Powell v. Carey Intern., Inc.
| Decision Date | 17 March 2006 |
| Docket Number | No. 05 21395 CV.,No. 05 21395 CIV.,05 21395 CIV.,05 21395 CV. |
| Citation | 490 F.Supp.2d 1202 |
| Parties | George POWELL and Viliam Kralovic, Plaintiffs, v. CAREY INTERNATIONAL, INC., Carey Limousine Florida, Inc., and Vince Wolfington, an individual, Defendants. |
| Court | U.S. District Court — Southern District of Florida |
Chris Kleppin, Harry O. Boreth, Glasser Boreth Ceasar & Kleppin, Plantation, FL, for Plaintiffs.
Alexander D. Del Russo, Carlton Fields, P.A., West Palm Beach, FL, Kristy Marie Johnson, Patricia Halvorson Thompson, Michael Adam Shafir, Carlton Fields, Miami, FL, for Defendants.
ORDER DENYING MOTION FOR SUMMARY JUDGMENT
This is a Fair Labor Standards Act ("FLSA") case. Plaintiffs George Powell and Viliam Kralovic, on behalf of themselves and all other similarly situated limousine drivers, seek recovery of unpaid overtime compensation from Defendants. Before the Court is Defendants' Motion for Summary Judgment, in which Defendants Carey International, Inc. and Carey Limousine Florida, Inc. (collectively "Defendants") contend that they are entitled to summary judgment because Plaintiffs are exempt employees under the motor carrier exemption and the taxi driver exemption.1 Having reviewed the motion, the response, and the reply thereto, as well as all relevant portions of the record, and after hearing the oral argument of the parties, the Court denies Defendants' Motion for Summary Judgment.
As to the motor carrier exemption, Defendants' travel arrangements with customers and destination management companies does not subject them to the jurisdiction of the Secretary of Transportation (the "Secretary") as a matter of law. Furthermore, because genuine issues of fact exist as to whether Defendants have a through ticketing arrangement with an airline company. Defendants are not entitled to summary judgment on this ground. Finally, as to the taxi cab exemption, Defendants have not shown by a preponderance of the evidence that they are in the "business of operating taxicabs."
Carey International, Inc. ("Carey International") arranges chauffeured transportation services for its customers through a system of franchised and affiliated companies. (Defs.' Statement of Material Facts, Ex. A ¶ 4.) In order to book a reservation, Carey International's customers contact the Carey International Reservation System, and in turn, Carey International arranges the chauffeured transportation with one of its affiliated companies. (Id., Ex. A ¶ 4.) These companies act as subcontractors to Carey International, and thus, they bill Carey International for all services provided. (Id., Ex. A ¶ 5.) Carey International, in turn, charges its customers for the services it has arranged. (Id., Ex. A ¶ 5.)
Carey International owns Defendant Carey Limousine Florida, Inc. ("Carey South Florida"). (Id., Ex. B ¶ 1.) Carey South Florida provides two types of chauffeured transportation services for compensation: (1) services for the local community, which includes services under contracts with local hotels, and services for local businesses and local residents of Miami-Dade, Broward, and Palm Beach counties; and (2) services for customers of Carey International and its franchised or affiliated companies, including destination management services. (Id., Ex. B ¶ 3.) Providing ground transportation for the local community comprises approximately 47% of the base revenue of Carey South Florida's business, whereas providing ground transportation for customers of Carey International and its franchised and affiliated companies comprises approximately 37% of the base revenue of Carey South Florida's business.2 (Id., Ex. B ¶ 3.) Neither party disputes that Plaintiffs do not drive across state lines.
Defendants contend that Plaintiffs are exempt employees under the FLSA based on three aspects of their business: (1) their through ticketing arrangements; (2) their prearranged travel services; and (3) their destination management services. As to the first aspect of their business, Defendants argue that Plaintiffs are exempt employees under the FLSA based on their through-ticketing arrangement with Virgin Atlantic Airways Ltd. ("Virgin Atlantic"). According to Defendants, on June 2, 1997, Carey International purchased Manhattan International Limousine Network, Ltd. ("Manhattan Limousine"). (Id., Ex. C ¶ 5.) Thereafter, on July 11, 1997, Manhattan Limousine and Virgin Atlantic entered into a contract to exclusively provide chauffeured transportation services for Upper Class passengers to and from John F. Kennedy International Airport and Newark Liberty International Airport. (Id., Ex. C ¶ 6.) Once an Upper Class passenger purchased a ticket to one of the destinations serviced by Manhattan Limousine, such passenger automatically received complimentary airport transportation. (Id., Ex. C ¶¶ 13-14.)
Sometime in 1999, Virgin Atlantic decided to extend its services to Upper Class passengers to include the Miami International Airport. (Id., Ex. C ¶ 15.) According to Carey International's President and Chief Executive Office, Devon Murphy, in order to provide such services, Virgin Atlantic has an agreement with Manhattan Limousine, which in turn has an agreement with Carey South Florida, and such arrangement is "essentially a three-part[y] agreement," pursuant to which Virgin Atlantic requires Carey South Florida to have employees in Miami to service its customers. (Defs.' Reply, Ex. 5 at 107-09.) However, Manhattan Limousine's Regional Vice President, Edward Martinez, testified that Manhattan Limousine contracted directly with Carey South Florida regarding the Virgin Atlantic business. (Defs.' Statement of Material Facts, Ex. C ¶ 10.) Thus, the facts are in dispute as to whether there is a direct agreement between Virgin Atlantic and Carey South Florida.
Nevertheless, the parties do agree that the arrangement works as follows: each night, Manhattan Limousine faxes to Carey South Florida flight information for Virgin Atlantic Upper Class passengers arriving or departing from Miami the following day. (Id., Ex. C ¶ 16.) Thereafter, Carey South Florida contacts Manhattan Limousine with a confirmation number for the job, and subsequently contacts Manhattan Limousine once the job is completed. (Id., Ex. C ¶ 16.) At that point, Manhattan Limousine bills Virgin Atlantic for the job, and Virgin Atlantic remits payment to Manhattan Limousine, which Manhattan Limousine forwards in whole to Carey South Florida. (Id., Ex. C ¶ 16.) Carey South Florida derives approximately 3% of its base revenue from the chauffeured transportation it provides to Virgin Atlantic Upper Class passengers.3 (Defs.' Summary of Key Facts, dated October 20, 2005, at 6 n. 2.)
Defendants also contend that they have through ticket arrangements with private air carriers, such as Sentient Jet, Inc., Charter Auction, Inc., Universal Weather and Aviation, Inc., Bombardier Flexjet, Net Jets, and Marquis Jets. However, these facts and arguments are entirely new, and not responsive to Plaintiffs' Response. Accordingly, the Court will not consider such arrangements at this juncture.4
In addition to their alleged through ticket arrangements, Defendants also have contracts for chauffeured transportation with corporate clients, such as Goldman Sachs and IBM. (Defs.' Statement of Material Facts, Ex. A ¶ 6.) Pursuant to these agreements, the corporations pay Carey International for transportation when their executives travel interstate or out of the country. (Id., Ex. A. ¶ 6.) Under the terms of the contracts, the corporations contact Carey International on an as needed basis, and Carey International then contacts the appropriate franchised or affiliated company to provide the transportation services. (Id., Ex. A ¶ 6.) The franchised or affiliated company then bills Carey International, and Carey International bills the private company's account. (Id., Ex. A ¶ 6.) Carey South Florida derives approximately 21% of its revenue from these services. (Defs.' Summary of Key Facts, dated October 20, 2005, at 6 n. 2.)
Carey South Florida also regularly provides airport chauffeured services to destination management companies. (Defs.' Statement of Material Facts, Ex. B ¶ 14.) Destination management companies sell travel packages to individuals and companies, usually located outside of Florida. (Id., Ex. B ¶ 14.) These companies sell travel packages that include airport transportation in conjunction with other travel related products through an arrangement that incorporates Defendants' costs into the overall price charged to the traveler. Therefore, the traveler does not pay directly for Defendants' services. (Id., Ex. B ¶ 14.) Carey South Florida derives approximately 13% of its revenue from these services. (Defs.' Summary of Key Facts, dated October 20, 2005, at 6 n. 2.)
Carey South Florida prearranges all of its services, and accordingly, drivers cannot typically obtain customers by cruising the streets. (See Defs.' Statement of Material Facts, Ex. B ¶ 6.) Thus, if a driver is approached by a customer who has not prearranged transportation services, the driver must contact the local dispatch office to record a reservation for that customer or have dispatch send another vehicle to transport such customer. (Id., Ex. B ¶ 6.) The customer dictates the destination and, if requested, the route to be traveled. (Id., Ex. B ¶ 7.)
Carey South Florida's fares are determined by the hour or by a flat rate. (Id., Ex. B ¶ 8.) For instance, a customer traveling from the airport to a specified location, such as Miami Beach, will be charged a flat rate, regardless of the time of travel. (See id., Ex. B ¶ 8.) If the customer does not specify an exact drop-off location, the number of hours required, or the number of stops over the course of the trip, the service will be considered an "as directed" job and an hourly rate will apply. (Id., Ex. B ¶ 8...
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