Baouch v. Werner Enterprises, Inc. et al

Filing 73

MEMORANDUM AND ORDER granting the Plaintiff's 62 Motion to Compel. No later than January 30, 2014, defendants shall produce their Formal Protest to the IRS in response to the IRS's November, 2012, Notice of Proposed Adjustment for tax years 2009 and 2010 (and any exhibits or documents attached thereto). Ordered by Senior Judge Lyle E. Strom. (MKR)

IN THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF NEBRASKA
YASSINE BAOUCH, et al.,

)
)
Plaintiffs,
)
)
v.
)
)
WERNER ENTERPRISES, INC.,
)
d/b/a WERNER TRUCKING, and
)
DRIVERS MANAGEMENT, LLC,
)
)
Defendants.
)
______________________________)

8:12CV408

MEMORANDUM AND ORDER

This matter is before the Court on the motion of
plaintiffs to compel production of documents (Filing No. 62).
Plaintiffs seek tax documents in which Werner took the position
that certain payments to its employees were not wages.
Defendants admit that they took that position in regard to the
tax status of the payments but argue that whether the payments
were wages for tax purposes is irrelevant to whether the payments
are wages under the Fair Labor Standards Act and Nebraska’s
minimum wage and wage collection statutes.

In an earlier order,

this Court held that plaintiffs could not subpoena these
documents from the IRS.

Plaintiffs now seek to compel production

from the defendants themselves.
should be granted.

The Court finds the motion

I. Relevance
Defendants urge the Court to find an analogy between
the present case and the case of Logan v. Rocky Mountain Rental,
3 Neb. App. 173, 524 N.W.2d 816 (1994).

In Logan, the Nebraska

Court of Appeals rejected the argument that because certain
payments to an employee were characterized as reimbursements for
purposes of federal tax law, the payments must be characterized
as reimbursements -- not wages -- for purposes of Nebraska’s
worker’s compensation statute.
524 N.W.2d at 819-20.

Logan, 3 Neb. App. 173 at 177-78,

Defendants frame the present issue as

whether an employer’s characterization of certain payments to an
employee as reimbursements for the purposes of federal tax law is
relevant to their characterization as reimbursements -- or wages
-- under the FLSA.
However, plaintiffs have not requested defendants’ tax
documents as evidence of defendants’ tax treatment of the
payments made to defendants’ employees.

As Logan recognizes,

differing statutory definitions can lead to different
characterizations under separate statutes.

Recognizing that the

issues are similar enough that defendants may have made
statements under oath regarding the nature and purpose of the
payments, plaintiffs seek not evidence of the tax treatment but
the potentially binding statements defendants made to the IRS in
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arguing that -- for tax purposes -- the payments were
reimbursements.

Though the standard for determining whether the

payments were a “wage” may be different under the statutes, the
reimbursement concept is similar enough to make production of the
documents highly likely to lead to the discovery of admissible
evidence.
II. Confidentiality - Heightened Burden
“[M]any courts require a heightened showing of
relevance and necessity before ordering the disclosure of such
information.”

Flores v. Tyson Foods, Inc., 4:12CV3089, 2013 WL

1091044 at *5 (D. Neb. Mar. 15, 2013) (quoting E-P Int’l
Distribution, Inc. v. A & A Drug Co., 2009 WL 1442534 at *5 (D.
Neb. May 21, 2009)).

Flores and the associated cases requiring a

heightened standard address requests for the production of tax
returns.

Id.

The cases do not indicate whether “such

information” includes associated tax filings such as those at
issue in the present case.

The Court finds no reason to decide

that issue today because, even if such a heightened standard
applied, it would be satisfied here.
To determine whether the heightened showing of
relevance is satisfied, “most courts apply a two-part test.”

Id.

The first part of the test “asks whether the tax [documents] are
relevant.”

Id.

As discussed above, the Court is satisfied that
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the documents at issue here contain relevant information as
defined by Federal Rule of Civil Procedure 26.

Second, the party

objecting to production must “show the information in the tax
[documents] is more readily obtainable elsewhere.”

Id. (quoting

E.E.O.C. v. Ceridian Corp., 610 F.Supp.2d 995, 996 (D. Minn.
2008).

The information at issue here is the potentially binding

statements by defendant to the IRS.

It is only the official

nature of these documents that makes the statements they contain
binding.

Therefore, by definition, the evidence cannot be

obtained elsewhere.

Thus, even if the heightened standard of

relevance applies, it is satisfied.

Accordingly,

IT IS ORDERED:
1) Plaintiffs’ motion to compel is granted.
2) No later than January 30, 2014, defendants shall
produce their Formal Protest to the IRS in response to the IRS’s
November, 2012, Notice of Proposed Adjustment for tax years 2009
and 2010 (and any exhibits or documents attached thereto).
DATED this 7th day of January, 2014.
BY THE COURT:
/s/ Lyle E. Strom
____________________________
LYLE E. STROM, Senior Judge
United States District Court

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