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McKeon v. Integrity Pizza LLC

United States District Court, D. Colorado

April 12, 2019

MICHAEL MCKEON, individually and on behalf of similarly situated persons, Plaintiff,
v.
INTEGRITY PIZZA LLC, and INFINITY PIZZA LLC, d/b/a Dominos Pizza, Defendants.

          ORDER GRANTING AS AMENDED JOINT MOTION TO APPROVE STIPULATED FORM OF NOTICE OF COLLECTIVE ACTION AND TO STAY PENDING MEDIATION

          WILLIAM J. MARTÍNEZ JUDGE

         Plaintiff Michael McKeon (“McKeon”) brings this action against Defendants Integrity Pizza LLC and Infinity Pizza LLC d/b/a Dominos Pizza (together, “Defendants”) for alleged violations of the Fair Labor Standards Act (“FLSA”) for alleged violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201 et seq., and similar state laws. (ECF No. 1 ¶¶ 1-2.) McKeon claims that he was a delivery driver for Defendants, and Defendant's pay structure deprived drivers of FLSA-mandated minimum wage.

         Currently before the Court is the parties' “Joint Motion to Approve Stipulated Form of Notice of Collective Action and to Stay Pending Mediation” (the “Motion”) as well as a “Joint Notice of Consent to Magistrate Jurisdiction on ECF No. 23” for the limited purpose of ruling on the Motion. (ECF No. 23.) For the reasons explained below, the Court certifies the collective action; approves the notice procedure and form, as modified by the Court below; and grants the parties' request to stay all deadlines pending mediation, except those related to notice to potential collective action members. The parties joint consent to magistrate judge jurisdiction for a limited purpose-assuming such a thing is even possible-is denied as moot. (ECF No. 43.)

         I. BACKGROUND

         The following alleged facts are drawn from McKeon's Complaint and the Motion. (ECF Nos. 1 & 23.)

         McKeon alleges that Defendants' failure to reasonably reimburse automobile expenses caused Defendants to undercompensate their delivery drivers. According to Plaintiff, Defendants required delivery drivers to maintain safe, legally-operable, insured automobiles when delivering pizza and other food. (ECF No. 1 ¶ 12.) Delivery drivers thus incurred costs for gasoline, vehicle maintenance, insurance, depreciation, and other expenses (“automobile expenses”) while working for Defendants. (Id. ¶ 13.) Defendants maintained a delivery driver reimbursement policy applicable to all delivery drivers that reimbursed drivers on a per-delivery basis. (Id. ¶ 14.) Plaintiff contends that the per-delivery reimbursement fell “below the IRS business mileage reimbursement rate or any other reasonable approximation of the cost to own and operate a motor vehicle.” (Id. ¶ 14.) As a result, the per-delivery reimbursements paid by Defendant fell below actual automobile expenses, resulting in a “kickback” to Defendants sufficient to reduce delivery drivers' effective hourly compensation below the minimum wage. (Id. ¶¶ 18-19, 29.)

         McKeon alleges that he is a former delivery driver for several of Defendants' Domino's pizza stores in Eagle, Parachute, Rifle, and Carbondale, Colorado. (ECF No. 1 ¶ 8.) He further alleges that he was paid $6.50 per hour during his employment with Defendants, “including a tip credit applicable to the time he performed deliveries, ” and reimbursed between $0.20 and $0.25 per mile. (Id. ¶ 23.) During that same period, the federal hourly minimum wage was $7.25, with an IRS business mileage reimbursement rate between $0.56 and $0.535, and the Colorado hourly minimum wage was $9.30 before January 1, 2018, and $10.20 thereafter. (Id. ¶¶ 25-26.) He also contends that all of Defendants' delivery drivers were subject to the same reimbursement policy, incurred similar expenses, completed deliveries of similar distances and at similar frequencies, and were paid at or near the federal minimum wage before deducting unreimbursed expenses. (Id. ¶ 28.)

         II. LEGAL STANDARD

         The FLSA permits collective actions where the allegedly aggrieved employees are “similarly situated.” 29 U.S.C. § 216(b). Whether employees are similarly situated is judged in two stages: a preliminary or “notice stage” (at issue here) and then a more searching, substantive stage, usually after the close of discovery. Thiessen v. Gen. Elec. Capital Corp., 267 F.3d 1095, 1102-03, 1105 (10th Cir. 2001). At the notice stage, a plaintiff requires “nothing more than substantial allegations that the putative [collective action] members were together the victims of a single decision, policy, or plan.” Id. at 1102 (internal quotation marks omitted); see also Boldozier v. Am. Family Mut. Ins. Co., 375 F.Supp.2d 1089, 1092 (D. Colo. 2005) (applying Thiessen in the FLSA context). The standard for certification at this stage is a lenient one. See Thiessen, 267 F.3d at 1103; Williams v. Sprint/United Management Co., 222 F.R.D. 483, 485 (D. Kan. 2004).

         If a plaintiff meets this standard, the Court may order the defendant to provide contact information for employees that may be eligible to participate in the collective action, and may approve a form of notice to be sent to all of those individuals. See Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 169-74 (1989). Such notice is usually required because, unlike class actions under Federal Rule of Civil Procedure 23, collective actions under the FLSA require a party to opt in rather than opt out. See 29 U.S.C. § 216(b) (“No employee shall be a party plaintiff to any [collective] action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought.”). Obviously current or former employees cannot opt in if they do not know about the pending action.

         III. ANALYSIS

         A. Collective Action Certification

         Defendants consent to conditional certification of this case as a collective action under the FLSA. (ECF No. 23 at 2.) The parties stipulate to defining the collective action class under the FLSA as “all current and former delivery drivers employed by Defendants within three years preceding [date of this Order].” (Id.) McKeon alleges that he was reimbursed between $0.20 and $0.25 per mile while employed as a delivery driver, far below the IRS business mileage reimbursement rate and this underpayment reduced his net wages below the minimum wage. (ECF No. 1 ¶¶ 25-26, 29, 32.) McKeon also alleges that Defendants' failed to pay other delivery drivers. (Id. ¶¶ 31-32.) These allegations are sufficient to establish that the potential collective action members were subject to “a single decision, policy, or plan” giving rise to their claims. See Thiessen, 267 F.3d at 1103.

         Given the parties' joint Motion and upon independent review, the Court finds that McKeon has made allegations sufficient to meet the lenient standard for conditional FLSA collective action certification. See Thiessen, 267 F.3d at 1103. Accordingly, the Court will certify the proposed collective action as “All current ...


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