A New Jersey district court denied certification of a putative class of furniture delivery drivers and helpers employed by various transportation companies (the “Driver/Helpers”) and individuals who owned those transportation companies. The court held that individualized questions regarding whether the plaintiffs should be classified as employees or independent contractors precluded findings of commonality and predominance.
The defendant, MXD, Inc., a company that specialized in “white glove delivery” of large items, had contracts with the putative-class-member transportation companies, under which they were paid per delivery, but MDX had no contracts with the Driver/Helpers, who were paid by the transportation companies for which they worked. The plaintiffs, both the Driver/Helpers and owners of the transportation companies, alleged that they were employees of MXD, which, they asserted, had violated New Jersey law by failing to pay them overtime wages.
Plaintiffs sought to certify a class under Rule 23(b)(3). MXD argued in opposition that it did not employ the Driver/Helpers, and that, although it had contracts with the putative transportation company plaintiffs, they were independent contractors.
The court began its Rule 23(a) commonality analysis by noting that “[t]he focus is . . . on whether the defendant’s conduct was common as to all class members.” The court found that the plaintiffs were seeking to “combine two fundamentally different sets of plaintiffs: the Driver/Helper[s], and the owners of small transportation companies.” This presented two impediments to a finding of commonality, according to the court. First, the transportation companies had contracts with MXD, and, therefore, at trial, the owners of the transportation companies would only need to argue that they were misclassified under these agreements as independent contractors. The Driver/Helpers had no contracts with MXD, and thus, under the applicable test, they would first need to establish the existence of an employment relationship with MXD before they could argue that they were misclassified as independent contractors. This “additional burden,” according to the court, made “a ‘classwide answer’ on the ultimate misclassification issue unlikely.” The court further found that engaging in the employee/independent contractor analysis would not likely “provide the same answers to the two groups of plaintiffs.” The court explained that MXD’s control over each group would differ based on the presence or absence of a contractual relationship.
The court then addressed the plaintiffs’ suggestion that “a class of Driver/Helper[s]” be considered and found that such a class would fail Rule 23(b)(3)’s predominance requirement because individualized evidence would be needed to determine whether each Driver/Helper was an employee or an independent contractor. The court noted that MXD’s control (or lack thereof) over each Driver/Helper was key in determining the existence of an employment relationship; however, the “amount of control MXD exercised over the different Driver/Hebelper Plaintiffs varied significantly.” Consequently, individualized issues would arise regarding control over work schedules, attendance of meetings, and when and how often to check in with MXD.
Echavarria v. Williams Sonoma, Inc., No. 15-cv-06441 (D.N.J. Mar. 16, 2016)
