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Young v. Act Fast Delivery of West Virginia, Inc.

United States District Court, S.D. West Virginia, Beckley Division

January 3, 2018

ERIC YOUNG, Plaintiff,
v.
ACT FAST DELIVERY OF WEST VIRGINIA, INC., et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          IRENE C. BERGER, UNITED STATES DISTRICT JUDGE

         The Court has reviewed the Plaintiffs' Motion for Partial Summary Judgment Against the Omnicare Defendants (Document 205) and Memorandum of Law in Support (Document 206), The Omnicare Defendants' Response in Opposition to Plaintiffs' Motion for Partial Summary Judgment (Document 221), the Reply in Support of Plaintiffs' Motion for Partial Summary Judgment Against the Omnicare Defendants (Document 235), and all attached exhibits. The Court has also reviewed The Omnicare Defendants' Motion for Summary Judgment (Document 208), The Omnicare Defendants' Brief in Support of Their Motion for Summary Judgment (Document 209), the Plaintiffs' Response to the Omnicare Defendants' Motion for Summary Judgment (Document 219), The Omnicare Defendants' Reply in Support of Their Motion for Summary Judgment (Document 236), and all attached exhibits. For the reasons stated herein, the Court finds that the Plaintiffs' motion for partial summary judgment should be granted and the Omnicare Defendants' motion for summary judgment should be denied.

         FACTUAL BACKGROUND AND PROCEDURAL HISTORY

         The named Plaintiff, Eric Young, initiated this suit by filing a Collective Action Complaint (Document 1) with this Court on October 17, 2016. The Plaintiff named as Defendants Act Fast Delivery of West Virginia, Inc., a West Virginia corporation, Act Fast Delivery, Inc., a Texas corporation, Home Care Pharmacy, LLC, a Delaware corporation doing business as a variety of entities including Omnicare of Nitro and Omnicare of Nitro, West Virginia, Compass Health Services, LLC, a West Virginia corporation doing business as a variety of entities including Omnicare of Morgantown and Omnicare of Morgantown, West Virginia, Omnicare, Inc., a Delaware corporation and other John Doe Defendants. In the complaint, the Plaintiffs allege violations of state and federal wage payment laws, including the Fair Labor Standards Act and the West Virginia Wage Payment and Collection Act. The Plaintiffs specifically allege that the Defendants intentionally misclassified the named Plaintiff and other similarly situated individuals as independent contractors when they were, in fact, employees to avoid paying them time-and-a-half rates for hours worked in excess of forty (40) hours per week, in violation of 29 U.S.C. § 207 and 29 C.F.R. § 778.111.

         The Defendant Omnicare, Inc. is a pharmaceutical company that “sells and delivers medications, mostly to nursing homes and long-term care facilities.” (Pls.' Mem. of Law in Support at 3). Omnicare works with these facilities to serve as their pharmacy and provide the facility's prescription drug needs through a delivery service. Typically, a facility enters into a contract with Omnicare and, as part of the contract, Omnicare establishes its price package to include the delivery service. In other words, the price the long-term care facility pays Omnicare includes the delivery service such that it is “Omnicare who suffers all delivery cost[s].” (Id.) In order to carry out this service, Omnicare “utilizes different independent delivery service companies to deliver pharmaceuticals to its long-term care clients.” (Omnicare Defs.' Brief in Support at 2.)

         In 2012, and again in 2015, Omnicare contracted with Act Fast to serve as its delivery courier from Omnicare's West Virginia pharmacies. Over the course of their relationship, 90% of Act Fast's business was generated in deliveries for Omnicare. (Laura Hick's Depo. at 23.)

         Upon accepting Act Fast's bid to serve as its courier, Omnicare and Act Fast entered into a Courier Agreement (Pls.' Mem. of Law in Support, Ex. 2) (Document 205-2). The agreement stated that neither Act Fast nor its courier drivers were employees of Omnicare, but were independent contractors. (Id. at ¶ 34.) The agreement also stated as follows:

Courier will operate its business and perform the Courier Service for Pharmacy independent of the Pharmacy and Omnicare. Courier's responsibilities in operating its business . . . include being solely responsible for: all staffing, labor, personnel and human resource functions; managing and directing the transportation functions and the drivers performing the Courtier services; and determining the methods, means, and manner of performing the pickup and delivery of products. . . .” (Id.)

         In spite of the independent contractor language, however, the agreement set forth many specific requirements that Act Fast was required by Omnicare to follow in order to adequately satisfy its duties. Omnicare used the Courier Agreement to establish precisely where and when Act Fast's drivers made their deliveries. Schedules attached to the agreement specifically mandated the different facilities of Omnicare customers to which the delivery drivers would deliver products, and established the routes, order of stops, and the times deliveries were to be made to each of these facilities. Omnicare established these routes and route times based on their customer's needs concerning medications so as to ensure their customers could provide medications to their patients on schedule. The Courier Agreement specifically laid out these details and provided that they were “subject to modifications by the pharmacy.” (Id. at ¶ 2.) Based on the Courier Agreement, the routes, stops, and delivery times were non-negotiable, and Omnicare “acknowledges that it controlled the where, when, and how Act Fast couriers made deliveries.” (Omnicare Defs.' Response in Opp. at 3.)

         The agreement required the drivers to pick up deliveries from the pharmacy in totes owned and marked by Omnicare and return the empty totes to Omnicare's facility. (Document 205-2 at ¶ 2.) It required that all delivery vehicles be “appropriately configured” and prohibited the use of “pickup trucks with camper shells.” (Id. at ¶ 12.) It also required Act Fast's drivers to be HAZMAT trained, wear uniforms during deliveries with photographic identification clearly visible, and use coolers for the storage and transportation of certain packages as Omnicare saw fit. (Id.; Document 205-1 at 4, ¶ 4.) In the 2012 iteration of the agreement, Omnicare required Act Fast to “ensure drivers look, smell, and act professionally” and to “deal with poor driver conduct swiftly.” (Document 205-1 at 19, ¶ 7.) It further required Act Fast to “monitor drivers to make sure they follow the routes as planned” and “[e]nsure STAT drivers leave the pharmacy promptly and go straight to their destinations.” (Id. at 19, ¶ 14.)

         The named Plaintiff, Mr. Young, began working for Act Fast as a delivery driver in 2012. When applying for the job, Mr. Young filled out an application to be a delivery driver for Act Fast. (Eric Young Depo. at 30:12--31:15.) As was mandated by Omnicare in the Courier Agreement, Act Fast administered the background check and drug test that Mr. Young and other drivers were required to take. (Id. at 185.) The Plaintiff and other drivers drove their own automobiles when making deliveries, and Act Fast also provided Mr. Young with the scanner to use while making deliveries and required him to pay for and wear a shirt with Act Fast's logo on it. (Id. at 22:15-18.) Mr. Young and other delivery drivers drove both regularly-scheduled routes and “STAT” deliveries, or deliveries that were urgently needed by the facility, and the drivers could choose whether to accept or reject the STAT delivery assignment. (Id. at 146:8-18.)

         Mr. Young did not receive his paychecks from Omnicare and was solely compensated by Act Fast. (Id. at 23:21-22.) Act Fast calculated all of its drivers' deliveries over each two-week period, including normal delivery routes and STAT deliveries, and invoiced Omnicare for the charges. Act Fast paid Mr. Young and the other drivers a set fee per route in lump sum payments. Thus, Mr. Young's pay varied based on the amount of deliveries he decided to take. (Eric Young Depo. at 57:21-58:5.) Omnicare did not make any deductions from Mr. Young's paychecks, nor did it provide Mr. Young with an IRS W-2 or 1099 form concerning his income taxes or provide any benefits of any kind. (Id. at 220:24-221:4.) Further, Mr. Young was trained by Act Fast employees or management and was supervised by Act Fast. Act Fast issued his performance evaluations and at one point during his employment promoted him to “head driver.” (Id. at 187:19-188:4.)

         However, the Courier Agreement allowed Omnicare, if “unsatisfied with [Act Fast's] service” to “notify [Act Fast] in writing” and give Act Fast “seven days to rectify the service problem.” (Document 205-2 at ¶ 19.) When Omnicare suggested employment decisions, Act Fast regularly followed through with them. For example, upon receipt of complaints from Omnicare customers, Act Fast regional manager Laura Hicks followed up with Omnicare employee Chris Lockard concerning those complaints and informed him that three drivers would be terminated in response to Omnicare's communication regarding complaints and appropriate action. (Pls.' Mot. for Sum. Judg., Ex. 13.) Ms. Hicks specifically requested Omnicare's input on “concerns or requests with the changes [Omnicare] plan[s] on making.” (Id.)

         On July 4, 2015, Mr. Young's contract as a delivery driver was terminated by Act Fast. (Id. at 94.) This action followed Mr. Young's termination. Both the Plaintiffs and the Omnicare Defendants filed their summary judgment motions on November 15, 2017. Both parties replied to the cross motions on November 29, 2017, and both parties filed their replies on December 6, 2017. The cross motions for summary judgment are therefore fully briefed and ripe for review.

         STANDARD OF REVIEW

         The well-established standard in consideration of a motion for summary judgment is that “[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a)-(c); see also Hunt v. Cromartie, 526 U.S. 541, 549 (1999); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); Hoschar v. Appalachian Power Co., 739 F.3d 163, 169 (4th Cir. 2014). A “material fact” is a fact that could affect the outcome of the case. Anderson, 477 U.S. at 248; News & Observer Publ'g Co. v. Raleigh-Durham Airport Auth., 597 F.3d 570, 576 (4th Cir. 2010). A “genuine issue” concerning a material fact exists when the evidence is sufficient to allow a reasonable jury to return a verdict in the nonmoving party's favor. FDIC v. Cashion, 720 F.3d 169, 180 (4th Cir. 2013); News & Observer, 597 F.3d at 576.

         The moving party bears the burden of showing that there is no genuine issue of material fact, and that it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Celotex Corp., 477 U.S. at 322-23. When determining whether summary judgment is appropriate, a court must view all of the factual evidence, and any reasonable inferences to be drawn therefrom, in the light most favorable to the nonmoving party. Hoschar, 739 F.3d at 169. However, the non-moving party must offer some “concrete evidence from which a reasonable juror could return a verdict in his favor.” Anderson, 477 U.S. at 256. “At the summary judgment stage, the non-moving party must come forward with more than ‘mere speculation or the building of one inference upon another' to resist dismissal of the action.” Perry v. Kappos, No.11-1476, 2012 WL 2130908, at *3 (4th Cir. June 13, 2012) (unpublished decision) (quoting Beale v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985)).

         In considering a motion for summary judgment, the court will not “weigh the evidence and determine the truth of the matter, ” Anderson, 477 U.S. at 249, nor will it make determinations of credibility. N. Am. Precast, Inc. v. Gen. Cas. Co. of Wis., 2008 WL 906334, *3 (S.D. W.Va. Mar. 31, 2008) (Copenhaver, J.) (citing Sosebee v. Murphy,797 F.2d 179, 182 (4th Cir. 1986). If disputes over a material fact exist that “can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party, ” summary judgment is inappropriate. Anderson, 477 U.S. at 250. If, however, the nonmoving party “fails to make a showing sufficient to establish the existence of an element essential to that party's case, ” then ...


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