United States District Court, District of Columbia
MEMORANDUM OPINION AND ORDER
P. MEHTA UNITED STATES DISTRICT JUDGE.
case concerns drivers who claim that they have not been paid
in accordance with federal and local wage laws for
transporting Medicaid patients in the District of Columbia.
Defendant Medical Transportation Management, Inc., is a
private company that contracts with the District of Columbia
to “manage and administer” non-emergency
transportation services for Medicaid recipients. Defendant
does not itself supply these transportation services; rather,
it contracts with various companies that own vehicles and
employ drivers for that purpose. Defendant considers itself a
“broker” of transportation services.
Isaac Harris, Darnell Frye, and Leo Franklin work as drivers
for companies that contract with Defendant to provide
transportation services. They bring this class action to
recover wages that they allege their employers have not paid
them and similarly situated drivers. Plaintiffs contend that,
even though Defendant is not their “employer” in
the ordinary sense of that word, Defendant is legally liable
for their unpaid wages as a “joint employer” or
“general contractor” under federal and local
laws. Plaintiffs' claims arise under four federal and
District of Columbia wage statutes: (1) the Fair Labor
Standards Act, (2) the D.C. Minimum Wage Act, (3) the D.C.
Living Wage Act, and (4) the D.C. Wage Payment and Collection
Law. Plaintiffs also advance a common law breach-of-contract
claim on the theory that they are third-party beneficiaries
of the contract between Defendant and the District of
Columbia, which requires Defendant and transportation
companies to pay no less than the current living wage.
seeks dismissal of Plaintiffs' claims in their entirety.
In its Motion to Dismiss, Defendant argues that: (1) it
cannot be held liable for the alleged wage violations because
it is neither a “joint employer” nor
“general contractor” under the relevant wage
laws; (2) Plaintiffs' line of work is exempted from the
D.C. Living Wage Act; and (3) Plaintiffs are not third-party
beneficiaries of the contract between Defendant and the
District of Columbia and, therefore, do not have standing to
reasons that follow, Defendant's Motion to Dismiss is
granted as to the breach of contract claim, but denied as to
the federal and District of Columbia wage claims.
Medicaid regulations provide that a state Medicaid plan must:
“(a) [s]pecify that the [state] Medicaid agency will
ensure necessary transportation for beneficiaries to and from
providers; and (b) [d]escribe the methods that the agency
will use to meet this requirement.” 42 C.F.R. §
431.53. Under its Medicaid State Plan, the District of
Columbia uses both public and private transportation options
to ensure that benefits recipients are able to get to and
from providers. Depending on the circumstances, recipients
may receive bus tokens, Metro fare cards, taxicab vouchers,
medi-van or other van transportation, or non-emergency
ambulance services to meet their transportation
District of Columbia does not deliver transportation services
directly to Medicaid patients. Rather, it uses a
“transportation broker system” to
“effectively and efficiently administer [non-emergency
transportation] services.” See generally
Def.'s Motion to Dismiss, ECF No. 10, Ex. 2, ECF No. 10-2
[hereinafter “Contract”], ¶ C.4.3.3.;
see also Compl., ECF No. 1, ¶¶ 22-24. To
that end, the District of Columbia has contracted with
Defendant Medical Transportation Management, Inc., to
“manage and administer” the District's
transportation broker system. Contract ¶ C.5. The
District first contracted with Defendant around 2007, and
during the last decade the parties have entered into new
agreements or extensions multiple times. See Compl.
¶¶ 22-24. The most recent contract-a three-year,
$85 million contract-took effect in December 2015. See
id. at 24; see generally Contract. The court
refers to this most recent contract when referencing the
agreement, Defendant is required to serve as the
“Gatekeeper of transportation service requests”
from Medicaid recipients. Contract ¶ C.1(c). Defendant
is required to create and operate a call center to receive
and process patients' transportation requests.
Id. ¶ C.1(b). Defendant must validate a
recipient's eligibility and assess the medical necessity
of the requested transportation, id., and upon doing
so, determine the “most Appropriate Mode of
Transportation, ” which may include public
transportation, id. ¶ C.1(d). Additionally,
Defendant must establish “a Comprehensive
Transportation Network offering [a] number and variety of
transportation providers to meet the needs of
Recipients.” Id. ¶ C.1(a). This includes
contracting with privately-owned transportation companies of
the kind that employ Plaintiffs in this case. See
Compl. ¶¶ 18- 19, 26. The Contract specifically
bars Defendant from “own[ing] or operat[ing] any
vehicle to be used for transport with the NET program,
” Contract ¶ C.5.1.5; see also Compl.
¶¶ 25, and federal regulations are to the same
effect, 42 C.F.R. § 440.170(a)(4)(ii)(A).
Isaac Harris, Darnell Frye, and Leo Franklin are current or
former drivers for companies that provide non-emergency
medical transportation services to Medicaid patients in the
District of Columbia. Compl. ¶¶ 1, 21; see
id. ¶¶ 49, 62, 67, 78, 89. All of their
employers have agreements with Defendant to provide such
services. Id. ¶ 22; see also Id.
¶¶ 18, 26-28. According to Plaintiffs, although
Defendant is not their direct employer, Defendant controls
their “daily operations.” Id. ¶ 27.
Specifically, they allege that Defendant has the authority to
exercise control over the transportation provider in various
ways, “including hiring and firing [of providers'
employees], the terms and conditions of employment and
employees' daily responsibilities, payment of wages, and
record retention relating to the employees.”
Id. Defendant's alleged control manifests itself
in a multitude of ways. For example, Defendant
“required” Plaintiffs to pass background checks
and drug tests as a prerequisite to being hired as drivers.
Id. ¶¶ 50, 68, 79; see also id.
¶ 34(c). Defendant also sets minimum qualifications for
drivers, including that they must be at least 21 years old,
speak English, and be physically capable of assisting
patients. Id. ¶ 34(c). Once hired, Plaintiffs
and all other drivers were required to complete a training
administered by Defendant and held at its offices.
Id. ¶¶ 51, 69, 80; see also id.
¶ 34(b). Some Plaintiffs even had to complete retraining
during their employment in order to retain their positions.
See, e.g., id. ¶¶ 69, 80. Defendant also
requires providers to share copies of drivers' personnel
records, and Defendant, in turn, maintains its own personnel
files containing drivers' records. See id.
¶ 38. In addition, Defendant requires the transportation
providers to ensure drivers are both insured and
that Defendant is listed as an “Additional
Insured” on their policies. Id. ¶ 37.
Defendant also imposes upon drivers standards of conduct.
See id. ¶ 82.
Contract also contains a wage provision. It requires
Defendant to “comply with the most recent and future
revisions of all federal and District of Columbia laws,
” and names the D.C. Living Wage Act as one of the laws
by which Defendant must abide. Id. ¶¶
39-40; see also Contract ¶¶ C.2, H.8.1,
allege that they have not been compensated consistent with
federal and state wage laws. In all of their driving
positions-collectively, they have worked for four different
transportation companies-each Plaintiff worked 40-plus hour
work-weeks for a fixed rate, regardless of the number of
hours he worked. E.g. Id. ¶ 54-56 (alleging
that Harris's “effective hourly wage” was
approximately $7.12); id. ¶ 72-74 (alleging
that Frye's “effective hourly wage” was about
$4.79); id. ¶¶ 88-90 (alleging that
Franklin's “effective hourly wage” ranged
between $5 and $8.18 when working for one transportation
provider, and between $3.61 to $8.63 when driving for another
company). Plaintiffs did not receive time-and-a-half for
their overtime hours. E.g., id.
¶¶ 55, 57 (alleging that Harris was paid a $463 a
week by Star Transportation, even though he regularly worked
65-hour work weeks); id. ¶¶ 63-64
(alleging that Harris received a “flat rate of $1200.33
biweekly” for weeks in which he worked more than 40
hours while driving for a transportation provider);
id. ¶¶ 72-75 (alleging Plaintiff Frye
received $350 a week while driving for a transportation
provider, despite working an average of 73 hours a week);
id. ¶¶ 85-87, 90 (alleging that Franklin
was paid between $325 to $475 a week while working for a
transportation provider, even though he worked between 55 and
90 hours a week). As a result, Plaintiffs claim they, and
other similarly situated drivers, were grossly underpaid.
13, 2017, Plaintiffs filed a five-count class action against
Defendant. See generally Compl. In Count One, they
allege that Defendant violated the Fair Labor Standards Act,
29 U.S.C. § 201 et seq., by failing to pay
Plaintiffs the minimum wage and overtime rates required by
the law. Compl. ¶¶ 124-32. Counts Two, Three, and
Four respectively allege that Defendant violated the D.C.
Minimum Wage Act, D.C. Code § 32-1001 et seq.;
the D.C. Living Wage Act, D.C. § 2-220.01 et
seq.; and the D.C. Wage Payment and Collection Law, D.C.
Code § 32-1301 et seq. Compl. ¶¶
133-162. Finally, Count Five alleges that Defendant breached
its contract with the District of Columbia by violating the
Living Wage Act. Id. ¶¶ 163-69.
responded with a Motion to Dismiss on August 31, 2017.
See generally Def.'s Mot. to Dismiss, ECF No. 10
[hereinafter Def.'s Mot.]. The court held argument on
Defendant's Motion on January 22, 2018.
motion to dismiss under Federal Rule of Civil Procedure
12(b)(6) tests the legal sufficiency of a complaint.
Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir.
2002). “To survive a motion to dismiss, a complaint
must contain sufficient factual matter, accepted as true, to
‘state a claim to relief that is plausible on its
face.'” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)). A claim is facially plausible when
“the plaintiff pleads factual content that allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Id. The
factual allegations in the complaint need not be
“detailed”; however, the Federal Rules demand
more than “an unadorned,
evaluating a motion to dismiss under Rule 12(b)(6) of the
Federal Rules of Civil Procedure, the court must accept a
plaintiff's factual allegations as true and
“construe the complaint ‘in favor of the
plaintiff, who must be granted the benefit of all inferences
that can be derived from the facts alleged.'”
Hettinga v. United States, 677 F.3d 471, 476 (D.C.
Cir. 2012) (quoting Schuler v. United States, 617
F.2d 605, 608 (D.C. Cir. 1979)). The court need not accept as
true either “a legal conclusion couched as a factual
allegation, ” Papasan v. Allain, 478 U.S. 265,
286 (1986), or “inferences . . . unsupported by the
facts set out in the complaint, ” Kowal v. MCI
Commc'ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994).
If the facts as alleged fail to establish that a plaintiff
has stated a claim upon which relief can be granted, then a
court must grant the defendant's Rule 12(b)(6) motion.
See Am. Chemistry Council, Inc. v. U.S. Dep't of
Health & Human Servs., 922 F.Supp.2d 56, 61 (D.D.C.
Fair Labor Standards Act Count
is no allegation in this case that any Plaintiff was employed
directly by Defendant. Rather, Plaintiffs' contention is
that, under the Fair Labor Standards Act
(“FLSA”), Defendant is a “joint
employer” equally responsible for the payment of
legally compliant wages. Defendant argues that Plaintiffs
have not alleged facts that could support the plausible
inference that it- along with the transportation
providers-jointly employed Plaintiffs. See
Def.'s Mot. at 9-16. It advances two primary arguments.
First, Defendant asserts that, to the extent Defendant
imposes requirements on the hiring of drivers, including
background checks and qualification requirements, those are
mere “quality control” or “minimum
qualification” standards that do not legally rise to
employer-level control. Id. at 11-14. Indeed,
Defendant states that many of Plaintiffs' allegations
concerning its involvement in their work “are not
imposed by [Defendant] MTM, but are in fact required by the
District of Columbia as reflected in the Contract [between
Defendant and the District].” Id. at 11.
Second, Defendant maintains that Plaintiffs critically fail
to allege facts showing that Defendant has any control over
setting Plaintiffs' work schedules and their rates of
pay. See Id. at 12-15. The absence of such facts,
Defendant claims, is “inconsistent with the existence
of an employer-employee relationship between the Plaintiffs
and [Defendant].” Id. at 16. Plaintiffs
counter that Defendant is taking an “unduly narrow
interpretation” of the term “joint employer,
” and that, under a correct reading, they have alleged
facts that are sufficient to establish a joint employer
relationship. See Pls.' Mem. in Opp'n to
Def.'s Mot. to Dismiss, ECF No. 13 [hereinafter Pl.'s
Opp'n], at 1, 7-22.
FLSA conditions liability on the existence of an
employer-employee relationship. See 29 U.S.C. §
206(a). The Act's definition of “employer” is
expansive, as it “includes any person acting directly
or indirectly in the interest of an employer in relation to
an employee. Id. § 203(d); Falk v.
Brennan, 414 U.S. 190, 195 (1973) (noting the
“expansiveness of the FLSA's definition of
‘employer'”). An entity “employs”
an individual if it “suffer[s] or permit[s]” the
individual to work.” 29 U.S.C. § 203(g). To that
end, an employee may be employed by more than one employer.
The Act's regulations make this clear:
A single individual may stand in the relation of an employee
to two or more employers at the same time under the Fair
Labor Standards Act of 1938, since there is nothing in the
act which prevents an individual employed by one employer
from also entering into an employment relationship with a
different employer. A determination of whether the employment
by the employers is to be considered joint employment or