Blair v. Transam Trucking, Inc.

Decision Date28 March 2018
Docket NumberCase No. 09-2443-EFM-KGG
Citation309 F.Supp.3d 977
Parties Larry BLAIR and Charlie Davis, on Behalf of Themselves and All Other Persons Similarly Situated, Plaintiffs, v. TRANSAM TRUCKING, INC., Defendant.
CourtU.S. District Court — District of Kansas

Athena M. Dickson, Eric W. Smith, Raymond A. Dake, Rik N. Siro, Siro Smith Dickson, PC, Teresa A. Woody, Woody Law Firm PC, Kansas City, MO, Mark A. Kistler, Michael F. Brady, Sara T. Ballew, Brady & Associates Law Office, Overland Park, KS, for Plaintiffs.

Brad K. Thoenen, Brenda G. Hamilton, Frederick H. Riesmeyer, II, Shannon Cohorst Johnson, Seigfreid Bingham, PC, Sharon A. Coberly, Kansas City, MO, Rachel H. Baker, for Defendant.

MEMORANDUM AND ORDER

ERIC F. MELGREN, UNITED STATES DISTRICT JUDGE

In 2009, Plaintiffs Blair and Davis, on behalf of themselves and all other persons similarly situated, filed suit alleging that Defendant TransAm Trucking, Inc. ("TransAm") violated the Fair Labor Standards Act ("FLSA") and the Kansas Wage Payment Act ("KWPA"). Plaintiffs bring this action as a collective action under the FLSA for minimum wage violations, and as a Rule 23 class action for KWPA violations. Plaintiffs, who are truck drivers, allege that TransAm failed to pay them minimum wages and made improper deductions from their paychecks.

This action has been ongoing for nearly a decade. Plaintiffs have amended the complaint twice, and the scheduling order has been revised six times. The final pretrial conference was eventually held on June 22, 2017, and the Pretrial Order (Doc. 433) was entered the following day.

Plaintiffs state three claims in the Pretrial Order, which supersedes all previous pleadings. Plaintiffs' first claim is a collective action brought under the FLSA’s minimum wage provision, 29 U.S.C. § 206 by the two Named Plaintiffs and approximately 1,928 opt-in Plaintiffs. Plaintiffs assert that TransAm has misclassified the FLSA class members as "independent contractors" because the opt-in Plaintiffs were "employees" pursuant to the application of the "economic realities" test for employee status under the FLSA, and that Defendant failed to pay them wages in the amount of at least the applicable federal minimum hourly wage for all hours worked in the relevant weekly pay periods.

Plaintiffs' second claim is a Rule 23 class action brought under the KWPA by the two Named Plaintiffs and an approximate 8,691 members class. Plaintiffs allege that TransAm has misclassified the Rule 23 KWPA class members as "independent contractors" because the Plaintiffs were "employees" pursuant to the application of the "right to control" test for employee status under the KWPA, and TransAm failed to pay them wages in the amount of at least the applicable federal minimum wage for all hours worked during numerous weekly pay periods, and such unpaid minimum wages constituted "wages due" under the KWPA.

Plaintiffs' third claim is also brought by the Rule 23 KWPA class. Plaintiffs again allege that TransAm has misclassified them as "independent contractors" because they were "employees" under the KWPA, and TransAm improperly deducted banking fees from the Plaintiffs' wages and thereby failed to pay the Plaintiffs all "wages due" in violation of the KWPA.

There are fourteen motions that are now pending before this Court. The Court will address the parties' motions in five different sections and will set forth the applicable parties, facts, and law in each respective section.1 In the first Section, the Court will address TransAm’s motion for judgment on the pleadings. In Section II, the Court will address TransAm’s motion to decertify the FLSA collective action. In Section III, the Court will address TransAm’s motion to decertify the Rule 23 class. In Section IV, the Court will address both parties' motions for summary judgment. And finally, in Section V, the Court will address the remaining motions.

The Court has received extensive briefing on these motions, and deems oral argument unnecessary.

I. TransAm’s Motion for Judgment on the Pleadings
A. Factual and Procedural Background

In the Pretrial Order, TransAm included an affirmative defense that it believed Plaintiffs' second claim fails to state a claim upon which relief could be granted, and included a motion for judgment on the pleadings as an additional motion TransAm intended to file before the dispositive-motion deadline.2 Plaintiffs did not object. The pleadings are now closed, and trial is set to begin on June 19, 2018.

TransAm’s motion raises two issues. The first issue is whether unpaid "wages in the amount of at least the applicable federal minimum wage" are recoverable as "wages due" under the KWPA. Assuming that such a claim may be brought under the KWPA, the second issue becomes whether the claim is preempted by the FLSA. For the reasons explained below, the Court concludes that under Kansas law, the KWPA does not provide a cause of action for the recovery of state or federal minimum wages. And to the extent that the KWPA could be interpreted to allow a claim for unpaid federal minimum wages, it is preempted by the FLSA.

B. Legal Standard

Under Federal Rule of Civil Procedure 12(c), a party may move for judgment on the pleadings after the pleadings are closed as long as the motion is made early enough not to delay trial.3 The standard for dismissal under Rule 12(c) is the same as a dismissal under Rule 12(b)(6).4 So to survive a motion for judgment on the pleadings, a complaint must present factual allegations, assumed to be true, that "raise a right to relief above the speculative level," and must contain "enough facts to state a claim to relief that is plausible on its face."5 All reasonable inferences from the pleadings are granted in favor of the non-moving party.6 Judgment on the pleadings is appropriate when "the moving party has clearly established that no material issue of fact remains to be resolved and the party is entitled to judgment as a matter of law."7

C. Discussion

In Count II of the Second Amended Complaint, Plaintiffs allege that "Defendant has had a policy and practice of violating K.S.A. § 44-314(d) by refusing to allow its Leased Drivers to receive all of their ‘wages due’ by refusing to pay them minimum wages as required by the FLSA and by making improper deductions from their wages."8 As outlined in the Pretrial Order, Plaintiffs reiterate this claim verbatim in their "factual contentions" section, but modify the claim slightly in their "legal claims" section.9 There, Plaintiffs claim that TransAm violated the KWPA when it failed to pay Plaintiffs "wages in the amount of at least the applicable federal minimum wage for all hours worked during relevant weekly pay periods, and such unpaid minimum wages constituted ‘wages due’ under the KWPA."10 Regardless, it is clear that Plaintiffs are using the KWPA as a vehicle to recover FLSA-mandated minimum wages.

TransAm now argues that "minimum wages as required by the FLSA" are not recoverable as "wages due" under the KWPA. According to TransAm, a Kansas state law claim for minimum wages must be brought under the Kansas Minimum Wage Maximum Hours Law (the "KMWMHL"). However, as TransAm points out, the KMWMHL expressly exempts employers covered by the FLSA, therefore Plaintiffs in the Rule 23 class are not entitled to recover FLSA-mandated minimum wages. Plaintiffs counter that multiple cases in this District "have found that the KWPA is not preempted by the FLSA," and that the Kansas Supreme Court has held "that unpaid [overtime] wages pursuant to the FLSA constituted wages due under the KWPA and nothing in the FLSA suggests that violations of its minimum wage requirements are treated differently than overtime."11

As the issues raised in this motion implicate federal and state wage-and-hour laws, the Court will begin with an overview of the applicable laws. Next, the Court will address whether FLSA-mandated minimum wages are recoverable as "wages due" under the KWPA. Assuming that such a claim may be brought under the KWPA, the Court will then address whether the claim is preempted by the FLSA.

1. The FLSA and Kansas Wage Laws

The FLSA, enacted by Congress in 1938, protects employees by prescribing the minimum and overtime wages that employers must pay. The parties do not dispute that TransAm is an employer subject to the FLSA.12 The federal minimum wage has been $7.25 per hour since 2007.13

The FLSA provides a private right of action to recover for violations, including a suit by "one or more employees for and in behalf of himself or themselves and other employees similarly situated."14 "In 1947, Congress amended this provision to require that a plaintiff in a FLSA suit ‘give his consent in writing to become such a party and such consent is filed in the court in which such action is brought.’ "15 In other words, similarly situated plaintiffs must affirmatively "opt in" to become a party to a FLSA "collective action."16

Many states, such as Kansas, have also enacted their own wage laws. In Kansas, the KMWMHL "is the state counterpart" to the FLSA and applies to claims for unpaid minimum and overtime wages.17 However, the KMWMHL explicitly provides that it "shall not apply to any employers and employees who are covered under the provisions of the [FLSA]...."18 Just like the FLSA, the KMWMHL requires employers to pay to each employee wages at $7.25 an hour.19

Kansas also has enacted the KWPA, which requires employers to pay employees all "wages due" to the employee at least once per month.20 As explained by the Kansas Supreme Court:

The KWPA controls several aspects of wages and benefits for the Kansas worker that are not covered by the [FLSA]. The KWPA governs when wages must be paid, the manner in which they must be paid, and the circumstances in which wages can be withheld. The KWPA also requires employers to provide certain notice requirements with respect to the payment of wages and the provision of benefits. It provides for remedies and penalties for violation
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