Plaintiff Jason Pietrzycki ("Pietrzycki"), on behalf of himself and others similarly situated, has sued Defendant Heights Tower Service, Inc. ("HTS") and Defendant Mark Motter ("Motter") (collectively, "Defendants") for allegedly underpaying some of HTS's employees for overtime in violation of the Illinois Minimum Wage Law ("the IMWL"),
This matter is now before the Court on three motions. The parties have filed cross-motions for summary judgment. Plaintiffs' Motion for Summary Judgment ("Plaintiffs' SJ Motion"), [ECF No. 132]; Defendants' Motion for Summary Judgment ("Defendants' SJ Motion"), [ECF No. 142]. Defendants also have filed a motion to decertify the Rule 23 class action and the FLSA collective action. Defendants' Second Amended Motion to Decertify the FLSA Collective Action and Motion to Decertify the Rule 23(a) Class Action ("Defendants' Motion to Decertify"), [ECF No. 140]. The parties have briefed these motions and the Court heard oral argument. For the reasons stated below, Plaintiffs' Motion for Summary Judgment [ECF No. 132] is denied, Defendants' Motion for Summary Judgment [ECF No. 142] is denied, and Defendants' Motion to Decertify [ECF No. 140] is denied. As the Court notes throughout this Memorandum Opinion, the record developed by the parties in discovery-or at least the record as presented in support of the parties' respective motions-is not adequate to justify granting any of the motions now before the Court.
I. BACKGROUND
1. Background Facts
HTS services cellular communication towers ("towers"). Plaintiff's Statement of Undisputed Material Facts in Support of His Motion for Summary Judgment ("Plaintiffs' SoF"), [ECF No. 134], ¶ 4; Defendants' Statement of Undisputed Material Facts in Support of Their Motion for Summary Judgment ("Defendants' SoF"), [ECF No. 143], ¶ 3. Motter is HTS's president and sole owner. Plaintiffs' SoF, [ECF No. 134], ¶ 2. Plaintiffs are current and former foremen and tower technicians employed by HTS and Motter. Id. ¶¶ 1, 2; Defendants' SoF, [ECF No. 143], ¶ 1.
Typically, HTS sends a four-person crew consisting of one foreman and three tower technicians to work on each tower. Defendants Heights Tower Service, Inc. and Mark Motter's Memorandum of Law in Support of Collective Action Decertification and in Opposition to Plaintiff's Motion for Class Certification ("Defendants' Prior Decertification Brief"), [ECF No. 94], at 8. At the tower, foremen and tower technicians install, repair, upgrade, and maintain towers and related equipment. Defendants' SoF, [ECF No. 143], ¶ 3; Pietrzycki ,
To record how much time employees work in a given week, HTS relies on foremen
HTS services towers in at least seven states, Illinois, Ohio, Wisconsin, Kentucky, Pennsylvania, Georgia, and South Dakota. Plaintiffs' SoF, [ECF No. 134], ¶ 7; Defendants' SoF, [ECF No. 143], ¶ 6. Most of HTS's business is concentrated in the first three states, which collectively accounted for 97% of its business in 2014. Plaintiffs' SoF, [ECF No. 134], ¶ 7; Defendants' SoF, [ECF No. 143], ¶ 6. HTS has warehouses in Yorkville, Illinois, and Mount Vernon, Ohio. Defendants' Prior Decertification Brief, [ECF No. 94], at 7. HTS's employees reside in Illinois, Ohio, Wisconsin, and Michigan. Id. at 8. To get to or from a tower on a given day, employees may have to travel a significant distance. Plaintiffs' SoF, [ECF No. 134], ¶ 10.
This case has to do with the time that employees spend traveling to and from towers. Employees' travel options can be broken into two categories. First, employees are allowed to arrange their own transportation if they want to do so. Defendants' SoF, [ECF No. 143], ¶ 5; see also Plaintiffs' Combined Reply in Support of Their Motion for Summary Judgment and in Response to the Defendants' Motion for Summary Judgment ("Plaintiffs' Combined Brief"), [ECF No. 147], at 3. Typically, this involves driving a personal vehicle or riding in another crew member's personal vehicle. Alternatively, HTS provides a free transportation option, allowing a crew's members to travel in an HTS-owned truck ("HTS truck") to and from their tower. See Plaintiffs' SoF, [ECF No. 134], ¶¶ 6, 11; Defendants' SoF, [ECF No. 143], ¶¶ 5, 7. One member of the crew, typically the foreman, drives the HTS truck and all other crew members who opt to travel in the HTS truck ride as passengers. If employees want to travel in an HTS truck, HTS requires them to meet at a designated location-normally an HTS warehouse at the start of the day-by a certain time. See Defendants' Memorandum of Law in Support of Their Motion for Summary Judgment ("Defendants' Opening SJ Brief"), [ECF No. 144], at 6; Defendants' Reply in Support of Their Motion for Summary Judgment ("Defendants' SJ Reply"), [ECF No. 156], at 7 n.3. It seems that employees usually choose to travel in an HTS truck and only infrequently arrange to travel in a personal vehicle.
Under HTS's new plan, employees should receive at least some compensation for all of the time that they spend traveling in an HTS truck. Time spent driving an HTS vehicle should be recorded as normal work hours. Defendants' Motion to Decertify, [ECF No. 140], at 12. Time spent riding as passengers normally should be recorded as travel hours. Id. at 9. Passengers' time should be recorded as normal work hours, though, if the passengers perform work in the truck while traveling. Defendants Heights Tower Service, Inc. and Mark Motter's Reply in Support of Their Second Motion to Decertify the FLSA Collective Action and Motion to Decertify the Rule 23(a) Class Action ("Defendants' Decertification Reply"), [ECF No. 152], at 3-4, 9. Passengers' time also should be recorded as normal work hours if they perform what Defendants call "substantial" work before getting in the truck at the start of the day or after exiting it at the end of the day. Id. Even under this new compensation arrangement, the time that employees spend traveling in personal vehicles-regardless of whether the employees drive or ride as passengers-should not be recorded as either work hours or travel hours. Defendants' Motion to Decertify, [ECF No. 140], at 9; see also id. at 12.
The parties dispute whether HTS consistently paid the Drive Time Rate in accordance with this plan. Plaintiffs say HTS largely followed it except that HTS also usually recorded the time spent traveling in personal vehicles as travel hours. Defendants, however, claim foremen distorted HTS's intended policy by recording "travel hours" on DARs in a haphazard and inconsistent manner. The Court will address this dispute-including whether it presents a genuine issue of material fact within the meaning of Federal Rule of Civil Procedure 56 -later in this Memorandum Opinion.
The parties agree that HTS treated all time that it recorded as travel hours and paid at the Drive Time Rate in a consistent manner when calculating how much overtime compensation to pay employees. When determining how many hours employees worked in a given week, HTS excluded all time that was recorded as travel hours and paid at the Drive Time Rate. Plaintiffs' SoF, [ECF No. 134], ¶ 21; Defendants' SoF, [ECF No. 143], ¶¶ 22, 24. When calculating the overtime rate of pay for employees, HTS excluded all payments at the Drive Time Rate of $10 per hour, and just multiplied employees' regular wages by 1.5. Plaintiffs' SoF, [ECF No. 134], ¶ 23; Defendants' SoF, [ECF No. 143], ¶ 23. It is these two overtime compensation practices that are at issue in this lawsuit.
2. Procedural History
On August 25, 2014, Pietrzycki filed the original complaint in this case on behalf of himself and similarly situated persons.
On April 1, 2015, at the joint request of the parties, the Court conditionally certified a FLSA collective action. Order Authorizing Notice to Similarly Situated Persons pursuant to
II. LEGAL STANDARD
1. Summary Judgment
Summary judgment is appropriate when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a) ; see also Cincinnati Life Ins. Co. v. Beyrer ,
2. Decertification
"Under Section 216(b) of the FLSA, employees may bring a collective action on behalf of themselves and other 'similarly situated' employees against employers who violate the Act's minimum wage or overtime provisions." Smallwood v. Illinois Bell Tel. Co. ,
Under Federal Rule of Civil Procedure 23(c)(1)(C), "[a]n order that grants or denies class certification may be altered or amended before final judgment." FED. R. CIV. P. 23(c)(1)(C). After granting certification, the court "remains under a continuing obligation to review whether proceeding as a class action is appropriate." Shurland v. Bacci Cafe & Pizzeria on Ogden, Inc. ,
A party seeking class certification must prove that the class meets the four requirements of Rule 23(a) and at least one of the three alternatives provided in Rule 23(b). Costello v. BeavEx, Inc. ,
III. DISCUSSION
Plaintiffs and Defendants have filed cross-motions for summary judgment. Defendants also have filed a motion to decertify. The Court will address the motions for summary judgment and then turn to the motion to decertify.
Both parties have moved for summary judgment. Before turning to the merits of the parties' motions, one preliminary issue must be addressed.
Plaintiffs argue the Court should strike Defendants' Statement of Undisputed Material Facts in Support of Their Motion for Summary Judgment [ECF No. 143] and Defendants' Response to Plaintiff's Statement of (Allegedly) Undisputed Material Facts [ECF No. 146] because they do not comply with Local Rule 56.1. Local Rule 56.1 requires a party moving for summary judgment to submit a statement of material facts with "specific references to the affidavits, parts of the record, and other supporting materials relied upon to support the facts." N.D. ILL. R. 56.1(a). Then, "the party opposing the motion for summary judgment is required to file and serve 'a concise response to the movant's statement that shall contain... a response to each numbered paragraph in the moving party's statement, including, in the case of any disagreement, specific references to the affidavits, parts of the record, and other supporting materials relied upon.' " Curtis v. Costco Wholesale Corp. ,
Plaintiffs criticize Defendants' Local Rule 56.1(a) and (b) statements in several ways. Plaintiffs say, among other things, that they are argumentative, contain multiple facts in each paragraph, and lack support for specific statements. In the Court's view, Defendants' statements do leave something to be desired. But most of the paragraphs in Defendants' statements are two sentences or shorter, are supported by appropriate citations, and are not filled with conjecture and legal arguments. More fundamentally, Defendants' statements are sufficient to serve the purpose of Local Rule 56.1 because they lay out for the Court Defendants' version of the material facts and the evidence upon which they rely. There is no indication that Defendants' statements were so deficient as to prejudice Plaintiffs by frustrating their ability to litigate the summary judgment motions. Therefore, the Court will not strike Defendants' Local Rule 56.1 statements.
Now the Court can address the merits of parties' arguments.
A. Plaintiffs' Hours Worked Claim
Plaintiffs claim Defendants violated the IMWL and the FLSA by undercounting the number of overtime hours they worked. See 820 ILL. COMP. STAT. 105/4a ;
Plaintiffs contend Defendants bear the burden of proving Drive Time is not hours worked. But Plaintiffs bear the burden to prove that they performed overtime work for which they were not properly compensated. Melton v. Tippecanoe Cty. ,
Department of Labor regulations state that "[t]he principles which apply in determining whether or not time spent in travel is working time depend upon the kind of travel involved."
Plaintiffs' first and main argument is that HTS had a custom or practice of paying employees for Drive Time and entered into a nonwritten contract to pay them for Drive Time. Plaintiffs contend that, under an amendment to the FLSA called the Portal-to-Portal Act of 1947 (the "PPA"),
As discussed below, even though the Court agrees with Plaintiffs that HTS had a custom, practice, or contract with its employees to compensate them for traveling as passengers in an HTS truck or other vehicle to and from a jobsite, the Court disagrees that the existence of such a custom, practice, or contract automatically makes Drive Time into hours worked under the PPA as a matter of law. Neither party addresses this issue very well in their written submissions. The PPA, however, does not turn ordinary home-to-work commuting into hours worked and Plaintiffs have not shown in their summary judgment filings that Drive Time should be characterized as anything other than ordinary home-to-work travel based on the record developed in support of their summary judgment motion. The Court will first discuss Plaintiffs' hours worked and regular rate claims and then address Defendants' argument that the PPA provides them with a defense to Plaintiffs' claims. See infra Section III(1)(C).
The Court's analysis of Plaintiffs' claims is as follows.
Two courts have addressed the exact argument raised by Plaintiffs in somewhat factually similar scenarios. In Johnson v. RGIS Inventory Specialists , the plaintiff employee's job was to travel to retail stores to count merchandise.
The court recognized that "[n]ormal travel from home to work is not worktime" under the FLSA.
In Wren v. RGIS Inventory Specialists , a different court dealt with a very similar case against the same defendant employer.
Plaintiffs rely on three cases to support their argument that a custom, practice, or contract of compensating for travel time can make that time count as hours worked. None of the cases actually supports this proposition. In Raper v. State , the Iowa Supreme Court case never addressed whether the plaintiff peace officers' travel time would have counted as hours worked in the absence of the PPA, possibly because the state patrol regulations relevant to the plaintiffs' claims in that case provided the peace officers were "on duty at any time they [were] in uniform or in a state vehicle."
In summary, none of the cases cited by Plaintiffs squarely deals with whether ordinary home-to-work travel can be made into hours worked solely by a custom, practice, or contract of compensating for that time. On the other hand, the regulations discussed above, Johnson , and Wren all directly address the issue. All of them agree that a custom, practice, or contract under the PPA does not make ordinary home-to-work commuting time into hours worked because that time was not compensable before Congress enacted the PPA. The Court agrees with that line of reasoning. Therefore, Plaintiffs' first argument is of no avail.
The Court recognizes that Plaintiffs assert this is not a run of the mill home-to-work commuting case. Plaintiffs point out that, at least when traveling in HTS trucks, they went to designated meeting locations and did not commute directly from or to home. Plaintiffs emphasize that HTS implemented its new Drive Time compensation arrangement in 2012 to compensate employees for long travel times and to attract qualified workers. Plaintiffs also contend HTS considered Drive Time to be payment for regular hours worked because it included Drive Time payments as taxable "Earnings" on paystubs and foremen marked start/end times on DARs that incorporated Drive Time. For all these reasons, Plaintiffs say, Drive Time is more than ordinary home-to-work travel.
At oral argument, Plaintiffs directed the Court to three Supreme Court decisions that they contend show Drive Time counts as hours worked. Those cases, however, all are easily distinguishable because they involved travel on an employer's premises that was controlled by the employer and was necessarily and primarily performed for the employer's benefit. Anderson v. Mt. Clemens Pottery Co. ,
Plaintiffs finally raise three arguments that apply to subsets of Drive Time rather than all Drive Time. Plaintiffs first say some Drive Time counts as hours worked under the "continuous workday rule" because some Plaintiffs performed work either before they traveled to the first tower of the day or on their way back at the end of the day. Plaintiffs also contend some Drive Time counts as hours worked because Plaintiffs sometimes performed additional activities while traveling as a passenger during Drive Time. Plaintiffs lastly assert some Drive Time counts as hours worked because they traveled away from their home communities. Each of these variations will be addressed in turn. None of them justify granting summary judgment in Plaintiffs' favor on the record presented.
i. The Continuous Workday Rule
Plaintiffs argue at least some Drive Time counts as hours worked under the "continuous workday rule," which also
According to Plaintiffs, when employees arrived at HTS's warehouse in the morning, they often performed pre-trip activities. "Examples of the work performed" include cleaning, loading, and servicing the HTS trucks they would travel in. Plaintiffs' Additional SoF, [ECF No. 149], ¶ 2; see also id. ¶ 3. Plaintiffs say that pre-trip activities benefited HTS because they helped crews get to towers faster and that the activities were integral to the employees' work because the tasks had to be completed before going to a tower. See id. ¶¶ 4, 5. Plaintiffs contend pre-trip activities took 30 or more minutes. Id. ¶¶ 14-15. Plaintiffs claim that employees were asked to do pre-trip activities and that, if they refused, they could be written up. Id. ¶¶ 7-8. Plaintiffs also assert employees performed work at customers' warehouses, including loading materials, on their way to towers. Id. ¶ 11. Likewise, Plaintiffs claim that, at HTS's warehouse at the end of the day, employees sometimes moved boxes to be burned or cleaned. Id. ¶ 12.
Because Defendants did not respond to Plaintiffs' Statement of Additional Facts, it is not entirely clear to what extent they dispute what Plaintiffs say about activities at warehouses. But Defendants' Local Rule 56.1(a) statement breaks with much of what Plaintiffs say. As an initial matter, Defendants claim tower technicians were not required or directed to perform the pre-trip activities described by Plaintiffs. Defendants' SoF, [ECF No. 143], ¶¶ 9, 15, 19. Defendants say tower technicians rarely performed work-related activities at HTS's warehouse and normally only loaded their personal belongings into an HTS truck. Id. ¶¶ 9, 15. When employees performed work at a warehouse, Defendants assert HTS paid their regular wages. See , e.g. , ¶ 8. Defendants only refer to employees "readying the HTS truck or trailer or loading materials," and do not indicate whether those employees also did things like training or assisting the warehouse manager. Id. ¶ 9. Defendants also claim it is "a very rare occurrence" that any employee performed work at a customer's warehouse at HTS's direction. Id. ¶ 15. Defendants do not address what activities, if any, employees performed after returning to HTS's warehouse at the end of the day. Plaintiffs dispute virtually everything Defendants say in this regard. See , e.g. , Plaintiffs' Response to Defendants' SoF, [ECF No. 148], at ¶¶ 3, 8, 9, 15, 19.
The parties' briefs concerning the application of the continuous workday rule also are not helpful. Plaintiffs did not raise the issue until their combined response and reply brief. Even in that brief, Plaintiffs do not discuss activities performed at warehouses at the end of the day (i.e. , taking boxes to be burned or cleaned) or activities performed at customers' warehouses. Instead,
The law in this area is clearly established. Under the continuous workday rule, "workers must be compensated for time they spend doing what might otherwise be non-compensable activities if those activities occur during the 'period between commencement and completion on the same workday of an employee's principal activity or activities,' subject to FLSA carve outs." Mitchell v. JCG Indus., Inc. ,
There is a factual dispute in this case as to whether employees were required to perform pre-trip activities. Defendants claim no tower technicians were required to clean, service, or load HTS trucks while Plaintiffs say they sometimes were asked to do so and were subject to discipline if they refused. No party addresses to what extent cleaning and servicing HTS trucks was necessary to the employees' performance of their duties at towers. Plaintiffs have cited evidence that loading HTS trucks was beneficial to HTS because it saved time and was necessary because the equipment, materials, and tools were used at towers. Plaintiffs' Additional SoF, [ECF No. 149], ¶¶ 4, 5. Defendants do not address either necessity or benefit in their statements of material fact or briefs. But, as discussed above, they dispute enough of what Plaintiffs say to muddy the waters on work performed at the beginning and end of the day. The Court is not prepared to say, based on the deficient record developed at this juncture, that Defendants have waived that argument.
To the extent employees spent periods of time performing activities such as loading HTS trucks, the Court does not see why that would not be sufficient to mark the start of their workdays. Although there is a genuine issue of material fact as to whether employees are required to perform these activities, they are done for HTS's benefit and are integral and indispensable to the principal activities performed at towers. But this is not enough on its own for the Court to find Drive Time counts as hours worked. The parties dispute how often employees performed these activities and it is not clear whether employees largely did the same activities or whether there was significant variation in what they did.
ii. Additional Activities
Plaintiffs argue at least some Drive Time counts as hours worked because, at times, employees performed other compensable work while traveling as passengers. The record now before the Court is poorly developed with respect to what employees did during Drive Time (besides travel as passengers). During oral argument, Plaintiffs conceded that employees usually slept or otherwise used their time as they pleased and did not perform other activities that constituted work. The parties seem to agree, though, that at least sometimes employees performed activities related to their work for HTS. Plaintiffs' Additional SoF, [ECF No. 149], ¶ 16; see also Motion to Decertify, [ECF No. 140], at 12. Defendants have not identified what activities were performed. Plaintiffs say the "passengers would pass along site plans, discuss job requirements, fill out paperwork,...and have telephone calls with management." Plaintiffs' Additional SoF, [ECF No. 149], ¶ 16. That sounds plausible as a matter of common sense. Neither party, however, has clearly shown how often employees performed any such activities although, based on the parties' statements during oral argument, it was the exception, not the rule. It also is unclear whether and, if so, how often HTS compensated time spent in these activities as regular work.
Defendants argue the Drive Time spent performing these activities does not count as hours worked because the activities are de minimis . "The de minimis doctrine allows employers to disregard otherwise compensable work when only a few seconds or minutes of work beyond the scheduled working hours are in dispute." Kellar ,
The factual record now before the Court is not developed with respect to any of the de minimis factors. The parties' statements of material fact are silent about how much time employees spent in the activities identified by Plaintiffs, how regularly the activities were performed, the aggregate amount of compensable time, and the administrative difficulty of tracking the time spent performing these activities. The parties also do not address in any depth either these factual matters or the legal principles governing the de minimis analysis in their briefs.
During oral argument, Plaintiffs raised for the first time the argument that at least some Drive Time should be counted as hours worked because it involved travel away from home overnight. Plaintiffs cited
For all of these reasons, Plaintiffs have not shown based on the undisputed facts that Drive Time counts as hours worked and Defendants have not shown based on the undisputed facts that Drive Time does not count as hours worked. Therefore, the Court cannot grant summary judgment to either party on the issue of whether Defendants improperly excluded Drive Time from their calculation of hours worked by Plaintiffs including for purposes of determining overtime. The Court will, however, go on to address Plaintiffs' argument that Defendants improperly calculated their regular rate by not including payments made at the Drive Time Rate in that calculation, including for purposes of paying overtime compensation, because that could be helpful in moving this case forward to an eventual resolution.
B. Plaintiffs' Regular Rate Claim
The FLSA requires an employer who employs an employee "for a workweek longer than forty hours" to pay that employee "compensation for his employment in excess of" 40 hours "at a rate not less than one and one-half times the regular rate at which he is employed."
In this case, it is undisputed that HTS calculated an employee's overtime compensation by multiplying the employee's regular wage rate by 1.5 in those weeks that the employee worked more than 40 hours. HTS did not include Drive Time when it calculated an employee's eligibility for overtime nor did it include payments at the Drive Time Rate in determining an employee's regular rate for purposes of the 1.5 times regular rate calculation. Plaintiffs argue this violated the IMWL and the FLSA. See
Defendants contend Drive Time payments fit within the statutory exclusion in
Section 207(e)(2) has three parts. The first excludes "payments made for occasional periods when no work is performed due to vacation, holiday, illness, failure of the employer to provide sufficient work, or other similar cause."
The second part of § 207(e)(2) excludes "reasonable payments for traveling expenses, or other expenses, incurred by an employee in the furtherance of his employer's interests and properly reimbursable by the employer."
The third part of § 207(e)(2) excludes "other similar payments to an employee which are not made as compensation for his hours of employment."
Defendants only cite
On the other hand, even though Drive Time payments constitute remuneration that should be considered when calculating Plaintiffs' regular rate, Plaintiffs have not shown that they are entitled to judgment as a matter of law on their regular rate claim based on the undisputed facts. An employer violates the IMWL and the FLSA when it pays "less than one and one-half times the regular rate."
In addition, Plaintiffs have not pointed to undisputed facts that establish Plaintiffs who worked overtime were underpaid. For example, Plaintiffs do not argue that any Plaintiff had a regular wage of less than $10 per hour. Instead, all of the regular wage rates reflected in the parties' briefs and Local Rule 56.1 statements are higher than $10 per hour. If, for instance, all Drive Time counts as hours worked (as Plaintiffs argue it does), then Defendants may well have paid Plaintiffs higher overtime rates than they were required to pay under the IMWL and the FLSA. That is because if Drive Time counts as hours worked, then the Drive Time Rate of $10 per hour should be included on a weighted average basis in HTS's determination of a proper overtime rate. That, in turn, would result in a lower overtime rate than would apply if HTS used only employees' regular wage rates to determine overtime compensation due. See
C. The Portal-to-Portal Act
As noted earlier in this Memorandum Opinion, both parties argue they are entitled to summary judgment based on the PPA,
i. Background of the PPA
The PPA, which became law in 1947, narrows the coverage of the FLSA with respect to certain activities. Balestrieri v. Menlo Park Fire Prot. Dist. ,
(1) walking, riding, or traveling to and from the actual place of performance of the principal activity or activities which such employee is employed to perform, and
(2) activities which are preliminary to or postliminary to said principal activity or activities,
which occur either prior to the time on any particular workday at which such employee commences, or subsequent to the time on any particular workday at which he ceases, such principal activity or activities.
The Employee Commuting Flexibility Act of 1996 (the "ECFA"),
For purposes of this subsection, the use of an employer's vehicle for travel by an employee and activities performed by an employee which are incidental to the use of such vehicle for commuting shall not be considered part of the employee's principal activities if the use of such vehicle for travel is within the normal commuting area for the employer's business or establishment and the use of the employer's vehicle is subject to an agreement on the part of the employer and the employee or representative of such employee.
Although § 254(a) relieves employers from liability for certain employee activities, § 254(b) reimposes that same liability in certain instances. Specifically, § 254(b) provides § 254(a) will not relieve an employer of liability "with respect to any activity" that is compensable by either:
(1) an express provision of a written or nonwritten contract in effect, at the timeof such activity, between such employee, his agent, or collective-bargaining representative and his employer; or
(2) a custom or practice in effect, at the time of such activity, at the establishment or other place where such employee is employed, covering such activity, not inconsistent with a written or nonwritten contract, in effect at the time of such activity, between such employee, his agent, or collective-bargaining representative and his employer.
To summarize, the PPA does not impose liability on employers in the first instance for certain activities. Section 254(a)"only exempts them from liability for certain activities that the Supreme Court had briefly imposed before the [PPA] overruled it." Kuebel ,
ii. Application of the PPA's Custom, Practice, or Contract Exception to the Facts of This Case
As described above, § 254(a) of the PPA provides that an employer shall not be liable for the failure to pay overtime compensation for certain activities. Defendants argue Drive Time is an activity that is encompassed by § 254(a). Plaintiffs dispute this point, contending Drive Time is more than just travel to or from the actual place of performance of their principal activities. Plaintiffs devote more of their attention, though, to arguing HTS had a custom, practice, or contract within the meaning of § 254(b) of compensating employees for Drive Time. Defendants dispute whether HTS had such a custom, practice, or contract. Because the parties' disagreement concerning § 254(b) is dispositive of Defendants' PPA argument, the Court will address that issue first.
The PPA does not relieve an employer of liability for failing to pay overtime compensation for an activity that is compensable by "an express provision of a...nonwritten contract in effect, at the time of such activity, between such employee...and his employer."
Plaintiffs contend HTS entered into a nonwritten contract with Plaintiffs (and its other employees) to compensate them for the activity of traveling as passengers in a vehicle. Plaintiffs' Local Rule 56.1(a) Statement contains several facts related to this theory, none of which Defendants dispute. Plaintiffs first state "HTS's communicated understanding and agreement with Class and Collective members is that in exchange for riding as a passenger in a vehicle, HTS employees are paid the reduced-rate $10 per hour Drive Time rate." Plaintiffs' SoF, [ECF No. 134], ¶ 14.
The Court must accept undisputed facts as true for the purposes of summary judgment. The undisputed facts of record here establish that HTS had a "communicated agreement" and "common understanding" with employees that they would be paid the Drive Time Rate for traveling as passengers in a vehicle and that HTS made this agreement to attract employees. Defendants do little to explain why these facts are insufficient to give rise to a nonwritten contract. Defendants say "there is no 'unwritten contract' to pay $10 per hour for Drive Time per
Even in the absence of a nonwritten contract, the PPA would not relieve Defendants of liability for failing to pay overtime compensation for an activity that was compensable by "a custom or practice...covering such activity."
Plaintiffs contend HTS had a custom or practice of compensating employees for all time spent traveling as passengers to or from a jobsite, regardless of whether the employees were traveling in an HTS truck or a personal vehicle. Defendants, though, argue HTS did not have a custom or practice of paying employees for any such time. As noted above, Defendants say foremen marked "travel hours" on DARs in a haphazard and inconsistent. According to Defendants, HTS's Drive Time arrangement amounted to "nothing more than a general employment policy." Defendants' Memorandum Contra/Brief in Opposition, Plaintiffs' Motion for Summary Judgment ("Defendants' SJ Response"), [ECF No. 141], at 7.
Plaintiffs rely mainly, although not exclusively, on the deposition testimony of Overholt and Motter. Overholt, HTS's Rule 30(b)(6) witness, testified as follows:
Q. But for the last four years, it's been the [HTS] custom and practice to pay people who are riding to sites $10 an hour for the time that they're traveling to a site, correct?
A. For the passengers, yes.
Q. And that's been-and that's the practice as to all tower technicians and foremen, correct?
A. Yes, sir.
Q. And that policy is applied at [HTS] on a uniform basis, correct?
A. That's correct. Overholt's Dep., [ECF No. 134-1], at 102-03. Motter offered similar testimony at his deposition:
A. I would say [foremen] know that mobilization from the warehouse to the job site falls under drive time, as does mobilization from the job site back to the warehouse.
Q. And you believe that that's consistent among all your foremen; they have the same understanding.
A. Yes, I do.
Motter's Dep., [ECF No.134-2], at 22-23. Plaintiffs contend this testimony is sufficient to establish a custom or practice of compensating employees for Drive Time.
In response, Defendants say Overholt and Motter are mistaken and HTS did not have a uniform custom or practice of compensating employees for traveling as passengers. Defendants claim HTS "may have expected...and believed" Drive Time to be "uniformly applied," but that was not, in fact, what happened. Defendants' Motion to Decertify, [ECF No. 140], at 3; see also
In their summary judgment briefs, Defendants repeatedly contend HTS did not have a custom or practice of compensating for any travel as passengers. Defendants' argument is set forth in conclusory and general sentences, four of which cite to the same three paragraphs in their Local Rule 56.1(a) statement. See , e.g. , Defendants' SJ Response, [ECF No. 141], at 2, 5, 6, 7, 8; Defendants' Opening SJ Brief, [ECF No. 144], at 2, 5, 6, 8, 9; Defendants' SJ Reply, [ECF No. 156], at 2, 12-13. With a few exceptions discussed below, Defendants do not discuss the specific facts that supposedly show a custom or practice did not exist or how the law applies in light of those facts. Defendants mostly fall back on the assertion that the Drive Time arrangement was "not uniformly applied." But this contention sets up a straw man. A custom or practice to compensate for travel as a passenger can exist even if, at times, HTS deviated from that custom or practice. For example, a person may have a custom or practice of parking his car at the curb in front of his house even if he occasionally parks in the garage. If, on the other hand, Defendants are saying the record does not support the conclusion that HTS did not have a custom or practice of paying for travel as a passenger at all, then that position is not supported on this record.
One of Defendants' few specific arguments is that HTS sometimes awarded the Drive Time Rate for activities other than traveling as passengers. See Defendants' SJ Reply, [ECF No. 156], at 11-12. Specifically, Defendants cite an exchange in one deposition in which a foreman said he paid the Drive Time Rate to employees for time spent performing "any task that needed to be done at a customer's warehouse" if the employees were at the warehouse for only a short period of time.
Defendants also argue foremen did not consistently differentiate between regular wages and the Drive Time Rate and sometimes paid regular wages for travel as passengers. See , e.g. , Defendants' SoF, [ECF No. 143], ¶ 17. Defendants, though, do not cite any case law holding that the custom or practice exception does not apply when employees are compensated at two rates for an activity. Such a conclusion is inconsistent with common sense and the broad definition of "compensable." See
As noted above, employees mostly traveled in HTS trucks but, on infrequent occasions, they traveled in personal vehicles. That means most Drive Time occurred in HTS trucks and some smaller portion of Drive Time occurred in personal vehicles. The record regarding HTS's custom or practice (though not, as explained above, its nonwritten contract) is different with respect to travel in these two types of vehicles.
Defendants never actually state, much less cite evidence showing, that HTS routinely failed to pay employees any compensation for traveling as passengers in an HTS truck. As noted above, Defendants rely on three paragraphs in their Local Rule 56.1(a) Statement when arguing no custom or practice existed.
With respect to a custom or practice of compensating for traveling as passengers in a personal vehicle, the analysis may be different. Defendants have identified evidence in the record that employees sometimes were compensated for time spent traveling as passengers in a personal vehicle and sometimes were not. This evidence creates an issue of fact as to whether HTS had a custom or practice of compensating employees for traveling as passengers in a personal vehicle. Because travel in a personal vehicle is a different activity than travel in an HTS truck, the issue of fact does not affect whether HTS had a custom or practice of compensating employees for Drive Time in an HTS truck. See
D. Defendants' Knowledge
Defendants argue they are entitled to summary judgment because they did not know Plaintiffs were performing work for which they were not paid sufficient overtime compensation. "[A]n employee must prove that he was 'employed' during the time for which he seeks overtime compensation, which requires a showing that the employer had either actual or constructive knowledge that he was working overtime." Von Friewalde v. Boeing Aerospace Operations, Inc. ,
Defendants contend they did not have actual or constructive knowledge. Defendants repeatedly assert they did not believe they were doing anything wrong or failing to pay Plaintiffs for work that they performed. Defendants, though, do not cite any case law holding that an IMWL or FLSA claim requires specific intent to underpay employees, thereby violating the law. See Cabrera v. B & H National Place, Inc. ,
For all of these reasons, Plaintiffs' and Defendants' motions for summary judgment are denied.
E. Defendant Motter's Individual Liability
Plaintiffs seek to hold Motter jointly and severally liable with HTS as their "employer." Although the Court is denying both parties' motions for summary judgment, the facts relevant to a determination of whether Motter was Plaintiffs' "employer" are not disputed. "The FLSA contemplates several simultaneous employers who may be responsible for compliance with the FLSA." Villareal v. El Chile, Inc. ,
The FLSA defines "employer" to include "any person acting directly or indirectly in the interest of an employer in relation to an employee."
The economic reality assessment encompasses a variety of factors, including "whether the alleged employer: (1) had the power to hire and fire the employees; (2) supervised and controlled employee work schedules or conditions of employment; (3) determined the rate and method of payment; and (4) maintained employment records." Deschepper v. Midwest Wine & Spirits, Inc. ,
In Solis v. International Detective & Protective Services, Limited , the court analyzed whether two individual defendants, a father and a son, were individually liable for the FLSA violations committed by a corporate defendant who employed the plaintiffs.
This case is similarly clear cut. Defendants concede that Motter is Plaintiffs' "employer" within the meaning of the IMWL and the FLSA. Plaintiffs' SoF, [ECF No. 134], ¶ 2. Defendants do not explain why this concession alone, coupled with Motter's undisputed involvement in the creation of the Drive Time arrangement, is not dispositive. Motter is the sole owner of HTS, as well as its president. He is involved in HTS's day-to-day operations, supervises and directs employees' work, and has the authority to hire and fire.
2. Defendants' Motion to Decertify
Defendants have moved to decertify the Rule 23 class action and the FLSA collective action. Defendants' argument that this case is not susceptible to classwide treatment seems to be at least somewhat in tension with the fact that they have moved for summary judgment on a classwide basis. See Costello v. BeavEx, Inc. ,
Outside of that testimony, Defendants more fully develop and support the arguments that they asserted during last year's motion practice. In particular, Defendants' attempt to make a more fulsome showing that individualized issues concerning how foremen awarded the Drive Time Rate will predominate over common issues because HTS did not have a custom or practice of compensating for Drive Time, enabling Defendants, therefore to take advantage of the PPA's protection from liability. As explained above, the Court disagrees with Defendants to the extent they contend HTS did not have a custom, practice, or contract to compensate employees for the activity of traveling as passengers in a vehicle. Whether HTS had a custom or practice of compensating for travel as passengers in a personal vehicle remains an open question. But the answer to that question is not determinative for the reasons discussed above. Based on the arguments asserted by Plaintiffs at summary judgment, Drive Time potentially may be hours worked if it is more than ordinary
IV. CONCLUSION
For all of the reasons stated above, Plaintiffs' Motion for Summary Judgment [ECF No. 132] is denied, Defendants' Motion for Summary Judgment [ECF No. 142] is denied, and Defendants' Motion to Decertify [ECF No. 140] is denied.
Notes
HTS has employees with other titles, including Warehouse Manager. Defendants' SoF, [ECF No. 143], ¶ 3. Throughout this Memorandum Opinion, though, "employees" and "employee" refer only to foremen and tower technicians.
Defendants state in their Local Rule 56.1(a) statement that "quite often" employees "elect to drive their personal vehicles to and from HTS customer job sites." Defendants' SoF, [ECF No. 143], ¶ 5. The evidence cited by Defendants does not support this statement of fact. See Deposition of Nicholas Brusatori, [ECF No. 143-5], at 55 ("It doesn't happen regularly."); Deposition of Christopher Fiene, [ECF No. 143-4], at 27 (stating that two members of his crew would drive personal vehicles to Fiene's house but then got in a HTS truck); Deposition of Joshua Morris, [ECF No. 143-7], at 44-45 (recognizing that it happened, but not identifying how frequently it happened). At most, Defendants have identified evidence that one employee traveled in a personal vehicle about half of the time. See Defendants' SoF, [ECF No. 143], ¶ 5 (citing Deposition of Allen Robinson, [ECF No. 143-9], at 55). Plaintiffs dispute Defendants' statement of material fact and, in doing so, cite evidence showing employees drove their personal vehicles rarely. Plaintiffs' Response to Defendants' Statement of Undisputed Material Facts in Support of Their Motion for Summary Judgment ("Plaintiffs' Response to Defendants' SoF"), [ECF No. 148], at 5.
Except as discussed below, the parties in this case do not argue that there are any differences between the IMWL and the FLSA that are material to this case. See Skelton v. Am. Intercontinental Univ. Online ,
"Hours worked" also includes "[a]ll time during which an employee is required to be on duty or to be on the employer's premises or at a prescribed workplace."
Subsection (c) provides: "For the purposes of subsection (b) of this section, an activity shall be considered as compensable under such contract provision or such custom or practice only when it is engaged in during the portion of the day with respect to which it is so made compensable."
Plaintiffs state in one sentence in their combined response and reply brief that HTS benefited from Drive Time because it charged some customers for certain travel time. Plaintiffs' Combined Brief, [ECF No. 147], at 11-12. But the record now before the Court indicates HTS only charged customers for travel when it sent a crew to address certain "troubleshooting scenarios." Plaintiffs' Statement of Additional Material Facts in Support of Their Opposition to Defendants' Motion for Summary Judgment ("Plaintiffs' Additional SoF"), [ECF No. 149], ¶ 13; Motter's Dep., [ECF No. 134-2], at 19. As the parties discussed during oral argument, HTS treated travel time in those situations as regular work, meaning HTS paid regular wages and counted it as hours worked. So, that travel time is not at issue in this case.
The parties also do not address whether travel to or from a warehouse where work was performed constitutes travel between job sites during the workday within the meaning of
At oral argument, the parties made various arguments about the de minimis doctrine based on factual representations that they conceded were not contained in their statements of fact or briefs. Again, as noted elsewhere in this Memorandum Opinion, neither party developed the record as it needed to be developed to support the rhetorical arguments they make throughout their summary judgment briefs.
During oral argument, the parties briefly disagreed about whether the activities performed by employees during Drive Time occurred during scheduled working hours (which may preclude the application of the de minimis doctrine). For the reasons explained in the hours worked and continuous workday sections of this Memorandum Opinion, that dispute cannot be resolved on the record and arguments now before the Court.
Defendants argue they are entitled to summary judgment under a provision of the IMWL concerning ridesharing that they seem to believe is analogous to the PPA. 820 Ill. Comp. Stat. 105/2.1. Defendants raise this argument for the first time in their reply brief and, even in that brief, do no more cite the statute in a string citation and drop quotations from it and a related provision in a footnote. Defendants have waived this argument in the context of their motion for summary judgment. See Crespo v. Colvin ,
This statement is supported by the deposition testimony of Motter; Matthew Overholt, HTS's Controller and Rule 30(b)(6) witness; and Tab Petersen, an HTS senior construction manager. Motter testified that he makes sure to tell every HTS hire that he will get $10 an hour for drive time, that "[i]t's a very known thing with everyone, and that the Drive Time arrangement is "just part of [employees'] compensation package." Deposition of Mark Motter ("Motter's Dep."), [ECF No.134-2], at 62-64. Overholt testified he told HTS's employees that they will be paid $10 per hour when they travel as a passenger. Deposition of Matthew Overholt ("Overholt's Dep."), [ECF No. 134-1], at 116-17. Finally, Petersen testified that employees normally asked whether they were paid a reduced rate for travel time and that he would tell them HTS did so. Deposition of Tab Petersen, [ECF No. 134-4], at 39.
One of the paragraphs does not address the custom or practice issue. Defendants' SoF, [ECF No. 143], ¶ 19. Another focuses on the failure to distinguish between regular wages and the Drive Time Rate, which is not material for the reasons already explained. Id. ¶ 17. In the final one, Defendants simply assert foremen did not have a uniform custom or practice of filling out DARs, without identifying any specific variation. Id. ¶ 20.
The Court's § 254(b) analysis distinguishes the present case from many of those relied upon by Defendants. See , e.g. , Integrity Staffing ,
The parties disagree about whether Plaintiffs would be entitled to liquidated damages under the FLSA if Plaintiffs prove Defendants violated the statute. Because the Court has not yet found Defendants violated the FLSA and because the parties dispute the facts relevant to the liquidated damages analysis, the Court will not now decide that issue.