Domino's Pizza Drivers Fail to Deliver Common Circumstances to the Eighth Circuit

by BakerHostetler
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Despite their work uniforms and company cars, pizza delivery drivers do not have much in common (at least according to the Eighth Circuit).

Recently, in Luiken v. Domino’s Pizza, LLC, No. 12-1216, 2013 WL 399248 (8th Cir. Feb. 4, 2013), the court found that a purported class of 1600 Domino's Pizza delivery drivers lacked the requisite commonality for class certification under the Federal Rules of Civil Procedure due to the variety of interactions between drivers and customers regarding tips.

In Minnesota, any gratuity received by an employee for personal services performed is the property of the employee. Obligatory charges, such as mandatory delivery fees, are considered gratuities when a customer might reasonably see the charge as a payment for personal services rendered by the employee and the employer fails to provide clear and conspicuous notice that the charge is not the employee’s property.

Domino’s Pizza charges a flat per-delivery charge on its pizzas ($1 in 2005; increased to $1.50 in 2009). This charge was disclosed to customers in a variety of ways based on the method of ordering. Notice of the delivery charge appears on online orders, receipts, and the boxes. The drivers do not receive any portion of this charge. However, customers may or may not know this. Some drivers tell customers that the charge is not a tip, while others simply do not address the issue.

Matt Luiken, the class representative, and his fellow delivery drivers argued that the delivery charge is a gratuity under Minnesota law and that Domino’s Pizza should pay the delivery charge to the drivers. The delivery drivers contended that customers could reasonably construe the delivery charge as a payment for personal services because Domino’s failed to provide proper notice that the drivers would not receive the money, and that the context of the transactions between the drivers and customers was irrelevant to the determination of whether proper notice was given.

Reversing the district court’s certification decision, the Eighth Circuit stated that it was unable to make a “one-stroke determination of a class-wide question” regarding the issue of gratuities. According to the Court of Appeals, the variety of pizza delivery transactions made it unreasonable for some customers to construe the delivery charge as a payment for personal services. In construing the statute addressing gratuities, the Court first determines whether the charge might reasonably be construed as a payment for personal services. If so, the court then analyzes any notice from the employer.

In contrast to the delivery drivers’ arguments, the Eighth Circuit emphasized that “context matters.” Relying on Wal-Mart Stores, Inc. v. Dukes, 133 S. Ct. 2541, 2551 (2011), the court noted that “[c]ommonality requires the plaintiff to demonstrate that the class members suffered the same injury.” However, the drivers in this case did not have the same circumstances in common.  Some drivers explained to customers that the delivery charge was not a gratuity, negating the need for the employer to provide notice. Other drivers did not address the issue, and notice from the employer would have been appropriate. Therefore, the customer’s circumstances determined whether the delivery charge could reasonably be viewed as a payment for personal services and whether notice is required.

The Eighth Circuit further emphasized that liability under Minnesota law is based on an objective, reasonable person standard and that context is critical in applying such a standard. Citing Avritt v. Reliastar Life Ins. Co., 615 F.3d 1023, 1032 (8th Cir. 2010), the court noted that “what is objectively reasonable depends on the nature and context of the parties’ bargain.” Since the Court had to consider varied circumstances in determining the objective reasonableness of construing the charge as a payment for personal services, the Court rejected class certification.

The Bottom Line: Delivering pizza is simple; delivering commonality is not. In the Eighth Circuit, if purported class members are affected by different circumstances, the commonality requirement for class certification will not be met.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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