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Johnston v. Titan Logistics & Resources, LLC

United States District Court, W.D. Pennsylvania

September 12, 2019

GLENWOOD JOHNSTON; et al, on behalf of themselves and similarly situated employees, Plaintiffs,
v.
TITAN LOGISTICS & RESOURCES, LLC; TONY DIGIAMBERDINE; and UNITED VISION LOGISTICS, Defendants.

          MEMORANDUM OPINION

          NORA BARRY FISCHER, SENIOR U.S. DISTRICT JUDGE

         I. INTRODUCTION

         This is a proposed hybrid class/collective action brought by Plaintiffs Glenwood Johnston et al. (“Plaintiffs”) on behalf of themselves and all other similarly situated drivers[1] against Defendants Titan Logistics & Resources, LLC (“Titan”); Tony DiGiamberdine (“DiGiamberdine”); and United Vision Logistics (“UVL”) alleging that Defendants jointly employed them from December 2014 through November 2017 and violated the Fair Labor Standards Act (“FLSA”) by paying them a day rate without any overtime compensation in weeks that they were driving small trucks weighing less than 10, 000 pounds. (Docket No. 154 ¶ 1). Presently before the Court is a motion filed by Plaintiffs seeking conditional certification of a proposed collective action to include all drivers jointly employed by Defendants; employed solely by UVL; or jointly employed by UVL and other entities similar to Titan during the past three years. (Docket No. 154). Neither Titan nor DiGiamberdine contest the motion. (Docket No. 172 at 49). However, UVL maintains that it should not be included in a conditional certification order because it is not a joint employer of the drivers. (Docket No. 156). Plaintiffs' motion has been fully briefed and argued at a motion hearing, the official transcript of which has been filed with the Court. (Docket Nos. 154-156; 164; 167; 168; 171; 172). After careful consideration of the parties' arguments, and for the following reasons, Plaintiffs' Motion [154] is granted, in part, and denied, in part.

         II. BACKGROUND

         A. UVL's Business Model

         UVL is “an authorized for-hire interstate motor carrier registered with the Federal Motor Carrier Safety Administration (“FMCSA”) of the U.S. Department of Transportation (“DOT”), USDOT No. 286600.” (Docket No. 156-3 (“ITOA”)). UVL provides transportation and logistics services to companies operating in the oil and gas industry, including Schlumberger, Halliburton and others engaged in hydraulic fracking within this District. (Docket No. 156-1 at 30-31). Specifically, UVL fulfills movement requests by its customers to transport equipment, personnel and supplies between sites throughout the United States. (Id. at 22). UVL maintains a network of terminals across the country and coordinates movement requests between the customers and truck drivers providing transportation services. (Docket Nos. 156-1 at 47; 156-2 at 35; 65). UVL operates some terminals itself which are referred to as “company terminals” while other terminals are operated by separate entities under Independent Terminal Operator Agreements (“ITOA”). (Docket Nos. 156-1 at 47; 156-2 at 48). UVL is otherwise a non-asset, independent owner-operator business, meaning that it does not own any of the trucks which are used to provide these transportation services. (Docket No. 156-1 at 18). UVL also claims that it does not employ any of the drivers, whom it maintains are either independent contractors or employed by others such as the independent terminal operators. (Docket No. 156 at 5). At the same time, all movement requests are fulfilled by drivers operating vehicles under UVL's USDOT No. 286600 and UVL ensures that all drivers meet federal standards prior to permitting them to work in this capacity. (Docket Nos. 156-1 at 48; 156-2 at 64).

         B. Titan

         Titan is owned and operated by DiGiamberdine out of its Oakdale, Pennsylvania headquarters. See ITOA. Titan entered into an ITOA with UVL to operate terminal 750 dated September 28, 2016. Id. Pursuant to this agreement, Titan served as an intermediary between UVL and the drivers, with the drivers reporting to Titan. Id. According to DiGiamberdine, Titan did not maintain separate agreements with the drivers. (Docket No. 172 at 23).

         Among other provisions, the ITOA between UVL and Titan states that: it establishes an independent contractor relationship between UVL and Titan; they are each independent businesses; Titan had no right to represent UVL for any purpose, rely on UVL's reputation or act on behalf of UVL in any manner; and the companies are not co-employers or joint employers of each other's employees. ITOA at §§ 1.3; 7.1. The ITOA further provides that Titan is solely responsible for its own employees, including paying wages and benefits and tasked with recruiting owner-operators and engaging them to conduct delivery services under independent operator agreements. Id. at §§ 1.3; 2.2; 3.3. Once Titan demonstrated that movement requests had been fulfilled, UVL paid Titan and Titan, in turn, paid the drivers or independent operators. Id. at § 6.2. The IOTA also includes indemnification provisions pursuant to which Titan purportedly agreed to indemnify UVL for certain losses including liability for violations of wage and hour laws. Id. at §§ 7.2; 9.6. The IOTA is to be interpreted with reference to the laws of the United States and the state of Texas and a corresponding venue provision states that any claim or dispute arising out of this agreement would be brought in state or federal court in Harris County, Texas. Id. at § 15.1.

         In his declaration, DiGiamberdine writes that the ITOA was prepared by UVL, its terms were not subject to negotiation by him or Titan, and the document was “mostly for show.” (Docket No. 160-1 at ¶¶ 4, 9). DiGiamberdine states that “the reality was that UVL controlled pretty much everything having to do with the terminal where I was working or what drivers could drive for Titan and UVL.” (Id. at ¶ 5). He adds that he was effectively acting as UVL's terminal manager and indeed was provided with letterhead identifying himself as a UVL terminal manager; and had a UVL email address, both of which were used to communicate with UVL's customers. (Id. at ¶¶ 6-7). He further notes that “he couldn't and didn't make decisions about how much [the drivers] were paid - UVL and its customers, like Schlumberger, made those decisions - and to the extent I wanted to make any changes in that pay I had to get permission from UVL and its customers to do so.” (Id. at ¶ 8). At the motion hearing, DiGiamberdine stated that he served as a conduit for UVL to communicate with the drivers regarding various aspects of their duties as he forwarded on UVL emails regarding medical benefits and other UVL programs directly to them. (Docket No. 172 at 19). He also confirmed that terminal number 750 in Oakdale, Pennsylvania was shut down at the time that the IOTA was terminated. (Id. at 28).

         C. Drivers

         The proposed collective action presently consists of approximately 70 individuals, including twenty-four named Plaintiffs and numerous opt-ins, all of whom worked as drivers fulfilling movement requests for UVL who reported to Titan at its Oakdale, Pennsylvania headquarters. Plaintiffs suggest that, if certified, the collective action would include approximately 150 drivers. Plaintiffs generally assert that they were jointly employed by Defendants and misclassified as independent contractors such that they were entitled to overtime compensation for hours worked in excess of 40 hours per week.

         At this stage, Plaintiffs have submitted the declarations of Johnston; Pamela With; James Michael Herrington; and Brian Gould. (Docket Nos. 155-1:155-4). Johnston and Gould are named Plaintiffs while With and Herrington opted-in to the lawsuit. Johnston drove for UVL/Titan from July 2017 until November 2017 out of the Cheyenne, WY terminal; then continued to work for UVL only out of the Cheyenne terminal until December 2018. (Docket No. 155-1 at ¶ 6). With worked for UVL/Titan from April 2017 until November 2017; for UVL only until January 2018; and jointly for UVL/JR Logistics from January 2018 until September 2018, all out of the Cheyenne, WY terminal. (Docket No. 155-2 at ¶ 7). Herrington drove for UVL/Titan from June 2017 until December 2017 out of the Cheyenne, WY, Williston, ND, and Pittsburgh, PA terminals. (Docket No. 155-3 at ¶ 6). Gould worked for UVL/Titan from July 2017 through mid-November 2017 out of the Cheyenne WY and Odessa, TX terminals; and then continued for UVL and JR Logistics out of the Cheyenne terminal until December 2018. (Docket No. 155-4 at ¶ 6). All four of these individuals assert that they were also jointly employed by Schlumberger at the same time as part of the “Driver Outsourcing Program” and are involved in a separate lawsuit filed against Schlumberger at Civil A. No. 19-358.

         In their similar declarations, Johnston, With, Herrington and Gould each state that they regularly drove small vehicles weighing less than 10, 000 pounds (i.e., Yukons, Suburbans, Expeditions, Explorers), as part of their duties; worked more than forty hours per week, including some weeks where they worked more than sixty hours; they were paid a day rate ($325) plus per diem; and were not paid any overtime compensation. (Docket Nos. 155-1:155-4). They each assert that other drivers for UVL and Titan were paid under the same compensation system. (Id.). They also declare that they joined this lawsuit because they were not paid for all days worked at the day rate. (Id.).

         The drivers contend that their work was significantly controlled by UVL. (Docket Nos. 65; 155-1:155-4). To this end, they were provided with UVL employee handbooks, subjecting them to UVL policies; filled out various forms bearing UVL letterhead; underwent drug and medical screenings required by UVL; completed online safety trainings produced by UVL; maintained driving logs which were transmitted directly to UVL for monitoring; conducted inspections of vehicles and submitted inspection reports to UVL; and often dealt directly with UVL managers regarding day-to-day activities. (Docket Nos. 65 at ¶ 7f.; 151-1 at ¶ 5; 151-2 at ¶ 5; 151-3 at ¶ 5; 151-4 at ¶ 5). Drivers were also required to contact UVL first in the event of an accident. (Id.).

         D. Operation and Termination of IOTA

         The IOTA continued until it was terminated by UVL effective November 24, 2017 as is reflected in a letter dated December 8, 2017. (Docket No. 156-4). During the relationship, Titan would submit waybills and invoices to UVL which would be paid within a week. (Docket No. 156 at 7). UVL would separately bill its customer and receive payment within 30-60 days. (Id.). UVL asserts that it paid all of Titan's waybills and invoices in full until an audit was conducted in October of 2017. (Id.). Indeed, UVL paid Titan $260, 000 in payroll advances between September 5, 2017 and November 6, 2017. (Id.). The audit ultimately resulted in an agreement between UVL, its customer and Titan, that the customer would receive certain credits until the difference between the charges authorized by the customer and Titan's bills was corrected. (Id.). Plaintiffs allege that they were not paid for all services rendered on behalf of UVL/Titan during the time frame of the audit and conclusion of the IOTA. (Docket Nos. 155-1:155-4). As is noted in the termination letter, UVL representatives worked with Titan to collect all of UVL's property including waybills; paperwork; signage; decals; and truck binders. (Docket No. 156-4). UVL also helped to closeout the terminal and de-lease trucks which DiGiamberdine explained meant to terminate drivers who would no longer continue in the program. (Id.).

         E. Relevant ...


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