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Hargrove v. Sleepy's LLC

United States District Court, D. New Jersey

February 28, 2018

SAM HARGROVE, ANDRE HALL, MARCO EUSEBIO, individually and on behalf of all others similarly situated, Plaintiffs,
SLEEPY'S, LLC, Defendant.


          PETER G. SHERIDAN, U.S.D.J.

         This matter comes before this Court on Plaintiffs' motion for class certification. [ECF No. 193].


         In 2010, Plaintiffs Sam Hargrove, Andre Hall, and Marco Eusebio, who were all delivery drivers for Defendants Sleepy's, LLC ("Sleepy's"), filed a complaint in this Court, on behalf of a putative class, alleging that Sleepy's misclassified them as independent contractors rather than employees, and thus denied them protections and benefits under the Employee Retirement and Income Security Act (ERISA), the Family Medical Leave Act, and the New Jersey Wage Payment Law. Hargrove v. Sleepy's LLC, 612 Fed.Appx. 116, 117 (2015). Specifically, Plaintiffs allege that Sleepy's withheld and diverted money from their wages in violation of New Jersey's Wage Payment Law. Id. Plaintiffs also allege that they were not paid overtime for their work, a claim that would also arise under the New Jersey Wage and Hour Law. Id.

         Generally, Sleepy's is a New York-based mattress retailer that adopts a comprehensive delivery process. They operate a facility in Robbinsville, New Jersey. The only merchandise dispatched from the Robbinsville terminal is Sleepy's merchandise sold to Sleepy's customers, or transfers from the terminal to another Sleepy's facility. (Zezas Dep. 20:23-21:8.) Sleepy's runs approximately 50-60 trucks per day, and sometimes as many as 85-90 trucks during peak season out of the Robbinsville facility. (Id. at 19:15-20:22.)

         According to Sleepy's, deliveries are performed by contractors. Sleepy's requires its contractors to sign Independent Driver Agreements (IDA) (See Def. Br. Ex. G, I, K, L, J, H, F, M). Pursuant to the IDA, drivers are classified as independent contractors. (EX. L (Sample IDA), IDA ¶3). The IDA provides for a non-exclusive relationship, meaning that the drivers are considered independent contractors, and may make deliveries for other companies while not performing deliveries for Sleepy's. (See Hargrove v. Sleepy's LLC, Civ. A No. 10-1138, 2012 EL 1067729, *1 (D.N.J. Mar. 29, 2012). Contractors and any helpers are required to wear Sleepy's uniforms and Sleepy's ID badges and display Sleepy's advertising on their trucks. (IDA ¶9-10.) Pursuant to the IDA, contractors pay for their own workers compensation insurance, and list Sleepy's as "certificate holder" on their policies. They also purchase motor vehicle insurance and list Sleepy's as an additional insured on their policy. (IDA ¶4.)

         Drivers are also required to "agree that while performing deliveries for Sleepy's [they] will not carry merchandise for any other business until [they] finished the delivery manifest given by Sleepy's." (IDA ¶2.)

         Plaintiffs contend that, between January 2007 and December 2016 (class period), Sleepy's has contracted with at least 193 individuals to perform deliveries out of its facility in Robbinsville. (Shuford Aff. ¶6 (Ex. E)).[1]

         Procedural History

         After the parties filed cross-motions for summary judgment, on March 29, 2012, this Court entered an order granting Sleepy's motion for summary judgment and denying Plaintiffs' cross-motion. Id. The decision was appealed and remanded by the Third Circuit who asked for the advice of the Supreme Court of New Jersey regarding which test to apply to determine the nature of an employment relationship under the New Jersey Wage Payment Law and the New Jersey Wage and Hour law. The Supreme Court deemed the "ABC test" to be most appropriate. Id. On remand, this Court granted Plaintiffs' motion for partial summary judgment and denied Sleepy's motion for summary judgment. In the decision, this Court applied the New Jersey Supreme Court ABC test, to determine whether Plaintiffs were to be considered employees. Hargrove v. Sleepy's, LLC, 2016 U.S. Dist. LEXIS 156697, *12 (D.N.J. Oct. 25, 2016).

         Following the remand, Plaintiffs voluntarily dismissed Count 8, 9, 10, and 11, which arose under the laws of Massachusetts, New York, Connecticut, and Maryland. However, the following claims remain: Breach of Contract (Count I and II); Mistake (Count III); Rescission (Count IV); Claim for Plan Enforcement under the Employee Retirement and Income Security Act (ERISA) (Count V); Violations of the Family and Medical Leave Act (FMLA) (Count VI); Violations of New Jersey Wage Payment Law (NJWPL) (Count VII); and violations of New Jersey Wage and Hour law (Count VIII). Plaintiffs now seek certification of the class pursuant to Fed.R.Civ.P. 23.

         As this Court understands it, the proposed class members would have to meet three criteria that define the class: (1) worked full-time making deliveries for Sleepy's and thus were misclassified as independent contractors; (2) were subject to improper deductions; and (3) worked over 40 hours per week without being paid over-time (time-and-a-half).

         On December 13, 2017, the Court held oral argument on the motion for class certification. There, Plaintiffs supported determining that "at least 193" people met the criteria for the class proposed, as specified in the affidavit of Rebecca Shuford, the paralegal who analyzed the data and documents to determine the proposed class. [ECF 193-5, Shuford Affidavit]. Ms. Shuford submitted two affidavits which listed the documents she reviewed and her findings. The only difference between the affidavits is that, at request of Plaintiffs' attorney, Ms. Shuford expanded on the number of trucks operated by contractors that she deemed part of the proposed class. (Shuford Depo., ECF 211-1, T30-21-31:15). Specifically, Ms. Shuford noted that 201 contractors were listed on Sleepy's documents. After eliminating eight contractors who operated 10 or more trucks simultaneously, she counted 193 contracts total. (ECF 196-10 2nd Shuford Affidavit ¶3).

Of the 193 contractors that I identified, 73 contractors operated only 1 truck for Sleepy's and an additional 12 contractors operated only 1 truck in the majority of the weekends they made Sleepy's delivery [55] contractors averaged operating 2 trucks while working for Sleepy's. [29] contractors averaged operating 3 trucks for Sleepy's. The remaining 24 contractors averaged between 4 and 9 trucks per week.

(Id. ¶4).

         At the hearing, the Court requested clarification as to the methodology used by Plaintiff to determine the proposed class members. The Court also provided the parties with the option to depose Ms. Shuford which they did on December 20, 2017. Thereafter, parties submitted supplemental briefs for consideration by this Court. [ECF No. 208 and ECF No. 211].

         Ms. Shuford"s Deposition

         Ms. Shuford is currently employed by Plaintiffs firm as a paralegal. She has been working as a paralegal since 2015 and was trained within the firm. At the time of the deposition, she did not hold a certificate of training as a paralegal. (T15-16). At the deposition, Ms. Shuford confirmed that she reached the conclusions mentioned in her affidavit by reviewing three sets of records:

         1. The Outside Carrier Expense Detail reports (Bates No. SL0021713-29781) produced by Sleepy's for all trucks making deliveries out of Sleepy's Robbinsville, New Jersey facility from January 1, 2007 to 2010;

         2. Outside Carrier Spreadsheets, containing data for payments and deductions made to carriers operating out of the Robbinsville facility from 2011 thought 2016, that were produced by Paul Lantis. (T1 9:17-23; respectively Ex. 1 (sample report) and Ex 2 (email from Lantis) to Shuford Affidavit); and

         3. Gate logs (3, 400 pages), however, Ms. Shuford noted that they only cover a time period in 2008-2009. (T45).

         There are three main points that seek resolution through exploring Ms. Shuford's review of the data and conclusions as to the class size: (1) how to determine which drivers provided delivery services for Sleepy's on a full-time basis; (2) who was subject to improper wage deductions; and ...

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