Edwards v. PJ Ops Idaho, LLC

Docket Number1:17-cv-00283-DCN
Decision Date31 July 2023
PartiesCORY EDWARDS, et al., On behalf of himself and those similarly situated, Plaintiffs, v. PJ OPS IDAHO, LLC, et al., Defendants.
CourtU.S. District Court — District of Idaho



Before the Court are cross motions for summary judgment filed by the parties addressing a narrow but critical issue in this case. Dkts. 237, 238. The Court held oral argument on May 30, 2023 and took the motions under advisement. Upon review, and for the reasons below, the Court DENIES Plaintiffs' Motion for Summary Judgment and GRANTS Defendants' Motion for Summary Judgment on the issue of reimbursement.


This is a putative hybrid Rule 23 class and 29 U.S.C. § 216(b) collective action. Plaintiffs, who were Defendants' pizza-delivery drivers, assert violations of the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. (“FLSA”) and various state laws. See generally Dkt. 114. Put simply, Plaintiffs assert Defendants underpaid them and/or failed to adequately reimburse them for certain vehicle-related expenses they incurred during their employment.

On May 15, 2018, the Court conditionally certified a § 216(b) FLSA collective action. Dkt. 67. On June 7, 2022, the Court certified five Rule 23 Classes. Dkt. 225.

At issue today is a question that has been lurking in the background of this case since its inception: what is the correct measurement of reimbursement? This open question has already caused issues with discovery, deadlines, and motion practice. The Court has discussed those issues before. See, e.g., Dkt. 152, at 9 (“Frankly, the Court does not know why the parties did not ask the Court to determine that issue (the legal matter of reimbursement) in this case up front. The Court suggested such a course during its informal discovery dispute conference with the parties in August of 2019; however, this path was not pursued.”); id. at 15-16 (outlining the competing positions regarding the issue and why resolution was important); Dkt. 225, at 8-9 (noting this question has been “a thorn in the Court's side since the inception of this lawsuit.”). In fact, it was this final, most recent matter (Rule 23 Class certification), and the Parties' disagreement regarding scheduling (Dkt. 218), that pushed the Court over the edge. The Court ultimately directed the parties to file briefs regarding “the legal question of reimbursement.” Dkt. 218, at 9.

The Parties filed their briefs, the Court held a hearing, and the matter is now ripe for decision.


Summary judgment is proper “if the movant shows that 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). The Court's role at summary judgment is not “to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.” Zetwick v. Cty. of Yolo, 850 F.3d 436, 441 (9th Cir. 2017) (cleaned up). Importantly, the Court does not make credibility determinations at this stage of the litigation. Such determinations are reserved for the trier of fact. Hanon v. Dataproducts Corp., 976 F.2d 497, 507 (9th Cir. 1992).

In considering a motion for summary judgment, the Court must “view[] the facts in the non-moving party's favor.” Zetwick, 850 F.3d at 441. To defeat a motion for summary judgment, the respondent need only present evidence upon which “a reasonable juror drawing all inferences in favor of the respondent could return a verdict in [his or her] favor.” Id. (cleaned up). Accordingly, the Court must enter summary judgment if a party “fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The respondent cannot simply rely on an unsworn affidavit or the pleadings to defeat a motion for summary judgment; rather the respondent must set forth the “specific facts,” supported by evidence, with “reasonable particularity” that precludes summary judgment. Far Out Prods., Inc. v. Oskar, 247 F.3d 986, 997 (9th Cir. 2001).

The standard applicable to motions for summary judgment do not generally change if the parties file cross motions. See, e.g., Cady v. Hartford Life & Accidental Ins., 930 F.Supp.2d 1216, 1223 (D. Idaho 2013). However, the Court must evaluate each party's motion on its own merits. Fair Housing Council of Riverside Cty., Inc. v. Riverside Two, 249 F.3d 1132, 1136 (9th Cir. 2001).

A. Introduction

The question here is how Defendants should calculate the rate of reimbursement for delivery drivers under the FLSA.[1] To reach an answer, the Court must first address two threshold issues.

First, how many options are there to choose from? Both sides agree that the mileage rate established by the Internal Revenue Service (“IRS”) is one acceptable option for reimbursement. But Plaintiffs assert it is the only option under the circumstances while Defendants counter that it would be equally appropriate to approximate vehicle expenses.

Second, and more importantly, which administrative guidance controls? Both sides agree the Court should defer to the applicable agency-here, the Department of Labor (“DOL”)-and its direction on the topic. The DOL, however, has issued two statements on this specific topic, which the parties argue are in tension with each other.[2] Thus, the Parties want the Court to defer to the agency's guidance that supports their position and reject the agency's guidance that is, in their mind, opposite.

The Court begins with the applicable statutes and whether the language is ambiguous. It will then discuss deference to agencies. Finally, the Court will delve into the guidance the DOL has provided and how that affects its decision today.

B. Statutes and Ambiguity

The FLSA requires employers to pay employees at least $7.25 per hour. 29 U.S.C. § 206(a). In certain circumstances, an employer can count some customer tips toward this minimum wage. 29 U.S.C. § 203(m)(2)(a). In either case, however, employers must pay their employees that wage “finally and unconditionally” or “free and clear” of any “kickbacks.” Stein v. HHGREGG, Inc., 873 F.3d 523, 530 (6th Cir. 2017) (citing 29 U.S.C. § 206(a) and 29 C.F.R. § 531.35). As the regulation outlines:

Whether in cash or in facilities, “wages” 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 Act 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. This is true whether the “kickback” is made in cash or in other than cash. 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. See also in this connection, § 531.32(c).

29 CFR § 531.35. In other words, a kickback occurs when the cost to the employee of tools specifically required for the performance of the employee's work “cuts into” his or her legally required minimum wage. Id.

For food delivery workers-such as the pizza delivery drivers here-the “kickback” is the cost associated with delivering food for an employer. Those costs must be fully reimbursed, lest a minimum wage violation be triggered.

Courts have routinely found that personal vehicles operated by pizza employees used to make deliveries qualify as tools of the trade under 29 C.F.R. § 531.35. See, e.g., Hatmaker v. PJ Ohio, LLC, 2019 WL 5725043, at *6 (S.D. Ohio Nov. 5, 2019) (holding that “drivers' cars are tools of the trade.”); Benton v. Deli Mgmt., Inc., 396 F.Supp.3d 1261, 1273 (N.D.Ga. 2019) (Plaintiffs' vehicles are a ‘tool of the trade' when they are used for [Defendant's] business.”); Brandenburg v. Cousin Vinny's Pizza, LLC, 2018 WL 5800594, *4 (S.D. Ohio Nov. 6, 2018) ([V]ehicles owned by the delivery drivers are considered ‘tools of the trade.'); Graham v. Word Enters. Perry, 2018 WL 3036313, *4 (E.D. Mich. Jun. 19, 2018) (“An example of such an expense are tools of the trade that the employee must provide which is required to perform the job, such as a personal car that an employee operates to make pizza deliveries.”); Perrin v. Papa John's Int'l, Inc., 114 F.Supp.3d 707, 720 (E.D. Mo. 2015) (explaining employees' cars were a necessary tool of the trade because “without them, Defendants could not deliver pizzas, as Defendants lack a delivery fleet of their own.”).

Neither party disputes that delivery vehicles are tools of the trade. Instead, they dispute how to reimburse drivers for the use of that tool (i.e., the costs associated with employees' use of their personal vehicles).

Defendants contend the answer lies, unambiguously, in the regulations themselves. They argue § 531.35 specifically incorporates § 531.32(c), and § 531.32(c) in turn incorporates § 778.217, which discusses that, “as part of the employee's regular rate” the employer may reimburse “the actual or reasonably approximate amount” of the employees travels. In Defendants' estimation, there is no need to go any further. They can simply approximate the amount incurred by Plaintiffs and reimburse them accordingly.

The Court has two problems with this approach. First, to say these regulations “inc...

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