Frazier v. PJ Iowa, L.C.

337 F. Supp. 3d 848
CourtDistrict Court, S.D. Iowa
DecidedOctober 9, 2018
Docket4:17-CV-00160–JEG-HCA
StatusPublished
Cited by8 cases

This text of 337 F. Supp. 3d 848 (Frazier v. PJ Iowa, L.C.) is published on Counsel Stack Legal Research, covering District Court, S.D. Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Frazier v. PJ Iowa, L.C., 337 F. Supp. 3d 848 (S.D. Iowa 2018).

Opinion

JAMES E. GRITZNER, Senior Judge

This matter is before the Court on a Motion for Conditional Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq. , Collective Action Certification and Federal Rule of Civil Procedure 23 Class Certification *858(the Motion), filed by Plaintiffs Billy Frazier (Frazier) and Angela Kearns (Kearns) (collectively, Plaintiffs), on behalf of themselves and similarly situated employees of Defendant PJ Iowa, L.C. (PJ Iowa). PJ Iowa opposes the Motion. No party requested a hearing, and the Court finds no hearing necessary. The matter is fully submitted and ready for disposition.

I. BACKGROUND1

PJ Iowa operates twenty-six Papa John's pizza restaurant franchises in Iowa, Illinois, and South Dakota. Twenty-one of these are in Iowa, two are in Moline, Illinois, and three are in Sioux Falls, South Dakota.

PJ Iowa employed Frazier as an hourly tipped delivery driver in Cedar Rapids, Iowa, from September 15, 2016, until April 10, 2017. PJ Iowa never paid Frazier minimum wage in Iowa, which at the relevant time was $7.25 an hour. Instead, as PJ Iowa clarifies, Frazier was paid a base cash wage of $5.25 or $5.75 per hour (wage increased on January 5, 2017), plus tips. PJ Iowa is allowed to pay this seemingly subminimum wage under the FLSA's "tip credit" policy. That is, for employees who regularly receive over $30 in tips a month, the FLSA allows employers to deduct a chosen amount from the otherwise-mandatory minimum wage. See 29 U.S.C. § 203(m), (t) ; U.S. Dep't of Labor, Wage & Hour Div., Field Operations Handbook (DOL Handbook) § 30d00 (Nov. 17, 2016), www.dol.gov/whd/FOH/FOH_Ch30.pdf. The difference-determined by subtracting the cash wage from the mandatory minimum wage-is the "tip credit."2 DOL Handbook § 30d06(a). The DOL Handbook states that when an employer takes a tip credit, the cash wage paid to the employee is not technically "a subminimum wage." DOL Handbook § 30d00(a). Instead "[t]ipped employees are entitled to the full ... minimum wage, which may be comprised of both a direct or cash wage and a tip credit ...." Id. As is required of employers who use a "tip credit" system, PJ Iowa provided Frazier with notice of his hourly rate of pay, the amount of tip credit claimed by PJ Iowa per hour ($2.00, then $2.50, aligned with wage increase), and that Frazier had the right to retain all tips. Id. § 30d00(e)(3).

PJ Iowa employed Kearns in Marion, Iowa, as an hourly tipped delivery driver during two separate time periods: May 14, 2014, to October 16, 2014, and July 4, 2016, to February 17, 2018. Instead of paying Kearns the minimum wage, PJ Iowa paid her a base hourly wage of $5.35, $5.50, or *859$5.90 per hour, plus tips. PJ Iowa applied a tip credit against Kearns's minimum wage. Therefore, PJ Iowa also provided Kearns with notice of her hourly rate of pay, the amount of tip credit claimed by PJ Iowa per hour ($2.00, $2.00, and $2.50, aligned with wage increases), and Kearns's right to retain all tips.

On April 13, 2017, Frazier filed a Petition in the Iowa District Court of Polk County against PJ Iowa for violation of the FLSA, the Iowa Minimum Wage Law (IMWL), Iowa Code § 91D, and the Iowa Wage Payment Collection Law (IWPCL), Iowa Code § 91A. PJ Iowa timely removed the case to this Court based on federal question jurisdiction, 28 U.S.C. § 1331, on May 5, 2017. PJ Iowa filed a pre-answer motion to dismiss Frazier's claims on May 19, 2017, arguing Frazier violated the rule against claims-splitting.3 This Court denied that motion on July 20, 2017. Frazier filed a Motion for Leave to File First Amended Complaint on July 19, 2017, adding Plaintiff Kearns. Upon opposition by PJ Iowa, Plaintiffs withdrew the Amended Complaint on August 14, 2017. On August 29, 2017, Frazier again filed a Motion for Leave to File First Amended Complaint, which was granted on the same day. Chief U.S. Magistrate Judge Helen C. Adams issued a scheduling order allowing for a period of limited discovery focused on collective action and class certification. In accordance with the scheduling order, the parties served initial disclosures, interrogatories, and document requests. At the conclusion of limited discovery, Plaintiffs filed this motion for conditional collective action certification and class action certification. As named representatives of the putative collective action, Plaintiffs properly filed opt-in consent forms with the Court.

Relevant to this Motion, Plaintiffs make three class-based claims.4 Count I, which is brought under the FLSA, and Count II, which is brought under the IMWL and the IWPCL, allege that PJ Iowa improperly applied a tip credit to wages of delivery drivers who spent over 20% of their time performing non-tipped duties or performed duties unrelated to their tipped duties. Count III alleges that PJ Iowa's vehicle reimbursement policy resulted in net wages below the minimum wage in violation of the FLSA.

Plaintiffs now move for conditional certification of Counts I and III as an FLSA collective action of PJ Iowa delivery drivers during the applicable limitations period, including Kearns's subcollective of PJ Iowa delivery drivers who used their personal vehicles for deliveries. Plaintiffs also seek class certification of the IMWL and the IWPCL claims-Count II-under Rule 23, as to the class of PJ Iowa delivery drivers during the applicable limitations period.

A. Dual Jobs Claim

Counts I and II are based on the same alleged circumstances, which are contemplated by the Department of Labor regulations on "dual jobs." Typically, dual jobs regulations are at issue when an employee has two occupations with an employer, one requiring the performance of tipped duties and the other requiring performance *860of non-tipped duties. See 29 C.F.R. § 531.56(e) ("[F]or example, where a maintenance man in a hotel also serves as a waiter.").

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Bluebook (online)
337 F. Supp. 3d 848, Counsel Stack Legal Research, https://law.counselstack.com/opinion/frazier-v-pj-iowa-lc-iasd-2018.