United States District Court, D. Maryland
MEMORANDUM AND ORDER
William M. Nickerson Senior United States District Judge
the Court is a motion to dismiss filed by Defendant Deli
Management, Inc. ECF No. 13. The motion is fully briefed.
Upon a review of the pleadings and the applicable case law,
the Court determines that no hearing is necessary, Local Rule
105.6, and that the motion will be denied.
to the Complaint, Defendant Deli Management, Inc. operates
approximately 253 “Jason's Deli” restaurants
in 29 different states, including Maryland. Plaintiff Andrea
Cornish was employed as a delivery driver at Defendant's
Jason's Deli restaurant in Timonium, Maryland, from the
spring of 2013 through April 2014. Defendant requires its
drivers to use their own vehicles to make their deliveries.
Plaintiff alleges that, as a result of Defendant's
failure to adequately reimburse her for car expenses, her
wages fell below the federal and state minimum wage. She
brings this action, individually and on behalf of other
similarly situated delivery drivers, under the federal Fair
Labor Standards Act (“FLSA”), 29 U.S.C. §
201 et seq., and the Maryland Wage and Hour Law
(“MWHL”), Md. Code Ann., Lab. & Empl. §
3-401 et seq.
has moved to dismiss the Complaint under Rule 12(b)(6) on the
ground that Plaintiff's allegations are too vague and
speculative to state a plausible claim for relief. Defendant
also argues that Plaintiff's conclusory allegations
concerning “similarly situated employees” do not
support a plausible claim for either class action or
collective action relief. In addition, Defendant argues that
Plaintiff is not entitled to liquidated damages under the
MWHL because Plaintiff stopped working for Defendant before
July 1, 2014, the effective date of the amendment that added
the remedy of liquidated damages to the MWHL. As to the claim
for liquidated damages, Plaintiff acknowledges that she is
not entitled to those damages but suggests that she still has
standing to pursue those damages on behalf of putative class
members who were employed after the effective date of the
complaint must be dismissed if it does not allege
“enough facts to state a claim to relief plausible on
its face.” Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007). Under the plausibility standard, a
complaint must contain “more than labels and
conclusions” or a “formulaic recitation of the
elements of a cause of action.” Id. at 555.
Rather, the complaint must be supported by factual
allegations, “taken as true, " that “raise a
right to relief above the speculative level.”
Id. at 555-56. The plausibility standard requires
that the pleader show more than a sheer possibility of
success, although it does not impose a “probability
requirement.” Twombly, 550 U.S. at 556.
Instead, “[a] claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Iqbal, 556 U.S.
at 663. Thus, a court must “draw on its judicial
experience and common sense” to determine whether the
pleader has stated a plausible claim for relief. Id.
at 664; see also Brockington v. Boykins, 637 F.3d
503, 505-06 (4th Cir. 2011).
parties generally agree on the relevant law governing
Plaintiff's FLSA and MWHL claims. The FLSA requires
covered employers to pay “nonexempt employees” a
minimum wage for each hour worked. 29 U.S.C. § 206(a).
There is no dispute that Defendant is a covered employer and
that its drivers are nonexempt. While Plaintiff was working
for Defendant, the federal minimum wage was $7.25. The MWHL
parallels the FLSA and, during the relevant time period, also
required the payment of a minimum wage of $7.25. Md. Code
Ann., Lab. & Empl. § 3-413. Because MWHL law mirrors
the FLSA, claims under MWHL stand or fall on the success of a
plaintiff's FLSA claim. Turner v. Human Genome
Science, Inc., 292 F.Supp.2d 738, 744 (D. Md. 2003).
acknowledges that she was paid $8.00 per hour, or 75 cents
more than the minimum wage, while working for Defendant.
Compl. ¶ 21. In addition, Plaintiff was reimbursed at a
rate of $1.75 for each delivery she made, purportedly to
cover the expenses incurred in utilizing her own vehicle, a
2000 Ford Taurus, to make those deliveries. Id.
¶¶ 24, 25. She maintains, however, that her
per-delivery expenses exceeded that reimbursement. Plaintiff
asserts that the average round-trip delivery distance was 6
miles and she averaged approximately one delivery event per
hour. Id. ¶¶ 26, 30. Plaintiff also
alleges that her “actual automobile expenses were at
the very least $.44 per mile.” Id. ¶ 29.
If accurate, that under-reimbursement of $.89 would result in
an effective hourly rate of only $7.11, or $.14 below the
federal and state minimum wage.
the FLSA itself does not address an employer's
reimbursement of expenses, the regulations implementing the
statute do. Those regulations provide that “the wage
requirements of the [FLSA] will not be met where the employee
‘kicks-back' directly or indirectly to the employer
or to another person for the employer's benefit the whole
or part of the wage delivered to the employee.” 29
C.F.R. § 531.35. A kickback occurs when the cost of
tools that are specifically required for the performance of
the employee's particular work “cuts into the
minimum or overtime wages required to be paid him under the
Act.” Id. As applied in the context of
delivery drivers, the regulations “permit an employer
to approximate reasonably the amount of an employee's
vehicle expenses without affecting the amount of the
employee's wages for purposes of the federal minimum wage
law.” Wass v. WKRP Management, LLC, 688
F.Supp.2d 1282, 1285-86 (D. Kan. 2010). If, however, the
employer makes an unreasonable approximation, the employee
can claim that his wage rate was reduced because her expenses
were not sufficiently reimbursed. Id. at 1287.
Complaint asserts that delivery drivers “incur costs
for gasoline, vehicle parts and fluids, repair and
maintenance services, insurance, depreciation, and other
expenses.” Compl. ¶ 11. While Plaintiff did not
track her actual automobile expenses, she asserts that her
“actual automobile expenses were at the very least $.44
per mile based on the true cost of owning a car calculated by
Edmunds.com for comparable vehicles and based on driving 15,
000 miles per year.” Id. ¶ 29.
Plaintiff's reliance on the Edmunds.com website's
“true cost to own” (TCO) as a proxy for her own
actual expenses is the primary focus of Defendant's
Motion and Reply. See ECF No. 13-1 at 9-13; ECF No.
15 at 6-8.
raises a number of challenges to Plaintiff's reliance on
Edmunds.com's TCO. First, Edmunds generates its TCO using
a proprietary formula that factors in seven cost categories:
depreciation, insurance, financing, taxes & fees, fuel,
maintenance, and repairs. Because the formula is proprietary,
Defendant proffers that there is no meaningful way to discern
how it is calculated and thus, to assess if Plaintiff's
expenses are similar to those of the “comparable
vehicles” she references. As Defendant notes, and
Plaintiff does not contest, Edmunds only calculates TCOs for
vehicles manufactured in or after 2010 and Plaintiff alleges
she drove a 2000 Ford Taurus. Depreciation, insurance, and
financing costs for a 2000 Taurus could be significantly less
than those for a 2010 Taurus, assuming that is the comparable
vehicle referenced by Plaintiff. Furthermore, Edmunds
cautions that its TCO is a “comparative tool, not a
predictive tool” and that the actual costs of owning a
particular vehicle “will vary depending on your
personal circumstances, such as your driving history and the
number of miles you drive.” In its motion, Defendant
indicated that it was unable to discern which specific
vehicles Plaintiff actually used to generate a 44 cent per
mile TCO. ECF No. 13-1 at 12. Defendant represents that the
TCO for a 2010 Ford Taurus is calculated at 39 cents per
mile. Id. Using that figure, Plaintiff's
effective wage would be $7.41 per hour, a figure above the
minimum wage. In opposing the motion, Plaintiff criticizes
Defendant for “blatantly ignoring that Plaintiff does
not cite Edmund's data for her particular 2000 Ford
Taurus, ” but “‘for comparable
vehicles.'” ECF No. 14 at 20-21 (quoting
Compl. ¶ 29, emphasis added in Opp'n). Plaintiff,
however, provides no additional information as to what those
“comparable vehicles” might be nor does she
explain how her $.44 per mile figure was generated.
her Complaint, Plaintiff had relied exclusively on the
Edmunds TCO estimate, the Court would be inclined to grant
the motion to dismiss. Plaintiff, however, also references
the business mileage reimbursement rate published by the
Internal Revenue Service (IRS), which ranged between $.54 and
$.575 during the relevant time period, and the American
Automobile Associations estimate of the “average cost
for owning and operating a sedan, ” which ranged
“between $.58 and $.608 for drivers who drive a sedan
approximately 15, 000 miles per year.” Compl. ¶
14. While it is true, as Defendant asserts, that employers
are not required to reimburse at the IRS rate, at least some
courts have held that, if employers fail to do so, they must
“keep detailed records of the employees' expenses
to justify another reimbursement rate.” Zellagui v.
MCD Pizza, Inc., 59 F.Supp.3d 712, 716 (E.D. Pa. 2014);
see also, Gattuso v. Harte-Hanks Shoppers,
Inc., 169 P.3d 889, 896 (Cal. 2007) (holding, in the
context of a California statute mandating reimbursement of
employees' expenses, that “[i]f an employer wants
to pay less than the established IRS rate, it bears the cost
of proving the employee's cost of operating the vehicle
for work is actually less”). Furthermore, the
Department of Labor (DOL) Field Operations Handbook instructs
that, for minimum wage purposes, an employer may either
reimburse employees who drive a personal vehicle for business
use at the IRS standard business mileage rate or keep
accurate, contemporaneous expense records and reimburse the
employee accordingly. DOL Field Operations Handbook §
30c15(a) (issued 6/30/2000).
opposing the motion to dismiss, Plaintiff relies primarily on
four cases from three federal district courts denying motions
to dismiss collective actions brought by delivery drivers.
The cases relied upon are:
Wass v. NPC Int'l, Inc., d/b/a “Pizza Hut,
” Case No. 09-2254-JWL (D. Kan.); Complaint (ECF No.
14-1), Opinion granting motion for leave to file third
amended complaint (2010 WL 7762621 (Sept. 1, 2010));
Perrin v. Papa John's Int'l, Inc., Case No.
4:09-cv-01335 (E.D. Mo.), Complaint (ECF No. 14-2), Opinion
granting in part and denying in part motion to dismiss (818