Tegtmeier v. PJ Iowa, L.C.

• Decision Date: 18 May 2016
• Docket Number: No. 3:15-cv-00110-JEG,3:15-cv-00110-JEG
• Citation: 189 F.Supp.3d 811
• Parties: Brandon Tegtmeier, on behalf of himself and others similarly situated, Plaintiffs, v. PJ Iowa, L.C., Defendant.
• Court: U.S. District Court — Southern District of Iowa

189 F.Supp.3d 811

Brandon Tegtmeier, on behalf of himself and others similarly situated, Plaintiffs,

v.PJ Iowa, L.C., Defendant.

No. 3:15-cv-00110-JEG

United States District Court, S.D. Iowa, Davenport Division.

Signed May 18, 2016

Bruce H Stoltze, Stoltze & Stoltze, PLC, Des Moines, IA, Eli Karsh, Liberman, Goldstein, & Karsh, Mark Alan Potashnick, Weinhaus & Potashnick, St. Louis, MO, for Plaintiffs.

Jennifer K. Oldvader, Patrick F. Hulla, Ogletree, Deakins, Nash, Smoak & Stewart P.C., Kansas City, MO, Bryan Patrick O'Neill, Jill R. Jensen-Welch, Dickinson Mackaman Tyler & Hagen PC, Des Moines, IA, for Defendant.

ORDER

JAMES E. GRITZNER, Senior Judge, UNITED STATES DISTRICT COURT

This matter is before the Court on a Second Motion to Dismiss for Failure to State a Claim (Motion to Dismiss) pursuant to Federal Rule of Civil Procedure 12(b)(6), ECF No. 22, and a Motion for Order Allowing Defendant to Deposit Settlement Funds With Court (Rule 67 Motion) pursuant to Federal Rule of Civil Procedure 67, ECF No. 32, brought by Defendant PJ Iowa, L.C. (PJ Iowa). Plaintiff Brandon Tegtmeier (Tegtmeier), on behalf of himself, two putative collective actions pursuant to 29 U.S.C. § 216(b), and two putative class actions pursuant to Federal Rule of Civil Procedure 23, resists.

Neither party requested a hearing on the Motions, and the Court finds a hearing is unnecessary. The matter is fully submitted and ready for disposition.

I. BACKGROUND

PJ Iowa operates twenty-six Papa John's franchise stores in Iowa, Illinois, and South Dakota. From January to October 2014, Tegtmeier was employed by PJ Iowa as a delivery driver in Davenport, Iowa. During Tegtmeier's period of employment, PJ Iowa paid Tegtmeier a cash wage of $5.50 per hour and applied a tip credit for all of Tegtmeier's work time. On October 15, 2015, Tegtmeier filed a five-count Complaint against PJ Iowa for violation of the federal Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq. and the Iowa Wage Payment Collection Law (IWPCL), Iowa Code § 91A. Tegtmeier filed a seven-count First Amended Complaint on December 3, 2015, adding two counts alleging violations of the Iowa Minimum Wage Law (IMWL), Iowa Code § 91D.¹

Tegtmeier alleges that certain practices of PJ Iowa caused his net wages to fall below the minimum wage set by federal and Iowa law. In particular, Tegtmeier alleges that PJ Iowa requires delivery drivers, who are paid as tipped employees, to spend over 20% of their work time performing non-tipped work such as answering telephones, preparing food orders, washing dishes, and cleaning. Tegtmeier argues that PJ Iowa's tip credit was improperly applied to time spent performing non-tipped work and that he and other delivery drivers are entitled to the full minimum wage for that time. Tegtmeier also alleges that delivery drivers, who operate their own vehicles on the job and who are responsible for out-of-pocket expenses for maintenance and upkeep of those vehicles, are not reimbursed at a rate that reasonably approximates the delivery drivers' costs of owning and operating their vehicles for PJ Iowa's benefit. This failure to adequately reimburse, Tegtmeier argues, constitutes a "kickback" to PJ Iowa and as a result, reduces his and other delivery drivers' net wages below the minimum wage. Tegtmeier also alleges that delivery drivers must at their own expense procure their driving records for PJ Iowa, which also reduces their net wages below the minimum wage. Finally, Tegtmeier alleges that PJ Iowa requires delivery drivers and other non-supervisory employees to purchase uniform items, which similarly results in PJ Iowa's non-supervisory employees receiving sub-minimum net wages.

Tegtmeier also alleges that his uniform purchases and those of other employees, made through payroll deductions, were made without proper written authorization as required under Iowa law. PJ Iowa counters this allegation by attaching to its Motion to Dismiss a document purporting to show Tegtmeier's authorization to deduct the costs of one shirt from his paycheck. PJ Iowa also asserts in its Reply Brief supporting its Motion to Dismiss that it provides employees with one shirt and hat at no cost and argues that any additional uniform purchases are made by the employee for his or her convenience.

Tegtmeier alleges that he is entitled to relief as part of four related but distinct groups. Tegtmeier asserts claims under the FLSA on behalf of two "opt-in" collective actions under 29 U.S.C. § 216(b) : one collective action made up of all similarly situated delivery drivers and another made up of all similarly situated non-supervisory employees. On behalf of all similarly situated delivery drivers, Tegtmeier claims that PJ Iowa violated the FLSA by (1) paying delivery drivers as tipped employees but requiring them to spend 20% or more of their time on non-tipped work (Count I); and (2) failing to appropriately reimburse delivery drivers for vehicle expenses, including driving record costs (Count II). On behalf of all similarly situated non-supervisory employees, Tegtmeier claims that PJ violated the FLSA by not reimbursing employees for uniform and driving record expenses (Count III).

Tegtmeier also asserts claims under Iowa law for an "opt-in" class action pursuant to Rule 23 of the Federal Rules of Civil Procedure made up of delivery drivers who were employed by PJ Iowa in Iowa (the Iowa Delivery Driver Class). On behalf of the Iowa Delivery Driver Class, Tegtmeier claims that PJ Iowa violated the IMWL by failing to appropriately reimburse delivery drivers for vehicle expenses and driving record expenses, which resulted in net wages for delivery drivers that fell below the Iowa minimum wage (Count IV). Also on behalf of the Iowa Delivery Driver Class, Tegtmeier claims that PJ Iowa illegally withheld or diverted portions of delivery drivers' wages under the IWPCL by inadequately reimbursing delivery drivers for their vehicle expenses and driving record expenses (Count VI).

Finally, Tegtmeier asserts claims under Iowa law for an "opt-in" Rule 23 class action made up of non-supervisory employees who were employed by PJ Iowa in Iowa (the Iowa Non-Supervisory Employee Class). On behalf of the Iowa Non-Supervisory Employee Class, Tegtmeier claims that PJ Iowa violated the IMWL by failing to appropriately reimburse employees for uniform expenses, which resulted in net wages for non-supervisory employees that fell below the Iowa minimum wage (Count V). Also on behalf of the Iowa Non-Supervisory Employee Class, Tegtmeier claims that PJ Iowa illegally withheld or diverted portions of employees' wages under the IWPCL by deducting uniform expenses without permission (Count VII).

In its Motion to Dismiss, PJ Iowa argues that Tegtmeier's IMWL claims (Counts IV-V) are preempted by the FLSA. PJ Iowa argues that Tegtmeier's FLSA and IMWL claims arise from the same facts and allege that the same entitlement provided by federal and state law, yet would require the Court to supervise simultaneous collective action and class action procedures, involving different (but overlapping) sets of plaintiffs pursuing essentially the same claims. This, in PJ Iowa's view, causes a conflict between the federal and state minimum-wage claims that compels dismissal of the state claims. PJ Iowa also argues that Tegtmeier's claim for violation of the IWPCL from vehicle expenses and driving record expenses (Count VI) fails because the unreimbursed business expenses alleged are not "deductions" under the IWPCL. Finally, PJ Iowa argues that Tegtmeier's claim for violation of the IWPCL from uniform deductions (Count VII) fails because Tegtmeier in fact signed a written authorization allowing uniform deductions.

PJ Iowa also filed a motion on March 7, 2016, requesting to deposit funds with the Court pursuant to Federal Rule of Civil Procedure 67(a). Specifically, PJ Iowa asks for permission to deposit $6000 with the Court, which it argues constitutes the full amount of damages that Tegtmeier claims individually.² PJ Iowa also represents that it will deposit with the Court or transfer to Tegtmeier an amount equal to his fees, costs, and interest provided by statute after Tegtmeier moves for such relief and the matter is briefed and argued. PJ Iowa contends that if it is allowed to deposit such funds with the Court and pledges to pay Tegtmeier an amount of costs, fees, and interest to be determined later by the Court, then Tegtmeier's claims will be moot in accordance with Campbell – Ewald v. Gomez, ––– U.S. ––––, 136 S.Ct. 663, 193 L.Ed.2d 571 (2016). However, PJ Iowa states in its Reply Brief that it is not moving to dismiss Tegtmeier's claims for mootness at this time.

II. DISCUSSION

A. Jurisdiction

Tegtmeier filed this action pursuant to 29 U.S.C. § 216(b), which offers a private right of action for FLSA violations. This Court has subject matter jurisdiction over those claims pursuant to 28 U.S.C. § 1331. Tegtmeier's Iowa law claims arise out of the same conduct as the federal claims, and this Court has supplemental jurisdiction over those claims pursuant to 28 U.S.C. § 1367.

B. PJ Iowa's Motion to Dismiss

"While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Benton v. Merrill Lynch & Co., Inc., 524 F.3d 866, 870 (8th Cir.2008) (internal quotation marks omitted) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." United States ex rel. Raynor v. Nat'l Rural Utils. Co-op....