Tegtmeier v. PJ Iowa, L.C.

208 F. Supp. 3d 1012, 2016 U.S. Dist. LEXIS 130190, 2016 WL 5340186
District Court, S.D. Iowa·Decided September 21, 2016·No. No. 3:15-cv-00110-JEG·Published·Cited by 22 cases

Opinion

ORDER

JAMES E. GRITZNER, Senior Judge, U.S. DISTRICT COURT

This matter is before the Court on a Motion for Conditional Collective Action Certification (the Motion) pursuant to the Fair Labor Standards Act (FLSA), 29 U.S.C. § 216(b), by Plaintiff Brandon Te-gtmeier (Tegtmeier or Plaintiff), on behalf of himself and similarly situated delivery drivers of Defendant PJ Iowa, L.C. (PJ Iowa). PJ Iowa resists. Neither party requested a hearing on the Motion, and the Court finds a hearing is unnecessary. The matter is fully submitted and ready for disposition.

I. BACKGROUND1

PJ Iowa operates twenty-six Papa John’s franchise stores in Iowa, Illinois, and South Dakota. From January to September 2014, Tegtmeier was employed by PJ Iowa as a delivery driver in Davenport, Iowa. During Tegtmeier’s employment, PJ Iowa paid Tegtmeier a cash wage of $5.50 per hour and applied a tip credit for all of Tegtmeier’s work time. On October 15, 2015, Tegtmeier filed a Complaint against PJ Iowa for violation of the FLSA, 29 U.S.C. § 201 et seq., and of Iowa law. Tegtmeier filed an Amended Complaint on December 3, 2015. PJ Iowa moved to dismiss Tegtmeier’s state law claims on December 17, 2015, and the Court granted in part and denied in part that motion on May 18, 2016. ECF No. 50.

The Amended Complaint makes three separate FLSA minimum wage claims. Count I alleges that PJ Iowa improperly applied a tip credit to Tegtmeier’s and other delivery drivers’ wages because PJ Iowa required delivery drivers to spend over 20% of their time performing non-tipped duties. Count II alleges that PJ Iowa reimbursed delivery drivers for vehicle expenses at an unduly low rate, resulting in net wages below the federal minimum wage. Count III alleges that PJ Iowa required delivery drivers to purchase uniforms and driving records at their own expense, also resulting in net wages below the federal minimum wage. Though the Amended Complaint contains three federal claims on behalf of an “opt-in” collective action of similarly situated delivery drivers pursuant to 29 U.S.C. § 216(b),2 the present Motion is narrower. Tegtmeier now moves for conditional certification of a FLSA collective action of PJ Iowa delivery drivers during the applicable limitations period only in pursuit of Count II and the [1016] driving record portion of Count III. (ECF Nos. 55-56).3 Tegtmeier also requests equitable tolling.

A. Vehicle Expense Reimbursement Claims

Tegtmeier argues that PJ Iowa uses a vehicle expense reimbursement formula that results in wages paid to delivery drivers that fall below the minimum wage. PJ Iowa pays its delivery drivers between $5.50/hour and $8.25/hour, depending on the state. As of February 2016, the bottom of PJ Iowa’s pay scale was $5.50/hour in Iowa, $6.00/hour in South Dakota, and $6.25/hour in Illinois, all below the federal minimum wage of $7.25/hour. For employees whose nominal pay falls below the applicable minimum wage rate(s), PJ Iowa uses a tip credit and provides a minimum wage adjustment when tips do not bring a delivery driver’s wages up to the minimum wage. All of PJ Iowa’s delivery drivers share the same title and written job description, and generally perform the same job duties.

PJ Iowa’s delivery drivers incur certain expenses for operating their vehicles on the job. PJ Iowa’s written policies require delivery drivers to use their own vehicles to deliver orders, and drivers must ensure that the vehicles are safe and reliable. Drivers’ vehicles are subject to inspection, and if a vehicle does not pass inspection, a driver may not operate that vehicle on the job. Drivers are also required to maintain insurance coverage and also incur expenses from fuel and depreciation while operating their vehicles on the job.

PJ Iowa reimburses its delivery drivers for their vehicle expenses by remitting 5% of the net sales of that driver’s delivery orders. This net sales figure includes all sales from delivery orders, including when multiple deliveries are made on a single trip and also including unsuccessful deliveries, but after accounting for any discounts or coupons used by the customer. PJ Iowa records neither the actual miles traveled by its delivery drivers nor its delivery drivers’ actual vehicle expenses, and it does not require its delivery drivers to record these figures. PJ Iowa does, however, track the actual reimbursement amounts remitted to drivers each shift and reimburses delivery drivers in cash at the end of each shift. This vehicle reimbursement policy applies to all of PJ Iowa’s delivery drivers, and has since at least 1997.

Though PJ Iowa does not track its delivery drivers’ miles traveled during deliveries, Tegtmeier has attempted to calculate the effect of PJ Iowa’s vehicle expense reimbursement policy on delivery drivers’ wages based on certain deposition testimony from PJ Iowa’s Rule 30(b)(6) witness, Mark Hauder. Hauder testified that the average price per order at PJ Iowa over the last three years was around $20, though that figure would be higher if only delivery orders were taken into account. Using this information, Tegtmeier estimates that PJ Iowa delivery drivers would expect to receive $1.00 per delivery, on average. Though Hauder said he did not know the average distance for PJ Iowa’s deliveries, he testified that PJ Iowa’s stores typically have a maximum delivery zone within a two-to three-mile radius from the store, or a distance that can be reached in a 12-or 13-minute trip.

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Tegtmeier v. PJ Iowa, L.C., 208 F. Supp. 3d 1012, 2016 U.S. Dist. LEXIS 130190, 2016 WL 5340186 (S.D. Iowa 2016).

208 F. Supp. 3d 1012 (Tegtmeier v. PJ Iowa, L.C.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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