Pelayo v. Platinum Limousine Servs., Inc.

ARSENIO PELAYO, FRANCIS MANANKIL, and BRANDON BORELIZ,individually and on behalf of all others similarly situated, Plaintiffs, v. PLATINUM LIMOUSINE SERVICES, INC.,KURT TSUNEYOSHI, et al. Defendants.

CIVIL NO. 15-00023 DKW-BMK

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HAWAII

December 30, 2015

ORDER (1) DENYING PLAINTIFFS' MOTION TO CONDITIONALLY CERTIFY A COLLECTIVE AND FOR AN ORDER OF NOTICE TO THE CLASS; AND (2) GRANTING DEFENDANTS' MOTION TO COMPEL ARBITRATION

INTRODUCTION

Plaintiffs, former employees of Defendant Platinum Limousine Services, allege that Platinum failed to pay wages and expenses required by federal and state law. They move under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §216(b), and Section 388-11(a) of the Hawaii Revised Statutes ("HRS") for an order conditionally certifying a collective and authorizing facilitated notice to all persons employed or formerly employed by Platinum within the three years preceding this action, who did not receive full compensation under the FLSA. Plaintiffs also request to serve as designated representatives pursuant to HRS §388-11(a) and for an order authorizing facilitated notice to all persons employed or formerly employed by Platinum within the six years preceding the complaint in this action, whose earned wages were retained in violation of Section 388-6. Because the members of the proposed collective are not sufficiently similarly situated, Plaintiffs' motion is DENIED, as set forth below.

Platinum, for its part, seeks to compel arbitration with some, but not all, Plaintiffs. Because there is no dispute that several former employees signed written agreements that subject the claims asserted here to arbitration, and because the issue of arbitrability is for the arbitrator to decide, Platinum's motion to compel arbitration is GRANTED.

The Court will hold the parties' pending cross-motions for partial summary judgment in abeyance until a further settlement conference, directed by a concurrently filed Entering Order, is held before the Magistrate Judge.

BACKGROUND

I. Allegations in the Second Amended Complaint

According to Plaintiffs, Platinum employed each of them as limousine drivers. Platinum employed Arsenio Pelayo from January 2012 until November 2013, Francis Manankil from approximately 2006 until January 2015, and Brandon Boreliz for approximately one month in 2012. Complaint ¶¶ 6-8.

As limousine drivers, Plaintiffs were paid by the hour, not by the job. They allege that Platinum "at least implicitly promised" that it would "comply with applicable law in paying wages and reimbursing expenses," and that "Plaintiffs relied on that implicit agreement and continued to provide their services, i.e., transporting Defendants' customers as directed by Defendants and/or related services, to the benefit of Defendants and in reliance on that implicit agreement." Complaint ¶ 29. Plaintiffs allege they were not paid the amounts required by law or "as at least implicitly promised by Defendants." Id.

According to Plaintiffs, Defendant Kurt Tsuneyoshi owned and operated Platinum, and created and implemented "company-wide policies and procedures," including "refusing to pay Plaintiffs and those similarly situated" -

required overtime wages; for cleaning Platinum vehicles; for driving from one customer drop-off to the next customer pickup; for driving from the last customer drop-off to Platinum;for taking Platinum vehicles to service facilities for gas and/or maintenance; and/or for expenses incurred as required by Defendants. These policies were communicated to Platinum employees orally by Defendant Tsuneyoshi and/or Platinum's manager "Fred", who together supervised Plaintiffs and collective members.

Complaint ¶ 24.

Plaintiffs allege they were not paid as required by law when they were required to report early for duty at Platinum's facility in order to clean Platinum's vehicles before departing to pick up their first customer of the day. These and other mandatory tasks and meetings could take several hours each day, but Plaintiffs "were not paid any wages or otherwise compensated for this required work." Complaint ¶ 30. Thereafter, once the first customer was transported to his or her destination, Plaintiffs were required to report to the location of the next scheduled customer pickup, and then wait for the customer, sometimes for several hours. This process of waiting for the next scheduled customer pickup continued throughout the work day, and Plaintiffs allege they were not compensated for this waiting time, even though they were not completely relieved of their duties and could not effectively use the time for personal purposes. Complaint ¶¶ 31-32.

Plaintiffs allege that, after dropping off their last customer each day, drivers were expected to deliver the Platinum vehicles back to the Platinum facility and toclean the vehicles. These tasks could also take several hours, but Plaintiffs were not paid any wages or otherwise compensated for this required work. Complaint ¶¶ 33. In this way, limousine drivers were denied minimum, regular and overtime wages. Complaint ¶ 34. Plaintiffs were also not paid for time spent attending required monthly meetings held by Platinum supervisors. Complaint ¶ 35. Overtime wages were allegedly not paid to Plaintiffs, who were regularly required to work over forty hours in any given workweek. Platinum began paying overtime to employees only in 2014 in response to a Department of Labor investigation of Platinum's labor practices. Complaint ¶ 37.

In addition to the non-payment of wages, Plaintiffs allege that certain expenses were not reimbursed by Platinum. For example, Plaintiffs allege that Defendants required limousine drivers to provide bottled water to customers without reimbursement. Tsuneyoshi purchased cases of water and required Plaintiffs to either purchase the water at a higher price from him or supply their own water for Platinum's customers. Boreliz also alleges that he was not reimbursed for a gas expense. Complaint ¶ 35.

Plaintiffs allege that, during relevant time periods, Platinum had a "consistent policy and practice" of:

a. Willfully failing to pay time and a half overtime wages for hours worked over forty (40) per 7-day work week in violation of the FLSA and Hawaii Revised Statutes, sections 388-2, and/or 388-6;

b. Willfully failing to pay minimum, regular or overtime wages for hours worked while driving Platinum vehicles to their first job of the workday and/or returning from the last assignment of the workday, in violation of the FLSA and the Hawaii Revised Statutes, sections 388-2, and/or 388-6;

c. Willfully failing to pay minimum, regular or overtime wages for hours worked between the transportation of Platinum's customers in violation of the FLSA and the Hawaii Revised Statutes, sections 388-2, and/or 388-6;

d. Willfully failing to pay minimum, regular or overtime wages for hours worked cleaning Platinum vehicles, activities required by Defendant Platinum, in violation of the FLSA and the Hawaii Revised Statutes, sections 388-2, and/or 388-6;

e. Willfully failing to pay minimum, regular or overtime wages for hours worked participating in required meetings, in violation of the FLSA and the Hawaii Revised Statutes, sections 388-2, and/or 388-6;

f. Willfully causing employees to incur expenses on Platinum's behalf solely for the benefit of Platinum and willfully failing to reimburse those expenses in violation of the FLSA (29 C.F.R. § 778.217) and the Hawaii Revised Statutes, sections 388-2, and/or 388-6;

g. Willfully converting employees' wages and/or unreimbursed expenses for their own use; andh. Willfully causing and/or failing to prevent the unlawful labor conditions despite having the power to do so.

Complaint ¶ 18.

The following causes of action remain: (1) violation of HRS § 388-6 for failure to timely pay wages due (Count 1); (2) unjust enrichment (Count 3); and (3) violations of the FLSA, 29 U.S.C. §§ 201 et seq. (Count 4).

II. Motions Before the Court

Pelayo, Manankil, Boreliz, and proposed class member plaintiffs seek certification of a collective action pursuant to the FLSA and HRS Chapter 388. Their proposed collective is composed of between twenty (20) and fifty (50) current and former employees of Platinum in the State of Hawaii.

Under the FLSA, the collective includes:

All non-exempt employees of Defendant Platinum who within the three (3) years preceding the filing of the Complaint in this action: (a) actually worked more than 40 hours in any given workweek and did not receive time and a half pay for overtime hours; (b) received less than $7.25 average hourly rate for work performed during any given workweek.

Under the HRS, the class is defined as:

All persons employed by Defendant Platinum within the six (6) years preceding the filing of the Complaint in this action and who did not receive timely compensation for work actually performed, including but not limited to thecleaning of Defendants' vehicles and returning to Platinum's facilities after dropping off the last customer of the day.

Mem. in Supp. at 9-10.

In support of their motion, Plaintiffs submitted the declarations of limousine drivers Paul Arakaki, Isaac Goya, Jonathan DeMotta and Byron Cockett,¹ in addition to the previously submitted declarations of Manankil and Pelayo attached to the complaint. Accordingly to Plaintiffs, each was required to perform the following work without receiving any minimum, straight or overtime pay: cleaning vehicles, driving to or from customer pickups, waiting for the next customer pickup, running company errands, gassing vehicles, and attending company meetings. See Arakaki Decl. ¶¶ 4-10; Goya Decl. ¶¶ 4-11; DeMotta Decl. ¶¶ 3-11; Cockett Decl. ¶¶ 6-11. They were also required to incur expenses that were not reimbursed. Complaint ¶ 37. Plaintiffs also attach to Arakaki's Declaration an unsigned and undated "Contract Agreement," purportedly drafted by Platinum, which Plaintiffs contend memorializes a...