Sullivan v. PJ United, Inc.

• Decision Date: 19 July 2018
• Docket Number: 7:13-cv-01275-LSC
• Citation: 362 F.Supp.3d 1139
• Parties: James SULLIVAN, Plaintiff, v. PJ UNITED, INC., et al., Defendants.
• Court: U.S. District Court — Northern District of Alabama

362 F.Supp.3d 1139

James SULLIVAN, Plaintiff,

v.PJ UNITED, INC., et al., Defendants.

7:13-cv-01275-LSC

United States District Court, N.D. Alabama, Western Division.

Signed July 19, 2018

William K. Hancock, Galloway Scott Moss & Hancock LLC, Birmingham, AL, for Defendants.

Jack D. McInnes, Paul McInnes LLP, Kansas City, MO, Mark Alan Potashnick, Weinhaus & Potashnick, St. Louis, MO, Brandy L. Robertson, William L. Bross, IV, Heninger Garrison & Davis LLC, Birmingham, AL, Gary L. Blume, Blume & Blume, Northport, AL, for Defendant.

MEMORANDUM OF OPINION

L. Scott Coogler, United States District Judge

I. INTRODUCTION

Before the Court is Defendants' Motion to Strike Sullivan's' Declarations filed in Opposition to Summary Judgment (doc. 210); Sullivan's Consolidated Motion for Summary Judgment (doc. 235)¹ ; Defendants' Motion for Summary Judgment (doc. 269); and Sullivan's Motions to Strike (docs. 275 & 277). These Motions have been fully briefed and are ripe for decision. For the following reasons Defendants' Motion to Strike Sullivan's Declarations filed in Opposition to Summary Judgment is due to be GRANTED; Sullivan's Consolidated Motion for Summary Judgment is due to be GRANTED in PART and DENIED in PART; Defendants' Motion for Summary Judgment is due to be GRANTED in PART and DENIED in PART; and Sullivan's Motions to Strike are due to be DENIED as MOOT.

II. FACTUAL BACKGROUND ²

Defendants operate approximately 158 Papa John's stores in Alabama, Louisiana, Texas, Mississippi, Tennessee, Illinois, Missouri, Ohio, Virginia, and Utah. As part of their business, Defendants employ delivery drivers who use privately owned automobiles to deliver pizzas or other foods on behalf of the Defendants. This case involves a minimum wage claim by Sullivan, who is a delivery driver formerly employed by the Defendants. Sullivan brought this case as a collective action under the Fair Labor Standards Act, ("FLSA"), 29 U.S.C. § 201, et seq. , alleging that Defendants failed to pay him and others similarly situated a minimum wage.

Central to the parties' dispute is the method Defendants use to reimburse drivers for the cost drivers incurred making deliveries on behalf of Defendants. Defendants' reimbursement policy is not based on a per-mile rate, but is calculated by multiplying a predetermined amount per delivery (called the "Mileage Rate") by the number of discrete delivery addresses to which a driver delivers. The Mileage Rate fluctuates according to local gas prices and also seeks to reimburse drivers for certain maintenance costs incurred such as oil changes and tire replacements. At the end of each delivery driver's shift, a "Checkout Report" is created by Defendants that includes the total amount of reimbursement due to the driver for the deliveries they made on their shift. The Checkout Reports do not include the total number of miles driven by the drivers each shift, nor do Defendants track or maintain records of delivery drivers' actual expenses.

Sullivan's minimum wage claims are based on the Department of Labor ("DOL") regulations made according to the rulemaking authority delegated to the DOL under the FLSA. Those regulations state that "the wage requirements of [the FLSA] will not be met where the employee ‘kicks-back’ directly or indirectly to the employer ... the whole or part of the wage delivered to the employee." 29 C.F.R. § 531.35. A kickback occurs when the cost to the employee of tools specifically required for the performance of the employee's work "cuts into the minimum or overtime wages required to be paid him under [the FLSA]." Id. Sullivan argues that Defendants' reimbursement method undercompensates the amount of actual expenses that Sullivan incurred delivering for Defendants, such that the kick-back given to Defendants reduces Sullivan's hourly wage below the federal minimum wage.

Subsequent to the filing of the parties' motions for summary judgment, the Supreme Court held in Epic Systems Corp. v. Lewis that otherwise valid arbitration agreements providing for the waiver of collective action procedures during arbitration must be enforced. ––– U.S. ––––, 138 S.Ct. 1612, 200 L.Ed.2d 889 (2018). Concerned that Epic Systems was possibly at odds with early holdings in relation to the class-wide-nature of this action, the Court ordered the parties to indicate their support or opposition to dismissal of this action in favor of individual arbitration. (See Doc. 283.) The parties responded, with Defendants supporting such dismissal and Sullivan initially opposing it. (See Docs. 287 & 88.) The Court set a hearing for the parties to offer arguments both in regards to the arbitration agreements and any decertification arguments.

In a motion on June 15, 2018, Plaintiffs reversed their earlier decision and indicated that they did not oppose dismissal of the conditionally certified class members so that they could participate in individual arbitration. (See Doc. 294.) Defendants likewise filed a Motion for Decertification on June 20, 2018. In light of these additional motions, the Court on June 22, 2018, decertified the class of Opt-in Plaintiffs, dismissing them without prejudice. The sole remaining plaintiff in this action is Sullivan himself. The Court thus addresses in this Memorandum of Opinion only the issues that directly implicate Sullivan, because the Court is without power to make any holding regarding the former Opt-in Plaintiffs.

III. STANDARD OF REVIEW

Summary judgment is appropriate "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). A dispute is genuine if "the record taken as a whole could lead a rational trier of fact to find for the nonmoving party." Id. A fact is "material" if it is one that "might affect the outcome of the case." Urquilla-Diaz v. Kaplan Univ. , 780 F.3d 1039, 1050 (11th Cir. 2015) (quoting Harrison v. Culliver , 746 F.3d 1288, 1298 (11th Cir. 2014) ). The trial judge should not weigh the evidence, but determine whether there are any genuine issues of fact that should be resolved at trial. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

In considering a motion for summary judgment, trial courts must give deference to the non-moving party by "considering all of the evidence and the inferences it may yield in the light most favorable to the nonmoving party." McGee v. Sentinel Offender Servs., LLC , 719 F.3d 1236, 1242 (11th Cir. 2013) (citing Ellis v. England , 432 F.3d 1321, 1325 (11th Cir. 2005) ). Further, "the moving party has the burden of either negating an essential element of the nonmoving party's case or showing that there is no evidence to prove a fact necessary to the nonmoving party's case." Id. (citing Clark v. Coats & Clark, Inc. , 929 F.2d 604, 608 (11th Cir. 1991) ). Although the trial courts must use caution when granting motions for summary judgment, "[s]ummary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole." Celotex Corp. v. Catrett , 477 U.S. 317, 327, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The standard of review for cross-motions for summary judgment does not differ from the standard applied when only one party files a motion. See Am. Bankers Ins. Grp. v. United States , 408 F.3d 1328, 1331 (11th Cir. 2005) ; Griffis v. Delta Family–Care Disability , 723 F.2d 822, 824 (11th Cir. 1984) ; see also 10A Wright, Miller & Kane, Federal Practice and Procedure: Civil 3d § 2720 , at 335–36 (1998) (footnote omitted).

IV. DISCUSSION

The parties have moved for summary judgment on over ten discrete issues. While some arguments are made only by Sullivan or Defendants, the central issues of this case are addressed in both parties' summary judgment briefs. In an attempt to create a coherent treatment of the parties' dispute, the Court first addresses the "core issues" surrounding the parties' dispute, wherein a grant of summary judgment in favor of Defendants would require dismissal of this action. After finding that the core of this action is not due to be dismissed, the Court then addresses additional issues raised by both sides.

1. MT. CLEMENS BURDEN SHIFTING

Perhaps more important than any other dispute, the parties both raise in their motions for summary judgment the applicability of burden-shifting scheme created in Anderson v. Mt. Clemens Pottery Co. to the claims in this action. 328 U.S. 680, 66 S.Ct. 1187, 90 L.Ed. 1515 (1946). "In Mt. Clemens , the Supreme Court held that where the employer's records are inaccurate or inadequate, the employee has the burden to prove by way of just and reasonable inference that he in fact performed work for which he was improperly compensated. Once the employee has met his burden, the burden then shifts to the employer to come forward with evidence of the precise amount of work performed or with evidence to negate the reasonableness of the inference to be drawn from the employee's evidence." Jarmon v. Vinson Guard Servs., Inc. , 488 F. App'x 454, 457 (11th Cir. 2012) (citing Mt. Clemens , 328 U.S. at 687-88, 66 S.Ct. 1187.)

In order to trigger applicability of Mt. Clemens burden shifting, a Court must find that Defendants have not complied with the statutory recordkeeping requirements under the FLSA in regards to Sullivan's employment. This inquiry in turn requires the Court to determine what records must be retained and produced by the Defendants "in accordance with the requirements of § 11 (c) of the [FLSA]." Mt. Clemens , 328 U.S. at 688, 66 S.Ct. 1187. When making this determination, the Court disregards whether "the lack of accurate records grows out of a bona fide mistake as to whether certain activities or non-activities constitute work, [because] the employer, having received the benefits of such work, cannot object to the payment for the work on the most accurate basis possible under the...