Johnson v. Serenity Transp., Inc.

• Decision Date: 02 November 2015
• Docket Number: Case No. 15-cv-02004-JSC
• Citation: 141 F.Supp.3d 974
• Parties: Curtis Johnson, Plaintiff, v. Serenity Transportation, Inc., et al., Defendants.
• Court: U.S. District Court — Northern District of California

141 F.Supp.3d 974

Curtis Johnson, Plaintiff,

v.Serenity Transportation, Inc., et al., Defendants.

Case No. 15-cv-02004-JSC

United States District Court, N.D. California.

Signed November 2, 2015

Peter Scott Rukin, Valerie Jean Brender, Rukin Hyland Doria & Tindall LLP, San Francisco, CA, for Plaintiff.

Jeffery M. Hubins, Pleasanton, CA, Candace Holly Shirley, Steven Hazard Gurnee, Toby Michael Magarian, John A. Mason, Gurnee Mason & Forestiere LLP, Roseville, CA, Nancy Joan Clark, Office of County Counsel, San Jose, CA, for Defendants.

ORDER GRANTING IN PART MOTION TO DISMISS THIRD AMENDED COMPLAINT

JACQUELINE SCOTT CORLEY

, United States Magistrate Judge

In this putative class action, Plaintiffs Curtis Johnson ("Johnson") and Anthony Aranda ("Aranda, and together "Plaintiffs") filed suit against their employer, Defendants Serenity Transportation, Inc. ("Serenity Transportation"), its owner David Friedel ("Friedel"), as well as Service Corporation International ("SCI"), SCI California Funeral Services, Inc. ("SCI California"), the Neptune Society of Central California, Inc. ("Neptune Society"), Lifemark Group, Inc. ("Lifemark"), and the County of Santa Clara (the "County" and collectively, "Defendants"). (Dkt. No. 50.) The gravamen of Plaintiffs' Third Amended Complaint ("TAC") is that Plaintiffs, mortuary drivers, have been misclassified as independent contractors and denied the benefits of California and federal wage-and-hour laws. Now pending before the Court is Defendants' motion to dismiss. Defendants seek dismissal of all claims against Friedel for failure to plead alter ego liability, all claims against SCI, SCI California, Neptune, Lifemark, and the County (together, the "Customer Defendants") for failure to plead that they are joint employers, as well as dismissal of various causes of action for failure to state a claim. (Dkt. No. 51.) Having considered the parties' submissions, and having had the benefit of oral argument on October 15, 2015, the Court GRANTS IN PART and DENIES IN PART the motion to dismiss.

BACKGROUND

I. Complaint Allegations

Plaintiffs are "mortuary transportation drivers who carry dead bodies and other human remains from various locations (including nursing homes, hospitals, and homes) to Defendants' facilities." (Dkt. No. 50 ¶ 1.) Johnson worked as a driver for Defendants from January 1, 2012 to August 23, 2013, and Aranda from approximately August 2012 to March 2015. (Id. ¶¶ 6-7.) They bring this putative class action on behalf of themselves and the other 40-plus drivers that Defendants have employed during the relevant period. (Id. ¶ 17.)

Serenity Transportation & Friedel

Defendant Serenity Transportation is a mortuary transportation company that employed Plaintiffs within the meaning of the Fair Labor Standards Act ("FLSA"), California Labor Code, and applicable Industrial Welfare Commission wage order ("IWC Wage Order") to transport decedents. (Id. ¶¶ 8, 17.)

Friedel is the owner, shareholder, CEO, and Board Member of Serenity Transportation, and an employer of Plaintiffs within the meaning of the FLSA, California Labor Code, and IWC Wage Order. (Id. ¶ 9.) Friedel "is the alter ego" of Serenity Transportation, which he operates for the purpose of concealing violations of the Labor Code. (Id. ) Friedel dominates and controls the actions of Serenity Transportation and knowingly advised the company to treat the drivers as independent contractors to avoid employee status. (Id. ) Friedel fails to respect Serenity Transportation's corporate form by failing to adequately capitalize it, failing to properly maintain its minutes and corporate records, maintaining sole ownership of all Serenity Transportation stock, using his personal home as the location for board meetings, and otherwise failing to conduct board meetings in compliance with the law. (Id. )

Together, Serenity Transportation and Friedel assign drivers to 24-hour shifts, five days a week, resulting in 120-hour work weeks. (Id. ¶ 18.) The drivers are made available 24 hours a day to SCI, SCI California, Lifemark, Neptune, and the County's Office of the Medical Examiner-Coroner. (Id. ) Serenity Transportation and Friedel recruit and supervise drivers and advertise available driver positions online. (Id. ¶ 19.) The advertisements specify that drivers must be available for on-call shifts 24 hours a day and that the employer enforces a professional attire dress code. (Id. ¶ 19.) Once hired, Serenity Transportation and Friedel schedule drivers for shifts and retain the right to change the shifts at their discretion. (Id. ) Friedel is personally involved in drafting hiring criteria, interviewing drivers, and scheduling their shifts. (Id. ¶ 19.) Together, Serenity Transportation and Friedel promulgated "Client Policy Standards" that required drivers to obey a dress code, report to dispatch their status throughout the day, notify dispatch if the driver checks out of service before shift's end, complete Serenity Transportation invoice information, keep the driver's vehicle clean, and notify Serenity Transportation of any need for personal time off. (Id. ¶ 22.) Serenity Transportation and Friedel's policy also provides that continuous violations of customer standards could result in termination of the driver's contract or the driver being removed from a route. (Id. ) Friedel is personally involved in monitoring and enforcing these policies. (Id. )

On both their website and in advertisements, Serenity Transportation and Friedel refer to the drivers as "staff." (Id. ¶ 29.) Serenity Transportation and Friedel lease equipment to drivers, including vehicles, radios, and stretchers. (Id. ) Initially, when Serenity Transportation was founded in 2010 it classified the drivers as employees, but Friedel, in his capacity as a member of the corporation's Board of Directors, recommended that Serenity Transportation reclassify the drivers as independent contractors, and Serenity Transportation followed suit in February 2011. (Id. ¶¶ 29, 35.)

Drivers work for Serenity Transportation and Friedel continuously for many months or years. (Id. ¶ 33.) The drivers are, however, subject to termination by Serenity Transportation and Friedel at any time for any reason. (Id. ¶ 35.) Drivers are not required to possess a special license or undergo special training to perform Serenity Transportation's transportation services. (Id. ¶ 34.)

Joint Employer Allegations

Serenity Transportation and Friedel served as labor contractors for SCI, SCI California, Neptune, Lifemark, and the County by providing drivers on an ongoing basis to meet those entities' needs. (Id. ¶¶ 20, 33.) SCI and SCI California provide funeral and end-of-life services in Alameda County and across the United States. (Id. ¶¶ 11-12.) Neptune and Lifemark provide cremation, removal, and end-of-life services in Alameda County and across the United States. (Id. ¶¶ 13-14.) The County provides investigation, removal, and autopsies in Santa Clara County. (Id. ¶ 15.) SCI, SCI California, Neptune, Lifemark, and the County all employed Plaintiffs by permitting them to work, exercising control over their wages, hours, and working conditions, and engaging them. (Id. ¶¶ 11-15.) The work that Plaintiffs and drivers generally performed for these Defendants was labor within the entities' usual course of business. (Id. )

The Customer Defendants control the means and methods by which drivers carry out their jobs by directing drivers as to how to handle and remove decedents. (Id. ¶ 23.) While Drivers were at each Joint Employer's location, drivers were under that Joint Employer's supervision and control. (Id. ¶¶ 24-26.) Specifically, SCI and SCI California promulgated detailed policies governing drivers' work, including requiring a particular type of identification band, specific labeling procedures, and a protocol for witnessing removal of human remains. (Id. ¶ 24.) SCI and SCI California retain the right to change these policies at any time. (Id. ) They also retain the right to require that drivers receive ongoing training to provide services in compliance with the entities' service guarantee; detail the time period in which drivers must respond to calls; and require drivers to follow a professional dress code. (Id. )

Neptune worked with Serenity Transportation and Friedel to create policies governing the drivers' work, subject to change by Neptune, which include "instructions on how and where to record information about the deceased (including paperwork), how to handle the deceased, and the order in which Drivers were to complete tasks." (Id. ¶ 25.)

Lifemark also worked with Serenity Transportation to create policies governing drivers' work subject to Lifemark's change. (Id. ¶ 26.) Lifemark's policies include instructions on "how and where to record information about the deceased, how to handle the deceased, and how Drivers should conduct themselves when arriving at and leaving Lifemark properties." (Id. )

The County also promulgated detailed policies governing the drivers' work subject to Change by the County at any time. (Id. ¶ 27.) These policies include identification and removal protocol at the County Coroner, including "the timeframe in which STI Drivers [are] expected to respond to different types of calls ...; the amount of time that Drivers [are] required to wait at the scene if the deceased [is] not ready to be transported; and ‘stand-by’ and ‘dry-run’ time." (Id. ) The County requires drivers to keep records of service completion, and retained the right to keep its own records of runs. (Id. ) The County also requires drivers to follow a dress code, refrain from displaying insignia besides the County Coroner's, specified rules for driver's vehicles' appearance and equipment and retains the right to inspect these vehicles at any time. (Id. ) The County supplies some of the driver's equipment and otherwise requires that drivers act in accordance with instructions given by County staff at the scene. (Id. )

Payment Allegations

Def...