Oliveira v. New Prime, Inc.

141 F. Supp. 3d 125, 2015 U.S. Dist. LEXIS 145620, 2015 WL 6472248
CourtDistrict Court, D. Massachusetts
DecidedOctober 26, 2015
DocketCivil Action No. 15-10603-PBS
StatusPublished
Cited by7 cases

This text of 141 F. Supp. 3d 125 (Oliveira v. New Prime, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Oliveira v. New Prime, Inc., 141 F. Supp. 3d 125, 2015 U.S. Dist. LEXIS 145620, 2015 WL 6472248 (D. Mass. 2015).

Opinion

MEMORANDÜM AND ORDER

Saris, Chief Judge

INTRODUCTION

This case involves a labor dispute between a trucking corporation and a former truck driver. In March 2015, the plaintiff Dominic Oliveira brought this proposed class action alleging that the defendant New Prime, Inc. violated the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201 et seq., and Missouri and Maine labor laws, by failing to pay its truck drivers minimum wage (Docket Nos. 1, 33). New Prime moved to compel arbitration under § 4 of the Federal Arbitration Act (FAA), 9 U.S.C. § 4, and two operating agree-ménts signed by Oliveira on behalf of Hallmark Trucking LLC, both of which contain an arbitration clause (Docket No. 35). Oli-veira argues that the Court must determine whether the operating agreements are exempt from arbitration under § 1 of the FAA before it can consider New Prime’s motion to compel arbitration (Docket No. 40). New Prime maintains that the exemption’s application is -a threshold question -of arbitrability that the parties delegated to the arbitrator in the operating agreements (Docket No. 51). After hearing, I agree that it is for the Court, and not the arbitrator, to decide whether the § 1 exemption applies before considering the motion. The motion to compel arbitration is therefore DENIED without prejudice.1

FACTUAL BACKGROUND

The following facts are taken from the First Amended Complaint (Docket No. 33) [128]*128and the operating agreements referenced by all parties (Docket No. 36, Ex. A, Ex. B). In March 2013, Plaintiff Dominic Oli-veira entered Defendant New Prime’s “Paid Apprenticeship” training program, which is advertised as an on-the-job training program for new truck drivers. Docket No. 33, Ex. 2, Ex. 3. Apprentices first obtain a Missouri Commercial Driver’s License (CDL) permit. They next shadow New Prime drivers for three to four weeks and drive 10,000 miles under supervision. During this time, apprentices receive an advance of $200 per week, which is subtracted from their future earnings, but otherwise receive no remuneration. As a result, apprentices are essentially free labor while they train with New Prime. Under Department of Transportation regulations, trucks can be on the road for longer periods of time when a New Prime driver switches off with an apprentice.

After completion of this on-the-road instruction, apprentices take a CDL exam and then work as a “B2” company driver trainee for 30,000 miles. During this period, the trainees earn fourteen cents per mile driven, but are not paid for time spent loading and unloading cargo or protecting company property. The company also regularly deducts money from payr-checks, including the $200 weekly advance from the apprenticeship program. As a result of these deductions, Oliveira received approximately $440-$480 per week for driving 5,000-6,000 miles, which equates to about $4/hour while driving.

Finally, after completing the 30,000 miles as a B2 company driver trainee, the truck drivers complete additional orientation classes, which last for about a week. They are then classified as either company drivers or independent contractors. The truck drivers are not paid for the time spent in the orientation classes, and receive a $100 bonus if they opt to become independent contractors.

In May 2013, when Oliveira returned from his trainee driving, New Prime told Oliveira that he could make more money if he became an independent contractor. New Prime directed him to a company called Abacus Accounting, which was located on the second floor of New Prime’s building. Abacus Accounting told Oliveira to provide suggested names for a limited liability company (LLC), and then created Hallmark Trucking LLC on his behalf. New Prime also directed Oliveira to Success Leasing, a closely related corporation to New Prime, to select a truck.

At Success Leasing, Oliveira was given several documents to sign. One of these documents was titled “INDEPENDENT CONTRACTOR OPERATING AGREEMENT,” which repeatedly states that the intent of the agreement is to establish an independent contractor relationship between New Prime and Hallmark Trucking LLC. Docket No. 36, Ex. A, at 1, 9. The agreement also contains the following arbitration clause:

GOVERNING LAW AND ARBITRATION. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF MISSOURI. ANY DISPUTES ARISING UNDER, ARISING OUT OF OR RELATING TO THIS AGREEMENT, INCLUDING AN ALLEGATION OF BREACH THEREOF, AND ANY DISPUTES ARISING OUT OF OR RELATING TO THE RELATIONSHIP CREATED BY THE AGREEMENT, AND ANY DISPUTES AS TO THE RIGHTS AND OBLIGATIONS OF THE PARTIES, INCLUDING THE ARBITRABILITY OF DISPUTES BETWEEN THE PARTIES, SHALL BE FULLY RESOLVED BY ARBITRATION IN ACCORDANCE WITH MISSOURI’S ARBITRATION ACT AND/OR THE FEDERAL ARBITRATION ACT ... THE PARTIES SPECIFICALLY AGREE THAT NO DIS[129]*129PUTE MAY BE JOINED WITH THE DISPUTE OF ANOTHER AND AGREE THAT CLASS ACTIONS UNDER THIS ARBITRATION PROVISION ARE PROHIBITED ... THE PLACE . OF THE ARBITRATION HEREIN SHALL BE SPRINGFIELD, MISSOURI.

Id. at 10. Oliveira “felt pressure” to sign quickly because New Prime had a load waiting for him outside. Docket No. 33, ¶ 45. Success Leasing then instructed Oli-veira to go to the New Prime company store to purchase security locks, fuel, insurance, and other tools of the trade. These items totaled roughly $5,000, which New Prime then deducted from his paycheck at a rate of $75 per week.

Although New Prime labeled Oliveira an independent contractor in the operating agreement, his role as a truck driver for New Prime did not change from his time as an apprentice and trainee driver. New Prime continued to directly and indirectly control Oliveira’s . scheduling, vacations, and time .at home by requiring him to take specific training courses, and follow certain procedures. These courses and. procedures limited which shipments he could take and made it difficult, if not impossible, for him to work for - other trucking or shipping companies. In particular, New Prime dispatched drivers through a “QUALCOMM system” that was not adaptable to other carriers. Docket No. 33, ¶ 51.2

Meanwhile, -New Prime continued to make regular deductions from Oliveira’s paycheck, ostensibly because of lease payments on the truck and payments for the other tools that New Prime instructed him to buy. On several occasions, his weekly pay was negative after spending dozens of hours on the road. In March 2014, Oliveira signed a second contract titled “INDEPENDENT CONTRACTOR OPERATING AGREEMENT” on behalf of Hallmark Trucking LLC, which contains an identical arbitration clause to that in the first agreement. Docket No. 36, Ex. B, at 1, 9-10. The second contract also repeatedly states that the agreement establishes an independent contractor relationship between New Prime and Hallmark Trucking LLC.

Oliveira' terminated his contract with New Prime in September 2014. The next month, however, New Prime rehired him as a company driver, on the condition that New Prime would continue deducting money from his paychecks to repay an alleged debt to Success Leasing. With these deductions, Oliveira again was paid below the minimum wage. He now brings this class action, arguing that he and other New Prime drivers were not paid the minimum wage under federal and state law.

DISCUSSION

I.

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Cite This Page — Counsel Stack

Bluebook (online)
141 F. Supp. 3d 125, 2015 U.S. Dist. LEXIS 145620, 2015 WL 6472248, Counsel Stack Legal Research, https://law.counselstack.com/opinion/oliveira-v-new-prime-inc-mad-2015.