Benton v. Deli Mgmt., Inc.

Decision Date08 August 2019
Docket NumberCIVIL ACTION FILE NO. 1:17-cv-296-TCB
Citation396 F.Supp.3d 1261
Parties Nial BENTON and Hutton Graham, individually and on behalf of similarly situated persons, Plaintiffs, v. DELI MANAGEMENT, INC. d/b/a Jason's Deli, Defendant.
CourtU.S. District Court — Northern District of Georgia

Andrew Weiner, Weiner & Sand LLC, Atlanta, GA, Mark Alan Potashnick, Weinhaus & Potashnick, Saint Louis, MO, Richard M. Paul, III, Sean Ray Cooper, Susan L. Becker, Paul McInnes, LLP, Kansas City, MO, for Plaintiffs.

Christopher M. Bentley, Pro Hac Vice, Christopher Carlton Johnson, Kevin D. Johnson, Pro Hac Vice, Johnson Jackson, LLC, Tampa, FL, John R. Hunt, Stokes Wagner, ALC, Atlanta, GA, for Defendant.

ORDER

Timothy C. Batten, Sr., United States District Judge

I. Background

Plaintiffs compose a conditionally certified class of Jason's Deli delivery drivers. As a condition of their employment, Jason's Deli requires that they provide an operable, safe, and legal vehicle in which to make their deliveries. In this case Plaintiffs allege that Jason's Deli violated the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. , because they incurred unreimbursed vehicle-related expenses on Jason's Deli's behalf, the cost of which drove their wages below the FLSA-mandated minimum. A more detailed factual background may be found in Judge Duffey's December 18, 2017 order [29] conditionally certifying the class.

Since certification, numerous plaintiffs have consented to join the class. The case also proceeded to discovery, which ended on November 1, 2018. Following discovery, Jason's Deli argues that the 29 U.S.C. § 216(b) collective action can no longer be maintained. In addition, the parties have filed cross motions to exclude the other's experts and cross-motions for summary judgment. Accordingly, the Court's order today resolves the following pending motions:

• Jason's Deli's motion [94] for decertification of the collective action;
• Jason's Deli's motion [95] for summary judgment;
• Jason's Deli's motion [103] to exclude Paul T. Lauria's expert testimony and report;
Plaintiffs' motion [92] for partial summary judgment; and
Plaintiffs' motion [97] to exclude Dr. Janet Thornton's expert testimony and report.1
II. Discussion

The resolution of the pending motion involves untangling interdependent issues. In order to best explain its decision, the Court begins first by settling the questions of law raised in Jason Deli's motion for summary judgment and Plaintiffs' motion for partial summary judgment. The Court will then proceed to Jason's Deli's Daubert motion to exclude the testimony of Plaintiffs' expert, Paul Lauria, and Plaintiffs' Daubert motion to exclude Jason's Deli's rebuttal expert, Dr. Janet Thornton. Finally, the Court resolves Jason's Deli's motion to decertify the collective-action class. The upshot is that the case will proceed as a collective action under § 216(b) of the FLSA.

A. Summary Judgment Motions

Summary judgment is appropriate when "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). There is a "genuine" dispute as to a material fact if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." FindWhat Inv'r Grp. v. FindWhat.com , 658 F.3d 1282, 1307 (11th Cir. 2011) (quoting Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ). In making this determination, however, "a court may not weigh conflicting evidence or make credibility determinations of its own." Id. Instead, the court must "view all of the evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in that party's favor." Id.

"The moving party bears the initial burden of demonstrating the absence of a genuine dispute of material fact." Id. (citing Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ). If the nonmoving party would have the burden of proof at trial, there are two ways for the moving party to satisfy this initial burden. United States v. Four Parcels of Real Prop. , 941 F.2d 1428, 1437–38 (11th Cir. 1991). The first is to produce "affirmative evidence demonstrating that the nonmoving party will be unable to prove its case at trial." Id. at 1438 (citing Celotex Corp. , 477 U.S. at 331, 106 S.Ct. 2548 ). The second is to show that "there is an absence of evidence to support the nonmoving party's case." Id. (quoting Celotex Corp. , 477 U.S. at 324, 106 S.Ct. 2548 ).

If the moving party satisfies its burden by either method, the burden shifts to the nonmoving party to show that a genuine issue remains for trial. Id. At this point, the nonmoving party must " ‘go beyond the pleadings,’ and by its own affidavits, or by ‘depositions, answers to interrogatories, and admissions on file,’ designate specific facts showing that there is a genuine issue for trial." Jeffery v. Sarasota White Sox, Inc. , 64 F.3d 590, 593–94 (11th Cir. 1995) (quoting Celotex Corp. , 477 U.S. at 324, 106 S.Ct. 2548 ).

The Court considers the parties' motions for summary judgment in turn.

1. Jason's Deli's Motion for Summary Judgment

Jason's Deli moves for summary judgment first, and most simply, it moves for summary judgment as to six individual opt-in plaintiffs based on the expiration of the statute of limitations. Second, it argues that it cannot be liable for a violation of the FLSA's "anti-kickback rule" because Plaintiffs are not entitled to a reimbursement for some of the expenses they claim.

a. Statute of Limitations

Plaintiffs have conceded that the following Plaintiffs' claims are barred by the applicable statute of limitations: Alex Alonso, Joyce Boyer, Alan Kirguev, Mikayla Luksha, Larry Powell, Shiaisa Respers. To the extent these Plaintiffs' opt-ins have not already been withdrawn, the Court will grant summary judgment in favor of Jason's Deli and against them.

b. Reimbursable Expenses

Jason's Deli's next argument is divisible into the following subparts. First, Jason's Deli contends that Plaintiffs are not entitled to reimbursement for certain fixed costs associated with owning their vehicles. Second, it contends that Plaintiffs cannot claim reimbursement for an estimate of costs (whether fixed or otherwise) when their actual costs either differ from the estimate or were not actually incurred by Plaintiffs (e.g., because someone else paid for them). These are taken in turn.

Plaintiffs' claims are based on a regulation under the FLSA referred to as the "anti-kickback rule," 29 C.F.R. § 531.35, which provides as follows:

"[W]ages" cannot be considered to have been paid by the employer and received by the employee unless they are paid finally and unconditionally or "free and clear." The wage requirements of the [FLSA] will not be met where the employee "kicks-back" directly or indirectly to the employer or to another person for the employer's benefit the whole or part of the wage delivered to the employee.... For example, if it is a requirement of the employer that the employee must provide tools of the trade which will be used in or are specifically required for the performance of the employer's particular work, there would be a violation of the Act in any workweek when the cost of such tools purchased by the employee cuts into the minimum or overtime wages required to be paid him under the Act.

The parties' dispute turns in part on whether Jason's Deli was required to reimburse Plaintiffs for fixed costs such as insurance and registration. In other words, Plaintiffs argue that paying these fixed costs resulted in a "kick-back" of at least a portion of their wages to Jason's Deli (and to the extent it caused the wages to fall below the minimum—$7.25 per hour—the arrangement violates the FLSA). Jason's Deli contends that it should not be required to reimburse fixed costs associated with Plaintiffs' vehicles.

The Court need not (and does not) hold that fixed costs categorically should be borne by employers of delivery drivers. Here, however, it agrees with Plaintiffs to the extent that they may include a portion of the fixed costs associated with the ownership of their vehicles because having a vehicle is a condition of Plaintiffs' employment with Jason's Deli.

Congress has determined that when calculating wages due, an employer may include the "reasonable cost" of "board, lodging, or other facilities" to satisfy its obligation to pay the minimum wage. 29 U.S.C. § 203(m). Various regulations have been promulgated to interpret § 203(m), one of which is § 531.35, at issue here. As set forth above, § 531.35 explains what it means for a wage to be "paid" under the FLSA: a wage is not considered "paid" if the employer causes a portion of or all of the employee's wage to be expended in the form of a "kick-back" that is for the employer's benefit.

Central to the parties' argument is how a "kick-back" should be defined. Jason's Deli argues that the Court should focus on whether an expense is incurred "primarily" for the employer's benefit, for which it cites cases in the Eleventh Circuit and other regulations referenced by § 531.35. Plaintiffs, also citing Eleventh Circuit cases and other regulations, contend that the Court should focus on whether an employee bearing a cost "tends to shift" that cost to the employee when it should in fact be borne by the employer. Because the parties quarrel over the interpretation of the case law on point, the Court begins its analysis with the regulations themselves before reviewing the cases interpreting them.

Section 531.35 itself does not define "kick-back." Though it does imply that a kick-back is an expense incurred "for the employer's benefit ...." 29 C.F.R. § 531.35. The regulation only contains the one example of a kick-back:

[I]f it is a requirement of the employer that the employee must provide tools of the trade which will be used in or are specifically required for the performance of the employer's particular
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