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Bedoya v. American Eagle Express Inc.

United States Court of Appeals, Third Circuit

January 29, 2019

EVER BEDOYA; DIEGO GONZALES; MANUEL DECASTRO, on behalf of themselves and all others similarly situated
v.
AMERICAN EAGLE EXPRESS INC, d/b/a AEX GROUP
v.
KV SERVICE, LLC; M&J EXPRESS, LLC; A&D DELIVERY EXPRESS, LLC American Eagle Express, Inc., Appellant

          Argued November 14, 2018

          Appeal from the United States District Court for the District of New Jersey (D.C. No. 2-14-cv-02811) District Judge: Hon. Esther Salas

          Harold L. Lichten [ARGUED] Lichten & Liss-Riordan, R. Andrew Santillo Peter D. Winebrake Winebrake & Santillo Counsel for Plaintiff-Appellees

          Joseph C. DeBlasio [ARGUED] Jackson Lewis Counsel for Defendant-Appellant

         Adina H. Rosenbaum Public Citizen Litigation Group Counsel for Amicus Public Citizen Inc.

          Christopher W. Weber [ARGUED] Emily M. Bisnauth Counsel for Amicus New Jersey Department of Labor and Workforce Development

          Before: GREENAWAY, JR., SHWARTZ, and BIBAS, Circuit Judges.

          OPINION

          SHWARTZ, Circuit Judge.

         Plaintiff delivery drivers Ever Bedoya, Diego Gonzalez, and Manuel Decastro (collectively, "the Drivers") filed a putative class action against Defendant American Eagle Express, Inc., ("AEX"), alleging that AEX misclassified them as independent contractors when they are actually employees under the New Jersey Wage and Hour Law ("NJWHL"), N.J. Stat. Ann. §§ 34:11-56a to -56a3, and the New Jersey Wage Payment Law ("NJWPL"), N.J. Stat. Ann. §§ 34:11-4.1 to -4:14. AEX moved for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c), arguing that the Drivers' claims are preempted by the Federal Aviation Authorization

         Administration Act of 1994 ("FAAAA"), 49 U.S.C. §§ 14501-06. The District Court denied AEX's motion and certified the order for interlocutory appeal. Because the FAAAA does not preempt the New Jersey law for determining employment status for the purposes of NJWHL and NJWPL, we will affirm the order and remand for further proceedings.

         I

         AEX is a logistics company that provides delivery services to various medical organizations. The Drivers are New Jersey residents who make deliveries for AEX. The Drivers filed this putative class action against AEX seeking, among other things, a judgment declaring that they are employees of AEX, rather than independent contractors, which entitles them to compensation under the NJWHL and NJWPL.[1]AEX moved for judgment on the pleadings, arguing that the FAAAA preempts the Drivers' claims.

         The District Court denied AEX's motion, Bedoya v. Am. Eagle Express, Civ. No. 14-2811, 2017 WL 4330351, at *1 (D.N.J. Sept. 29, 2017), reasoning that "[t]here is no clear indication" that Congress intended for the FAAAA to preempt state wage laws, Dkt. 109 at 6, 10, and that the connection between regulation of AEX's workforce and the "prices, routes, and services" provided to its consumers is too attenuated to justify preempting claims under the NJWHL and NJWPL, id. at 8-9. We now consider AEX's interlocutory appeal of the order denying the motion pursuant to 28 U.S.C. § 1292(b). Bedoya, 2017 WL 4330351, at *1-4.

         II[2]

         A

         The question before us is whether the FAAAA preempts New Jersey's test for determining employment classification for purposes of the NJWHL and NJWPL. Under this test, workers performing services for a given company in exchange for pay are deemed employees unless the company can demonstrate each of the following:

A. Such individual has been and will continue to be free from control or direction over the performance of such service, both under his contract of service and in fact; and
B. Such service is either outside the usual course of the business for which such service is performed, or that such service is performed outside of all the places of business of the enterprise for which such service is performed; and
C. Such individual is customarily engaged in an independently established trade, occupation, profession, or business.

N.J. Stat. Ann. §§ 43:21-19(i)(6)(A)-(C) ("New Jersey ABC classification test"). Where a company successfully demonstrates all three elements with respect to a worker, that worker qualifies as an independent contractor under the NJWHL and NJWPL. Hargrove v. Sleepy's, LLC, 106 A.3d 449, 458 (N.J. 2015). The company, in turn, is exempt from requirements under those statutes with respect to the worker. Id. For individuals classified as employees, however, the employing company is subject to each statute's obligations, including minimum and overtime wage requirements, N.J. Stat. Ann. § 34:11-56a4, conditions regarding the time and mode of pay, N.J. Stat. Ann. § 34:11-4.2, 4.2a, and restrictions on pay deductions, N.J. Stat. Ann. § 34:11-4.4. AEX contends that the New Jersey ABC classification test is preempted by the FAAAA.

         B

         The preemption doctrine stems from the Supremacy Clause, which provides that "the Laws of the United States . . . shall be the supreme Law of the Land . . . any Thing in the Constitution or Laws of any State to the Contrary notwithstanding." U.S. Const. art. VI, cl. 2. Thus, "Congress . . . has the power to preempt state law." In re Vehicle Carrier Servs. Antitrust Litig., 846 F.3d 71, 83 (3d Cir. 2017) (citing Arizona v. United States, 567 U.S. 387 (2012)), cert denied sub nom., Alban v. Nippon Yusen Kabushiki Kaisha, 138 S.Ct. 114 (2017). There are three categories of preemption: field preemption, conflict preemption, and express preemption. H ...


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