JOHN A. ROSS, District Judge.
This matter is before the Court on Plaintiffs' Motions for Partial Summary Judgment as to Employment Status [Gray ECF No. 209; Wells ECF No. 113], Defendant FedEx Ground Package System, Inc.'s Consolidated Motion for Summary Judgment [Gray ECF No. 212; Wells ECF No. 122], and Plaintiffs' Consolidated Objections to and Motions to Strike Defendant's Consolidated Response to Plaintiffs' Omnibus Statements of Uncontroverted Facts [Gray ECF No. 309; Wells ECF No. 188] and Plaintiffs' Individual Statements of Uncontroverted Material Facts. [Gray ECF No. 310; Wells ECF No. 189] The Motions are fully briefed and ready for disposition. Oral argument on the motions for summary judgment was held on January 10, 2013. For the following reasons, the Plaintiffs' motions for partial summary judgment as to employment status will be granted and their motions to strike will be denied. FedEx's motion for summary judgment will be granted in part and denied in part.
FedEx Ground Package System ("FedEx") provides small package pick-up and delivery services in the United States, including the State of Missouri, through a network of pick-up and delivery drivers. Plaintiffs are former drivers/contractors. Each Plaintiff executed a "Pickup and Delivery Contractor Operating Agreement" ("OA")
On March 6, 2006, seven current and former drivers from Missouri filed a putative class action complaint against FedEx challenging their status as independent contractors under Missouri law. The complaint alleged claims for illegal deductions, fraudulent misrepresentations, rescission, and declaratory relief. The case was transferred to the Multi-District Litigation (the "MDL") in which similar cases against FedEx were consolidated in the Northern District of Indiana for discovery and class certification purposes. In re FedEx Ground Package Sys., Inc., No. 3:05-MD-527-RM (N.D.Ind.).
On April 2, 2007, the Gray Plaintiffs moved for class certification of their statutory claim for unauthorized wage deductions, Mo.Rev. Stat. § 290.010, their common law claims for rescission and unjust enrichment, and their claim for declaratory relief. The MDL court denied class certification on March 25, 2008, finding that under Missouri law, the question of employment status could not be decided on a class-wide basis. In re FedEx Ground Package System., Inc., Employment Practices Litigation, 273 F.R.D. 424, 475 (N.D.Ind.2008). In September 2008, following denial of class certification, the Gray Plaintiffs filed a Second Amended Complaint, naming sixteen additional plaintiffs. Four more plaintiffs were added in a Third Amended Complaint, which was filed in April 2010. After the case was remanded back to this Court, the Fourth Amended Complaint adding one additional Plaintiff was filed on October 30, 2011, and a Fifth Amended Complaint was filed on November 9, 2011.
On December 15, 2011, this Court granted FedEx's motion to dismiss Plaintiffs' Fifth Amended Complaint as to the declaratory judgment claim, construed the illegal deductions claim to include a claim for overtime pay, and granted Plaintiffs leave to amend their complaint. (Gray Doc. No. 136) Plaintiffs' Sixth Amended Complaint alleges causes of action for fraudulent misrepresentation (Count I) and overtime (Count II) under Mo. Ann. Stat. §§ 290.527 and 290.505. (Gray Sixth Amended Complaint ("Gray Compl."), Gray Doc. No. 142) On FedEx's motion, this Court dismissed the wage claims of four Plaintiffs as time-barred. (Gray Doc. No. 157).
On November 3, 2010, 24 current and former drivers from Missouri filed suit against FedEx challenging their status as independent contractors under Missouri law and asserting claims for illegal deductions/overtime (Count I); fraudulent misrepresentation (Count II); rescission
Plaintiffs move for partial summary judgment on the issue of employment status. FedEx moves for summary judgment on all Counts of Plaintiffs' Sixth Amended Complaint in Gray: Fraudulent Misrepresentation (Count I) and Claims for Wages Under Sections 290.527 and 290.505, R.S.Mo. (Count II), and on all Counts of Plaintiffs' Amended Complaint in Wells: Illegal Deductions from Wages (Count I), 1 Fraudulent Misrepresentation (Count II), Rescission (Count III), and Declaratory Judgment (Count IV).
Summary judgment is proper if the pleadings, discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. Torgerson v. City of Rochester, 643 F.3d 1031, 1042-43 (8th Cir.2011) (internal citations and quotation marks omitted). The movant bears the initial burden of informing the district court of the basis for its motion, and must identify those portions of the record which it believes demonstrate the absence of a genuine issue of material fact. Id. If the movant does so, the nonmovant must respond by submitting evidentiary materials that set out specific facts showing that there is a genuine issue for trial. Id. On a motion for summary judgment, facts must be viewed in the light most favorable to the nonmoving party only if there is a genuine dispute as to those facts. Id. Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge. Id. The nonmovant must do more than simply show that there is some metaphysical doubt as to the material facts, and must come forward with specific facts showing that there is a genuine issue for trial. Id. Where the record taken as a whole could not permit a jury to find for the nonmoving party, there is no genuine issue for trial.
Where parties file cross-motions for summary judgment, each summary judgment motion must be evaluated independently to determine whether a genuine issue of material fact exists and whether the movant is entitled to judgment as a matter of law. Husinga v. Federal-Mogul Ignition Co., 519 F.Supp.2d 929, 942 (S.D.Iowa 2007). "[T]he filing of cross motions for summary judgment does not necessarily indicate that there is no dispute as to a material fact, or have the effect of submitting the cause to a plenary determination on the merits." Wermager v. Cormorant Township Bd., 716 F.2d 1211, 1214 (8th Cir.1983). In determining the appropriateness of summary judgment, "the relevant inquiry is whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Bingaman v. Kansas City Power & Light Co., 1 F.3d 976, 980
As a threshold matter, Plaintiffs have moved to strike FedEx's consolidated responses to their statements of material facts on the grounds that they are nonresponsive and supported by self-serving declarations, legal conclusions and improper statements of opinion. Plaintiffs point to declarations filed by various FedEx managers which they contend contradict their earlier deposition testimony concerning certain aspects of control FedEx exercised over Plaintiffs. In response, FedEx acknowledges that a disputed issue of material fact cannot be created through an affidavit that directly contradicts previous deposition testimony, see, e.g., Page v. Fifth Third Bank, 2009 WL 2252557 at *3 (E.D.Mo. July 29, 2009), but contends that is not the case here, where the kind of direct contradictions addressed in cases such as Page do not exist simply because one witness's testimony differs from another's. (Gray Doc. No. 319; Wells Doc. No. 197, p. 3)
By way of example, FedEx points to the declaration of terminal manager Mark Kanter, wherein he states that "contractors had the option of using the scanner leased from FedEx Ground to code their packages." (Gray Doc. No. 320-4; Wells Doc. No. 198-2, Kanter Decl., ¶ 32) In his deposition, however, Kanter testified that every driver was required to have a scanner. (Gray Doc. No. 320-3; Wells Doc. No. 198-2, Kanter Depo. 87:10-88:8) The fact that every driver was required to have a scanner is a separate matter from where the scanner was obtained. There is nothing contradictory about these statements. Likewise, Kanter stated that "scanners were not used by the managers to track the contractors." (Kanter Decl., ¶ 6) In his deposition, however, he testified he could and did track the drivers' package delivery throughout the day for several reasons, including "to see how somebody is doing. If he has got a lot of stops. If he is going to get done today," because he wanted to "make sure all of the packages got delivered." (Kanter Depo. 23 8:20-240:4) This does not appear to actually contradict his earlier testimony in that he may be making a distinction between tracking contractors and tracking package delivery.
Plaintiffs also maintain that a number of FedEx managers were unable to recall on deposition specific training on FedEx policies and procedures, although they all testified they had received some training. (Gray Doc. No. 309, 310; Wells Doc. No. 188, 189) In particular, Plaintiffs point to the declaration of FedEx manager Kearce Peters, wherein she stated that she attended managerial training classes offered by FedEx, and that in those training classes, emphasis was placed on "the importance of adhering to the terms of the [Operating Agreement]." She also stated that she was taught that "FedEx Ground employees may not dictate the manner and means of package delivery to contractors, but must focus only on the ultimate results sought under the OA." At her deposition, Peters testified she had received training on FedEx's policies and procedures but did not recall any specifics. The purported inconsistencies between Peters' declaration and deposition do not appear
Generally, a court is required to consider an otherwise admissible affidavit, unless that affidavit contradicts previous deposition testimony. Popoalii v. Correctional Medical Services, 512 F.3d 488, 498 (8th Cir.2008). The court must exercise extreme caution and carefully articulate its reasons for finding an affidavit contradictory of earlier testimony. Pimentel v. St. Louis Public Schools, 2011 WL 128788, at *1-2 (E.D.Mo. Jan. 14, 2011) (citing Mountain Pure, LLC v. Bank of America, N.A., 481 F.3d 573, 577 (8th Cir.2007)). A court should not strike a post-deposition affidavit that "simply restates information already contained in deposition testimony or elaborates on information already conveyed, that does not actually contradict the affiant's earlier testimony, that includes statements "that [the affiant] was confused in [the earlier] deposition or where the affiant needs to explain portions of [the earlier] deposition testimony that were unclear."" Pimentel, 2011 WL 128788, at *1 (internal quotations and citations omitted)
The Court has considered the parties' arguments and in its discretion will deny Plaintiffs' motions to strike. The Court will consider FedEx's declarations since they aid the Court in determining whether there is a genuine issue of material fact on the issue of Plaintiffs' employment status. Likes v. DHL Express (USA), Inc., 2012 WL 8499732, at *1 n. 1 (N.D.Ala. Mar. 7, 2012).
Plaintiffs submit that the undisputed facts of these cases demonstrate that FedEx controlled and managed their routes and businesses to such an extent that they were employees of FedEx and not independent contractors. According to Plaintiffs, FedEx required packages to be delivered and picked up at certain times, dictated the drivers' dispatches, set the pricing, and even controlled what they wore. Essentially, Plaintiffs argue they had no distinct businesses of their own.
In opposition to Plaintiffs' motions, FedEx points to a number of undisputed facts that demonstrate Plaintiffs are independent contractors as a matter of law. In particular, Plaintiffs perform their duties pursuant to an Operating Agreement that gives them the right to hire their own employees and "work" entirely through someone else's labor. FedEx maintains that Plaintiffs manage and control substantial investments in their business, set their own hours, choose their own routes, and select whatever methods they want to complete their work. They can buy and sell their jobs and FedEx has no right to unilaterally terminate their contracts.
Whether an individual is an employee or an independent contractor is generally considered a question of fact. Huggins v. FedEx Ground Package System, Inc., 592 F.3d 853, 857 (8th Cir.2010). However, when the facts are undisputed and "only one reasonable conclusion can be drawn" from those facts, the issue may be decided as a matter of law. Id. The right to control "is the pivotal factor in distinguishing between employees and other types of workers. If the employer has a right to control the means and manner of a person's service — as opposed to controlling only the results of that service — the person is an employee rather than an independent contractor." Leach v. Board of Police Com'rs of Kansas City, 118 S.W.3d 646, 649 (Mo.Ct.App.2003) (citing Seaton v. Cabool Lease, Inc., 7 S.W.3d 501, 505 (Mo. App.1999)).
To determine extent of control, the Court looks to the terms and provisions of the OA to see what powers FedEx reserved for itself. Nunn v. C.C. Midwest, 151 S.W.3d 388, 400 (Mo.Ct.App.2004). Plaintiffs acknowledge that certain sections of the OA specify they will be independent contractors, and that the manner and means of their work will not be controlled by FedEx; however, they contend that the balance of the OA details the virtually unlimited control FedEx exercised over them, including, inter alia, their vehicles, day-to-day operations, and delivery routes. (Gray Mem. in Supp., Doc. No. 210; Wells Mem. in Supp., Doc. No. 113, p. 6)
For example, although Plaintiffs provided their own vehicles, FedEx requires each vehicle to meet certain specifications (OA, ¶ 1.1), to be painted "FedEx White," and to be marked with the FedEx logo and insignia. (OA, ¶ 1.5) Plaintiffs' vehicles had to be maintained in a "clean and presentable fashion free from body damage and extraneous markings." (OA, ¶ 1.12) Plaintiffs pay the costs of operating and maintaining their vehicles, including repairs, cleaning, fuel, tires, taxes, licenses and insurance, and must provide FedEx with proof of inspection and maintenance. (OA, ¶¶ 1.2, 1.3, 1.6) Plaintiffs must use their trucks exclusively in the service of FedEx, or mask the logo if the truck is used for any other purpose. (OA, ¶ 1.4, 1.5) FedEx reserves the right to remove Plaintiffs' vehicles from service if it finds the vehicles deficient in any way, a practice known as "deadlining." (OA, ¶ 1.2) If a vehicle was deadlined, Plaintiffs were required, at their expense, to provide alternative equipment, subject to FedEx approval, to meet their obligations under the OA. (Id.) Plaintiffs were not permitted to own or operate additional vehicles without FedEx's consent, or to allow drivers who were not pre-approved by FedEx to assume their job duties, even temporarily. (OA, ¶¶ 2.1, 2.2)
Plaintiffs were required to wear FedEx uniforms, which had to be maintained in good condition, and otherwise had to agree to keep their personal appearance consistent with "reasonable standards of good order" as set by FedEx. (OA, ¶ 1.12) FedEx agreed to familiarize Plaintiffs with its quality service procedure, and reserved the right to have its management employees travel with Plaintiffs four times each year to verify they were meeting FedEx standards. (OA, ¶ 1.14)
On a daily basis, Plaintiffs were required to prepare driver logs, inspection reports,
In opposition to Plaintiffs' motion, FedEx responds that the core provisions of the OA either address the results Plaintiffs agreed to achieve, and not the physical performance of their work, or are directed at ensuring compliance with government regulations. (Gray Doc. No. 279; Wells Doc. No. 158 ("Consol. Opp."), pp. 4-9). In particular, the requirements that Plaintiffs inspect and maintain their vehicles, prepare daily driver logs and reports, and provide shipping information, are directed at ensuring compliance with the regulatory control and oversight of the Department of Transportation and the Federal Motor Carrier Safety Administration. (Id., p. 5) Likewise, FedEx's provision that Plaintiffs not use their vehicles for other customers while carrying FedEx packages, and that Plaintiffs paint their vehicles a certain color and mark them with certain insignia, also stem from federal regulations. (Id., pp. 6-7) FedEx also points out that many courts have recognized that the sort of uniform and branding provisions found in the OA do not establish that it controlled Plaintiffs' work methods. Rather, they foster the professional image and good reputation of FedEx and allow consumers "to be assured of their bona fides." (Consol. Opp., pp. 9-10, citing Herman v. Mid-Atlantic Installation Servs., Inc., 164 F.Supp.2d 667, 673 (D.Md.2000)).
Plaintiffs reply that while an employer's efforts to comply with government regulations is not in and of itself sufficient to prove employee status, see K & D Auto Body, Inc. v. Division of Employment Sec., 171 S.W.3d 100, 106 (Mo.Ct.App. 2005), "pervasive control by an employer [which exceeded] to a significant degree the scope of the government imposed control" evidences employee status. Id. (Gray Doc. No. 308; Wells Doc. No. 181 ("Reply Memo"), pp. 10-11)
As discussed above, the determination of employment status cannot be made based on a review of the OA alone. In Missouri, the "right to control" is defined with reference to the actual exercise of control.
The analysis of actual control requires a driver-by-driver, terminal-by-terminal, supervisor-by-supervisor analysis that is unnecessary in most other states. In re FedEx, 273 F.R.D. at 475 (citing Leach, 118 S.W.3d at 649). To that end, Plaintiffs have submitted individual statements of uncontroverted material facts with attached
As evidence of actual control, Plaintiffs focus on a "comprehensive network" of policies and procedures which they contend were developed and implemented by FedEx to manage and control their daily activities. In particular, Plaintiffs point to Contractor Relations POLICY-007 (Plaintiffs' Omnibus Ex. 22), which applies to FedEx managers and employees responsible for maintaining relationships with pick-up and delivery drivers. (Gray Mem. in Supp., pp. 19-25; Wells Mem. in Supp., pp. 20-27)
Pursuant to these policies, prospective drivers were subjected to background checks, credit reports, and drug screening. (Plaintiffs' Omnibus Exs. 9-12; 30-32) In addition, FedEx maintained an extensive training program, called Quality P & D Learning, for prospective or temporary drivers who lacked the requisite experience. (Plaintiffs' Omnibus Ex. 13; Plaintiffs' Indiv. SOF, ¶ C.4.f)
Plaintiffs were required to leave from and return to the terminal each day. Home delivery drivers were required to work Tuesday through Saturday; ground delivery drivers were required to work Monday through Friday. (Plaintiffs' Indiv. SOF, ¶ C.3.a) Plaintiffs were required to work on the days before and after holidays, and had to "buy" time off through Contractor Time-Off Program. (Plaintiffs' Indiv. SOF, ¶ C.3.i)
Plaintiffs were required to carry and use scanners on their routes, maintain clean vehicles, wear FedEx uniforms, submit their vehicles to D.O.T. inspections, and submit to random drug screening. (Plaintiffs' Omnibus Exs. 26-27; Plaintiffs' Omnibus SOF, ¶¶ 30-31, 62; Plaintiffs' Indiv. SOF, ¶¶ B.4 and C.2.a-e) FedEx provided these items to Plaintiffs through its Business Support Package (OA, ¶ 7) and deducted the cost of each item through their weekly settlements. (Plaintiffs' Omnibus Exs. 26, 27; Plaintiffs' Indiv. SOF, ¶ E.3). The Business Support Package, characterized by Plaintiffs as a "company store," is an elective program; however, Plaintiffs contend that in practice, it was the only way to obtain the items provided and required by Fed Ex and charged to Plaintiffs. (Gray Mem. in Supp., pp. 17-18; Wells Mem. in Supp., p. 14)
In addition, Plaintiffs contend that the methods and manner of package delivery was closely monitored and controlled. FedEx assigned each Plaintiff a number of packages to deliver each day, told each Plaintiff how and when each package must be delivered, and could even contact Plaintiffs on their routes to direct them to pick up packages. (Plaintiffs' Indiv. SOF ¶¶ C. 1.a-k, C.4.b, i, I.10) FedEx procedures also covered such matters as obtaining signatures, where to leave packages when recipients were not available, and when packages could be released under these circumstances. (Plaintiffs' Omnibus Exs. 13 and 14; Plaintiffs' Indiv. SOF, ¶¶ C. 1.a-e, i)
Plaintiffs who drove for the home delivery division were required to perform a morning check-out before leaving the terminal. (Plaintiffs' Omnibus Exs. 38-39; Plaintiffs' Omnibus SOF, ¶¶ 41-42) FedEx would obtain certain information from each
To ensure compliance with FedEx procedures, FedEx terminal personnel could ride with Plaintiffs on their daily routes (customer service rides) to audit their performance. (Plaintiffs' Omnibus Ex. 36; Plaintiffs' Omnibus SOF, ¶¶ 12, 39; Plaintiffs' Indiv. SOF, ¶ C.4.1) Contractor Customer Service Ride Worksheets, as well as customer complaints or comments about Plaintiffs' performance, were kept in files FedEx maintained on its drivers. (Plaintiffs' Omnibus Ex. 36)
FedEx reviewed Plaintiffs' overall operations, package "flexing," customer complaints, problem solving, as well as aspects of each Plaintiff's performance, through "Business Discussions." (Plaintiffs' Omnibus Exs. 18, 46; Plaintiffs' Omnibus SOF, ¶¶ 25, 49) FedEx also required Plaintiffs to prepare and submit an annual "business plan" outlining FedEx's expectations of that Plaintiff and providing a record of what FedEx and Plaintiffs had committed to do for the coming year. (Plaintiffs' Omnibus Ex. 14; Plaintiffs' Indiv. SOF, ¶¶ C.4.b-c) Contract Termination Guidelines provided direction to FedEx management on how to terminate an OA and retake control of Plaintiffs' routes. (Plaintiffs' Omnibus Exs. 15, 16 and 17)
Plaintiffs also point to a number of FedEx programs they maintain were inconsistent with independent contractor status, including the Contractor Time-Off Program, which permitted them to buy time off each year from FedEx (Plaintiffs' Omnibus Ex. 37; Plaintiffs' Indiv. SOF, ¶¶ C.3.c-d); a Maintenance Loan Program, which permitted ground delivery drivers to borrow money from FedEx for specific maintenance repairs required on their vehicles (Plaintiffs' Omnibus Ex. 44); and a plan through which a prospective contractor could purchase a vehicle through FedEx-approved vendors and FedEx-approved financing institutions. (Plaintiffs' Omnibus Ex. 45) In addition, FedEx provided Plaintiffs with bonuses based on performance and years of service. (Plaintiffs' Indiv. SOF, ¶ E. 6; Plaintiffs' Omnibus Exs. 14; 42)
Further, Plaintiffs identify several unwritten policies and procedures regarding FedEx control through scanners, pick-up windows, delivery sequence, restrictions on route sales and management contact during operation of routes. (Gray Mem. in Supp., pp. 25-27; Wells Mem. in Supp., pp. 27-29) Plaintiffs were required to record a check-in and check-out time through their scanners. (Plaintiffs' Indiv. SOF, ¶ C.2.e) FedEx management could track Plaintiffs' progress because the scanners tracked the time and location of each delivery or attempted delivery of each FedEx package. (Plaintiffs' Indiv. SOF, ¶¶ C.2.e and C.4.i)
"Pick-up windows," windows of time set by FedEx's sales department during which
Ground drivers' delivery trucks were loaded for them at FedEx terminals before they left each morning on their routes. (Plaintiffs' Indiv. SOF, ¶¶ C.1.j, C.3.e, C.4.j-k, and I.4-8) Plaintiffs played no role in the loading procedure, which effectively dictated their routes since the trucks had to be unloaded in reverse order. (Plaintiffs' Omnibus SOF, ¶ 56; Plaintiffs' Indiv. SOF, ¶¶ C.1.j, C.3.e, C.4.k, and I.7, 9) Plaintiffs who drove for the home division were responsible for loading their own vehicles (Plaintiffs' Omnibus SOF, ¶ 60; Plaintiffs' Indiv. SOF, ¶¶ I. 8 and I.9); however, FedEx provided them with explicit "turn-by-turn" directions which they were expected to follow on a daily basis. (Plaintiffs' Omnibus SOF, ¶ 60)
Plaintiffs' departure times were also controlled by FedEx terminal management. In many cases, when trucks delivering packages from FedEx "hubs" were late in arriving at the terminals, resulting in delays in loading Plaintiffs' vehicles, Plaintiffs were kept at the terminals and not allowed to depart until after 10:00 a.m. (Plaintiffs' Indiv. SOF, ¶ C.3.b)
Plaintiffs were not permitted to sell their routes without prior approval from FedEx. (Plaintiffs' Individual SOF, ¶¶ G.5 and H.4) Likewise, FedEx threatened to take Plaintiffs' routes away on a number of occasions for various reasons. (Plaintiffs' Indiv. SOF, ¶ H.2)
In response, FedEx argues that Plaintiffs have no evidence that the substance of these policies and procedures were actually followed by FedEx management given the testimony of FedEx's terminal managers that the OA controlled their interaction with contractors and that the policies and procedures were considered reference materials only. (Gray Doc. No. 158; Wells Doc. No. 279 ("Consol. Opp."), pp. 15-16) Further, even if the policies and procedures had been followed by management, FedEx contends they are not evidence of control over the means and manner of Plaintiffs' work. (Id., pp. 18-22) Many of these policy documents relate to efforts to comply with federal regulations and are not evidence of control for that reason. See, K&D Auto Body, 171 S.W.3d at 106. Other policies relate to results that Plaintiffs promised to provide under the OA, i.e., providing a "suitable" vehicle (OA, ¶ 1.1) and presenting "a consistent image and standard of service to customers." (OA, ¶ 1.12) Policies pertaining to service standards go to the results the contractors agreed to provide under the OA, and not to the manner and means of performance. Intermittent monitoring of the results of a contractor's work, such as the "customer service rides," does not create an employee relationship. See State ex rel. MW Builders, Inc. v. Midkiff, 222 S.W.3d 267, 271-72 (Mo.2007) (determining that sub-contractor was an independent contractor even though general contractor visited construction site weekly to review progress and see whether work and results conformed to architectural plans). Resulting feedback from FedEx was in the form of "suggestions" and not tantamount to the actual exercise of control. See also Williamson v. SW Bell Tel. Co., 265 S.W.2d 354, 359 (Mo.1954) ("[I]t is necessary to distinguish between authoritative direction and control
Plaintiffs reply that the reasons for an employer's control and supervision over its workers, such as service standards and customer demands, are not relevant to the determination of employment status. (Gray Doc. No. 308; Wells Doc. No. 181 ("Plaintiffs' Consol. Reply"), pp. 12-13) Plaintiffs also point to the deposition testimony of a number of FedEx terminal managers, and Policy 007 itself, which specifically states that managers could be terminated for not following such policy and the procedures promulgated under it. (Plaintiffs' Consol. Reply, p. 10, citing Plaintiffs' Omnibus Ex. 27, p. 3; FedEx Rule 30(b)(6) Depo. 29:12-31:14; Kanter Depo. 66:16-67:22, 68:11-69:21, 124:7-125:19, 127:12-130:12, 137:7-18, 145:10-146:3, 168:3-7, 184:19-23, 208:12-14, 218:5-219:6, 228:13-230:8; Peters Depo. 70:14-71:13, 73:12-74:13; Wallace Depo., 74:10-17).
After reviewing the terms of the OA with reference to the affidavits and deposition testimony of Plaintiffs and FedEx managers and other evidence presented, the Court finds that both the extent of control and actual exercise of control factors weigh in favor of employee status. FedEx screened potential drivers and trained them in the most fundamental aspects of their jobs, such as courteous treatment of the FedEx customers, where to leave a package, and whether to obtain a customer's signature on a package. Similar evidence of control over hiring and training has been found to support a reasonable inference that FedEx had a right to control its drivers' performance. See, Huggins, 592 F.3d at 858. Plaintiffs were doing business in FedEx's name, wearing the FedEx uniform, and driving vehicles with FedEx logos. The right to determine and enforce driver and vehicle appearance and vehicle suitability standards also favors employee status. In re FedEx Ground Package System, Inc. Employment Practices Litigation, 869 F.Supp.2d 942, 980 (N.D.In.2012). Plaintiffs operated with the assistance and guidance of FedEx. FedEx assigned the routes, established times of pick-ups and deliveries, and provided loading, sales and customer service operations. FedEx audited Plaintiffs' compliance with its standards through customer service rides. "Daily assignments" demonstrates control indicative of employee status, as does the monitoring of Plaintiffs' workloads and consequent reconfiguring of their routes. Burgess v. NaCom Cable Co., 923 S.W.2d 450, 454 (Mo.Ct. App.1996) (periodic communication with installer by radio dispatch throughout the day is a clear emblem of control and scheduling benefit to cable company). See also Williams v. Sodexho Operations, LLC, 2009 WL 2592312, at *3-4 (E.D.Mo. Aug. 20, 2009) (authority and promulgation of standards for supervision and performance reviews demonstrates control). In addition, FedEx provides programs to decrease insurance cost and vehicle maintenance, as well as performance based incentives such as the CCS bonuses, the Service Guarantee Program and the HR-10 defined contribution plan. (OA, ¶¶ 8, 10) Such incentives are also indicative of employee status.
Independent contractors are typically hired by the job to complete a specific task. State ex rel. Sir v. Gateway Taxi Management Co., 400 S.W.3d 478, 486 (Mo.Ct.App.2013). Plaintiffs argue that none of them were hired by the job; rather they were hired by the year(s), which is the direct opposite of independent contractor status, citing Nunn, 151 S.W.3d at 401 (truck driver was an "employee" rather than an independent contractor, for purposes
The inability to terminate a worker at will supports independent contractor status. In re FedEx, 869 F.Supp.2d at 986 (citing McDonnell v. Music Stand, Inc., 20 Kan.App.2d 287, 886 P.2d 895, 899 (1994)). FedEx maintains it cannot unilaterally terminate its relationship with Plaintiffs; rather, FedEx can only terminate the OA without the contractor's consent in limited circumstances, such as if the contractor breaches the terms of the agreement. (OA, ¶¶ 3(a), (b), 12.1, 12.3). Further, if a contractor disputes his termination, the OA provides that the dispute can be submitted to arbitration. (OA, ¶¶ 12.1, 12.3) FedEx observes that Missouri courts have found that less restrictive termination provisions favor independent contractor status. (Consol. Opp., p. 30, citing Kirksville Pub'g Co. v. Div. of Emp't Sec., 950 S.W.2d 891, 899 (Mo.Ct.App.1997) (holding that the right to discharge factor supported contractor status even though the company was only required to provide thirty days' notice to discharge a motor carrier)).
Plaintiffs argue that even though the OA provides for termination with cause, there are no limitations on the grounds for nonrenewal of the OA. (OA, ¶ 11) Plaintiffs assert that FedEx told many of them that they either had to sell their routes or FedEx would send their contracts up for non-renewal or termination and take their routes away from them. (Plaintiffs' Indiv. SOF, ¶¶ H.1, 2) A number of the Wells Plaintiffs were either non-renewed or terminated by FedEx. (Plaintiffs' Indiv. SOF, ¶¶ H.3-4). Based on an identical OA, the California Court of Appeals in Estrada v. FedEx Ground Package System, Inc., 154 Cal.App.4th 1, 64 Cal.Rptr.3d 327 (Cal.App.2007), concluded the drivers could be terminated "at will." Id. at 9. See also Narayan, 616 F.3d at 903 (contract signed by plaintiff drivers which contained automatic renewal clauses and could be terminated by either party upon thirty-days notice or upon breach of the agreement, is a substantial indicator of an at-will employment relationship). This factor weighs in favor of employee status.
"Independent contractors are typically... paid a fixed sum on a by-the-job basis." Gateway Taxi, 400 S.W.3d at 486 (quoting Midkiff, 222 S.W.3d at 270). Plaintiffs were paid weekly based on certain non-negotiable factors, including stops made, packages handled, and distance traveled, after deductions for the Business Support Package, insurance and other items paid by FedEx. (OA, ¶ 4.1, 4.2; Plaintiffs' Indiv. SOF, ¶¶ E.1-7, F.1-3; Plaintiffs' Omnibus Exs. 5, 8, 19-20, and 42) Plaintiffs argue that FedEx's pay formula is a "piecework system" and not "payment by the job." (Mem. in Supp., pp. 31-32) FedEx responds that Plaintiffs are paid regardless of whether they perform the work or hire others to do so,
Although their settlements were based in part on deliveries made, Plaintiffs were paid on a regular basis. The fact they were paid this way is consistent with an employee relationship, particularly where other indicia of employment are present. See, Narayan, 616 F.3d at 904. The fact that compensation rates were not negotiated (Plaintiffs' Indiv. SOF, ¶ E.2) also weighs in favor of employee status. See, In re FedEx, 869 F.Supp.2d at 986 (citing Lewis v. ASAP Land Express, Inc., 554 F.Supp.2d 1217, 1225 (D.Kan.2008)).
That a worker supplies his own tools is some evidence that he is not an employee. In re FedEx, 869 F.Supp.2d at 985 (citing Restatement (Second) of Agency, § 220 cmt. k (1958)); see also Gateway Taxi, 400 S.W.3d at 486. Although Plaintiffs provide their own trucks and equipment, FedEx is intricately involved in the purchasing process, providing funds and recommending vendors. See, Estrada, 154 Cal.App.4th at 9, 64 Cal.Rptr.3d 327. As discussed above, FedEx requires Plaintiffs to have FedEx uniforms, scanners, printers, and communications-related equipment, and provides them an option of purchasing or renting through its Business Support Package. (OA, ¶ 7) Plaintiffs argue that all of this equipment was used during their service to FedEx, which was integral to FedEx's business. Where a worker uses "equipment in a continuous service integral to the business, a factual inference of employment arises." Miller v. Hirschbach Motor Lines, Inc., 714 S.W.2d 652, 657 (Mo.App. 1986). (Mem. in Support, pp. 31-34) In addition, the undisputed facts demonstrate that FedEx provides the entire system of receiving, sorting, and loading packages. It supplies contractors with software and a computer network for tracking packages and provides terminals and sorting equipment for packages, sales and marketing services, and customer service personnel. (Plaintiffs' Omnibus SOF, ¶¶ 51-57; Plaintiffs' Indiv. SOF, ¶¶ I.1-13). This factor weighs in favor of employee status.
There is no dispute that the work of FedEx package delivery drivers is the essence of the business of a package delivery company such as FedEx. This factor clearly weighs in favor of employee status. Burgess, 923 S.W.2d at 454 (finding employee status where defendant would have no business purpose if the work of the plaintiff did not occur).
The OA states the parties' intent to create an independent contractor agreement. ("Both FedEx ... and Contractor intend that Contractor will provide these services strictly as an independent contractor, and not as an employee of FedEx for any purpose. (OA, Background Statement) In several provisions, the OA says FedEx directs the results, but not the manner and means, of the Plaintiffs' work. (OA, ¶ 1.15) More specifically, the OA provides that FedEx cannot "prescribe hours of work, whether or when the Contractor is to take breaks, what route the Contractor is to follow, or other details of performance." (Id.)
The contractual designation of the work status of a person is not conclusive for purposes of determining whether he is an employee or an independent contractor, when there is evidence to overcome such designation. Nunn, 151 S.W.3d at 401. See also, Williams, 2009 WL 2592312, at * 3-4 (the mere characterization in a contract
Huggins v. FedEx, 592 F.3d 853, is the only Missouri case to address the employment status of FedEx drivers.
The Eighth Circuit reversed after examining the agreement and determining that FedEx had retained the right to control at least some of the "means and methods" of the work. Id. at 859. In particular, the agreement provided that the drivers performed work that was "part of the regular business" of FedEx. Drivers were required to look and act like FedEx employees while they performed FedEx services. Drivers were required to wear a FedEx-approved uniform and mark their vehicles with FedEx insignia. In a section addressing customer service, the agreement states that FedEx will "familiarize" drivers "with various quality service and safety procedures developed by [FedEx]," supporting an inference that the drivers were required to follow FedEx's procedures. FedEx also reserved the right to monitor drivers' safety practices; FedEx terminal personnel, "at their option," were permitted to "take a ... safety ride with contractor [or presumably the contractor's driver] to verify" compliance with standards in the agreement. Furthermore, drivers had to submit daily fuel receipts and daily shipping documents to FedEx. They also organized and returned undeliverable packages to FedEx, and drivers agreed to provide FedEx with "advance notice of routes to be taken for each linehaul movement" and "a state by state mileage report" for interstate package and delivery movement. The agreement also lists certain bases for "driver disqualification,"
The Court also focused on evidence offered by Huggins including a "record of Strength Test," a "Fair Credit Reporting Act Disclosure Statement," and a drug testing form, all of which supported an inference that FedEx participated in deciding whether Gutierrez would be hired. Id. at 861. While acknowledging there was record evidence tending to show that Gutierrez was an independent contractor, the Court in Huggins went on to state that "we believe that the evidence — including the terms of the written agreement, Mr. Huggins's declaration, and the documents showing that FedEx tested Mr. Gutierrez and checked into his background before he was hired — would support a reasonable inference and thus a jury finding that FedEx had a right to control his performance and was his employer for respondeat superior purposes." Id.
Based on an identical OA, the California Court of Appeals in Estrada, 154 Cal.App.4th 1, 64 Cal.Rptr.3d 327, held that FedEx drivers who serviced a single work area were employees rather than independent contractors under California law. The evidence showed that the drivers' ability to use their equipment for independent purposes was "more imagined than real," Id. at 333 n. 5; that "drivers and their trucks are subject to inspection every day... and if either fails inspection, the driver may be barred from service," Id. at 333; that "FedEx discharges drivers at will," Id. at 336; and that FedEx exercises "control over every exquisite detail of the drivers' performance, including the color of their socks and the style of their hair." Id. The court found the drivers' right to control their own routes and schedules was illusory because they were "constrained by customer pick up and delivery windows contracted by the [FedEx] sales force" and by FedEx's paperwork requirements that required the drivers' presence at the terminal. Id. at 333-334. In sum, the court found the Operating Agreement to be "a brilliantly drafted contract creating the constraints of an employment relationship with [the drivers] in the guise of an independent contractor model." Id. at 334. See also Air Couriers Int'l v. Employment Dev. Dep't, 150 Cal.App.4th 923, 59 Cal.Rptr.3d 37 (2007) (affirming finding of employee status for employment tax purposes where package delivery company retained all necessary control over the overall delivery operation, the work was simple, the workers weren't engaged in a separate profession or operating an independent business, and the delivery work was an integral aspect of the courier's business.)
While other courts have reached different conclusions, these cases are not dispositive, particularly in light of Huggins. In Johnson v. FedEx Home Delivery, 2011 WL 6153425 (E.D.N.Y. Dec. 12, 2011), for example, the Eastern District of New York held on summary judgment that the plaintiff delivery drivers were independent contractors under New York law. Because the plaintiffs did not file any opposition to FedEx's motion for partial summary judgment, the court concluded there was insufficient evidence on the record to create a genuine dispute on the issue whether the plaintiffs were employees or independent contractors, but clarified that its holding
In FedEx Home Delivery v. NLRB, 563 F.3d 492 (D.C.Cir.2009), the District of Columbia Circuit held that FedEx single route drivers were independent contractors under the National Labor Relations Act. Unlike the "right to control" test for determining employment status in Missouri, in this case the court focused on the worker's right to engage in entrepreneurial activity, and specifically the drivers' "ability to operate multiple routes, hire additional drivers (including drivers who substitute for the contractor) and helpers, and to sell routes without permission, as well as the parties' intent as expressed in the contract." Id. at 504. See also Anfinson v. FedEx Ground Package System, Inc., 159 Wn.App. 35, 244 P.3d 32 (2010), which held that the test for determining whether FedEx delivery drivers are independent contractors or employees is not whether FedEx had the "right to control" the workers, but rather, the "economic reality" of the working relationship.
After carefully considering the facts of record in the light most favorable to FedEx, the Court concludes that FedEx had the right to control and did control the means and manner of Plaintiffs' work to such an extent that they were employees of FedEx and not independent contractors. Plaintiffs were required to foster the professional image and reputation of FedEx by wearing the approved uniform and complying with personal appearance standards. FedEx required Plaintiffs' vehicles to meet certain specifications, to be painted "FedEx White," and to be marked with the FedEx logo and insignia. While governmental regulations may "furnish reasons for at least part of the control exercised" over driver and vehicle appearance and vehicle suitability standards, FedEx's requirements have been found to go beyond federal regulations. See In re FedEx, 869 F.Supp.2d at 980. Thus, FedEx's right to control Plaintiffs' personal appearance, as well as the appearance and suitability of their vehicles, weighs in favor of employee status. Id. See also Burgess, 923 S.W.2d at 453.
FedEx controlled Plaintiffs' PSAs. Plaintiffs actually received their route assignments from FedEx, rather than finding their own work. Such "daily assignments" demonstrate control that is indicative of employee status. See, Burgess, 923 S.W.2d at 453 ("Independent contractors generally find their own work rather than pick up daily assignments."). In addition, FedEx controlled Plaintiffs' daily workloads by flexing and reconfiguring their PSAs as it saw fit.
FedEx controlled the services Plaintiffs must provide for its customers, prices charged for those services, and customer service standards that drivers must meet. Fed Ex also retained the right to determine some time parameters for providing service to its customers. Drivers must work certain days of the week, deliver all packages assigned to them that day based on a nine to eleven hour work day and, on occasion, meet pick-up and delivery windows. While Plaintiffs may exercise discretion in selecting how to travel their assigned route, they were required to make daily pickups and deliveries on specific days and times due to FedEx's agreements with its customers. All of this weighs in favor of employee status.
FedEx monitored and disciplined Plaintiffs to control the work process. Supervisors or managers conducted "customer service rides" with drivers up to four times annually "to verify that the Contractor is meeting the standards of customer service provided in the Agreement," and reviewed expectations through business discussions.
In addition to the "extent of control" and "actual control" factors of the eight factor test, the remaining six factors also weigh in favor of employee status. Many of the Plaintiffs had long-term relationships with FedEx, demonstrating that they were not hired by the job. Plaintiffs could effectively be terminated at will given that the OA provides for nonrenewal without cause. Plaintiffs were not paid by the job like independent contractors. Instead, they were paid weekly, based on fixed and variable factors, all of which were non-negotiable. Although Plaintiffs provided their own vehicles and some equipment, FedEx was intricately involved in the purchasing process, providing options for leasing and/or financing. Moreover, FedEx provided the entire system of receiving, sorting and loading packages, software and computer network for tracking packages, terminals and sorting equipment for packages, sales and marketing services, and customer service personnel. Finally, Plaintiffs' work is the essence of the business of a package delivery company such as FedEx.
FedEx is correct that a worker's ownership interest in his route is inconsistent with any traditional understanding of employment. Skidmore, 110 S.W.2d at 730. Here, however, none of the Plaintiffs actually "owned" their routes. Customer accounts were based on contracts between FedEx and the customers. FedEx set up any new business brought to Plaintiffs' routes. Drivers could not increase their compensation through soliciting new customers. (Plaintiffs' Indiv. SOF, ¶ C.k, 1) Plaintiffs could only sell their routes to purchasers approved by FedEx. (Id., ¶ G.5). Further, Plaintiffs could only buy routes once they were approved by FedEx. In addition, FedEx could unilaterally change the size and configuration of the Plaintiffs' routes at any time without Plaintiffs' approval. (Plaintiffs' Omnibus SOF ¶ 14; Plaintiffs' Indiv. SOF ¶ G.2) All of the Plaintiffs either sold their routes to a purchaser approved by FedEx, were forced to sell their routes to a purchaser approved by FedEx, or were either terminated or non-renewed by FedEx, in which case, FedEx took their routes. (Gray and Wells Plaintiffs' Opp. Affs., ¶ 12; Plaintiffs' Indiv. SOF ¶¶ G.5, H.3, H.4)
For all these reasons, Plaintiffs' motion for partial summary judgment on the issue of employment status will be granted.
FedEx moves for summary judgment on all Counts of Plaintiffs' Sixth Amended Complaint in Gray: Fraudulent Misrepresentation (Count I) and Claims for Wages Under Sections 290.527 and 290.505, R.S.Mo. (Count II), and all Counts of Plaintiffs' Amended Complaint in Wells: Illegal Deductions from Wages (Count I), Fraudulent Misrepresentation (Count II), Rescission (Count III), and Declaratory Judgment (Count IV).
All Plaintiffs allege that FedEx committed fraud by misrepresenting to them in the OA that they would be independent contractors when they were in fact treated as employees. The Gray Plaintiffs also allege that similar oral misrepresentations were made to them by members of FedEx terminal management. (Gray Compl. ¶ 47). Plaintiffs claim that FedEx knew or should have known "that the `independent contractor' classification in the OA was
FedEx argues Plaintiffs' fraud claims fail as a matter of law because they cannot prove proximately caused injury and because the alleged misrepresentations are not actionable statements of fact. In addition, FedEx argues that 21 of the Plaintiffs' claims are untimely. (Gray Doc. No. 214; Wells Doc. No. 123 ("Consol. Mem. in Supp."), p. 11)
While the Court has ruled herein that Plaintiffs were FedEx employees as a matter of law, Plaintiffs must still show that FedEx's representation that they were independent contractors was the direct and proximate cause of their loss. FedEx argues Plaintiffs' fraud claims fail because the harm they claim to have suffered was not caused by the misrepresentations they allege. (Consol. Mem. in Supp., pp. 13-19) Here Plaintiffs are trying to recover the value of what they conferred to FedEx, measured by what they would have been paid if they were employees. (Id., pp. 14-16) According to FedEx, if Plaintiffs had been treated as independent contractors, they would have borne the same expenses and would not have earned overtime pay or other employment benefits. In sum, when the same loss would have occurred in the absence of the misrepresentation, the causation element of a fraud claim is lacking and a claim for fraud fails. See First Franklin Fin. Corp. v. Residential Title Servs., Inc., 2009 WL 1508784 (E.D.Mo. May 28, 2009); First Bank of Marietta v. Hogge, 161 F.3d 506 (8th Cir.1998); Mackey & Associates, Inc. v. Russell & Axon International Engineers-Architects, Ltd., 819 S.W.2d 49 (Mo.Ct.App.1991).
In response, Plaintiffs rely on the Restatement (Second) of Torts, § 548A, which states that "[a] fraudulent misrepresentation is a legal cause of a pecuniary loss resulting from action or inaction in reliance on it if, and only if, the loss might reasonably be expected to result from the reliance." (Gray Doc. No. 293; Wells Doc. No. 173 ("Rev. Mem. in Opp."), p. 11)
The Court previously addressed this argument in its order denying FedEx's motion to dismiss the Sixth Amended Complaint in Gray. (Doc. No. 152, p. 8) Whether expressed in the form of lost pay, or increased and unnecessary expenses, Plaintiffs' alleged damages clearly flow from FedEx's misrepresentations.
In addition, FedEx challenges Plaintiffs' theory of damages as not based on the benefit of the bargain or lost profits analysis. See Heberer v. Shell Oil Co., 744 S.W.2d 441, 443 (Mo.1988) ("The courts of this state are committed to the benefit of the bargain rule as a method of arriving at damages in a case of fraud."). FedEx contends that based on the undisputed evidence, Plaintiffs cannot establish lost profits sufficient to support recovery of damages for their loss. (Consol. Mem. in Supp., pp. 16-19)
Plaintiffs respond that they are not proceeding on a benefit of the bargain theory. Instead, they are seeking general damages,
The most common method of determining damages is to assess the difference between what the plaintiff received and the value given for what he received. These are usually called "general damages." See Restatement (Second) of Torts, Comment (a) on subsec. (1). (Rev. Mem. in Opp., pp. 12-13)
As further support for their position, Plaintiffs noted at oral argument that Missouri law expressly permits the use of the generalized damages instruction, MAI 4.01, as opposed to MAI 4.03, the benefit of the bargain instruction, when the parties have clearly presented the nature of the dispute as to damages. See Central Microfilm Service Corp. v. Basic/Four Corp., 688 F.2d 1206, 1220 (8th Cir.1982); Craig Outdoor Advertising, Inc. v. Viacom Outdoor, Inc., 528 F.3d 1001, 1015-16 (8th Cir.2008). (Transcript of Oral Argument ("Tr."), Gray Doc. No. 329; Wells Doc. No. 208, 45:10-46:23)
Although the primary measure of damages for fraud in Missouri is the benefit of the bargain, the use of other measures of damages are permitted when the benefit of the bargain rule does not accurately measure the loss sustained. Glass Design Imports, Inc. v. Import Specialties, 867 F.2d 1139, 1143 (8th Cir.1989) (citing Central Microfilm, 688 F.2d at 1220); Kerr v. First Commodity Corp., 735 F.2d 281, 285 (8th Cir.1984). The "bargain theory" measure is the difference between the actual value and the represented value of the subject of the transaction. Central Microfilm, 688 F.2d at 1220 (citing Smith v. Tracy, 372 S.W.2d 925, 938 (Mo.1963)). In this case, FedEx did not make representations as to specific values; rather, it induced Plaintiffs to work as employees without the benefits inherent in an employer/employee relationship. The resultant harm is best measured by what Plaintiffs should have been paid as opposed to what they were actually paid. Id. at 1220-21. Accordingly, Plaintiffs have presented a submissible case on the issue of damages related to their fraud claims sufficient to defeat summary judgment.
Next, FedEx argues that because the legal standard for determining employment status requires consideration of numerous factors, the alleged misrepresentations regarding Plaintiffs' status as independent contractors are not actionable statements of fact. Constance v. B.B.C. Dev. Co., 25 S.W.3d 571, 587 (Mo.Ct.App.
Fed Ex further argues that the fraud claims of 11 of the 14 Wells Plaintiffs
Plaintiffs respond that there is no statute of limitations issue for those who filed within five (5) years of their start date, namely Gray Plaintiffs Baker, Blackmon, Gray, Hill, Holmes, Huskic, Tenison, Tichenor, and Tucker, and Wells Plaintiffs Cook and Miller. (Rev. Memo. in Opp., p. 20)
In further response, Plaintiffs maintain that the accrual dates of the fraud claims of Gray Plaintiffs Austin, Brown, Jost, Pour, Sanders, Sheffer, and Waweru, and the remaining Wells Plaintiffs can be determined with accuracy and are not barred by the five-year statute of limitations. Austin started his employment with FedEx on September 18, 2000 and became a plaintiff on September 30, 2008. He testified on deposition that he realized he was not an independent contractor when FedEx would not permit him to add an additional route in either 2003 or 2004. (Austin Depo., 185:5-25; 186:1-25; 187:1-21) Brown was employed by RPS in 2000 when FedEx purchased the company. Thereafter, Brown was employed by FedEx as a ground pick-up and delivery driver from 2000-2003, and a home delivery driver from April 17, 2003 through November 8, 2006. He became a plaintiff on
As for the remaining Wells Plaintiffs, Borders, Bowden, Dees, Fickbohm, Jacobson, Moore, Smith, Svitak, Taube and Wells, all of them stated they "slowly became aware" of FedEx's control over the course of their employment. Once they realized the extent of that control, they sold their routes. Specifically, Borders started with FedEx in October 2002 and ended on or about January 2006, when he sold his route. He became a plaintiff on November 3, 2010. (Borders Aff., ¶¶ 11-12; Borders Depo., 188:17-189:3) Bowden started with FedEx in October 2003 and ended on or about September 2006. He sold his route in 2006 and became a plaintiff on November 3, 2010. (Bowden Aff., ¶¶ 11-12) Dees started with FedEx in January 2000 and ended on or about July 2006. He sold his route in 2006 and became a plaintiff on November 3, 2010. (Dees Aff., ¶ 11-12) Fickbohm started with FedEx in February 2004 and ended on or about November 2009. He sold his route in 2009 and became a plaintiff on November 3, 2010. (Fickbohm Aff., ¶¶ 11-12) Jacobson started with FedEx in July 2001 and ended on or about January 2006. He sold his route in 2006 and became a plaintiff on November 3, 2011. (Jacobson Aff., ¶¶ 11-12) Moore started with FedEx in May 1999 and ended on or about June 2006. He sold his route in 2006 and became a plaintiff on November 3, 2011.
Finally, Plaintiffs concede that for Gray Plaintiffs Arbutti, Hendricks, and McLain, it is unclear when their causes of action accrued. (Rev. Memo. in Opp., p. 21) Plaintiffs take the position that if there is any question as to whether their fraud clams were timely filed, then this is an issue of fact to be submitted to a jury, citing Judy v. Arkansas Log Homes, 923 S.W.2d 409, 419 (Mo.Ct.App.1996) and Martin v. Holloran, 2008 WL 878420, at *8 (E.D.Mo. Mar. 27, 2008) (While normally "the running of the statute [of limitations] is a question of law for the court to decide ... when contradictory or different conclusions may be drawn from the evidence as to whether the statute of limitations has run, it is a question [of] fact for the jury to decide.") (internal citations and quotations omitted).
In reply, Fed Ex argues that Plaintiffs mistakenly argue that a subjective standard governs the date of accrual of their fraud claims, when it is settled that a cause of action for fraudulent misrepresentation accrues at the time the defrauded party discovers, or with the exercise of due diligence, should have discovered the fraud. Graf v. Michaels, 900 S.W.2d 659, 661 (Mo.Ct.App.1995). (Doc. No. 302, p. 8)
In Missouri, the limitations period does not begin to run at the time of the wrongdoing, but when the damages from the wrong are incurred and are reasonably capable of being ascertained by the injured party. Joyce v. Armstrong Teasdale, LLP, 635 F.3d 364, 367 (8th Cir.2011) (citing Mo.Rev.Stat. § 516.100 ("[F]or the purposes of [§ 516.120], the cause of action shall not be deemed to accrue when the wrong is done ... but when the damage resulting therefrom is sustained and is capable of ascertainment.")). Missouri courts have interpreted this statute to mean the limitations period commences when a "reasonably prudent person [is] on notice of a potentially actionable injury." Id. (quoting Powel v. Chaminade Coll. Preparatory, Inc., 197 S.W.3d 576, 582 (Mo.2006)). Because this standard is objective, "where relevant facts are uncontested, the statute of limitations issue can be decided by the Court as a matter of law. However, when contradictory or different conclusions may be drawn from the evidence as to whether the statute of limitations has run, it is a question of fact for the jury to decide." Powel, 197 S.W.3d at 585 (citing Lomax v. Sewell, 1 S.W.3d 548, 552-53 (Mo.Ct.App. 1999); Straub v. Tull, 128 S.W.3d 157, 159 (Mo.Ct.App.2004)).
Although many of the Plaintiffs were aware of certain aspects of FedEx's control when they signed the OA, such as the required uniforms and FedEx's logo on their vehicles, it is their position that they did not realize the true extent of FedEx's control over their routes and businesses until later in their employment. (Plaintiffs' Opp. Affs., ¶¶ 10-11, attached to Plaintiffs' Supp. Resp., Gray No. 294; Wells Doc. No 174). FedEx told Plaintiffs
The original six Gray Plaintiffs (Gray, Hill, Holmes, Patton, Tichenor and Tucker) filed their complaint on March 6, 2006; the remaining Gray Plaintiffs joined the lawsuit on September 30, 2008 (Arbutti, Austin, Blackmon, Brown, Candela, Huskic, Jost, Mitchell, Pour, Sanders, Sheffer, Tenison and Waweru), April 26, 2010 (Baker, Hansen, McClain, O'Keefe), and October 30, 2011 (Hendricks). The Wells Plaintiffs filed their complaint on November 3, 2010 (Adams, Borders, Bowden, Dees, Fickbohm, Jacobson, Miller, Moore, Redel, Taube and Wells) and May 10, 2011 (Cooke, Smith, Svitak). To prevail on its statute of limitations defense, FedEx must prove that Plaintiffs' claims accrued more than five years from the date each joined the lawsuit plus another year and twenty-seven days of tolling. After reviewing the summaries of the Plaintiffs' testimony relating to the statute of limitations (Gray Doc. No. 227-28; Wells Doc. No. 156-18), the Court finds that different conclusions may be drawn from the evidence as to whether the statute of limitations has run, making summary judgment inappropriate.
Accordingly, FedEx's motion for summary judgment on Plaintiffs' claims for fraudulent misrepresentation will be denied.
Plaintiffs have asserted claims under the Missouri Minimum Wage Law ("MMWL"), Mo. Stat. Ann. § 290.505, which provides that "no employer shall employ any of his employees for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed." FedEx argues it is entitled to summary judgment on the overtime claims of 24 of the 25 Plaintiffs asserting such claims.
First, FedEx argues that the ten Plaintiffs
Plaintiffs did not address FedEx's argument in their opposition. At oral argument, however, they relied on Davenport v. Charter Communications, LLC, 2012 WL 5050580 (E.D.Mo. Oct. 18, 2012), to support their position that all of their wage claims survive. (Tr., 53:11-54:7) Plaintiffs' reliance is misplaced. In Davenport, a collective action to recover unpaid wages and overtime under the FLSA, the plaintiffs alleged identical violations of the MMWL as well as three common law claims for breach of contract, quantum meruit and unjust enrichment. Defendant moved to dismiss the plaintiffs' common law claims on the grounds of preemption by the FLSA. Following the decisions of other district courts in the Eighth Circuit, including the Eastern District, the court found no preemption under the FLSA of the plaintiff's state common law claims. Davenport, 2012 WL 5050580, at *3 (and cases cited therein). The court did not, however, address the plaintiff's MMWL claims and no argument was made that in that case that the claims predated the effective date of the statute.
In Doyel, the court instructed that "[b]ased on the entire text and purpose of the MMWL, the exemption meant to protect individuals by the MMWL if they were not protected by the FLSA ... [B]ecause defendant was covered by the FLSA before January 1, 2007, plaintiffs ... are barred from recovering under the MMWL for violations occurring before January 1, 2007." 2009 WL 350627 at *2. The Court has ruled that Plaintiffs were employees of FedEx as a matter of law. Thus, FedEx is an "employer" as defined under the FLSA. Because Gray Plaintiffs Brown, Candela, Hill, Holmes, Patton, Sheffer, Tenison, Tichenor and Tucker and Wells Plaintiff Moore were not working for FedEx after January 1, 2007, they are barred from recovering under the MMWL.
Next, FedEx contends that the claims of five other overtime Plaintiffs
Before August 10, 2005, a "motor carrier" was defined as "a person providing motor vehicle transportation for compensation," 49 U.S.C. § 13102(12) (2004), and the MCA exemption "applied to all drivers operating in interstate commerce, regardless of the weight of the vehicle driven." Buckner v. United Parcel Service, Inc., 2012 WL 1596726, at *4 (E.D.N.C. May 7, 2012). On August 10, 2005, Congress changed the definition of a "motor carrier" to include only commercial motor vehicles. Id. Commercial vehicles were defined as vehicles having "a gross vehicle weight rating or gross vehicle weight of at least 10,001 pounds." Id. (citing 49 U.S.C. § 31132(1)(A)). As a result, employees of motor vehicles operating vehicles weighing less than 10,001 pounds no longer qualified for the MCA exemption. Id.; Jaramillo, 2012 WL 4955932, at *3 (citing 49 U.S.C. § 31132(1)); Brooks v. Halsted Communications, Ltd., 620 F.Supp.2d 193, 197-98 (D.Mass.2009). Then on June 6, 2008, Congress enacted the SAFETEA-LU Technical Corrections Act of 2008 (the "TCA"), which restored the 2004 definition of a "motor carrier," but retained the weight limitation for vehicles. Jaramillo, 2012 WL 4955932, at *3. In sum, the TCA permits overtime claims under the FLSA by drivers of vehicles weighing 10,001 pounds or less. (Mem. in Supp. of Consol. Mo., p. 35) Drivers of vehicles weighing over 10,001 pounds remain exempt from the FLSA's overtime requirements. (Id.) FedEx argues that because these five Plaintiffs did not drive vehicles under 10,001 pounds after the June 6, 2008 enactment of the TCA, their claims are barred by the MCA exemption.
In response, Plaintiffs argue that FedEx is a "hybrid motor carrier," because it employs drivers with vehicles weighing both over and under 10,001 pounds. "When mixed activities occur, and employees are asked to operate both commercial and on-commercial vehicles during their course of employment, the employees' coverage under the FLSA is favored." (Rev. Mem. in Opp., p. 39) (citing Hernandez v. Brink's Inc., 2009 WL 113406, at *6 (S.D.Fla. Jan. 15, 2009)).
Courts that have considered the issue of a "mixed fleet" of both commercial and noncommercial vehicles are divided on the proper approach, but the prevailing view appears to be that when mixed activities occur, the MCA favors coverage of the employee during the course of employment, so long as the time an employee spends operating commercial motor vehicles is more than de minimus. Avery v. Chariots For Hire, 748 F.Supp.2d 492, 500 (D.Md.2010) (citing Hernandez v. Brink's, Inc., 2009 WL 113406, at *6 (S.D.Fla. Jan. 15, 2009) ("[W]hen mixed activities occur, the Motor Carrier Act favors coverage of the employee during the course of employment.")); Dalton v. Sabo, Inc., 2010 WL 1325613, at *4 (D.Or. Apr. 1, 2010) (holding that motor carrier exemption applied to plaintiffs that performed maintenance on a fleet that consisted of vehicles weighing both more and less than 10,000 pounds); cf., Tews v. Renzenberger, 592 F.Supp.2d 1331 (D.Kan.2009) (holding that the mere presence of a few commercial motor vehicles in a company's fleet does not render all of its driver's exempt from overtime pay). As the Seventh Circuit explained, "[d]ividing jurisdiction over the same drivers, with the result that their employer would be regulated under the [MCA] when
Employers relying on an exemption to avoid the minimum wage and overtime requirements of the FLSA bear the burden of proof that an exemption applies. Fast v. Applebee's Intern., Inc., 638 F.3d 872, 882 (8th Cir.2011) (citing Corning Glass Works v. Brennan, 417 U.S. 188, 196-97, 94 S.Ct. 2223, 41 L.Ed.2d 1 (1974)). Exemptions are construed narrowly against the employer. Adams v. City of Manchester, 2012 WL 3242078, at *4 (E.D.Mo.2012). Plaintiffs take the position that an individualized analysis as to each driver is required in order for FedEx to claim exemption from the FLSA under the MCA. (Tr., 56:11-12:57:14-22)
The undisputed evidence shows that Gray Plaintiffs Arbutti and Blackmon, and Wells Plaintiff Jacobson, stopped contracting with FedEx prior to June 6, 2008 (SOF, ¶¶ 44-46), when the MCA exemption applied to all employees of motor carriers. Accordingly, their claims are barred. As for the remaining Plaintiffs, FedEx asserts that Gray Plaintiff O'Keefe and Wells Plaintiff Cooke both drove vehicles weighing over 10,001 pounds after June 6, 2008. (Consol. Mem. in Supp., p. 36) O'Keefe testified he did not know the GVWR of his vehicle, raising a disputed issue of material fact. (Plaintiffs' Supp.Resp. SOF, ¶ 48) Cooke does not dispute that he operated a vehicle with a GVWR of over 10,000 pounds. (Id., ¶ 47) Therefore, his claim is barred.
FedEx further argues that the overtime claims of nine Plaintiffs
Finally, FedEx argues Plaintiffs Gray, Sheffer and Wells are judicially estopped from asserting their wages claims because they failed to disclose them in bankruptcy proceedings. (Mem. In Supp., The law is well-settled that a plaintiff who previously filed for bankruptcy "may be judicially estopped from asserting a cause of action not raised in a reorganization
First, Plaintiffs' failure to include their claims against FedEx in their bankruptcy filings is "clearly inconsistent" with their prosecution of those claims in this case. All three either knew of their claims against FedEx before they filed for bankruptcy or during the pendency of their bankruptcy proceedings, yet none of them listed any claim against FedEx as an asset in their bankruptcy petition or supplemented their bankruptcy filings to disclose their claims against FedEx. Second, Plaintiffs' bankruptcy debts have been discharged. Third, Plaintiffs' failure to disclose their claims was not inadvertent, in that they were all aware of their claims against FedEx when they filed for bankruptcy. (Consol. Mem. in Supp., pp. 39-41)
Plaintiffs respond that judicial estoppel is not a mandatory doctrine, but rather an equitable one, invoked by a court in its discretion; it does not apply when a party's prior position was taken because of a good-faith mistake rather than as part of a scheme to mislead the court. See Loth v. Union Pacific RR Co., 354 S.W.3d 635 (Mo.Ct.App.2011) (reversing summary judgment granted on the basis of judicial estoppel). Plaintiffs argue that estoppel is inappropriate in this context, without a thorough inquiry into the facts and circumstances of their failure to disclose their claims in bankruptcy. Plaintiffs state they have either reopened their bankruptcy cases or are in the process of doing so. (Gray Opp. Aff., ¶¶ 17, 18; Sheffer Opp. Aff., ¶¶ 17, 18; Wells Opp. Aff., ¶¶ 18-20) FedEx has produced no evidence that Plaintiffs acted in bad faith. (Rev. Mem. in Opp., pp. 41-44) Where the evidence is susceptible to more than one inference, summary judgment is not proper. Loth, 354 S.W.3d at 642. Because there is a question of fact regarding Plaintiffs' intent in failing to disclose their claims against FedEx in their bankruptcy actions, summary judgment based on judicial estoppel will be denied.
Accordingly, FedEx's motion for summary judgment on Plaintiffs' claims for wages/overtime will be granted as to Gray Plaintiffs Arbutti, Blackmon, Brown, Candela, Hill, Holmes, Patton, Sheffer, Tenison, Tichenor and Tucker, and Wells Plaintiff Jacobson, Cooke and Moore.
Plaintiffs concede that only the rescission and declaratory judgment claims of two Wells Plaintiffs, Wells and Smith, remain. (Revised Mem. In Opp., pp. 7-8) In their claim for rescission, Plaintiffs allege the OA mischaracterizes their status as employees, and claim entitlement to compensation for all of the business expenses FedEx required them to bear, for all of the employment taxes, unemployment compensation and workers' compensation FedEx did not pay, and the value of their services as employees. Plaintiffs further seek entry of a declaratory judgment in their favor declaring FedEx's practices to be unlawful and providing for recovery of all sums determined by the Court to be owed by FedEx to Plaintiffs.
Accordingly,
As to Plaintiffs' claims for fraudulent misrepresentation (Gray Compl., Count I; Wells Amended Compl., Count II), the motion is
As to Plaintiffs' claims for wages/overtime (Gray Compl., Count II; Wells Amended Compl., Count I), the motion is
As to the claims of Wells Plaintiffs Wells and Smith for rescission and declaratory judgment (Wells Amended Compl., Counts III and IV), the motion is
