Eltayeb v. Deli Management, Inc.

District Court, E.D. Texas·Decided March 25, 2024·No. 4:20-cv-00385·Unknown

Opinion

United States District Court EASTERN DISTRICT OF TEXAS SHERMAN DIVISION

MOHAMED HISHAM ELTAYEB, § individually and on behalf of all others § similarly situated, § § Plaintiff, § § CIVIL ACTION NO. 4:20-CV-00385 v. § JUDGE MAZZANT

§ DELI MANAGEMENT, INC. d/b/a § “JASON’S DELI”, § Defendant. § §

MEMORANDUM OPINION AND ORDER

Pending before the Court is Plaintiff’s Combined Second Renewed Motion for Notice to Potential Plaintiffs (Dkt. #70). Having considered the motion and the relevant pleadings, the Court finds that Plaintiff’s motion should be DENIED without prejudice. BACKGROUND This case arises from the employment relationship between Defendant Deli Management, Inc., doing business as Jason’s Deli, (“Jason’s Deli”) and its delivery drivers. Jason’s Deli operates multiple restaurants and employs drivers to deliver food items to customers. Drivers make deliveries using their own vehicles. Jason’s Deli then reimburses delivery drivers pursuant to a method outlined in its policies. Through this policy, Jason’s Deli instructs managers to maintain a spreadsheet to track drivers’ mileage, number of deliveries, payouts per delivery, and total payouts (see Dkt. #46-11). The spreadsheet is designed to ensure all payouts meet the IRS guidelines. Jason’s Deli requires that its delivery drivers provide their own operable delivery vehicles and vehicle insurance. Jason’s Deli reimburses its delivery drivers for the cost of driving their own vehicles to perform deliveries according to the following table: National Unleaded Average Delivery Driver Payout

<=$2.50 $1.00 $2.51 - $3.00 $1.25 $3.01 - $3.50 $1.50 $3.51 - $4.00 $1.75 $4.01 - $4.50 $2.00

(Dkt. #70 at p. 9). Each delivery driver receives the outlined standard delivery payout for each delivery made within the store’s designated delivery area. If a driver makes multiple deliveries during a single run, the driver will receive the standard delivery payout for each delivery. In other words, the delivery fees paid to drivers are not connected to the miles driven. If delivery drivers are assigned outside of their store’s designated delivery area, they receive an additional payout at the discretion of management. Jason’s Deli does not provide its individual deli stores with direction on how to make these additional payments, so the way additional payments are made varies across

stores. Jason’s Deli keeps track of deliveries and reimbursements at all stores. Jason’s Deli also tracks delivery addresses, which can be computer mapped to determine distances. However, Jason’s Deli does not record which deliveries were combined into the same delivery trips. Plaintiff Mohamed Hisham Eltayeb (“Eltayeb”) brought this suit under the Fair Labor Standards Act (“FLSA”) to recover unpaid minimum wages from when he worked as a delivery driver at Jason’s Deli. Two additional plaintiffs have since joined the suit. Eltayeb claims that Jason’s Deli uses a flawed method to determine vehicle reimbursement rates. As a result of this method, the drivers’ unreimbursed expenses allegedly caused their wages to fall below the federal minimum wage during some or all workweeks.

On January 8, 2021, the Court entered a Memorandum Opinion and Order granting in part and denying in part Eltayeb’s Motion for Notice to Potential Plaintiffs and for Conditional Certification (Dkt. #29). In this opinion, the Court found that Eltayeb had met his burden of showing the potential plaintiffs within the proposed collective were likely similarly situated and could thus receive notice of the suit. Days later, the Fifth Circuit’s decision in Swales v. KLLM Transportation Services, L.L.C. altered the standard by which district courts determine whether

potential plaintiffs may be notified of a collective action. 985 F.3d 430 (5th Cir. 2021). Following this change in the law, Jason’s Deli’s filed a Motion for Reconsideration of the Court’s Order Granting Class Notice (Dkt. #30). The Court granted the Motion for Reconsideration on March 19, 2021 (Dkt. #35). On June 17, 2021, Eltayeb filed his Renewed Motion for Notice to Potential Plaintiffs (Dkt. #46). On December 14, 2021, the Court denied Plaintiff’s Renewed Motion for Notice to Potential Plaintiffs (Dkt. #58). In that Order, the Court recognized Eltayeb’s claim is based on the following

equation: (Wage Payments1 + Delivery Fees2 + Additional Payouts3) - Business Related Automobile Expenses4

1 Wage payments refer to the hourly wages delivery drivers received. 2 Jason’s Deli paid its drivers a standard dollar amount for each delivery completed. 3 Jason’s Deli made additional payouts to certain drivers, but these payouts were not uniform across all store locations. 4 Business related automobile expenses refer to gasoline expended on delivery routes, maintenance costs, etc. (Dkt. #58 at p. 8). The Court noted that “the discovery conducted to date shows that there is a wide variation among the drivers with respect to virtually all of the key inputs into the liability formula” (Dkt. #58 at p. 8). However, the Court “recognize[d] that any number of Jason’s Deli

drivers may have recovered a net profit of less than the $7.25 per hour that the FLSA requires, particularly those that earned hourly wages of $8.65 or less” (Dkt. #58 at p. 11). And further explained that “the primary purpose behind collective actions stems from ‘the need for efficient resolution in one proceeding of common issues.’” (Dkt. #58 at p. 11) (citing In re JP Morgan Chase & Comp., 916 F.3d 494, 502 (5th Cir. 2019)). The Court then opined that “[i]n this case, even if the parties ‘must pose an inquiry to each of the [] Plaintiffs, the Court does not see how doing so

in one collective trial is any less difficult than posing the same inquiry in separate trials’” (Dkt. #58 at p. 11) (citing Segovia v. Fuelco Energy LLC, No. SA-17-CV-1246, 2021 WL 2187956, at *9–11 (W.D. Tex. May 28, 2021)). Despite denying Eltayeb’s renewed motion for notice, the Court allowed Eltayeb another opportunity to compose a class (Dkt. #58 at p. 12). Specifically, the Court authorized additional discovery to facilitate a determination of whether “Jason’s Deli drivers who earned $8.65 per hour or less are similarly situated in a manner that would allow the Court to collectively answer the ultimate question of liability” (Dkt. #58 at p. 12). Any other route, the

Court explained, “would either leave potential plaintiffs without a remedy for their underpaid wages or result in separate trials, thus defeating the efficiency that collective actions are intended to create” (Dkt. #58 at p. 12). On January 12, 2022, the parties submitted a Joint Motion to Submit Briefing for Discovery Plan (Dkt. #61), indicating they could not come to a mutual agreement on the scope of the additional discovery. On January 18, 2022, both parties submitted briefs on the issue (Dkt. #63; Dkt. #64). The Court ordered discovery as follows: 1. Jason’s Deli will produce a store list identifying each of the 122 stores, as well as the number of delivery drivers employed at that location, who were paid $8.65 or less; 2. The Parties will randomly select five stores from each of the four regions (20 total stores), in addition to the five stores that were previously selected as Representative Stores per the Court’s order. 3. For each selected deli location, the Parties will randomly select two delivery drivers who were paid a rate of $8.65 or less. If the deli has eight or more delivery drivers employed at that rate during the relevant time period, then the parties will randomly select three delivery drivers for that deli. If the location has two or fewer drivers employed at that rate, all of those drivers will be selected. 4.

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Eltayeb v. Deli Management, Inc., (E.D. Tex. 2024).

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