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Chebotnikov v. Limolink, Inc.

United States District Court, D. Massachusetts

July 6, 2017

VLADIMIR CHEBOTNIKOV, EUGENE PANTYUKHIN, and YOGESH SHARMA, on behalf of themselves and others similarly situated, Plaintiffs,
v.
LIMOLINK, INC., Defendant.

          MEMORANDUM AND ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT

          F. Dennis Saylor IV, United States District Judge

         This is a putative class action alleging violations of Massachusetts wage laws and the Fair Labor Standards Act (“FLSA”). Defendant LimoLink, Inc., is a company that, in substance, provides a platform for customers seeking to use limousine services. Plaintiffs are three limousine drivers who operate their own limousine companies and, through those companies, contracted with LimoLink to provide limousine services to its customers. The contracts included various restrictions and requirements, including adherence to certain standards set by LimoLink. Plaintiffs allege that LimoLink violated state and federal wage laws by improperly classifying them as independent contractors, failing to pay them overtime compensation, and failing to distribute to them all gratuities paid by its customers.

         The parties have filed cross-motions for summary judgment. For the following reasons, the motions will be granted in part and denied in part.

         I. Background

         A. Factual Background

         Unless otherwise noted, the following facts are undisputed.

         1. The Parties

         a. LimoLink

          LimoLink, Inc. is a corporation headquartered in Marion, Iowa, that does business across the United States and internationally. (Vittetoe Dep. at 23).

         As set forth in more detail below, LimoLink contracts with drivers or fleet operators who own limousines and who are willing to accept customer requests for transportation.[1] LimoLink provides a mobile application that permits customers to reserve and obtain the limousine services. It also provides related services, such as notifications and GPS monitoring (so that, for example, the passenger and the driver know where each other are prior to pickup). (See West Dep. at 51; Vittetoe Dep. at 22, 31). The contracts also require, among other things, that limousine drivers adhere to certain service standards.

         LimoLink does not own any of the vehicles, all of which are provided by vendors under contract. LimoLink's vendors include “large fleets” of 50 to 100 vehicles, “medium fleets” of five to 50 vehicles, and “small fleets, ” sometimes referred to as “independent operators, ” of one to five vehicles and often only a single driver. (Vittetoe Dep. at 7; West Dep. at 65).

         LimoLink has a Service Provider Agreement that it presents to all vendors. (Vittetoe Dep. at 49-52). The agreement provides, among other things, that LimoLink will perform all billing activities and that the service providers will meet certain standards of operation, be available 24 hours a day and seven days a week, and will not subcontract or “farm out” reservations received through LimoLink. It also provides that the agreement may be terminated by either party with thirty days' written notice or by LimoLink at any time without notice upon breach of the agreement's terms, including “the failure of Service Provider to meet the high standards of service required by participation in the LimoLink Reservation Network.” (Hupfeld Aff. Ex. 3).[2]

         When customers contact LimoLink to make reservations for transportation services, one of its 30 “Command Desk” employees then assigns the reservation to a vendor. (West Dep. at 14-15, 51; Vittetoe Dep. at 22). Reservations are assigned in one of several ways. In markets with only one vendor, the reservation is passed directly to that vendor by e-mail. (Vittetoe Dep. at 164). In markets with multiple vendors, reservations are automatically placed in an online “marketplace” where vendors can select the reservations that they want to accept. (Id.; West Dep. at 17). Alternatively, “Command Desk” employees may manually offer reservations to particular vendors, either by a telephone call to that vendor or a text or e-mail. (Vittetoe Dep. at 164-65; West Dep. at 17).

         According to LimoLink, it does not require vendors to accept the reservations it offers and does not restrict vendors from providing services to non-LimoLink customers. (Vittetoe Dep. at 66-67, 164-65; West Dep. at 28).[3]

         LimoLink prefers to assign reservations to its independent operators (that is, the vendors with small fleets) because they become more familiar with its operations and it can exercise more “quality control” over them. (Vittetoe Dep. at 41, 119; West Dep. at 63-64, 92-93). However, approximately two-thirds of LimoLink's vendors are medium or large fleets. (Vittetoe Aff. ¶ 10).

         b. Plaintiff Pantyukhin

          Eugene Pantyukhin entered the limousine business in early 2007, when he began driving for a transportation company in Everett, Massachusetts. (Pantyukhin Dep. at 11). Later that year, he started his own company, East Coast Limousine Transportation (“ECL”). (Id.).

         Pantyukhin drives for ECL, and describes himself as its “manager”; he does “everything to run the company, ” including answering phones, booking reservations, billing customers, and making budgetary decisions. (Id. at 17, 19, 31, 42). For part of 2010, Pantyukhin employed one other individual to drive an extra car. (Id. at 16). He paid that employee $15 or $16 per hour. (Id. at 16). In addition, when he books jobs for ECL that he cannot perform himself, he refers, or “farms out, ” those jobs to other drivers with their own independent limousine companies. He refers to those drivers as his “affiliates, ” and pays them some portion of the payments received from the customers. (Id. at 18-19, 167-68). However, he never “farmed out” jobs that he received through LimoLink. (Id. at 168).

         Pantyukhin owns and maintains the vehicles that he drives in connection with ECL, and purchases the gasoline. (See Id. at 42-43). ECL maintains a $1 million insurance policy on the vehicles, as well as the permits required to pick up passengers at Logan Airport. (Def. SMF ¶ 34; Pantyukhin Dep. at 87-88). ECL also maintains its own business telephone number and website. (Pantyukhin Dep. at 21-22). Since 2008, ECL has advertised through “pay per click” ads on Google in order to increase its customer base; it has also tried various other advertising strategies. (Id. at 89-90).

         In January 2013, ECL, through Pantyukhin, entered into a contract with LimoLink as a service provider by signing the standard LimoLink Service Provider Agreement. (Hupfeld Aff. Ex. 3). ECL received $54, 418 from LimoLink for services provided in 2013, $44, 299 for services provided in 2014, and $3, 414 for services provided in 2015. (Def. SMF ¶ 45; Hupfeld Aff. Ex. 5).

         Prior to working with LimoLink, ECL performed contract work for two different transportation companies. (Pantyukhin Dep. at 12-15). By 2013, that contract work had ceased. (Id.).

         Before, during, and after the time that ECL performed work for LimoLink, it also provided a substantial number of rides, through either Pantyukhin or one of his affiliates, for non-LimoLink customers. (Pantyukhin Dep. at 98-99, 100-01, 166-67; Norton Aff. Ex. 15). ECL received approximately $127, 562 from other limousine companies and clients in 2013, $124, 690 in 2014, and $35, 258 during the first quarter of 2015. (Norton Aff. Ex. 15).

         c. Plaintiff Sharma

         After several years driving a Boston taxicab, Yogesh Sharma incorporated a limousine company, Maya Limo, Inc., in 2009. (Sharma Dep. at 6-7). Like ECL, Maya owns, maintains, and insures its own vehicles. (Sharma Dep. at 53, 73). From 2009 to 2011, Maya received its business from a chauffeur company in Braintree, Massachusetts. (Id. at 27).

         Sharma serves as the owner and operator of Maya. (Sharma Dep. at 11-12, 38). In 2013, he “brought in” a friend named Mumtaz Siddiqui to serve as the secretary and director of Maya. (Id. at 9, 39). Siddiqui handles the accounting, as well as occasional repairs, associated with a car that Maya leases to an Uber driver. (Id. at 39). Sharma directs Siddiqui regarding “how to do the work, [but] not what to do.” (Id.). Between 2013 and 2015, Siddiqui received a salary from Maya, and he was compensated as an officer in 2014. (Norton Aff. Ex. 18).

         In 2011, Maya, through Sharma, entered into a contract with LimoLink by signing its standard Service Provider Agreement. (Sharma Dep. at 27; Smit Aff. Ex. 6). From 2011 through March 2013, LimoLink was the only source of Maya's limousine business. (Sharma Dep. at 27).

         In 2012, at LimoLink's request, Sharma covered some jobs for another LimoLink driver, Muhammad Irfan, whose mother was ill. (Id. at 112-17). For those jobs, Sharma drove Irfan's vehicle but received payment into Maya's LimoLink account. (Id.). Sharma then compensated Irfran for the use of the vehicles and gas. (Id. at 114). No driver other than Sharma performed any LimoLink job on behalf of Maya. (Sharma Resp. to Interrog. at ¶ 16).

         In March 2013, Maya began doing some work for other limousine companies. It stopped all work for LimoLink in September of that year. (Id. at 28). 150

         d. Plaintiff Chebotnikov

          In 2000, Vladimir Chebotnikov started V&M as a d/b/a medical transportation company. (Chebotnikov Dep. at 9-10, 18). He operated V&M for approximately seven years, employing up to ten drivers. (Id. at 10-12). After losing several contracts, Chebotnikov filed for bankruptcy in 2007. (Id. at 17-18).

         Around 2006, Chebotnikov purchased a limousine and began doing contract work for several limousine companies. (Id. at 21-22). It appears that Chebotnikov personally owned and insured the vehicles he drove for V&M. (See Id. at 21, 23, 107-115). In 2008, V&M, through Chebotnikov, entered into a contract with LimoLink by signing its standard Service Provider Agreement. (Id. at 39; Hupfeld Aff. Ex. 12).

         V&M formally incorporated, under the same name, in 2011. (Chebotnikov Dep. at 42). Between 2011 and 2014, V&M, through either Chebotnikov or other “affiliates” to whom he “farmed out” jobs, also provided limousine services to other limousine companies and individual clients. (Norton Aff. Ex. 27 at No. 13). However, “no other drivers transported LimoLink clients on behalf of [Chebotnikov] . . . and V&M.” (Chebotnikov Resp. to Interrog. at ¶ 16). V&M received approximately $7, 012 from other limousine companies or individual clients in 2011, $15, 096 in 2012, $14, 580 in 2013, and $35, 804 in 2014. (Id.). In 2014, LimoLink terminated its relationship with Chebotnikov following an argument concerning his payment. (Chebotnikov Dep. at 158).

         In 2008, the same year that V&M entered into a contract with LimoLink, Chebotnikov and two partners formed Boston Executive Car Service (“BECS”), a limousine service company. (Id. at 30-31, 48-49). However, Chebotnikov was not involved with running BECS during the time that he was driving for LimoLink. (Id. at 56).

         2. LimoLink's Standard Service Agreement and Policies

         As noted, Chebotnikov, Pantyukhin, and Sharma all signed LimoLink's standard Service Provider Agreement, either personally or on behalf of their respective corporations. (Pl. Exs. 4, 5, 6). Under the terms of the agreement, vendors are prohibited from (1) subcontracting or “farming out” reservations received through LimoLink without its express, written authorization; (2) accepting payment directly from customers; (3) providing any services for LimoLink customers, except through LimoLink; and (4) releasing drivers from jobs “under any circumstances (excluding personal safety) without first contacting a LimoLink reservation specialist for direction.” (Pl. Ex. 5).

         The agreement requires vendors to review its “Chauffeur Standards” and to ensure that all drivers comply with its requirements. (Id.). Under the Chauffeur Standards, drivers are required to wear dark suits with white (or other approved color) dress shirts, ties, be “neatly groomed, ” and wear “[n]eutral smelling deodorant and minimal cologne.” (Pl. Ex. 7). Although not expressly stated in the Chauffeur Standards, LimoLink requests that all vendors wear a specific LimoLink tie when driving its customers. (Vittetoe Dep. at 94). It appears that LimoLink provided drivers with the LimoLink tie, but not any other clothing. (See Sharma Dep at 186).

         LimoLink requires drivers to arrive at the designated pick-up location at least 15 minutes before the scheduled pick-up time. (Pl. Ex. 7). Drivers are required to greet passengers with a “[s]incere and genuine smile, ” a “[w]arm, brief introduction, ” and a “[s]incere offer to carry everything the passenger is carrying, ” while standing outside the vehicle near the rear passenger door. (Pl. Ex. 7).[4] The Chauffeur Standards suggest that drivers greet passengers in the following way: “Hello Mr. Smith. My name is John and I will be your LimoLink chauffeur today. May I carry your bag for you?” (Id.).

         The Chauffeur Standards require that vendors maintain clean vehicles, with the “front passenger seat . . . moved all the way forward, providing maximum legroom for passenger in rear seat, ” and that they provide passengers with a newspaper and a bottle of water with a LimoLink label. (Id.). Drivers are required to sit “reasonably erect without excessive ‘tilt back' of the driver seat, ” maintain two hands on the steering wheel, avoid personal phone calls while driving, and to drive in an “extremely smooth” manner that “creates no distractions for the passenger.” (Id.).

         LimoLink does not dictate what routes drivers use to take passengers to their destinations. (Vittetoe Dep. at 177).

         At the end of a trip, drivers are required to “[t]hank the passenger for travelling with LimoLink.” (Id.). They are also required to check the vehicle for personal belongings and to remain at the drop-off site until the passenger is “safe and secure” at their ...


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