300 F. Supp. 3d 234
D.C. Cir.2018Background
- MTM (Medical Transportation Management, Inc.) is the District's contracted transportation broker for non-emergency Medicaid trips; it does not operate vehicles but contracts with private transportation providers that employ drivers.
- Plaintiffs (drivers employed by MTM network providers) allege they were paid fixed flat rates for long workweeks and were not paid minimum wage or overtime; they bring class claims under the FLSA, D.C. Minimum Wage Revision Act, D.C. Living Wage Act, D.C. Wage Payment and Collection Law, and a breach‑of‑contract claim as third‑party beneficiaries of MTM’s contract with D.C.
- Contract terms require MTM to operate a call center, validate eligibility, assign trips, establish provider network standards (uniforms, ID badges, vehicle appearance, training, reporting, ability to take vehicles out of service), and ensure compliance with living‑wage requirements; MTM is barred from owning/operating vehicles.
- Plaintiffs allege MTM controls hiring/credentialing, training, discipline, work assignment (which trips go to which providers), recordkeeping, and some performance standards—facts they contend support joint‑employer or general‑contractor liability.
- MTM moved to dismiss, arguing it is only a broker (not an employer or general contractor), that drivers are exempt under the Living Wage Act as Medicaid direct‑care providers, and that plaintiffs are not intended third‑party beneficiaries of the MTM–D.C. contract.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MTM is a joint employer under the FLSA | MTM exercised employer prerogatives (hiring/credentialing, training, discipline, standards, trip assignment, recordkeeping) and thus is a joint employer | MTM is merely a broker enforcing contractual/City standards; it did not set pay or schedules and lacks employer control | Denied dismissal: allegations plausibly support joint‑employer status; factual inquiry reserved for discovery |
| Whether MTM is liable as a general contractor under the D.C. Minimum Wage Act | MTM’s contract obligations (to "provide" NET services, oversee network, pay providers from contract funds) make it a general contractor and providers subcontractors | MTM performs different functions and is prohibited from providing transport directly, so it is not a general contractor | Denied dismissal: allegations and contract language plausibly establish general‑contractor/subcontractor relationship |
| Whether drivers are exempt from D.C. Living Wage Act as "Medicaid provider direct care services" | Drivers are not "direct care" workers; statutory context and regulatory usage show "direct care services" means medical or daily‑living assistance (e.g., home‑health, aides), not transportation | Transportation is part of providing access to medical care and thus falls within "care" and the Medicaid provider exemption | Denied dismissal: court construed "direct care services" to mean medical or residential daily‑living care; transportation alone is not exempt |
| Whether drivers may sue for breach of MTM–D.C. contract as third‑party beneficiaries | Drivers are intended beneficiaries because contract incorporates Living Wage Act requirements and requires MTM/subcontractors to pay living wage | Contract provisions reflect statutory mandates, not an intent by the contracting parties to confer enforceable rights on drivers; government contracts presumptively create only incidental beneficiaries | Granted dismissal: drivers are not intended third‑party beneficiaries of the government contract; breach‑of‑contract claim dismissed |
Key Cases Cited
- Morrison v. Int'l Programs Consortium, Inc., 253 F.3d 5 (D.C. Cir.) (economic‑reality approach and typical employer prerogatives inform FLSA employee status)
- Goldberg v. Whitaker House Co‑op., Inc., 366 U.S. 28 (U.S. Supreme Court) (FLSA analysis focuses on economic reality, not formal labels)
- Falk v. Brennan, 414 U.S. 190 (U.S. Supreme Court) (broad FLSA definition of "employer")
- Bonnette v. Cal. Health & Welfare Agency, 704 F.2d 1465 (9th Cir.) (four‑factor joint‑employer test)
- Zheng v. Liberty Apparel Co., 355 F.3d 61 (2d Cir.) (multi‑factor joint‑employment inquiry and allowance to consider other relevant factors)
- Salinas v. Commercial Interiors, Inc., 848 F.3d 125 (4th Cir.) (joint‑employer factors emphasizing shared control and employer‑type functions)
- Brock v. Superior Care, Inc., 840 F.2d 1054 (2d Cir.) (factors for joint employment analysis)