Cottman v. Naskrent

          ORDER

          Honorable John J. Tuchi United States District Judge.

         At issue is Plaintiffs Robert P. Cottman, Michael A. Baker, Daniel L. Theobald, and Stephanie Harvey's^[1] (collectively, “Plaintiffs”) Motion to Proceed Conditionally as a Collective and Class Action (Doc. 26, Mot.), to which Defendants David G. Naskrent, Matthew J. Surma, Corrina Surma, Cory Lee Hughes, Corey B. Cleghorn, DPHC Enterprise Inc., and DHSC Enterprise Inc. (collectively, “Defendants”) filed a Response (Doc. 38, Resp.) and Plaintiffs filed a Reply (Doc. 43, Reply). Although oral argument was requested, the Court finds the matter ripe for resolution such argument. See LRCiv 7.2(f). For the reasons set forth below, the Court will grant in part and deny in part Plaintiffs' Motion.

         I. BACKGROUND

         Defendants are the owners and managers of Rosati's Pizza (“Rosati's”) located in Phoenix. Plaintiffs each worked at Rosati's as a pizza delivery driver at assorted points in time during periods spanning October 2012 to December 2012 and from January 2014 to January 2017.

         During Plaintiffs' time at Rosati's, Defendants required drivers to complete deliveries as assigned by Rosati's. Defendants did not pay its drivers an hourly salary. Instead, each driver received a standard fee per delivery in addition to any tip paid out by the customer. The delivery fee started at $2 during each driver's probationary period and increased to $3 after Defendants took the driver off probation. The fee increased once again in December 2016 to $3.25 per delivery.

         After each driver was hired, he or she had to complete training, which consisted of ride-alongs with senior drivers; however, Defendants did not compensate new drivers for this time. Drivers used their own vehicles for deliveries, but were not reimbursed for mileage, fuel, or other costs incurred when delivering pizzas. When not delivering pizzas, Defendants required that Plaintiffs work in the restaurant-without additional pay-by answering phones, assisting customers, cleaning the dining room, and assisting with the preparation of food.

         After completing their deliveries for the day, the delivery drivers returned to the restaurant to settle their payments for the day with the store manager or owner. If the cash that the driver received from customers during their deliveries did not cover the amount he earned in delivery fees, the manager pulled cash from the register to pay the difference.

         Beginning in 2015, if the amount paid for food ordered through a third party website was less than that charged directly by Rosati's, Defendants deducted the difference from the tip of the driver delivering the food. Defendants additionally deducted the cost of an order from the drivers' day-end pay for credit card orders if the driver failed to take an imprint of the purchaser's card and if that card was subsequently declined after delivery. These policies frequently resulted in Rosati's drivers earning less than federal and state minimum wage. Additionally, Plaintiffs typically worked in excess of forty hours per week without overtime compensation.

         On May 25, 2017, Plaintiffs filed a Hybrid Collective and Class Action Complaint in the Maricopa County Superior Court alleging violations of the Fair Labor Standards Act and minimum wage provisions of Arizona law. Defendants subsequently removed to this Court on June 26, 2017, on the basis of federal question jurisdiction. Plaintiffs now move to certify a collective action under the FLSA and a class action pursuant to Federal Rule of Civil Procedure 23(b)(3) for Plaintiffs' state law claims.

         II. LEGAL STANDARD

         A. FLSA Collective Action

         Congress enacted the FLSA “to protect all covered workers from substandard wages and oppressive working hours.” Barrentine v. Arkansas-Best Freight Sys. Inc., 450 U.S. 728, 739 (1981). Among the FLSA's central provisions is its requirement that employers pay non-exempted workers at one and a half times the regular rate for any time worked in excess of forty hours in a single week. 29 U.S.C. § 207; see Tyson Foods, Inc. v. Bouaphakeo, 136 S.Ct. 1036, 1042 (2016).

         The FLSA provides a mechanism-the “collective action”-through which workers can sue jointly for violations of its overtime compensation and other provisions. See 29 U.S.C. § 216(b). The collective action thus allows a representative plaintiff to bring suit on behalf of a group of workers who are “similarly situated, ” see id., and thereby serves to (1) reduce the burden on plaintiffs through the pooling of resources, and (2) make efficient use of judicial resources by resolving common issues of law and fact together. See Hoffman-La Rouche, Inc. v. Sperling, 493 U.S. 165, 170 (1989). This mechanism, however, differs from the class action mechanism under Federal Rule of Civil Procedure 23. See Genesis Healthcare Corp. v. Symczyk, 569 U.S. 66, 75 (2013). Thus, “[t]he sole consequence of conditional certification is the sending of court-approved written notice to employees, who in turn become parties to a collective action only by filing written consent with the court.” Id. (internal citations omitted).

         The decision as to whether a collective action is appropriate lies within the court's discretion. Leuthold v. Destination Am., Inc., 224 F.R.D. 462, 466 (N.D. Cal. 2004). Before certifying an FLSA collective action, courts must evaluate whether the plaintiff has demonstrated that he or she and the proposed members of the collective action are “similarly situated.” Id. To do so, courts in the Ninth Circuit follow a two-tiered approach. Colson v. Avnet, Inc., 687 F.Supp. 2d. 914, 925 (2010). First, and at issue here, is the “notice stage, ” during which courts determine based on pleadings and affidavits whether a collective action should be certified ...