ORDER
Defendants MCD Pizza, Inc. and Serah Enterprises, Inc. (“Defendants” or “Domino’s”) have owned and operated approximately ten Domino’s Pizza stores in Pennsylvania since 2010. Cmplt. ¶ 9 (Doc. No. 1); Zellagui Decl. ¶ 3 (Doc. No. 8). Domino’s accommodates its customers’ delivery requests by hiring drivers to transport food and drink orders from its stores to customers’ homes. Cmplt. ¶ 11. Defendants emplоy an average of fifteen delivery drivers in each of their ten stores at any given time. Zellagui Decl. ¶ 3. Plaintiff was one such delivery driver. Cmplt. ¶ 4.
From December 2010 to June 2013, Plaintiff worked at several of Defendants’ locations. Id.; Zellagui Decl. ¶ 4. Like all of Defendants’ delivery drivers, Plaintiff was scheduled to work nine-hour shifts. Zellagui Decl. ¶ 6; Cmplt. ¶ 14. However, Plaintiff and the Class members routinely worked two extra hours past the end of each shift to complete extra work like cleaning the store, putting away food and equipment and preparing the store for the next shift. Zellagui Decl. ¶¶ 6-9; Cmplt. ¶ 34. As a result, Plaintiff and the Class members worked an average of 11 hours per day. Id.
On a typical shift, Plaintiff and the Class members spent four hours in the store performing non-tipрed work and seven hours on the road making deliveries for which they were eligible to receive tips. Zellagui Decl. ¶ 10; Cmplt. ¶ 15.
At all times, Defendants paid Plaintiff and the Class members $6.00 per hour, regardless of whether they were performing tipped work or working overtime hours. Zellagui Decl. ¶ 15; Cmplt. ¶¶ 1, 4, 18, 31, 36, 43, 67. While out on the road, Plaintiff and the Class members were also paid a supplеmental wage of $1.00 per delivery. Zellagui Decl. ¶ 15; Cmplt. ¶ 31.
As a result, Plaintiff alleges that he and the Class members were: (1) paid less than the minimum wage for their non-tipped, in-store work; (2) under-reimbursed for their vehicle expenses while making deliveries, thereby bringing their hourly wages below the applicable tipped minimum; and (3) not paid one and one-half times the mandatory minimum for any of their overtime hours.
Because Defendants failed to appear, plead, or otherwise defend the action, Default was entered against them on May 1, 2014. All well-plead factual allegations in the Complaint, except those relating to damages, are therefore accepted as true. See Eastern Elec. Corp. of N.J. v. Shoemaker Const. Co.,
To determine the amount of damages, the Court may conduct a hearing and accept affidavits from the plaintiff. Schwartzman v. Rogue Int’l Talent Group, Inc., No. 12-5255,
Additionally, in calculating damages, a three-year statutory period applies. See Walker v. Washbasket Wash & Dry, No. 99-4878,
Non-Tipped, In-Store Work
When employees perform both tipped and non-tipped work, employers must pay the full minimum wage for all hours thаt their employees spend performing non-tipped tasks. See, e.g., Driver v. AppleIllinois, LLC,
Plaintiff claims that Defendants violated the Pennsylvania Minimum Wage Law (“MWA”) by failing to pay their delivery drivers at least $7.25 per hour for any of the hours they spent performing non-tiрped tasks in the store. Zellagui Decl. ¶ 15; ¶¶ 62-73.
Plaintiff alleges that, during a typical eleven-hour work day, he and the Class members spent approximately four hours performing non-tipped work in the store. Cmplt. ¶¶ 14-15, 18; Zellagui Decl. ¶ 10. Plaintiff further alleges that he and the Class members were always paid $6.00 per hour for their non-tipped work. Cmplt. ¶¶ 14-20, 62-73; Zellagui Decl. ¶ 15. Pennsylvania’s minimum wage rate has been $7.25 per hour throughout the relevant period. Taking these factual allegations as true, Plaintiff has stated a prima facie minimum wage violation based on Defendants’ failure to provide proper wages for un-tipped, in-store work.
The amount of damages owed on this claim is readily ascertainable from the evi-dentiary record. Defendants paid Plaintiff $1.25 per hour less than the applicable minimum wage. Because the statutory period extends back three years from the date of the Complaint, the damages on this claim are as follows:
Hourly Rate Per Shift (4 hours) Per Week (5 shifts) 191 Weeks
Paid_:_$6.00 $24.00 $120,00 $22,920,00
Minimum_$7.25 $29.00_$145.00 $27,695.00
Difference_($1.25) ($5.00)_($25.00) '($4,775.00)
Total for Class (150 members)_($716,250.00)
Thus, the total damages owed on Plaintiffs under-reimbursement claim is $716,250.00.
Tipped Deliveries
Employers are required to reimburse hourly-paid employees whо.drive for work to cover the vehicle-related expenses they incur so their hourly wages do not fall below the minimum when those expenses are taken into account. See, e.g., Perrin v. Papa John’s Int’l, Inc.,
Each year, the Internal Revenue Service (“IRS”) calculates and publishes a standard mileage reimbursement rate for businesses and employees to use in computing the minimum deductible costs оf operating an automobile for business purposes. Class Cert. Mot., Ex. A (Doc. No. 8). “The IRS figure is a national average of the cost of operating a motor vehicle.” Gattuso v. Harte-Hanks Shoppers, Inc.,
When minimum wage law requires an employer to reimburse an employee for using the employee’s vehicle for the employer’s benefit, thе employer should reimburse the employee at the IRS per mile rate or keep detailed records of the employees’ expenses to justify another reimbursement rate. See Department of Labor Field Operations Handbook, § 30cl5(a) (issued June 30, 2000) (for minimum wage purposes, employer may either reimburse employees who drive a personal vehicle for business use at the IRS rate or keep accurate, contemporaneous expense records and reimburse the employee accordingly); Gattuso,
Defendants required Plaintiff and the Class members to maintain safe, functioning, insured and legally-operable vehicles to make deliveries. Cmplt. ¶ 21; Zellagui Dec. ¶ 5. Defendants also required Plaintiff and the Class to pay for all costs associated with their vehicles, including gasoline, vehicle depreciation, insurance, maintenance and repairs. Cmplt. ¶ 26; Zellagui Dec. ¶ 5. The tipped minimum wage in Pennsylvania is $2.83 per hour. See MWA § 3(d). Defendants paid Plaintiff and the Class $6.00 per hour while making deliver
However, Plaintiff and the Class members drove an average of five roundtrip miles per delivery and made an average of three deliveries per hour while working for Defendants. Applying the IRS reimbursement rate (which has varied from a low of $0.51 per mile in 2011 tо a high of $0.565 per mile in 2013), Plaintiff and the Class members incurred out-of-pocket costs and expenses of between $7.65 per hour (15 miles x $0.51/mile) and $8.48 per hour (15 miles x $0.565/mile) while on the road. Id. ¶¶ 28-29, 31-32. Thus, in order for Plaintiff and the Class members to receive at least the tipped minimum wage of $2.83 per hour, Defendant would have had to pay wages plus reimbursements that ranged between $10.48 and $11.31 рer hour.
Taking these factual allegations as true, Plaintiff has stated a prima facie minimum wage violation based on Defendants’ failure to provide proper automotive reimbursements. Based on the evidentia-ry record, Defendants owe damages to Plaintiff and the Class members as follows:
From March 12, 2011 through June 2011 (15 weeks), the IRS reimbursement rate was $0.51 per mile. Taking Plaintiffs allegations as true, damages for this period are:
Per Hour
Hourly Rate (3 deliveries /15 miles) Per Shift (6 hours) Per Week (5 shifts) 15 Weeks
Wage_$6.00 $9.00_$54.00 $270.00 $4.050.00
Minimum_$2.83 $2.83_$16.98 $84J0_$1,273.50
Expenses_($7.65)_($45.90) ($229.50) ($3,442.50)
Difference_;_($1.48)_($8.88) ($44.40) ($666.00)
Total for Class (150 members) ($99,900.00)
From July 1, 2011 through December 2012 (73 weeks), the IRS reimbursement rate was $0.555 per mile. Taking Plaintiffs allegations as true, damages for this period are:
Per Hour
Hourly Rate (3 deliveries /15 miles) Per Shift (6 hours) Per Week (5 shifts) 73 Weeks
Wage_$6.00 $9.00_$54,00 $270.00 $19.710.00
Minimum_$2.83 $2,83_$16.98 $84.90 $6.197.70
Expenses_($8.33)_($49.98) ($249.90) ($18,242.70)
Difference_($2.16)_($12,96) ($64.80) ($4,730.40)
Total for Class (150 members) ($709,560.00)
From January 2013 through December 2013 (52 weeks), the IRS reimbursement rate was $0.565 per mile. Taking Plаintiffs allegations as true, damages for this period are:
Hourly Rate (3 deliveries /15 miles) Per Shift (6 hours) Per Week (5 shifts) 52 Weeks
Wage_$6.00 $9.00_$54.00 $270.00 $14,040.00
Minimum_' $2.83 $2.83_$16.98 $84.90 $4,414.80
Expenses_($8.48)_($50.88) ($254.40) ($13,228.80)
Difference_($2.31)_($13.86) ($69.30) . ($3,603.60)
Total for Class (150 members) ($540,540.00)
From January 2014 to present (48 weeks), the IRS reimbursement rate has been $0.56 per mile. Taking Plaintiffs allegations as true, damages for this period are:
Per Hour
Hourly Rate (3 deliveries /15 miles) Per Shift (6 hours) Per Week (5 shifts) 48 Weeks
Wage_$6.00 $9.00_$54.00 $270.00 $12,960.00
Minimum_ $2.83 $2.83_$16.98 $84.90 $4,075.20
Expenses_($8.40)_($50.40) ($252.00) ($12,096.00)
Difference_($2.23)_($13.38) ($66.90) ($3.211.20)
Total for Class (150 members) ($481,680.00)
Adding each of the totals from the four charts abové provides a total damages figure of $1,831,680.00 for Plaintiffs under-reimbursement claim.
Overtime Hours
The MWA specifically requires employers to pay their hourly employees at least one and one-half times their hourly rate for all hours beyond forty each workweek. See MWA § 4(c).
Plaintiff and the Class members typically worked at least 50 hours each week, Cmplt. ¶ 33; Zellagui Dec. ¶¶ 6-9. Defendants never pаid their delivery drivers a “time-and-a-half’ premium rate for overtime work. Cmplt. ¶¶ 33-37; Zellagui Dec. ¶¶ 15-16. Instead, Defendants pro.vided a regular paycheck every two weeks that included up to 80 hours of work time at $6.00 per hour and, thereafter, provided a supplemental check for hours over 80 per pay period, which were always paid at the straight-time rаte -of $6.00 per hour. Cmplt. ¶ 34; Zellagui Dec. ¶ 15. Because the minimum wage is $7.25 per hour for non-tipped work, Defendants should have paid Plaintiffs and the Class members at the rate of $10.88 for each- overtime hour they worked.
Taking these factual allegations as true, Plaintiff has stated a prima facie overtime claim for failure to pay overtime premium wages in violation of the MWA. Based on the evidentiary record, Defendants owe damages to Plaintiff and the Class members in the following amounts:
Hourly Rate Per Shift (two hours) Per Week (5 shifts) 191 Weeks for Class
Paid_$6.00 $12.00_$60,00_$11.460.00
Minimum_$10.88 $21.76_$108.80 $20.780.80
Difference_($4.88) ($9.76)_($48.80) ($9.320.80)
Total for Class (150 Members)_($1.398.120.00)
Total Damages
In sum, Defendants owe the Class $3,946,050.00 in pre-interest damages. The Class is also entitled to 6% simple interest per annum. See 41 P.S. § 202. Over the three-year and eight-month period at issue, statutory interest adds an additional $583,703.66 to Plaintiffs claims, for a total damages figure of $4,529,753.66.
Attorney’s Fees
Class Counsel have asked the Court to approve a 25% attorneys’ fee in this matter. “In a certified class action, the court may award reasonable attorney’s fees and nontaxable costs that are authorized by law or by the parties’ agreement.” Fed. R. Civ. P. 23(h). The perеentage-of-recovery method is typically applied to determine the amount of attorneys’ fees in common fund cases. See In re Diet Drugs Prod. Liab. Litig.,
In awarding fees in common fund cases, Courts typically consider the following factors:
(1) the size of the fund created and the number of persons benefitted; (2) the presence or absence of substantial objections by members of the class to the settlement terms and/or fees requested by counsel; (3) the skill and efficiency of the attorneys involved; (4) the complexity and duration of the litigation; (5) the risk of nonpayment; (6) the amount of time devoted to the case by plaintiffs’ counsel; and (7) the awards in similar cases.
In re Rite Aid Corp. Sec. Litig.,
In analyzing the first factor noted above, courts sometimes apply a sliding-scale approach where the greater the recovery, the lesser the percentage of attorneys’ fees, and vice-versa. However, because each case is unique, the Third Circuit has “generally cautioned against overly formulaic approaches in assessing and determining the amounts and reasonableness of attorneys’ fees.” See id. at 303. Indeed, courts in this District have authorized significant percentages of the recovery in cases with judgments much greаter than here. See, e.g., Meijer, Inc. v. 3M, No. 04-5871,
As to the second factor, the Defendants are in default and the Class members have yet to be identified. As a result, this factor cannot be evaluated.
The third factor favors the proposed fee award. Class Counsel, David J. Cohen, Esq. of Kolman Ely, P.C. and Jeremiah Frei-Pearson, Esq. of Finkelstein, Blan-kinship, Frei-Pearson & Garber, LLP, are highly skilled wage and hour attorneys who have been appointed as class counsel
The fourth and sixth factоrs are the primary reasons why Class Counsel have requested a more modest fee award of 25% instead of the 30% that is often awarded in common fund cases. Default judgment was entered against Defendants, so the time spent on the case is naturally less than it would have been had Defendants chosen to answer or in any way respond to the Complaint.
The fifth faсtor, the risk of non-payment, is a significant consideration here. As this is a default judgment case, Class Counsel will likely have to expend considerable resources postjudgment in order to enforce this judgment and, even so, may still have difficulty collecting the monies at issue. See, e.g., Sullivan v. DB Investments, Inc.,
Finally, the seventh factor supports approval of the requested fee, because this percentage is lower than the typical award in similar cases. See, e.g., Hall v. Best Buy Co., Inc.,
After considering the Gunter factors, the Court is satisfied that the 25% attorneys’ fee requested by Class Counsel is reasonable. See, e.g., Young v. Tri Cnty. Sec. Agency, Inc., No. 13-5971,
WHEREAS, the Court issued an Order on October 31, 2014 requiring Defendants to show cause at a hearing on November 10, 2014 why a judgment should not be entered against them and why damages should not be assessed against them;
WHEREAS, Plaintiff timely served Defendants with a сopy of this Order by Certified U.S. Mail and filed their Proof of Service with the Court on November 10, 2014;
WHEREAS, at the hearing on November 10, 2014, Class Counsel established, that they have provided Defendants with adequate notice both of the key events in this litigation and of the show-cause hearing;
WHEREAS, at the hearing on November 10, 2014, Plaintiff presented sufficient proof of the damages outlined abоve to permit an informed calculation of the value of his claim on a class-wide basis and justify entry of a judgment in his favor. See Fed.R.Civ.P. 55(b)(2); Durant v. Husband,
WHEREAS, the Court is satisfied that the 25% attorneys’ fee requested by Class Counsel is reasonable under the test promulgated in Gunter v. Ridgewood Energy Corp.,
AND NOW, this 13th day of November 2014, upon consideration of Plaintiffs
1. Defendants shall provide Class Counsel with a list of the names, last known addresses, and last known telephone numbers of all delivery drivers who worked in Defendants’ stores from March 12, 2011 to present;
2. Defendants shall transfer $4,529,753.66 to the Garden City Group to be held in escrow until the Class members have been identified, at which point the funds shall be divided and distributed proportionally based on the number of weeks еach Class member worked for Defendants;
3. Class Counsel are awarded an attorney’s fee equal to 25% of the damages awarded above; and
4. Defendants shall hereafter: pay each of their delivery drivers at least the non-tipped minimum wage for each hour spent performing in-store work; reimburse their delivery drivers for their vehicle expenses at the IRS reimbursement rate; and pay their delivery drivers at least one-and-one-half times their regular rate of pay for each hour they work beyond 40 in any seven-day workweek or risk additional sanctions upon further application to the Court.
Notes
. The claims period for the Class extends from March 12, 2011 through present, for a total of 191 weeks.
. See also Morgan v. Family Dollar Stores, Inc.,