Williams v. King Bee Delivery, LLC

199 F.Supp.3d 1175

Craig WILLIAMS, On behalf of himself & all others similarly situated, et al., Plaintiffs,

v.KING BEE DELIVERY, LLC, and Bee Line Courier Services, Inc., Defendants.

Action No. 5:15-cv-306-JMH

United States District Court, E.D. Kentucky, Central Division at Lexington .

Signed August 8, 2016

Benjamin J. Weber, Harold L. Lichten, Lichten & Liss-Riordan, PC, Boston, MA, Trent Taylor, Barkan Meizlish Handelman Goodin Derose Wentz, Columbus, OH, for Plaintiffs.

Keith Moorman, Frost Brown Todd LLC, Lexington, KY, Kyle Donald Johnson, Robert C. Webb, Frost Brown Todd LLC, Louisville, KY, for Defendants.

MEMORANDUM OPINION AND ORDER

Joseph M. Hood, Senior United States District Judge

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 retail merchandise to Defendants' customers' businesses. Plaintiffs claim Defendants have 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. Standard of Review

A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of the plaintiff's complaint. 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 is plausible on its face." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (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. Miri 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 has also recognized that businesses are liable to workers for overtime wages even if the company has "put ... an ‘independent contractor’ label" on a worker whose duties are that of an employee. Keller , 781 F.3d at 806–07 (quoting Rutherford Food Corp. v. McComb , 331 U.S. 722, 729, 67 S.Ct. 1473, 91 L.Ed. 1772 (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.

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 a "sheer possibility that a defendant acted unlawfully." Iqbal , 556 U.S. at 679, 129 S.Ct. 1937. 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. 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 in the morning to the times that deliveries had to be made. 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. See id. at 808.

Based on the foregoing, 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 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...