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Federal Court in Indiana Allows Class-Action FLSA Suit to Move Forward After Partially Denying Motion to Dismiss

This past month, a federal court in Indiana allowed a class-action employment suit to move forward after affirming in part and denying in part the employer’s motion to dismiss. In Harris v. Reliable Reports, Inc., the named plaintiff, Matthew Harris, claimed that the Fair Labor Standards Act (FLSA) and wage and hour laws in six states had been violated. He sought court certification for a class-action lawsuit.

house-in-field-of-flowers-1440514-m.jpgHarris initially filed a 44-page complaint against Reliable Reports, Inc., for whom he had worked as a field reporting specialist from March 2011 to April 2013. Reliable Reports operated in 22 states, where it employed field reporting specialists to inspect both residential and commercial properties. Part of a field reporting specialist’s job was to log into Reliable Reports’s computer network to download addresses of properties to be inspected; call to arrange inspection appointments and prepare route maps; load coordinates into their GPS units; drive to inspection sites and inspect and photograph the properties; respond to calls and texts from Reliable Reports and other interested parties; contend with traffic delays; and log into the computer network at the end of the day to enter hours worked and miles traveled.

For this, field reporting specialists were paid at a piece rate, which meant that they received a set fee for every report of the inspection completed and passed, as opposed to a standard hourly rate. Harris claimed that despite traveling hundreds of miles from home each day, field reporting specialists were not compensated for that time. Nor did they receive a true lunch break, being required to drive to appointments, get gas, or respond to calls during that time. Overall, though Harris claimed to have worked 60 to 65 hours per week, he had just $21,334.19 to show for it. Reliable Reports allegedly told employees that they must not report their actual hours and miles. The company also failed to fully compensate employees for mileage, despite claiming that it would in the employee manual.

Harris sought to bring FLSA claims on behalf of himself and similarly situated field reporting specialists who were employed within the past three years. Reliable Reports sought to have the complaint dismissed on the grounds that the minimum wage and overtime claims were not “factually plausible,” that it had no obligation to pay an hourly minimum wage or fully compensate mileage, and that it did not violate the wage and hour laws of six states, including Indiana.

In response to the first claim for dismissal, the federal court noted that since Harris inaccurately claimed that the FLSA allowed employees a 30-minute uninterrupted lunch break (the FLSA does not require employers to give meal breaks), that part of the complaint would be dismissed. The court also dismissed Harris’s claim that the piece rate should have been a standard hourly rate, but upheld the part of the claim that not all hours were being compensated. Moreover, the court found that Harris had pled enough facts to uphold the claim that he had worked a continuous work day by traveling from job to job, and that he should be compensated under the FLSA.

Regarding the second claim, the court agreed with Reliable Reports that Harris had not pled enough facts to suggest Reliable Reports was contractually obligated to pay both an hourly wage and to fully compensate for all miles traveled. The employee handbook stated that mileage would be compensated at the IRS rate “or the fee schedule as defined by job description,” which meant that there was no blanket statement that all employees would be compensated at the IRS rate of $0.55 per mile.

Finally, with regard to the third claim, the court dismissed it with regard to Michigan, West Virginia, Indiana, and Ohio, but upheld it with regard to Iowa and Illinois. The court also denied Reliable Reports’s attempt to dismiss Harris’s unjust enrichment claim or his class-action claim.

Miller & Falkner is an Indiana and Kentucky plaintiffs law firm serving residents of Kentucky and Indiana. Located in Louisville, Kentucky, the firm provides representation in the areas of personal injury and employment law. If you need an Indiana employment law attorney, contact us today for a free consultation.

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