Judge: Driver has established enough potential unpaid OT to allow class action vs taxi dispatcher

By Scott Holland | Jun 2, 2017

A driver’s class action complaint, accusing a taxi dispatcher of not paying him and other drivers like him overtime and wrongly deducting from their pay, will be allowed to proceed after a federal judge refused to fully dismiss the action.

In an opinion issued May 26 in Chicago, Magistrate Judge Young B. Kim denied portions of a motion to dismiss the complaint of Daniel Martinez, who is suing Citizen’s Taxi Dispatch, Inc., and its owner, Patricia Shelton, alleging violations of the Fair Labor Standards Act, Illinois Minimum Wage Law and Illinois Wage Payment and Collection Act. Martinez said the company failed to pay overtime and also alleged unlawful payroll deductions.

According to Kim’s background, Citizen’s Taxi operates cars in and around DuPage County, but primarily contracts with school districts to provide student transportation in Wheaton and Warrenville. Drivers are designated independent contractors, though they are subject to drug testing, set weekly schedules, non-negotiable schedules and route assignments and disciplinary action.

Drivers are required to rent vehicles from the company; the weekly fee is deducted from their paychecks along with other expenses, such as parking tickets and towing costs associated with terminated employees. The drivers pay for vehicle maintenance and repairs, tolls and gas. Martinez drove for Citizen’s from February through September 2016, and allegedly worked up to 56 hours a week without being paid time-and-a-half for the overtime hours in excess of 40 hours worked.

In moving to dismiss, Citizen’s argued it is exempt from FLSA regulations, and therefore the complaint does not belong in federal court. Kim noted Martinez invoked enterprise coverage rather than alleging he is subject to individual FLSA coverage. Citizen’s said that position required Martinez to allege its drivers handle or transport goods that crossed state lines. In a response brief, Martinez pointed to daily runs to O’Hare and Midway airports, as well as frequent trips to take goods to and from interstate shipping facilities, including post offices.

“Enterprise coverage has repeatedly been found to extend to local businesses whose local employees, in the course of their employment, use supplies that were manufactured out-of-state,” Kim wrote, noting the clause has such broad interpretation it applies to nearly any business meeting FLSA dollar volume requirements.

Citizen’s also argued for dismissal under FLSA’s taxicab exemptions, but Kim said the burden falls on the company to prove it qualifies.

“Exemption must be construed narrowly against the employer,” Kim wrote, adding, “the exemption question is better left for the summary judgment or trial stage.”

Finally, Citizen’s said Martinez failed to sufficiently allege facts about his compensation, pay rate and what he feels he’s owed.

But the judge noted Martinez had cited two specific weeks in which he worked 54 and 56 hours without getting time-and-a-half for the excess. The “uncompensated overtime allegations are sufficiently detailed,” Kim wrote.

However, Kim did dismiss the FLSA claim without prejudice to allow Martinez to amend his complaint to include allegations filed in the response brief.

Under the state law claim, Citizen’s argued for dismissal by saying Martinez did not fully allege a compensation agreement with the company. Referencing his independent contractor agreement on its own does not satisfy requirements to uphold the state law claim, Kim said, dismissing that complaint without prejudice.

Martinez also accused Citizen’s of unjust enrichment by requiring drivers to pay vehicle expenses. Citizen’s argued that claim should fail on the same grounds it opposed the FLSA claim, but since Martinez is allowed to replead that complaint, Kim said “this argument gets them nowhere.”

Martinez is represented in the action by attorneys with The Fish Law Firm, of Naperville, and Osborne Employment Law, of Glen Ellyn.

Citizen's Taxi is defended by attorneys Zachary Bravos and Kathleen DiCola, of the firm of Bravos & DiCola, of Wheaton.

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The Fish Law Firm P.C. U.S. District Court for the Northern District of Illinois

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