United States District Court, D. Massachusetts
DJAMEL OUADANI, on behalf of himself and all others similarly situated, Plaintiff,
v.
DYNAMEX OPERATIONS EAST, LLC, Defendant.
MEMORANDUM AND ORDER
HON.
PATTI B. SARIS CHIEF UNITED STATES DISTRICT JUDGE.
INTRODUCTION
Plaintiff
Djamel Ouadani (“Ouadani”) brings this lawsuit
against Defendant, Dynamex Operations East, LLC
(“Dynamex”), alleging violations of the Fair
Labor Standards Act (“FLSA”), and the
Massachusetts misclassification and wage laws. He asserts
individual, class, and collective claims arising from
Dynamex's practice of classifying drivers who perform
Google Shopping Express deliveries as independent
contractors. Pending before the Court are Ouadani's
motion to certify a class of Google Express delivery drivers
for his state law misclassification and improper deductions
claims and his motion for partial summary judgment on the
misclassification claim.
After
hearing, the Court ALLOWS IN PART and
DENIES IN PART Ouadani's motion for
class certification (Dkt. No. 70) and DENIES
his motion for partial summary judgment (Dkt. No. 71).
FACTUAL
BACKGROUND
The
following facts are undisputed except where otherwise stated.
I.
The Parties
Ouadani
performed Google Express deliveries from March 2016 to August
2016. He contracted directly with Selwyn & Bertha LLC
(“S&B”), which was one of companies Dynamex
used to supply drivers for Google Express deliveries. S&B
classified and paid Ouadani as an independent contractor, not
an employee.
Dynamex,
which is now doing business as TForce Final Mile LLC, is
headquartered in Dallas, Texas and operates a branch office
in Wilmington, Massachusetts. Dynamex is a provider of
transportation logistics services, which include providing
same-day delivery services for its clients. From June 1, 2014
to October 14, 2016, Dynamex contracted with Google Inc.
(“Google”) to provide drivers to make Google
Express deliveries across several major U.S. cities,
including Boston, Massachusetts. Dynamex's Wilmington
office was responsible for Google Express deliveries in the
Greater Boston area.
II.
Dynamex's Business
a.
The Google Express Contract
Google
Express is a same-delay delivery service that allows
consumers to place delivery orders online from local retail
stores such as Target, Walgreens, or Staples. Dynamex entered
into a Statement of Work (“SOW”) with Google
effective June 1, 2014. Under the SOW, it agreed to provide
drivers to perform Google Express deliveries for a two-year
period. Prior to the expiration of the SOW, Dynamex and
Google entered into an amendment to the SOW (“Amended
SOW”) effective June 1, 2016. The Amended SOW was to
last until November 30, 2016 unless otherwise terminated by
the parties. The SOW and the Amended SOW included
substantially the same terms. Google terminated the Amended
SOW sometime in October 2016. Dynamex stopped performing
services under the Amended SOW on October 14, 2016.
The SOW
(and the Amended SOW) included a list of minimum
qualifications for Google Express drivers. Drivers were
required to have at least two years of experience, have a
clean driving record, speak fluent, understandable English,
and be comfortable using a smartphone and related technology.
They were also required to be well-groomed and wear approved
Google apparel. Dynamex was responsible for making sure
drivers satisfied these qualifications. The SOW also required
that the drivers complete a Google Express orientation and
abide by Google's standard operating procedures in making
deliveries. Dynamex was responsible for training the drivers
on Google's standard operating procedures. This included
administering Google-designed training programs but also
“developing and coordinating orientation programs based
on identified needs.” Dkt. No. 72-3 at 3-4. For
example, it was Dynamex's responsibility to
“initiat[e], maintain[] and supervis[e] all necessary
safety precautions and programs.” Id. at 4.
Once drivers were trained, Dynamex had a continuing
obligation to monitor driver performance to ensure that
deliveries were made on time and in accordance with
Google's standard operating procedures.
b.
Masters, Agents, and Indirect Drivers
Dynamex
contends it did not have any W-2 employees that performed
Google Express deliveries. In the beginning, deliveries were
performed by (1) independent contractors who contracted
directly with Dynamex, (2) drivers who worked for Master
Independent Contractors (“Masters”) that
contracted with Dynamex, and (3) drivers who worked for
Agents that contracted with Dynamex. After October 31, 2014,
however, Dynamex ceased contracting directly with individual
drivers and, from that point forward, all Google Express
deliveries were made by drivers who were associated with
either a Master or an Agent.[1]
Masters
were the primary source of drivers Dynamex used to complete
Google Express deliveries. Masters contracted directly with
Dynamex. In order to be eligible, Masters were required to
have a business license and be an incorporated company,
limited liability company (“LLC”), or special
corporation. There were two type of drivers provided by
Masters: the owners of the contracting “Master”
entities and other individuals who contracted with or were
employed by Masters. Dynamex referred to the latter group as
“Indirect Drivers.” Masters were required to have
at least one Indirect Driver (the owners were permitted but
not required to be drivers). Masters also had to provide
insurance for their drivers, which they could purchase
through Dynamex. Dynamex used at least 19 Masters to perform
Google Express deliveries in Massachusetts: Banana Hill
Courier Service, Braulio Vega, Elite Delivery Services Inc.,
Eureka Logistics, Omega Express Courier Service, R&R
Courier Service, LLC, Rafferty & Family Enterprises, LLC,
Red Line Trucking LLC, RMB Transport, Roberto Ozuna LLC,
S&B, [2] Sam Courier, Soni Courier Service LLC,
TDOO Express Services Inc., Thomas Multi Services LLC, Time
Bandit Courier, Topline Courier, United Transportation System
LLC, and World Trans Inc. In total, Masters provided Dynamex
with 122 Indirect Drivers that performed Google Express
deliveries in Massachusetts during the proposed class period.
Agents
were larger transportation companies that Dynamex used when
it needed additional drivers to cover excess demand for
Google Express delivery services. Agents also contracted
directly with Dynamex. Like Masters, Agents were required to
have a business license and be an incorporated company, LLC,
or special corporation. Unlike Masters, however, they needed
to have a verifiable brick-and-mortar location, a website,
and more than ten total drivers. Agents also had to perform
their own background checks, drug tests, and vehicle checks
and were solely responsible for providing insurance for their
drivers. Finally, 50% or more of Agents' business had to
come from companies other than Dynamex. Dynamex referred to
all drivers provided by Agents as “Indirect
Drivers.” Dynamex used two Agents to perform Google
Express deliveries in Massachusetts: Famm Driving and Patriot
Express Logistics LLC. In total, Agents provided Dynamex with
eight Indirect Drivers that performed Google Express
deliveries in Massachusetts during the proposed class period.
In
general, Dynamex did not require its Masters to classify
their drivers as either W-2 employees or independent
contractors. However, Elite Delivery Services Inc., Omega
Express Courier Service, LLC, Rafferty & Family
Enterprises LLC, and Topline Courier signed a
“Broker/Motor Carrier Master Agreement” with
Dynamex in 2009 which required that all drivers either be
“directly employed and paid hourly by [the Master] or
provided to [the Master] by a bona fide employment staffing
agency.”[3] Dkt. No. 79-2 at 16-17, 27-28, 56-57,
171-72. A representative from R&R Courier Service, LLC
also has submitted an affidavit stating that it employed its
Indirect Drivers as W-2 employees. In total, the Masters and
Agents who are known to have used W-2 employees provided
Dynamex with 18 Indirect Drivers. Meanwhile, S&B
classified its Indirect Drivers as independent contractors
who filed Form 1099s with the IRS. Ouadani also attempted to
subpoena employment records from 19 of the Masters and
Agents. Only six Masters or Agents responded to the
subpoenas, and only two of those -- Eureka Logistics and
Patriot Express Logistics LLC -- produced tax forms for their
Indirect Drivers. According to the tax forms, both Eureka
Logistics and Patriot Express Logistics LLC paid their
Indirect Drivers as independent contractors. In total, the
Masters and Agents who are known to have used independent
contractors provided Dynamex with 36 Indirect Drivers. It is
not clear from the record whether the remaining Masters and
Agents classified their drivers as W-2 employees or
independent contractors.
c.
Recruiting, Onboarding, and Orientation
Certain
basic facts about the recruiting and onboarding of Indirect
Drivers are undisputed. Pursuant to its contracts with the
Masters, Dynamex performed the background checks, driving
checks, drug tests, and other onboarding tasks for Indirect
Drivers who worked for Masters. Dynamex did not perform these
tasks for Indirect Drivers who worked for Agents. Rather,
under their contracts with Dynamex, the Agents handled most
onboarding tasks and certified to Dynamex that they had been
completed. Otherwise, the parties extensively dispute the
process by which drivers came to be drivers for Google
Express.
Ouadani
claims that Dynamex recruited the Indirect Drivers through
internet advertisements on websites such as Craigslist and
Indeed.com. The advertisements specified that Dynamex was
looking for independent contractors with their own vehicles
who were willing to work for shift pay and no commissions.
Indeed, this is how Ouadani first learned about the
opportunity to perform Google Express deliveries. Dynamex
concedes that from March 16, 2016 to June 10, 2016 it ran
such an advertisement but insists that advertisement was
placed by mistake and was an exception to its ordinary
practice. Dynamex claims that the rest of time it only
advertised for third-party companies (i.e., Masters and
Agents) that could provide drivers to perform deliveries for
its clients, such as Google. Dynamex also points out that not
all the Indirect Drivers approached it directly. Some
drivers, for example, were associated with Masters well
before they began driving for Google Express. In those cases,
the Masters would suggest to Dynamex the drivers they wanted
to perform Google Express deliveries, which would trigger the
onboarding process.
Ouadani
also contends that when prospective drivers contacted Dynamex
about performing delivery services in response to an
advertisement, Dynamex would ask them to come into its
Wilmington office. Once there, Dynamex would have the
prospective drivers fill out paperwork and submit to a drug
test. The paperwork included a job application and consent
forms for background and driving checks. Ouadani claims
Dynamex then “assigned” prospective drivers to
the Masters with whom they would contract directly.
Dynamex
disputes many of the details of how Ouadani characterizes
this process. First, it denies that the process always
followed this order. Instead, Dynamex contends that
ordinarily once a prospective driver contacted the company,
it would refer them to the Masters before completing any
additional onboarding. Second, it denies that prospective
drivers filled out a job application or that it
“assigned” the drivers to Masters. Dynamex
contends that when prospective drivers first came to its
office they were provided with a list of Masters who might be
hiring. Both the drivers and the Masters were then free to
decide whether or not to enter into an employment
relationship. If a prospective driver and a Master did choose
to associate, then the Master would send the driver back to
Dynamex for onboarding.
Regardless
of how the Indirect Drivers came to Dynamex, the SOW required
that all Indirect Drivers complete an orientation program
before they could began performing Google Express deliveries.
The parties do not dispute the essential details of the
orientation program. The first part of the program was a
three to five-hour training called “Intrepid”
which was designed by Google. Intrepid covered various
subjects, including how to interact with customers, perform
deliveries, and resolve delivery issues consistent with
Google's standard operating procedures. The Indirect
Drivers completed the Intrepid training at Dynamex's
Wilmington office. The second part of the program was an
online training called “Marshall” which also was
designed by Google and was intended to familiarize the
Indirect Drivers with the Google application they would be
using to make deliveries. The final part of the program was
an on-the-road orientation where the Indirect Drivers rode
along with more experienced drivers to get hands on
experience before performing deliveries solo -- the more
experienced driver was not always from the same Master or
Agent as the trainee driver.
As part
of the onboarding process, Google would issue each driver an
email address with the extension
“dynamex.courier-ops.com” that Google used to
communicate with them. The Indirect Drivers also were
required to use a Google-approved phone and a
“Socket” scanner. Ouadani claims that Dynamex
issued the required phones and scanners to the Indirect
Drivers. Dynamex disagrees, claiming that it did not issue or
lease any equipment directly to the Indirect Drivers.
Instead, the Indirect Drivers leased the phones and scanners
from their Masters or Agents, who in turn had leased them
from Dynamex, who in turn leased them from Google.
d.
Scheduling and Deliveries
Once
the Indirect Drivers had been onboarded, trained, and
supplied with the necessary equipment, they were ready to
begin making deliveries. Up until mid-August 2016, the
standard Google Express shift was four hours long. From
mid-August to October 2016, shifts were between four and six
hours long. Shifts were scheduled based on Google's
anticipated need for drivers and the availability of
individual drivers. Ouadani claims that the drivers reported
their availability directly to Dynamex, and then Dynamex
scheduled their shifts. Dynamex disputes that this was always
the case. According to Dynamex, sometimes the Indirect
Drivers would inform Dynamex of their availability, but other
times they would inform their Masters or Agents, who in turn
would inform Dynamex. Dynamex employees would then input the
drivers' availability into the Google application and the
drivers would be notified of their assigned shifts.
Neither
Google nor Dynamex required the Indirect Drivers to work a
certain number of shifts per week. But the shifts were for
pre-determined time slots and, once Indirect Drivers were
assigned a shift, they were required to work that shift. If a
driver was unable to work an assigned shift, they were
supposed to let their Master or Agent know. The Master or
Agent would then inform Dynamex. Conversely, if Dynamex
needed additional drivers to cover shifts, it would reach out
to the Masters and Agents to see if they had any available
drivers. Under the SOW, Google charged Dynamex a fee for
shifts that went uncovered and, if a shift went uncovered
because the assigned driver did not show, Dynamex would pass
that charge on to the driver's Master or Agent. S&B,
for example, would then pass these fees on to the drivers
themselves by deducting from their pay checks. But the
parties dispute whether the Masters and Agents always would
charge their drivers for missed shifts.
For
each shift, drivers were required to report to an assigned
starting location 15 minutes before the shift started. The
starting location was selected and communicated to the
drivers by Google. Drivers were required to login to the
Google Express application five minutes before their shift
started, but they could only login if they were already at
their starting location. Once a shift started, drivers were
required to complete deliveries in the order they were
assigned by Google and in accordance with the routes provided
by Google. Although drivers primarily took directions from
Google during their shifts, they would sometimes receive
additional instructions from Dynamex dispatchers. Dynamex
claims, however, that when this happened its dispatchers were
only relaying instructions that came from Google.
Dynamex
also periodically would send emails to its Masters and Agents
asking that they remind their drivers about Google's
standard operating procedures for making deliveries and/or
notify them of changes to those procedures. Google tracked
the drivers' performance through its application and
would charge Dynamex fees when the drivers did not follow the
specified procedures (e.g., showing up late for a shift,
making deliveries out of order). Dynamex would then pass
these fees on to the drivers' Masters or Agents via
deductions from their per shift payments. Again, the parties
dispute whether these charges were always passed on to the
drivers by their Masters or Agents. The parties also dispute
whether Dynamex had the authority to terminate drivers if
they failed to perform adequately. Dynamex insists that only
Google or the Masters and Agents could terminate a driver.
While
completing Google Express deliveries, drivers were required
to wear Google-approved apparel. Ouadani claims that this was
a Dynamex requirement, while Dynamex claims it was a Google
requirement. What constituted Google-approved apparel meant
different things at different times. From June 2014 through
at least February 2016, Google required that Indirect Drivers
wear uniforms and badges bearing its own logo. And, from at
least April 2016 to October 2016, it required uniforms and
badges with Dynamex's logo. Drivers were also required
periodically to complete supplemental trainings on Google
standard operating procedures. These trainings were designed
by Google, and Dynamex would notify the drivers of the
trainings. As with the uniform policy, the parties disagree
about whether Dynamex or Google required the supplemental
trainings.
e.
Payment and Deductions
Dynamex
did not directly make payments to the Indirect Drivers.
Instead, Dynamex made payments to the Masters and Agents for
the shifts their Indirect Drivers worked. These payments were
for a per shift amount less any applicable deductions.
Dynamex paid a fixed amount per shift regardless of the time
needed to complete the shift or the miles driven. This per
shift rate was negotiated between Dynamex and the individual
Masters and Agents. Dynamex deducted from these amounts
various costs for services and equipment, such as background
checks, insurance, uniforms, scanners, and radios. Dynamex
also took deductions when a driver missed a shift, logged in
late for a shift, or when a Google Express customer
complained about missing or damaged goods (i.e., customer
“cargo claims”). All of this information was
tracked in Dynamex's proprietary software system, Dynamex
Enterprise Courier Software (“DECS”).
The
parties dispute how the Masters and Agents in turn paid their
drivers. There is limited evidence in the record on this
score. Ouadani contends that the Masters and Agents simply
passed through the payments (and deductions) to the Indirect
Drivers. He points to several pieces of evidence to support
this theory. One of the forms that Indirect Drivers signed as
part of their onboarding was the Indirect Driver/Helper
Deduction Agreement (the “Deduction Agreement”).
Each Deduction Agreement listed the various deductions
Dynamex would take per shift and it was signed by Dynamex, a
representative of the Master or Agent, and the Indirect
Driver. Also, the “settlement statements”
generated by Dynamex's DECS system and sent to the
Masters and Agents reflected the “Total payment to
driver, ” not the payment to the Master or Agent. And
S&B simply passed the per shift payments and deductions
on to its Indirect Drivers, albeit after taking a 17.5% cut
for itself.
Dynamex
counters that at least some Masters and Agents paid their
Indirect Drivers as W-2 employees, but presents no evidence
on whether the employees were paid hourly or on a shift
basis.
PROCEDURAL
HISTORY
Ouadani
filed this proposed class action on October 11, 2016. His
complaint asserts class claims for misclassification under
Mass. Gen. Laws ch. 149 § 148B (the “Massachusetts
Independent Contractor Statute”) (Count I), improper
deductions under Mass. Gen. Laws ch. 149 § 148 (the
“Massachusetts Wage Act”) (Count II), minimum
wage violations under Mass. Gen. Laws. ch. 151, § 1A
(the “Massachusetts Minimum Wage Law”) (Count
III), and unjust enrichment (Count IV). It also asserts an
individual claim for retaliation (Count V) and a collective
action claim for minimum wage violations under the Fair Labor
Standards Act (Count VI). Dynamex moved to dismiss and/or
compel arbitration of all claims on February 9, 2017. The
Court denied Dynamex's motion on May 10, 2017. Dynamex
then appealed the Court's decision, and the case was
stayed while the appeal was pending. On November 21, 2017,
the First Circuit denied Dynamex's appeal. The Court
subsequently lifted the stay and discovery on liability
proceeded between the parties.
On
October 14, 2018, Ouadani filed a motion for class
certification as to Counts I and II. He seeks a class with
the following definition:
[A]ll individuals categorized by Dynamex as “indirect
drivers” who performed Google Express deliveries
between July 16, 2014 and October 14, 2016.
On the
same day, Ouadani also filed a motion for summary judgment as
to Count I only. Defendants opposed both motions. The Court
held a hearing on Ouadani's class certification and
summary judgment motions on January 29, 2019.
MOTION
FOR ...