United States District Court, D. Massachusetts
JUAN CARLOS MONTOYA, on behalf of himself and all others similarly situated, Plaintiff,
CRST EXPEDITED, INC., and CRST INTERNATIONAL, INC., Defendants.
MEMORANDUM AND ORDER
B. Saris Chief United States District Judge.
Juan Carlos Montoya alleges that Defendants CRST Expedited,
Inc., and CRST International, Inc. (collectively,
“CRST”), underpaid their long-haul truck drivers,
misled them regarding the costs of driver training, and
imposed excessive charges to recoup those costs in violation
of the federal Fair Labor Standards Act (“FLSA”)
and Iowa law. Plaintiff has filed motions asking the Court to
certify a collective action under the FLSA and three classes
for the state-law claims.
hearing, Plaintiff's motion to certify the FLSA
collective action (Dkt. No. 72) is ALLOWED. The
motion to certify the proposed Iowa wage class (Dkt. No. 72)
is ALLOWED IN PART and DENIED IN PART. The motion to
certify a consumer-fraud class (Dkt. No. 95) is ALLOWED IN
PART and DENIED IN PART. The motion to certify the Iowa usury
class (Dkt. No. 95) is ALLOWED IN PART and DENIED IN
following facts are drawn from the First Amended Complaint
and materials in the class-discovery record.
a Boston resident, worked for Defendants as a truck driver in
late 2014. Defendants are Iowa corporations that transport
goods in interstate commerce.
complaint asserts four theories of liability. Count I alleges
that CRST violated the FLSA, 29 U.S.C. § 201, et
seq., because it failed to pay drivers at least minimum
wage for all hours worked, took unlawful deductions from
drivers' pay, and did not pay drivers' wages
“free and clear.” Count II alleges that this
conduct also runs afoul of Iowa's wage laws, including
the Iowa Wage Payment Collection Law, Iowa Code § 91A.1,
et seq., and the Iowa minimum wage law, Iowa Code
III arises under the Iowa Private Right of Action for
Consumer Frauds Act (“Consumer Frauds Act”), Iowa
Code § 714H.1, et seq. It alleges that CRST
engaged in a variety of consumer frauds, such as misleading
drivers about “free” training, charging drivers
more than their actual costs for educational programs, and
failing to disclose the training program's high dropout
rate. The complaint also challenges CRST's collection
tactics. Count IV asserts that Defendants violated the Iowa
usury law, Iowa Code § 535.2, by requiring drivers to
sign contracts that provided for a higher rate of interest
(18 percent or more per year) than the law permitted (between
3.5 and 7.25 percent annually).
seeks to certify four classes:
- Count I (a collective action under the FLSA): All
individuals who have participated as contract drivers in any
phase of CRST's Driver Training Program, at any time
since December 22, 2013.
- Counts II and III (classes under Iowa's wage laws
and Consumer Frauds Act): All individuals who have
participated as contract drivers in any phase of CRST's
Driver Training Program, at any time since January 21, 2014.
- Count IV (a class under Iowa's usury law): All
individuals who have signed pre-employment contracts and/or
driver employment contracts with CRST that have provided for
an interest rate on amounts owed at a rate higher than the
maximum lawful rate of interest determined by the Iowa
Superintendent of Banking (ranging between 3.5 percent and
7.25 percent per annum) at any time since January 21, 2006.
Driver Training Program
recruits drivers like Montoya by promising “free,
” “sponsored, ” or “cover[ed]”
commercial driver's license (“CDL”) training,
as well as sign-on bonuses. New recruits must complete a
four-phase Driver Training Program.
to Phase 1, CRST recruiters arrange for drivers'
transportation to the Phase 1 facility. Drivers must later
repay this cost as an “advance.” On the first day
of Phase 1, drivers are required to sign a Pre-Employment
Driver Training Agreement (“Training Agreement”).
consists of driver training at an educational facility.
Specifically, it involves a learner's permit course for
drivers who lack such a permit, followed by one or two weeks
of “truck-driving school” to obtain a CDL.
Between 50 and 60 percent of those enrolled in the Driver
Training Program attend Phase 1 training in Cedar Rapids,
Iowa, at the North American Driver Training Academy
(“NADTA”). NADTA is owned by Admiralty Holdings,
which also owns the two CRST Defendants. The remaining
drivers attend one of approximately 12 other schools with
which CRST has contracted.
consists of an orientation program held at a CRST facility.
In this phase, drivers fill out paperwork and provide CRST
with required documentation, such as I-9 Forms, CDLs, Social
Security cards, and birth certificates. They also must take a
drug test, pass a physical examination, and complete a skills
assessment. Drivers attend training sessions on a variety of
topics, including driver wellness, filling out time logs,
transporting hazardous materials, customer service, truck
maintenance, and harassment prevention.
point before Phase 3, drivers must sign a Driver Employment
Contract (“Employment Contract”). The precise
timing of when the Employment Contract gets signed remains
unclear on this record. Some students may sign it at the end
of Phase 1. Others, like Montoya, sign it at the end of Phase
completing orientation, drivers are placed on CRST's
payroll, which initiates Phase 3. Phase 3 consists of
approximately 28 days of driving with a “lead
driver” who has at least six months of driving
entering Phase 4, drivers are paired with a
“co-driver” for the remaining seven to nine
months of their contract terms.
Training Agreement and Employment Contract
Training Agreement and Employment Contract are both
standardized documents that CRST uses nationwide. The
Training Agreement designates which educational facility a
driver will attend, describing the facility as an
“independent contractor” that is a
“separate non CRST affiliated” entity. This
agreement also explains that if a driver satisfies certain
preconditions, CRST will advance certain of the driver's
Phase 1 and Phase 2 expenses, such as travel, lodging, and
tuition, subject to the repayment conditions discussed below.
lodging cost is based on an average for all participants in
the Driver Training Program and does not change based on the
actual cost of lodging provided to a particular driver.
Similarly, the tuition fees, which range between $3, 950 and
$6, 500,  are based on averages that take into
account all of CRST's costs associated with the Driver
Training Program, including meals, housing, transportation,
advertising, recruiting, signing bonuses, and other costs.
CRST actually pays the third-party schools between $1, 400
and $2, 500 per student. It does not disclose those actual
costs to drivers.
Training Agreement, the driver acknowledges that all of these
advances “will equal or exceed the sum of $2,
000.” The driver agrees that if he is dismissed or
withdraws prior to completing Phase 3, he must repay the
advances with interest “at a rate equal to the lesser
of 1.5 [percent] per month or the maximum rate permitted by
applicable federal and state usury laws.”
addition, the Training Agreement previews the terms of the
Employment Contract that drivers must sign. The Employment
Contract contemplates two scenarios for repayment of the
advances. In one, so long as the driver remains employed by
CRST, the company will deduct up to $40 per week from the
driver's paycheck until the Phase 1 expenses (but not
tuition), plus interest, are repaid in full. The other
scenario arises when the driver breaches the Employment
Contract or is terminated for cause. Under those
circumstances, the driver immediately owes CRST between $3,
950 and $6, 500 for tuition at the educational facility, plus
any remaining Phase 1 expenses, plus interest.
Employment Contract authorizes CRST to deduct these amounts
from any compensation owed to the driver or to employ a
collection agency to enforce the obligation. It also contains
a non-competition agreement that prohibits drivers from
working for any CRST competitor in the United States for the
term of the contract or until the driver repays any amounts
owed to CRST.
Drivers' Wages and Deductions
Phases 1 and 2, CRST does not consider drivers to be
employees and does not pay them. During Phases 3 and 4, CRST
employs a “team driver” model, in which two
drivers take turns either driving the truck, or spending time
in the sleeper berth or passenger seat. This tag-team
approach is necessary to comply with federal regulations
limiting the amount of time a driver is permitted to be
drivers are paid using a “split mileage” formula.
For example, new drivers entering Phase 3 are paid 25 cents
per mile; so, if a driving team completes a 2, 000-mile trip,
each driver gets credit for 1, 000 miles (regardless of how
many miles each drove) and earns $250. During Phase 4,
drivers' per-mile rates periodically increase until CRST
converts them to a “per diem” program, which
reduces their per-mile rate by 12 cents and shifts some of
their compensation to non-taxable
on CRST payroll records, Montoya has calculated the hourly
pay rate that he and three other opt-in plaintiffs received
over the course of several weeks in 2014 and 2015. Those
hourly rates range from $0 to $7.19 per hour depending on
Phase 3, CRST also deducts the cost of a mandatory drug test
from drivers' pay. Then, in Phase 4, CRST begins
deducting $40 per week from drivers' pay to recoup the
aforementioned Phase 1 “advances” for housing,
lodging, and the mandatory physical examination. In addition,
the company permits drivers during Phases 3 and 4 to request
advances on future wages to cover ...