Ra v. Gerhard's, Inc., CIVIL ACTION No. 17-5211
| Decision Date | 03 January 2019 |
| Docket Number | CIVIL ACTION No. 17-5211 |
| Parties | SEYOUNG RA, Plaintiff, v. GERHARD'S, INC., et al. Defendants. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
MEMORANDUM
Plaintiff SeYoung Ra has sued his former employers Defendants Gerhard's, Inc., Charles "Bud" Gerhard III, Richard Gerhard, and Gerald Gerhard (collectively, "Defendants") seeking to recover damages under the Fair Labor Standards Act of 1939 ("FLSA"), 29 U.S.C. § 201, the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001, the Pennsylvania Minimum Wage Act ("PMWA"), 42 Pa. Cons. Stat. § 333.101, the Pennsylvania Wage Payment and Collection Law ("WPCL"), 43 Pa. Cons. Stat. § 260.1, and a common law theory of breach of contract. Defendants move to dismiss the Amended Complaint under Federal Rule of Civil Procedure 12(b)(6). For the following reasons, I will deny the Motion to Dismiss.
The following facts are taken from Plaintiff's Amended Complaint:1
Defendant Gerhard's, Inc. ("Gerhard's") operates a retail appliance business with five locations throughout the Delaware Valley. Defendants Bud Gerhard, Richard Gerhard, and Gerald Gerhard (collectively, the "Individual Defendants") are the owners and operators of Gerhard's, have the power to hire and fire employees, controlled the work schedules for Plaintiff and other employees, and have an active role in all decision-making, employee rates of compensation, truck delivery records, and employment records. (Id. ¶¶ 10, 64-69.)
Under Gerhard's policy, if a customer's appliance order is over $999.00, Gerhard's offers free delivery. For orders under $999, if a customer is located in the Philadelphia area, Gerhard's describes its delivery process as including, "dropping off, installing your appliance and removing the old and taking it with us." (Id. ¶ 11.)
Between late February/early March 2017 through June 9, 2017, Plaintiff worked for Gerhard's as a Lead Delivery Driver. Gerhard's trained Plaintiff and required him to purchase and wear a shirt with the employer logo. During his tenure as a Lead Delivery Driver, Gerhard's had approximately eight, two-man truck delivery crews composed of a Lead Delivery Driver and a helper to deliver appliance purchases to Gerhard's customers' homes. Plaintiff was compensated at the rate of $40.00 for most delivery jobs and had no input into his rate of pay. According to the Amended Complaint, Gerhard's advised Plaintiff that he would be paid as a 1099 independent contractor and not as a W-2 employee, even though Defendants knew that Plaintiff could not be lawfully considered an independent contractor. (Id. ¶¶ 12-20.)
On a daily basis, Plaintiff reported for work at Gerhard's warehouse, located in Fort Washington, PA, at approximately 7:30 a.m. Plaintiff was required to load delivery trucks with new appliances to be delivered to Gerhard's customers, and would depart the warehouse by no later than 8:30 a.m. Each work day, Gerhard's assigned Plaintiff a delivery route by providing adelivery sheet that showed a required sequence of customer delivery addresses. After each delivery was completed, Plaintiff was required to contact Gerhard's office to report job status. During the course of a work day, Gerhard's would frequently contact Plaintiff by cell phone to change the delivery schedule and give him other assignments. On certain occasions, Plaintiff would have to return to a Gerhard's store to pick up appliances for immediate delivery to a customer. (Id. ¶¶ 21-26.)
Gerhard's leased the delivery trucks used by its delivery crews from Enterprise Truck Leasing. These delivery trucks contained advertisements for Gerhard's on their sides and backs. Gerhard's directly paid the cost of all insurance for the trucks. Gerhard's also had deliveries made to its customers using at least one smaller delivery truck, not leased from Enterprise Truck Leasing, as well as small pickup trucks for small appliances. (Id. ¶¶ 27-30.)
Plaintiff was required to use one of the leased trucks and, during the latter term of his work, he used the smaller delivery truck not leased from Enterprise Truck Leasing. In order to carry out delivery assignments, Gerhard's required Plaintiff to "rent" a delivery truck from Gerhard's. Gerhard's maintained a set of keys for that truck, did not permit Plaintiff to take the assigned delivery truck home at the end of any work day, required that the delivery truck be stored and parked at Gerhard's warehouse at the completion of the delivery day, prohibited Plaintiff from using the assigned truck for anything other than the delivery of appliances to Gerhard's business, and required Plaintiff to pay for all gas used in operating the delivery trucks. Gerhard's also required Plaintiff to unload all appliances from the delivery trucks and place them in a scrap metal trailer stored on Gerhard's premises, but did not compensate Plaintiff for providing this service. Gerhard's sells the contents of each full scrap metal trailer and keeps the proceeds. (Id. ¶¶ 31-39.)
Plaintiff mainly delivered to Gerhard's customers located in Pennsylvania and rarely traveled out of state. Gerhard's deducted $400 per week from Plaintiff's pay for delivery truck rental, no matter how many days he worked per week, and deducted $50 per week from his pay for a fund to pay for any alleged damage caused as a consequence of a delivery (the "Retainer Fund"). Gerhard's used these funds at its sole discretion to reimburse customers for any alleged damage. Following the end of Plaintiff's tenure as a Lead Delivery Driver, Gerhard's failed to return the Retainer Fund balance of $910.00, despite the fact that Plaintiff did not cause any damages that would justify Gerhard's retention of that money. (Id. ¶¶ 40, 43-45.)
Gerhard's did not require Plaintiff to keep time records of the number of hours worked on a daily or weekly basis. Most weeks, Plaintiff worked ten to sixteen hours per day, between four to six days per week, and his work hours exceeded forty per week. Based upon the delivery stops Plaintiff was required to follow each work day, from March 1, 2017 to March 29, 2017, Plaintiff worked in excess of forty hours every week without additional pay. (Id. ¶¶ 46-49.)
On certain dates during the period March 2017 through June 5, 2017, Gerhard's required Plaintiff to perform extra work beyond making local appliance deliveries (the "Additional Work"). The Additional Work included labor for assembly of grills and special installations for Gerhard's customers; travelling long distances to make deliveries to locations such as Harrisburg, Pennsylvania and on two occasions, to the New York/Connecticut area; assembling gas grills at customer homes; and performing other labor related to appliances being delivered to Gerhard's customers. On certain occasions when Plaintiff was required to perform Additional Work, he was advised that he would receive additional compensation ranging from $10.00 to $680.00, depending on the Additional Work assigned. The agreement for the Additional Work compensation was allegedly an oral agreement between Plaintiff and Gerhard's. According to Plaintiff, Gerhard'shas failed to pay Plaintiff the agreed compensation for the Additional Work, which totals approximately $3,515.00. (Id. ¶¶ 50-52, 55.)
Gerhard's provides its full-time employees with employer-sponsored benefits, including retirement benefit plan eligibility contributions, bonuses, profit sharing, health insurance, and other employment benefits. Gerhard's did not provide Plaintiff with any of these benefits since it classified its Lead Delivery Drivers as independent contractors and not employees. Nor did Plaintiff receive any Federal Insurance Contribution Act ("FICA") contributions, unemployment benefit contributions, or worker's compensation benefits. (Id. ¶¶ 56-57, 61-63.)
On November 17, 2017, Plaintiff brought this case against Defendants. In his Amended Complaint, filed February 13, 2018, Plaintiff set forth claims under the FLSA, ERISA, the PMWA, the WPCL, and common law breach of contract. Defendants filed the current Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6).
Under Federal Rule of Civil Procedure 12(b)(6), a defendant bears the burden of demonstrating that the plaintiff has not stated a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6); see also Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005). The United States Supreme Court has recognized that "a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quotations omitted). "[T]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice" and "only a complaint that states a plausible claim for relief survives a motion to dismiss." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."Id. A complaint does not show an entitlement to relief when the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct. Id.
The United States Court of Appeals for the Third Circuit has detailed a three-step process to determine whether a complaint meets the pleadings standard. Bistrian v. Levi, 696 F.3d 352 (3d Cir. 2014). First, the court outlines the elements a plaintiff must plead to state a claim for relief. Id. at 365. Next, the court must "peel away those allegations that are no more than conclusions and thus not entitled to the assumption of truth." Id. Finally, the court "look[s] for well-pled factual allegations, assume[s] their veracity, and then 'determine[s] whether they plausibly give rise to an entitlement to relief.'" Id. (quoting Iqbal, 556 U.S. at 679...
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