputed that Plaintiffs’ delivery trucks are commercial vehicles of the requisite weight.
19
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 20 of 33
PageID #: 7741
[describing the Secretary’s jurisdiction over interstate transportation]; (B) the person is the
owner, lessee or bailee of the property being transported; and (C) the property is being
transported for sale, lease, rent, or bailment or to further a commercial enterprise. 49
U.S.C. § 13102(15). These, then, are the ABCs of Defendants’ summary judgment burden.
Plaintiffs argue Defendants have failed to carry their evidentiary burden at summary
judgment to show the absence of disputed material facts as to A and B. Pls.’ Opposition
Mem. at 29 (ECF No. 244). Defendants believe their status as a motor private carrier is
self-evident if Plaintiffs are their employees: “There is no question that, if Plaintiffs
are/were employees, then the Defendants clearly satisfy the definition of a motor private
carrier.” Defs.’ Motion at 25. Given the undisputed facts, I agree with Defendants that,
once Plaintiffs are understood to be employees of any one of the Defendants, the issue
resolves in Defendants’ favor as a matter of law.
a. Whether Plaintiffs’ transportation activity falls within the Secretary’s
authority?
Transportation activity comes within the Secretary’s “general jurisdiction” when it
involves the carriage of property, in commercial vehicles, in interstate commerce. 49
U.S.C. §§ 13102(15)(A), 13501. Although Plaintiffs concede that their delivery trucks
qualify as commercial vehicles, Plaintiffs argue they do not carry property in interstate
commerce because their routes are entirely intrastate.
The undisputed facts demonstrate that Plaintiffs carry out the final leg of the
transportation of interstate products shipped to fulfill the existing orders of readily
ascertainable customers. Consequently, Plaintiffs are engaged in interstate commerce
notwithstanding the brief stopover of the products in warehouses along the interstate route.
20
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 21 of 33
PageID #: 7742
A solid bulwark of precedent and regulatory authority support this conclusion. See, e.g.,
Walling v. Jacksonville Paper Co., 317 U.S. 564, 569 (1943); Timberline, 925 F.3d at 850
(6th Cir. 2019); Collins v. Heritage Wine Cellars, Ltd., 589 F.3d 895, 900 (7th Cir. 2009);
29 C.F.R. § 782.7(b) (“Interstate commerce requirements of exemption”); U.S. Dep’t of
Labor, Field Operations Handbook § 24d02(b) (Rev. 690, May 23, 2016) (“Handbook”).
As explained in the Department of Labor regulation and the Handbook, intrastate
transportation of property will empower the Secretary to regulate the shipper as a carrier,
if the shipper has a “fixed and persistent transportation intent,” Handbook § 24d02(b), to
cause the property in question to undergo “a ‘practical continuity of movement’ across
State lines from the point of origin to the point of destination,” 29 C.F.R. § 782.7(b)(1),
even if the shipper only employs persons to carry out an intrastate leg of the transportation
route. Thus, highway transportation is within the Secretary’s authority “where the vehicles
do not actually cross State lines but operate solely within a single State, if what is being
transported is actually moving in interstate commerce …; the fact that other carriers
transport it out of or into the State is not material.” 29 C.F.R. § 782.7(b)(1).
The Department’s Handbook uses the shipment of bakery products as an example
of when “the shipper is also the importer,” making its local delivery routes subject to the
Secretary’s general jurisdiction:
In some situations the shipper is also the importer, as would be the case where
a manufacturer, such as a bakery, produces goods in one state and moves
them through his distribution point in another state to his customers in that
state [and] [t]he employer, as the shipper, knows at the time of the shipment
what he intends to do with the goods after they reach his out-of-state
distribution point. If, as would normally be the case, there is a practical
continuity of movement of the out-of-state goods through the firm’s
21
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 22 of 33
PageID #: 7743
distribution point to its customers, this is sufficient to establish a “fixed and
persisting transportation intent” beyond the distribution point.
“Transportation of commodities from terminal storage,” U.S. Dep’t of Labor, Field
Operations Handbook § 24d02(b) (Rev. 690, May 23, 2016), available at
https://www.dol.gov/whd/FOH/FOH_Ch24.pdf.
Where the “shipper” has this fixed and persisting intent to transport products
interstate to reach identifiable customers in fulfillment of existing orders, as is the case here
based on undisputed evidence, the shipper’s employees who drive intrastate legs in
commercial vehicles haul in the Secretary’s domain. Indeed, the rule is broad enough to
cover even shipments designed merely to meet “projections of customer demand that have
some factual basis.” Ehrlich v. Rich Prod. Corp., 767 F. App’x 845, 849 (11th Cir. 2019)
(citing Motor Carrier Interstate Transportation – From Out-of-State Through Warehouses
to Points in Same State, 57 Fed. Reg. 19812-01 (May 2, 1992)).
The fact that Defendants tricked out their interstate carriage system by breaking it
into multiple component parts overseen by different affiliated entities does not aid
Plaintiffs. Whether Plaintiffs are employed by one defendant, two defendants, or all three
defendants, the fact remains that Plaintiffs are employed by one or more shippers to carry
out the final leg of an interstate transportation program. See, e.g., Foreman v. Five Star
Food Serv., 950 F. Supp. 2d 958, 968-70 (M.D. Tenn. 2013) (“[C]ircumstances matter,
including whether the original shipping entity or entities controlled, either directly or
through affiliates, the ultimate intrastate destination of the products during and after the
22
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 23 of 33
PageID #: 7744
products crossed state lines.”) 10; Musarra v. Digital Dish, Inc., 454 F. Supp. 2d 692, 706
(S.D. Ohio 2006) (technicians for local DISH Network subsidiary were covered by the
MCA, where DISH Network shipped goods interstate to its subsidiary’s distribution center
and subsidiary’s technicians shipped goods to DISH Network’s designated customers).
In Bilyou v. Dutchess Beer Distribrutors, Inc., 300 F.3d 217 (2d Cir. 2002), the
Second Circuit affirmed a grant of summary judgment to the employer of a plaintiff who
transported empty bottles and containers entirely within the State of New York because the
employee’s transportation activity “was merely one leg of a route to an out-of-state
destination” overseen by his employer’s parent organization. Id. at 224 – 25. The circuit
opined that the presence of distinct entities overseeing different legs of an interstate journey
could make a difference where those entities operate “at arm’s length,” but it could not see
how the Secretary’s jurisdiction could be thwarted where the entities are “interrelated” with
“common owners [who] share the same property[] and arrange with one another [to]
allocate[e] the benefits and burdens of handling” the property being carried. Id. at 225.
The logic of this rule is sound. The general jurisdiction of the Secretary of Transportation
over motor private carriage cannot depend on the manner in which commercial enterprises
divvy up portions of an interstate route among subsidiaries and affiliates.
In this case, not only is it undisputed that Defendants are affiliated entities, but it is
also Plaintiffs contention that each Defendant employs Plaintiffs. Indeed, the success of
10
In Foreman, District Judge Trauger initially denied the defendant’s motion for summary judgment, but
granted the defendant’s motion for reconsideration and accepted supplemental evidence offered on the
defendant’s MCA exemption defense, ultimately granting summary judgment. See 2013 U.S. Dist. Lexis
150182.
23
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 24 of 33
PageID #: 7745
Plaintiffs’ FLSA claim depends on Plaintiffs’ contention that they will be able to prove at
trial that they are the common law employees of at least one of the Defendants.
Unfortunately for them, such a finding would bolt down the wheels of the interstate
commerce component of the MCA exemption because it would mean Plaintiffs are
employed by a shipper to complete the intrastate leg of the interstate shipment of property
bound for specific customers in fulfillment of existing orders.
b. Who is the owner, lessee or bailee of the property?
Congress has defined a motor private carrier as a “person” who transports property
interstate in the capacity of owner, lessee, or bailee, with the intent to sell, lease, rent, or
bail the property, or simply to “further a commercial enterprise.” 49 U.S.C. § 13102(15).
Pointing to the terms of the Distributor Agreement, specifically that portion stating they
purchase and own the products they deliver, 11 Plaintiffs argue there is a genuine issue of
material fact whether Defendants can prove they are owners, lessees, or bailees of the
interstate bakery products after Plaintiffs take possession of the products.
I am not persuaded that the purported allocation of ownership to Plaintiffs is the
silver bullet Plaintiffs think it is. Nor am I persuaded that the question is one for a jury to
11
For example, the sample Distributor Agreement reads:
4.1 Products and Authorized Products will be sold to DISTRIBUTOR at such terms and
prices as established by COMPANY from time to time. Title and risk of loss shall pass
to DISTRIBUTOR upon delivery to DISTRIBUTOR.
ECF No. 225-2 at 6. Defendants’ representative Gilbert Brock, a Vice President of Sales for Lepage
Bakeries, confirmed this relationship in his declaration. Brock Decl. ¶ 8 (ECF No. 229-4 at 5).
24
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 25 of 33
PageID #: 7746
resolve. The question is one of law, and the answer puts the hammer down on the MCA
exemption.
In the first place, even if I embrace the idea that Plaintiffs own the property once
they acquire it, the fact remains that they placed orders for the shipment of property in
interstate commerce, knowing that upon arrival they would pick up the property and carry
it to fulfill the final leg of its interstate travel. That alone would make Plaintiffs the owners
of products carried in fulfillment of a shipper’s interstate carriage program, which would
bring Plaintiffs within the Secretary’s authority to regulate.
And when I further accept that Plaintiffs are the common law employees of
Defendants, a finding that is essential to their overtime claims, then perforce they are
employed by one or more entities that share an ownership interest in the property being
carried to market. To rule otherwise would mean that an employer of a delivery driver
could erect a roadblock to the Secretary’s authority by the simple expedient of purporting
to transfer title of property to employees while the employees carry the property in a
commercial vehicle. 12 The illogic of that proposition is plain. The Secretary’s jurisdiction
over private carriers is not susceptible to manipulation by such artificial devices.
In any event, Plaintiffs asserted at oral argument that the notion of their ownership
of the property is fantastical. When I asked counsel what I should make of the fact that the
12
The DOL Handbook reads: “The fact that an employee of a private carrier may use his own [commercial]
vehicle in transporting property in interstate commerce does not deny an otherwise applicable exemption.”
Handbook § 24a05(d). This is a reasonable interpretation of the scope of the Secretary’s authority.
25
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 26 of 33
PageID #: 7747
distributor agreements purport to transfer ownership to Plaintiffs, counsel responded that
the contractual buying and selling described in the Agreements is a fiction.
THE COURT: So that’s a – that’s a point that’s provided some confusion to
me. So let me ask you if you can clarify. Can plaintiffs simultaneously be
employees and own the baked goods they transport?
MS. ELLINGSTAD: I don’t think so.
THE COURT: All right. And the employment contract indicates plaintiffs
buy the products from the defendants before they are transported and sold to
third-party customers. Does the assumption that plaintiffs are employees
undercut that relationship?
MS. ELLINGSTAD: Yes. I mean, we – we don’t believe this – you know,
we believe this is just a sham method of, you know, quote, unquote, buying
and selling and that they – they don’t … buy it.
Transcript of Proceedings at 39 (ECF No. 261).
At the end of the line, assuming Plaintiffs are employees of one or more of the
Defendants, they are, necessarily, employed by an entity that shares with its affiliates an
ownership interest in the property being transported in interstate commerce. This means
the activity is subject to the Secretary’s jurisdiction, unless Plaintiffs can prove an
exception to the MCA exemption.
2.
The TCA Exception
Although Defendants have demonstrated application of the MCA exemption on
undisputed evidence, Plaintiffs may still avail themselves of relief under the FLSA to the
extent they can prove that a portion of their interstate transportation activity takes place in
personals vehicle that weigh 10,000 pounds or less.
Through the Technical Corrections Act (“TCA”), Congress rejiggered the
relationship between the Department of Labor and the Department of Transportation in the
26
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 27 of 33
PageID #: 7748
following terms: “Section 7 of the Fair Labor Standards Act of 1938 … shall apply to a
covered employee notwithstanding section 13(b)(1) of the Act.” Safe, Accountable,
Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), Pub.
L. No. 110-244, § 306(a), 122 Stat. 1572, 1621 (2008). A “covered employee” is an
individual:
(1) who is employed by a motor carrier or private motor carrier …
(2) whose work, in whole or in part, is defined
(A) as that of a driver … and
(B) as affecting the safety of operation of motor vehicles weighing
10,000 pounds or less in transportation on public highways in
interstate or foreign commerce … and
(3) who performs duties on motor vehicles weighing 10,000 pounds or less.
Id.
In effect, the TCA exception provides that “an employee need only work [in]
[lighter] vehicles ‘in part’ to qualify for overtime compensation, thereby placing drivers of
mixed fleets within the FLSA’s requirements.” Schilling v. Schmidt Baking Co., Inc., 876
F.3d 596, 601 (4th Cir. 2017). See also McMaster v. E. Armored Servs., Inc., 780 F.3d
167, 170 – 172 (3d Cir. 2015). 13 The employee’s work in lighter vehicles, however, must
still involve interstate transportation. SAFETEA-LU, Pub. L. No. 110-244, § 306(c)(2)(B)
(work must “affect[] the safety of operation of motor vehicles weighing 10,000 pounds or
less in transportation on public highways in interstate or foreign commerce”). See also
13
For a discussion of the treatment courts have given to the mixed fleet scenario see, e.g., Twiddy v. Alfred
Nickles Bakery, Inc., No. 5:14-cv-2053, 2017 WL 1199167, at *4 – 6 (N.D. Ohio Mar. 31, 2017) (collecting
cases).
27
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 28 of 33
PageID #: 7749
Garcia v. W. Waste Svcs., Inc., 969 F. Supp. 2d 1252 (D. Id. 2013) (finding that the plaintiff
did not transport property across state lines when using the personal vehicle and therefore
was not a TCA “covered employee”).
The First Circuit has not determined how much time an employee must spend
operating a vehicle weighing 10,000 pounds or less to maintain entitlement to FLSA
overtime under the TCA exception. The Department of Labor has offered its interpretation
that drivers are not exempt from overtime in any work week that they perform “safety
affecting duties on a motor vehicle that weighs 10,000 pounds or less.” Department of
Labor, Field Assistance Bulletin No. 2010-2 (Nov. 10, 2010). Based on the bulletin, if an
employee spends any amount of time during a regular work week on a vehicle weighing
less than 10,000 pounds and is otherwise a covered employee, she or he is entitled to
overtime under the TCA exception for that week.
The First Circuit also has not addressed which party has the burden of proving
application of the TCA exception to the MCA exemption. I conclude it is most reasonable
to place the burden on Plaintiffs to show that the duties they perform in their personal
vehicles are duties affecting interstate commerce, meaning the interstate transportation of
property in furtherance of a commercial enterprise. Carley v. Crest Pumping Techs., LLC,
890 F.3d 575, 580 (5th Cir. 2018).
The record supports the finding that at least some of the members of the FLSA class
have on occasion driven personal vehicles to deliver interstate products to their customers.
In particular, it appears that pull up or recall duties can involve the delivery of products to
restock customers’ shelves. Based on this evidence, the finder of fact could conclude,
28
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 29 of 33
PageID #: 7750
through an exercise of inferential reasoning, that there are some individuals who will, in
some work weeks, use personal vehicles to deliver in-bound products 14 that have traveled
in interstate commerce, at that in doing so meet “projections of customer demand that have
some factual basis.” Ehrlich, 767 F. App’x 845, 849 (11th Cir. 2019). Consequently, I am
not persuaded by Defendants that the record calls for the entry of class-wide summary
judgment based on the MCA exemption. However, the record does suggest that summary
judgment may well be warranted as to several members of the class, and that proof of the
TCA exception is likely to be highly individualized. For example, the record indicates that
deliveries in personal vehicles are rare for some distributors (perhaps most – the parties’
summary judgment statements and citations do not offer deep insight). This may be due
to the fact, attested to by opt-in Plaintiff Curran, that distributors can keep extra product in
the back of some larger customers’ stores, which they can access during pull ups or recalls.
On January 15, 2019, I issued a Decision and Order (ECF No. 202) that denied
Defendants’ motion to decertify the FLSA collective action Judge Woodcock certified in
his Order of January 20, 2017 (ECF No. 81). As of that writing, my consideration of the
certification question was focused primarily on whether the issue of employee status versus
independent contractor status was amenable to class-wide proof using representative
evidence. I concluded that it was, but I had not yet wrestled with the dispositive issues
surrounding application of the MCA exemption and the TCA exception. Having now done
14
Sometimes, individuals will also use personal vehicles to take away expired product. I am not persuaded
that the act of carrying stale product away from a store entails transportation of property in interstate
commerce. After all, there is no evidence in the record that the removal of expired product involves
transportation out of Maine. Rather, the expired product returns to the local warehouse and may find its
way to food banks or similar local outlets.
29
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 30 of 33
PageID #: 7751
so, I am concerned that application of the TCA exception requires individualized proof,
and that a significant number of individuals who have opted-in to the collective action may
not have recourse to the TCA exception at all, or else, having recourse to it, will have used
personal vehicles only sporadically, not as part of their regular weekly routine. Even lead
Plaintiff Noll’s evidence calls into question whether he can take advantage of the weekby-week TCA exception.
“[A]fter a certification order is entered, the judge remains free to modify it in light
of subsequent developments in the litigation.” General Tel. Co. of SW v. Falcon, 457 U.S.
147, 160 (1982). For reasons set forth above, although I am not persuaded that it would be
appropriate to enter a judgment disposing of the FLSA overtime claims on a class-wide
basis, I conclude it is necessary to revisit certification of the FLSA collective given the
mixed bag of evidence concerning the TCA exception.
C.
Plaintiffs’ “Penal” Claims
Defendants also move for judgment as a matter of law on Count III and part of Count
IV. In Count III, Plaintiffs claim Defendants misclassified them as independent contractors
under 26 M.R.S. § 591-A and ask for “all statutory and equitable remedies to which they
are entitled.” 15 Complaint ¶ 72. One paragraph in Count IV alleges that Defendants failed
to keep and preserve accurate time records as required by 26 M.R.S. § 622. Id. ¶ 79.
Maine law presumes that, absent express legislative intent to the contrary, statutes
imposing monetary penalties do not simultaneously convey a private right of action. See
In re Wage Payment Litig., 2000 ME 162, ¶ 7, 759 A.2d 217, 222 (Me. 2000). Starting
15
Plaintiffs also cite 26 M.R.S. § 1043(11)(E) in the Complaint, but that provision merely provides a
statutory definition, not a cause of action.
30
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 31 of 33
PageID #: 7752
with Count III, section 591-A states an employer that intentionally or knowingly
misclassifies an employee as an independent contractor commits a civil violation for which
a fine of not less than $2,000 and not more than $10,000 per violation may be adjudged.
26 M.R.S. § 591-A. Plaintiff concedes that “section 591-A does not provide for a private
right of action.” Pls.’s Opposition at 39. Therefore, I dismiss Count III because Plaintiffs
have failed to state a claim upon which relief can be granted. See Wawenock, LLC v. Dep’t
of Transp., 2018 ME 83, ¶ 27, 187 A.3d 609, 621 (holding judgment on the pleadings was
appropriate where there was no private right of action under Maine law).
Defendants’ reliance on section 622 in Count IV is likewise barred because the law
does not give Plaintiffs a private right of action. Section 622 provides for a forfeiture of
$100 to $500 for each violation, but it does not convey a private right of action to Plaintiffs.
It “is the type of civil violation that is solely enforceable by the Attorney General unless
otherwise specified.” In re Wage Payment Litig., 759 A.2d 217, 222 (Me. 2000); see also
In re Wal-Mart Wage & Hour Employment Practices Litig., 490 F. Supp. 2d 1091, 1131
(D. Nev. 2007) (finding that, “[p]ursuant to § 626–A, only the Maine Department of Labor
may pursue civil forfeiture penalties against an employer for violating § 622.”). Because
section 622 does not confer a private right of action on Plaintiffs, I likewise grant judgment
31
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 32 of 33
PageID #: 7753
in favor of Defendants to the extent Plaintiffs were seeking any monetary relief under
section 622 in Count IV.
D.
Remaining Issues
I resolve the remaining issues in summary fashion:
The preemption challenge based on the Federal Aviation Administration
Authorization Act of 1994 is a non-starter for the reasons Judge Torresen set forth in
Venegas v. Global Aircraft Service, Inc., No. 2:14-CV-249-NT, 2016 WL 5349723, at *18
(D. Me. Sept. 23, 2016).
Mr. Degen’s participation in this matter is not foreclosed for the reasons Magistrate
Judge Cohen set forth in his recommended decision in Goode v. Signet Electronic Systems,
Inc., No. 2:06-CV-65, 2006 WL 1636066, at *4 (D. Me. June 8, 2006).
Mr. Temm’s participation in this matter is not foreclosed by judicial estoppel
because the record does not demonstrate he manipulated or misled the courts.
It is not appropriate, at this time, on this record, to declare that Plaintiffs are entitled
to the three-year FLSA statute of limitations or liquidated damages.
CONCLUSION
Plaintiffs’ Motion for Partial Summary Judgment (ECF No. 230) is DENIED.
Defendants’ Motion for Partial Summary Judgment (ECF No. 224) is GRANTED IN
PART and DENIED IN PART.
Defendants’ request for judgment as to the state law
claims asserted in Counts II, III and IV is GRANTED. More specifically, Count III and
that portion of Count IV that requests relief pursuant to 26 M.R.S. § 622 are DISMISSED
WITH PREJUDICE. As to the remainder of Count IV, Defendants are granted summary
32
Case 1:15-cv-00493-LEW Document 262 Filed 01/29/20 Page 33 of 33
PageID #: 7754
judgment pursuant to the Maine outside sales exemption. Defendants’ request for summary
judgment as to the FLSA collective claim in Count I is DENIED. In addition, the federal
declaratory judgment claim in Count II will remain, pending resolution of Count I.
Defendants are hereby granted leave to file a motion to decertify the FLSA
collective action, but only as regards the TCA exception to the MCA exemption. The Court
will establish a schedule for briefing the motion in a forthcoming telephone conference.
SO ORDERED.
Dated this 29th day of January, 2020.
/s/ Lance E. Walker
UNITED STATES DISTRICT JUDGE
33
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?