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Foschi v. Pennella

United States District Court, D. Arizona

December 9, 2014

Daniel J. Foschi, Plaintiff,
Dennis M. Pennella, et al., Defendants.


NEIL V. WAKE, District Judge.

Before the Court are Plaintiff's Motion to Proceed Conditionally as a Collective and Class Action (Doc. 22), Defendants' Response (Doc. 28) and Plaintiff's Reply (Doc. 29). Plaintiff asks the Court to certify a collective action brought under the Fair Labor Standards Act ("FLSA"), alleging Defendants paid Plaintiff and fellow class members less than minimum wage and failed to pay increased wages for overtime work. In addition, Plaintiff seeks certification of a Federal Rule of Civil Procedure 23(b) class of workers to whom Defendant failed to provide minimum wage, as required by Arizona state law. For the reasons that follow, Plaintiff's Motion will be granted in part and denied in part at this time.


Since October 2004, Plaintiff has worked as a delivery driver and dispatcher for Defendant Drivers Solutions, which describes itself as "a complete delivery service company that specializes in automotive parts distribution and comprehensive logistics." Doc. 1-1 at 8 (quoting Defendant's website). According to Defendant, it dispatches its workers to auto dealerships, including dozens in the metropolitan Phoenix area, where they often negotiate the terms of their client relationships directly with the dealerships. Doc. 28 at 4. Defendant's contracts with its workers, who have numbered up to 500 since 2007, include "monthly contracts, daily contracts, special-day-rate contracts (usually for weekends) and per-delivery or Hot Shots contracts." Id. at 4-5. Plaintiff's responsibilities as a driver include participating in morning roll call with a supervisor, delivering parts from the dealership warehouse to vendors, transporting car parts from vendors or other dealerships to the warehouse, collecting payment from vendors and distributing parts among warehouse bins. Doc. 1-1 at 9. As a dispatcher, Plaintiff creates routes for other drivers, drafts manifests and distributes them to drivers, supervises a group of eight to ten drivers, and requests transfers for unsatisfactory drivers. Id. at 10.

Plaintiff alleges, "[u]pon information and belief, " that these duties are similar to the responsibilities of other drivers and dispatchers who work for Defendant. Id. Plaintiff further alleges that, in addition to imposing a $25 penalty for calling in sick, Defendant deducts $120 if he or "similarly situated drivers" miss work or leave early. Id. at 11. In addition, Plaintiff-and, "[u]pon information and belief, other drivers"-must pay Defendant $20 semi-monthly to use a two-way radio, as well as $22 for each work shirt, which they are required to wear. Id. Plaintiff and other drivers are allegedly personally responsible for purchasing "items required by the company such as: a telephone, mapbook, car insurance, car maintenance, and straps/bungee cords." Id. Finally, Defendant allegedly takes "standard paycheck deductions" for contractor insurance coverage, advances, and interest charged on advances. Id. at 10-11. The cumulative effect of these practices, according to Plaintiff, is that his gross pay usually falls below the minimum wage. Id. at 12.

Separately, Plaintiff alleges that since January 2007, he has regularly worked between 45 and 53 hours per week, including on about 80 percent of Saturdays. Id. Defendant allegedly failed to compensate Plaintiff for these overtime hours at one-and-a-half times his normal hourly rate. Id. Plaintiff alleges in his Motion, for the first time, that this failure owes to Defendant's decision to misclassify him and other members of the potential class as independent contractors. Doc. 22 at 14.

In May 2014, Plaintiff filed suit in Maricopa County Superior Court against Defendants-Drivers Solutions and its owners, Dennis and Mary Pennella-for (1) willfully failing to compensate him for overtime work, as required by 29 U.S.C. § 207, (2) willfully failing to pay him at least the federal minimum wage, as required by 29 U.S.C. § 206, and (3) willfully failing to pay him at least the Arizona state minimum wage, as required by A.R.S. § 23-363(A). Plaintiff's Complaint asserts that it is brought on behalf not only of Plaintiff, but also of "all other similarly situated employees who work, or have worked, for Defendants and who have not been paid the requisite overtime compensation" since January 1, 2007. Doc. 1-1 at 6. On June 6, 2014, Defendants removed the case to this Court, and Plaintiff filed the instant action on August 15, 2014, seeking certification of proposed collective and class actions and requesting that the Court order notice be sent to potential class members.


A. Fair Labor Standards Act

1. Legal standard

"The FLSA provides that a covered employer shall not employ any employee for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.'" Wood v. TriVita, Inc., No. CV-08-0765-PHX-SRB, 2009 U.S. Dist. LEXIS 64585, at *3-4 (D. Ariz. Jan. 22, 2009) (quoting 29 U.S.C. § 207(a)(1)). The law also mandates that "[e]very employer shall pay to each of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, wages" that are "not less than" specified statutory rates. 29 U.S.C. § 206(a)(1). "Any employer who violates the provisions of [§ 206 or § 207] shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages." Id. § 216(b). An action to recover these damages "may be maintained against any employer... in any Federal or State court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated." Id. "The FLSA requires class members who are not named in the complaint to affirmatively opt in to the class by filing a written consent with the Court." Wood, 2009 U.S. Dist. LEXIS 64585, at *5 (citing 29 U.S.C. §§ 216(b), 256). "The district court has discretion to determine whether a collective action is appropriate." Id. at *6 (citation and internal quotation marks omitted).

"Section 216(b) does not define similarly situated, ' and the Ninth Circuit has not construed the term. Federal district courts have taken at least three approaches to determining whether plaintiffs are similarly situated' for purposes of § 216(b): (1) a two-tiered case-by-case approach, (2) the incorporation of the requirements of Rule 23 of the current Federal Rules of Civil Procedure, or (3) the incorporation of the requirements of the pre-1966 version of Rule 23 for spurious' class actions. However, district courts within the Ninth Circuit generally follow the two-tiered or two-step approach for making a collective action determination." Colson v. Avnet, Inc., 687 F.Supp.2d 914, 925 (D. Ariz. 2010) (citations and most internal quotation marks omitted).

"Under the two-step approach, the court determines, on an ad hoc case-by-case basis, whether plaintiffs are similarly situated. This requires the court to first make an initial notice stage' determination of whether plaintiffs are similarly situated.' At this first stage, the court require[s] nothing more than substantial allegations that the putative class members were together the victims of a single decision, policy, or plan. If a plaintiff can survive this hurdle, the district court will conditionally certify the proposed class and the lawsuit will proceed to a period of notification, which will permit potential class members to opt-into the lawsuit. Once the notification period ends, the Court moves on to the second step of the certification process. At the second step, in response to a motion to decertify the class filed by a defendant, the court makes yet another determination whether the proposed class members are similarly situated; this time, however, the court utilizes a much stricter standard to scrutinize the nature of the claims." Id. (alteration in original) (citations and internal quotation marks omitted).

"While conditional certification at the first stage is by no means automatic, Plaintiffs' burden is light. All that need be shown by the plaintiff is that some identifiable factual or legal nexus binds together the various claims of the class members in a way that hearing the claims together promotes judicial efficiency and comports with the broad remedial policies underlying the FLSA. Given the light burden, motions to conditionally certify a class for notification purposes are typically' granted. To proceed to the notification stage of the litigation, Plaintiffs' allegations need neither be strong [n]or conclusive.'" Id. at 925-26 (alteration in original) (citations and some internal quotation marks omitted). "Courts recognize that collective action notification normally occurs before the Parties have had the chance to engage in extensive fact discovery. That is why in making a determination in whether to conditionally certify a proposed class for notification purposes only, courts do not review the underlying merits of the action." Id. at 926 (citations omitted). The ...

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