Derolf v. Risinger Bros. Transfer, Inc.

259 F. Supp. 3d 876
CourtDistrict Court, C.D. Illinois
DecidedApril 21, 2017
DocketCase No. 16-cv-1298
StatusPublished
Cited by12 cases

This text of 259 F. Supp. 3d 876 (Derolf v. Risinger Bros. Transfer, Inc.) is published on Counsel Stack Legal Research, covering District Court, C.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Derolf v. Risinger Bros. Transfer, Inc., 259 F. Supp. 3d 876 (C.D. Ill. 2017).

Opinion

MEMORANDUM OPINION & ORDER

JOE BILLY McDADE, United States Senior District Judge

This matter is before the Court on the Defendants’ Motion To Dismiss The Amended Complaint Pursuant To Federal Rule Of Civil Procedure 12(B)(6) (Doc. 22). The motion has been fully briefed and is ready for decision. For the reasons stated below, the motion is GRANTED in part.

BACKGROUND

Plaintiffs Debbie Derolf and Kevin Anderson were truck drivers who hauled freight for Defendant Risinger Bros. Transfer, Inc. (referred to as “Defendant Risinger”). Defendant Stanley K. Risinger is the Chairman of the Board of Directors of Defendant Risinger. Defendant Dean Hoffman is the President of Defendant Risinger. The Amended Complaint also names several John Doe Defendants as presently unknown persons who are alleged to have either directly or indirectly, directed, aided, abetted, and/or assisted with creating and/or executing the policies and practices of Defendants or processed payroll regarding the Plaintiffs.

First, Plaintiffs allege that Defendants falsely designated them and others similarly situated to them as independent contractors instead of employees and unlawfully deducted from and withheld portions of the wages owed to them in violation of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (“FLSA”). Second, Plaintiffs allege that they and others similarly situated to them entered into lease agreements with Defendant Risinger that violate the Truth in Leasing Act, 49 U.S.C. § 14704 by not including certain terms in the leases and by including certain terms that actually violate the law. Third, Plaintiffs allege that Defendants have violated the Internal Revenue Code, 26 U.S.C. § 7434, by purposefully misclassifying Plaintiffs and others similarly situated to them as independent contractors and willfully filing fraudulent information returns. Lastly, Plaintiffs also bring several Illinois and Indiana state law claims that will not be discussed because the Court has determined that the federal claims should be dismissed.

LEGAL STANDARDS

In ruling on a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), “the court must treat all well-pleaded allegations as true and draw all inferences in favor of the non-moving party.” In re marchFIRST Inc., 589 F.3d 901, 904 (7th Cir. 2009). The pleading must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). To survive a motion to dismiss, the challenged [879]*879pleading must contain sufficient detail to give notice of the claim, and the allegations must “plausibly suggest that the [non-mov-ant] has a right to relief, raising that possibility above a ‘speculative level.’” EEOC v. Concentra Health Servs., Inc., 496 F.3d 773, 776 (7th Cir. 2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). The plausibility standard requires enough facts “to present a story that holds together,” but does not require a determination of probability. Swanson v. Citibank, N.A., 614 F.3d 400, 404 (7th Cir. 2010). Though detailed factual allegations are not needed, a “formulaic recitation of a cause of action’s elements will not do.” Twombly, 550 U.S. at 545, 127 S.Ct. 1955. Lastly, when a plaintiff pleads facts demonstrating that he has no claim, dismissal of the complaint is proper. McCready v. eBay, Inc., 453 F.3d 882, 888 (7th Cir. 2006).

DISCUSSION

I. FLSA Claims

Plaintiffs allege that they and others similarly situated to them are employees of Defendant Risinger but that Defendant Ri-singer failed to pay them statutorily-required minimum wages as well as unlawfully deducted from.and withheld portions of their wages by deliberately misclassify-ing them as independent contractors. Defendants counter that the contracts the Plaintiffs and others entered into with Defendant Risinger conclusively establish that the Plaintiffs and others were independent contractors and thus, Plaintiffs’ FLSA requirements are simply not applicable.

The FLSA requires certain employers to pay its employees certain minimum wages. 29 U.S.C. § 206. “Employer” is defined under the Act to be “any person acting directly or indirectly in the interest of an employer in relation to an employee....” 29 U.S.C. § 203(d). An “employee” is any individual employed by an employer. 29 U.S.C. § 203(e)(1). The term “employ” means “to suffer or permit to work.” 29 U.S.C. § 203(g). The FLSA only applies when there is an employer-employee relationship; it does not apply when there is a contractor-independent contractor relationship. See Goldberg v. Whitaker House Co-op., Inc., 366 U.S. 28, 33, 81 S.Ct. 933, 6 L.Ed.2d 100 (1961) (Whittaker, J., dissenting) (“It is clear and undisputed that the Fair Labor Standards Act does not apply in the absence of an employer-employee relationship.”)

Whether a plaintiff is an employee or independent contractor is a question that is amenable to a Rule 12(b)(6) analysis even though it is fact-intensive. See Berger v. Nat’l Collegiate Athletic Ass’n, 843 F.3d 285, 294 (7th Cir. 2016). A proper claim under the FLSA must allege facts that make it plausible the workers at issue are employees covered by the Act. It is not sufficient to simply say one is an employee; indeed, mere labels and formulaic language are not enough to satisfy the pleading requirements of Federal Rule of Civil Procedure 8(a). See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (a “formulaic recitation of the elements of a cause of action will not do.”). The Seventh Circuit utilizes an “economic reality” standard to evaluate whether workers under consideration are actual employees or independent contractors. Sec’y of Labor, U.S. Dept. of Labor v. Lauritzen,

Related

Cite This Page — Counsel Stack

Bluebook (online)
259 F. Supp. 3d 876, Counsel Stack Legal Research, https://law.counselstack.com/opinion/derolf-v-risinger-bros-transfer-inc-ilcd-2017.