Phelps v. 3PD, Inc.

261 F.R.D. 548, 2009 U.S. Dist. LEXIS 94893, 2009 WL 3127736
CourtDistrict Court, D. Oregon
DecidedSeptember 30, 2009
DocketNo. CV-08-387-HU
StatusPublished
Cited by10 cases

This text of 261 F.R.D. 548 (Phelps v. 3PD, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Phelps v. 3PD, Inc., 261 F.R.D. 548, 2009 U.S. Dist. LEXIS 94893, 2009 WL 3127736 (D. Or. 2009).

Opinion

[552]*552OPINION & ORDER

HUBEL, United States Magistrate Judge:

Plaintiffs David Phelps and Max Lugauer bring wage and other claims against defendant 3PD, Inc., based on the allegation that defendant purposefully misclassified plaintiffs, and a class of similarly situated individuals who provide home delivery services for defendant, as “independent contractors,” when in fact, according to plaintiffs, they were defendant’s employees.

Plaintiffs move for certification of a class on certain claims under Federal Rule of Civil Procedure 23. They also seek appointment of Phelps and Lugauer as class representatives, and appointment of the San Francisco law firm of Schubert Jonckheer Kolbe & Kralowec LLP, and local law firm Stoll Stoll Berne Lokting & Shlachter PC, as class counsel. All parties have consented to entry of final judgment by a Magistrate Judge in accordance with Federal Rule of Civil Procedure 73 and 28 U.S.C. § 636(c). I grant the motion.

BACKGROUND

Plaintiffs are former delivery drivers for defendant and were classified as independent contractors during their tenure. Plaintiffs bring seven claims for relief. An element of each claim, although not the only element, is the issue of whether plaintiffs were properly classified by defendant as independent contractors or were misclassified because the relationship was actually one of employee-employer. It appears that the majority of defendant’s home delivery business in Oregon was performing deliveries for Home Depot stores. Additional facts are discussed below.

I. Claims

Plaintiffs bring the following claims:

(1) Illegal deductions from wages under Oregon Revised Statute § (O.R.S.) 652.610. Plaintiffs allege they were employees under O.R.S. 652.310. Plaintiffs contend that defendant deducted vehicle expenses, cargo claims, and insurance claims from their pay in violation of O.R.S. 652.610 because plaintiffs did not expressly and freely give written consent to such deductions and the deductions were not made in response to a valid wage assignment or deduction order. Plaintiffs further allege that the deductions were not made for their benefit and defendant did not provide plaintiffs with advance notice of such amounts, reasons, or documentation to justify the deductions. Am. Compl. at ¶¶ 63-67.

(2) Rescission of Agreements. Plaintiffs contend that the contracts signed by each driver purporting to establish an independent contractor relationship, are void as against public policy and thus unenforceable because they fail to recognize the proper employment status of plaintiffs and therefore, deny them the legally cognizable benefits of employment. Am. Compl. at ¶¶ 68-73.

(3) Unjust enrichmenVquantum meruit. Plaintiffs contend that by misclassifying them as independent contractors, and by improperly requiring them to pay defendant’s ordinary business expenses, defendant has been unjustly enriched. Plaintiffs contend they are entitled to restitution of all the business expenses they were required by defendant to bear, and for the fair value of the services they provided as employees. Am. Compl. at ¶¶ 74-76.

(4) Declaratory Relief. Plaintiffs contend that an actual controversy has arisen between plaintiffs/class members and defendant relating to (a) whether defendant unlawfully misclassified plaintiffs and the members of the class as independent contractors and thus denied them the common benefits of employee status such as wages, holiday pay, workers’ compensation, unemployment insurance, income tax withholding, and meal, break, and rest periods; (b) whether defendant has unlawfully failed to timely pay benefits and compensation owing to plaintiffs/class members whose employment with defendant ended; (c) what amounts plaintiffs and the class members are entitled to receive in compensation and benefits; (d) what amounts plaintiffs and the class members are entitled to receive in interest on unpaid compensation due and owing; and (e) what amounts plaintiffs and the class members are entitled to receive from defendant in statutory penalties and [553]*553interest. Plaintiffs seek entry of a declaratory judgment which declares defendant’s practices unlawful and which provides for recovery of all sums determined by the court to be owed by defendant to plaintiff and the class members. Am. Compl. at ¶¶ 77-79.

(5) Injunctive Relief. Plaintiffs contend that defendant will continue to misclassify plaintiffs and the class members as independent contractors and unlawfully deny them the common benefits of employee status unless enjoined from doing so. They allege they have no adequate remedy at law for defendant’s continued misclassifieation and unlawful refusal to pay all compensation and benefits. They further assert that they have a reasonable fear that defendant will retaliate against class members for attempting to enforce their rights under Oregon law. Thus, they seek permanent injunctive relief enjoining defendant from engaging in the unlawful practices alleged. Am. Compl. at ¶¶ 80-84.

(6) Penalty Wages. Plaintiffs allege that as a result of the violations of O.R.S. 652.610 as asserted in plaintiffs’ first claim, defendant has violated O.R.S. 652.140 by failing to timely pay wages owed to terminated employees, and thus, defendant owes penalty wages under O.R.S. 652.150. Am. Compl. at ¶¶ 85-88.

(7) Fraud. Plaintiffs allege that defendant knew, or recklessly disregarded, the improper designation of its drivers as independent contractors in the contracts with its drivers. Plaintiffs contend that through the driver agreements and other actions as alleged in the Amended Complaint, defendant intentionally or recklessly misled plaintiffs and the members of the class as to their employment status for the purpose of realizing unjust profits from their work and/or to avoid paying for its own operating costs and payroll taxes owed to the state and federal government. Plaintiffs assert that defendant knew that the material representations made to plaintiffs and class members in the agreements concerning their employment status, and the concealment and/or non-disclosure of material facts from plaintiffs and class members concerning their employment status and their corresponding obligation to assume responsibility for all of their “own” employment-related expenses, including, but not limited to, purchasing or leasing, operating and paying to maintain expensive trucks, were false and fraudulent. Plaintiffs contend that defendant intended to and did induce plaintiffs and the class members to reasonably and justifiably rely to their detriment on the false and fraudulent representations made to them by defendant in the agreements concerning their employment status and obligation to assume responsibility for employment-related expenses, including but not limited to, purchasing or leasing, operating and maintaining expensive trucks, and that plaintiffs suffered damage as a direct and proximate result. Am. Compl. at ¶¶ 89-93.

II. The Motion

Plaintiffs seek certification of a class with respect to their claims for illegal deductions from wages, rescission, unjust enrichment, and fraud, defined as follows:

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Cite This Page — Counsel Stack

Bluebook (online)
261 F.R.D. 548, 2009 U.S. Dist. LEXIS 94893, 2009 WL 3127736, Counsel Stack Legal Research, https://law.counselstack.com/opinion/phelps-v-3pd-inc-ord-2009.