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Hall v. Fedex Freight, Inc.

United States District Court, E.D. California

July 11, 2014

FEDEX FREIGHT, INC., an Arkansas Corporation, and DOES 1 through 25, inclusive. Defendants.


SHEILA K. OBERTO, Magistrate Judge.


On May 2, 2014, Defendant FedEx Freight, Inc. ("FedEx") filed a motion for summary judgment as to the claims of Plaintiffs Kelly Hall, Robert Markowitz, and Richard Rodriguez (collectively, "Plaintiffs").[1] (Doc. 13.) On May 28, 2014, Plaintiffs filed an opposition to FedEx's motion. On June 4, 2014, FedEx filed a reply brief as well as a request for judicial notice. On June 10, 2014, the Court found FedEx's motion suitable for decision without argument and vacated the June 11, 2014, hearing. (Doc. 24.) For the reasons set forth below, FedEx's motion for summary judgment is GRANTED.


A. FedEx's Operations Background and Allegations

Plaintiffs are employed as line-haul drivers for FedEx. Line-haul drivers transport freight using tractor-trailers between various FedEx facilities called Service Centers. (Doc. 15, Declaration of Katyna Naylor ("Naylor Decl."), ¶ 12.) Generally, drivers report to their home Service Center and transport freight to another Service Center. (Doc. 15, Naylor Decl., ¶ 12.) When drivers arrive at a destination Service Center, FedEx employees unload the freight from the trailer, and the drivers then drive a loaded trailer back to their home Service Center. (Doc. 15, Naylor Decl., ¶ 12.) The round-trip is referred to as a "run." (Doc. 15, Naylor Decl., ¶ 12.)

FedEx assigns runs to drivers within each Service Center using a bidding process that is seniority-based. (Doc. 15, Naylor Decl., ¶ 13.) Approximately twice a year the Service Centers conduct a "rebid, " when drivers, in order of seniority, are eligible to select new runs. (Doc. 15, Naylor Decl., ¶ 12.)

According to FedEx, it uses a seniority system that considers the employee's time with the company, as well as the amount of time the employee held a particular position. (Doc. 15, Naylor Decl., ¶ 14.) The first type of seniority is called "Company Seniority, " and the second type is called "Job Class Seniority." (Doc. 15, Naylor Decl., ¶ 14.) Both types of seniority may be relevant to employment decisions at FedEx. (Doc. 15, Naylor Decl., ¶ 14.) For employees who transfer to different Service Centers, FedEx's seniority-bases system also accounts for whether the employee transferred voluntarily or involuntarily. (Doc. 15, Naylor Decl., ¶ 16.) If the employee transferred voluntarily, that employee receives an updated job class seniority date, reflecting the date of transfer. (Doc. 15, Naylor Decl., ¶ 16.) If the employee was transferred involuntarily, that employee retains his or her existing job class seniority date upon transfer. (Doc. 15, Naylor Decl., ¶ 16.)

The freight business is unpredictable and can change based on shipper needs and the time of year; thus, it is impossible to be certain whether a particular run will remain assigned to the same Service Center for an extended period of time, or to the same driver. FedEx maintains that, to meet these changing needs, it must periodically engage in what it calls a "Change of Operations, " whereby certain runs are moved from one Service Center to another to better serve FedEx customers and to streamline movement of freight. (Doc. 15, Naylor Decl., ¶ 17.) When a Change of Operations occurs, FedEx follows certain written internal procedures and guidelines to ensure that employees are treated fairly and consistently. (Doc. 15, Naylor Decl., ¶ 17.)

According to FedEx, Plaintiffs' lawsuits involve claims for fraud and breach of contract based on FedEx's long-held procedures that were applied to a Change of Operations undertaken shortly after Plaintiffs transferred, on a voluntary basis, to the Kettleman City Service Center in 2012. FedEx claims that Plaintiffs are upset that FedEx followed its standard policies during a Change of Operations in 2012 at the Kettleman City Service Center and, as a result, employees who involuntarily transferred to Kettleman City shortly after Plaintiffs transferred on a voluntary basis, ended up with higher job class seniority ranking when it came time to bid for runs.

B. Plaintiffs' Allegations Against FedEx

In 2011, FedEx built a new Service Center in Kettleman City, California ("Kettleman"). (Cmplt., ¶ 18.) When the new Service Center was announced, FedEx solicited line-haul drivers from other service centers to relocate. (Cmplt., ¶ 19.) When few drivers volunteered to relocate, FedEx made promises to drivers regarding the number and length of bids that would be available upon transfer. (Cmplt., ¶ 19.) Specifically, Plaintiffs allege that FedEx promised that as the Service Center at Kettleman City expanded, drivers who transferred early would have higher seniority and would receive better bids for runs. (Cmplt., ¶ 19.) According to Plaintiffs, because FedEx line-haul drivers are paid per mile driven, the longer the run, the more a driver earns. Senior drivers can earn more than $80, 000 per year, while junior drivers will often make half that. (Cmplt. ¶ 15.)

Plaintiffs assert that, based on these representations, they volunteered to relocate for the promise of more income. (Cmplt. ¶ 19.) Plaintiffs maintain they were specifically told where they would rank on the seniority list of line-haul drivers before they moved to Kettleman and they chose to relocate based on those statements made by FedEx management. (Cmplt., ¶ 19.)

Plaintiffs all agreed to relocate in June 2012, and began working in Kettleman in July 2012. (Cmplt., ¶ 20.) When Plaintiffs began working at Kettleman, they discovered they would not be bidding on runs; rather, they were assigned runs. (Cmplt., ¶ 20.) They were told that it was the middle of the year and these runs would be assigned for a few months, and that a formal bidding process would take place at the end of the year. (Cmplt., ¶ 20.) Although unusual, Plaintiffs were generally satisfied with their runs and did not object since the runs were to be assigned only for a few months.

During this time, FedEx downsized its Fresno Service Center and moved personnel from Fresno to Kettleman. When they were transferred to Kettleman, the Fresno drivers were allowed to transfer their seniority. (Cmplt., ¶ 21.) As a result, instead of being at the top of the seniority board, Plaintiffs were all placed below Fresno drivers. (Cmplt., ¶ 21.) As operations continued to change throughout 2013, additional drivers transferred from other Service Centers with each of them being able to transfer his/her seniority. (Cmplt., ¶ 21.)

Fresno drivers informed Plaintiffs that FedEx represented to them a year earlier they would be allowed to transfer to Kettleman and keep their seniority. (Cmplt., ¶ 22.) Plaintiffs allege that FedEx therefore knew in June 2012, at the time its management was enticing Plaintiffs to transfer, that Plaintiffs were not going to have the seniority they were promised. (Cmplt., ¶ 22.)


Summary judgment is appropriate when the pleadings, disclosure materials, discovery, and any affidavits provided establish 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). A material fact is one that may affect the outcome of the case under the applicable law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute is genuine "if the evidence is such that a reasonable jury could return a verdict in favor of the nonmoving party." Id. (internal quotation marks and citation omitted)

The party seeking summary judgment "always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (internal quotation marks omitted). The exact nature of this responsibility, however, varies depending on whether the issue on which summary judgment is sought is one in which the movant or the nonmoving party carries the ultimate burden of proof. See Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007); Cecala v. Newman, 532 F.Supp.2d 1118, 1132 (D. Ariz. 2007). If the movant will have the burden of proof at trial, it must demonstrate, with affirmative evidence, that "no reasonable trier of fact could find other than for the moving party." Soremekun, 509 F.3d at 984. In contrast, if the nomoving party will have the burden of proof at trial, "the movant can prevail merely by pointing out that there is an absence of evidence to support the nonmoving party's case." Id. (citing Celotex, 477 U.S. at 323).

If the movant satisfies its initial burden, the nonmoving party must go beyond the allegations in its pleadings to "show a genuine issue of material fact by presenting affirmative evidence from which a jury could find in [its] favor." FTC v. Stefanchik, 559 F.3d 924, 929 (9th Cir. 2009). "[B]ald assertions or a mere scintilla of evidence" will not suffice in this respect. Id. at 929; see also Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) ("When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts."). "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial.'" Matsushita, 475 U.S. at 587 (citation omitted).

In resolving a summary judgment motion, "the court does not make credibility determinations or weigh conflicting evidence." Soremekun, 509 F.3d at 984. That remains the province of the jury or fact finder. See Anderson, 477 U.S. at 255. Instead, "[t]he evidence of the [nonmoving party] is to be believed, and all justifiable inferences are to be drawn in [its] favor." Id. Inferences, however, are not drawn out of the air; the nonmoving party must produce a factual predicate from which the inference may reasonably be drawn. See Richards v. Nielsen Freight Lines, 602 F.Supp. 1224, 1244-45 (E.D. Cal. 1985), aff'd, 810 F.2d 898 (9th Cir. 1987).


A. The Parties' Arguments[2]

1. FedEx's Motion for Summary Judgment

FedEx argues the claims of Plaintiffs Hall, Rodriguez, and Markowitz are time-barred because they signed employment applications that contained a 6-month limitation period for bringing suit arising out of employment with FedEx. FedEx maintains that California law routinely enforces reasonable contractual limitation periods, even significantly shorter than those contained in the applicable statute of limitations. Thus, the only question is whether the 6-month period for filing suit to which these Plaintiffs agreed is reasonable as a matter of law. FedEx contends that a shortened limitation period is reasonable so long as it provides sufficient time to adequately pursue a judicial remedy, and limitation periods of six months or less have been routinely upheld as reasonably providing time to pursue a judicial remedy.

According to FedEx, Plaintiffs Hall, Rodriguez, and Markowitz all failed to bring their lawsuits within six months. Rodriguez and Markowitz both admitted they first discovered they would be impacted by FedEx's changing operations in July 2012; Hall testified that he first discovered the changes sometime before December 2012. To be timely under the limitation period, Rodriguez and Markowitz should have filed their lawsuit by January 2013, and Hall should have filed his lawsuit by June 2013. Plaintiffs, however, did not file suit until September 19, 2013. FedEx asserts their claims are thus time-barred and subject to summary dismissal.

2. Plaintiffs' Opposition to the Motion for Summary Judgment

The causes of action alleged by all Plaintiffs have statutes of limitations ranging from two to four years. Plaintiffs argue the applications for employment they signed do not constitute enforceable contracts, and thus the 6-month term of limitation to bring claims arising out of employment is not binding. There is also no evidence the 6-month limitation provision was contained in any of Plaintiffs' employment materials, handbooks, or in any discussions with Plaintiffs once they began their employment. Plaintiffs also contend that the employment applications are not supported by consideration on the part of FedEx because, at the time the applications were signed, FedEx had not yet agreed to employ Plaintiffs and Plaintiffs had not yet accepted any position with FedEx.

Even to the extent the applications are construed to be contracts or to supply the terms of the employment relationship, the 6-month limitation provision is unconscionable. There was no negotiation by Plaintiffs before signing the employment applications, and the limitation term itself is buried in fine print. Substantively, the employment applications are on-line forms, the purpose of which is "solely to preclude [FedEx] employees from bringing lawsuits by tricking them into missing an unknown contractual statute of limitations." (Doc. 18, 16:6-7.) FedEx regularly updates its employee handbooks and driver guidelines, but this provision was not included in any of the written material provided to Plaintiffs over the course of their employment. The right to bring suit is a fundamental First Amendment right, and to deny its own employees this right by burying the provision in an employment application and then never again including it in any of its materials is unconscionable.

Plaintiff also cites Moreno v. Sanchez, 106 Cal.App.4th 1415, 1430 (2003) for the proposition that contractually shortened limitation periods have never been recognized outside the context of straightforward transactions in which the triggering event for either a breach of a contract or the accrual of a right is immediate and obvious. Plaintiffs argue the cases cited by FedEx are 100 years old, and concern filing an insurance claim on a life insurance policy and a business partner suing for a commission under a mutually negotiated agreement. The two cases cited by FedEx, Tebbets v. Fidelity Cas. & Co., 155 Cal. 137, 139 (1909) and Beeson v. Schloss, 183 Cal. 618, 622-23 (1920), are limited to breach of contract actions and easily recognizable claims.

Additionally, Plaintiffs assert that Markowitz' employment application was submitted to another company, and should not therefore preclude his claim. Specifically, he submitted that application to FedEx National, Inc. before going to work for FedEx Freight, Inc. (Defendant). FedEx has presented no evidence how the employment application submitted to FedEx National, Inc. could be incorporated into his current employment situation or possibly govern his relationship with FedEx Freight, Inc.

Finally, Plaintiffs assert that, even if the limitation provision controls, the Court should apply equitable tolling and ...

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