United States District Court, S.D. Ohio, Eastern Division
R. ALEXANDER ACOSTA, Plaintiff,
RAB COMMUNICATIONS, INC., Defendant,
FAST PACE CONNECTIONS, LLC, AND CORY L. JOHN Third-Party Defendants.
OPINION & ORDER
ALGENON L. MARBLEY, CHIEF UNITED STATES DISTRICT JUDGE
matter comes before the Court on Plaintiff, R. Alexander
Acosta, Secretary of Labor, United States Depart of
Labor's Motion to Strike or, in the Alternative, to Sever
and/or Try Separately RAB Communication Inc.'s
Third-Party Complaint (“Motion”). (ECF No. 7). In
the Motion, the Secretary asks this Court to strike
Defendant's counterclaim (ECF No. 3) against third-party
Defendants Cory L. John and Fast Pace Connections, LLC. For
the reasons set forth below, Plaintiff's Motion is
GRANTED IN PART AND DENIED IN PART.
and third-party Plaintiff, RAB Communications, (hereinafter
“Defendant” or “RAB”) is a Maryland
company that provides installation services to cable
television, telephone, and internet providers. (ECF No. 3 at
8). RAB contracts with local installation companies, like
third-party Defendant, Fast Pace Connections LLC (“Fast
Pace”) to provide installation services to those cable
and internet providers. Those third-party companies in turn
employ installers to provide installation services to users
of the telephone, television and internet providers.
Id. at 8-9. RAB entered into a contract with Time
Warner Cable Midwest in June of 2014. Id. at 9. To
comply with this contract, RAB contracted with Fast Pace in
January 2015. Id. Fast Pace agreed to employ
“competent, reliable installers” that would meet
Time Warner's specifications and also “abide by all
state and federal laws.” Id. at 9. The
agreement between RAB and Fast Pace specifically provided
that the contract creates no “employer-employee”
relationship between RAB and Fact Pace and that Fast Pace
agrees to “indemnify, defend, and hold harmless”
RAB. Id. at 9-10. In December 2016, Fast Pace's
sole member, Cory L. John, submitted a letter to RAB
terminating the contract between RAB and Fast Pace. (ECF No.
17 at 4).
to RAB, Plaintiff began investigating RAB shortly thereafter
and determined that RAB properly paid its Worthington, Ohio
area employees. (ECF No. 3 at 11). Plaintiff also
investigated installers officially employed by Fast Pace and
determined that those employees were not paid minimum wage or
overtime. Id. Plaintiff then filed suit against RAB
pursuing injunctive relief and damages, alleging that RAB was
the actual employer of those installers, and failed to pay
them minimum wage or overtime pursuant to the Fair Labor
Standards Act (“FLSA”). Id.
suit was brought, RAB submitted a copy of the complaint to
Fast Pace and Mr. John and asked that they indemnify RAB and
defend them in the action. (ECF No. 17 at 4). Fast Pace and
John refused to do so, arguing that they have no
indemnification obligation. (ECF No. 17-3). RAB then filed an
answer to Plaintiff's complaint including a third-party
complaint against Fast Pace alleging breach of contract for
failure to pay installers, breach of contract for failure to
defend and indemnify, common law indemnity, statutory
contribution under Ohio law, unjust enrichment, and
requesting a declaratory judgment that Fast Pace must
indemnify RAB. (ECF No. 3 at 12-17).
response, Fast Pace filed an answer and counterclaim against
RAB alleging that RAB never operated according to the terms
of the agreement. (ECF No. 20 at 9). According to Fast Pace
and Mr. John, RAB hired all the initial installers that
worked for Fast Pace and controlled all aspects of the
employment relationship including hiring decisions, drug
testing, work schedules, assignments, and hours. Id.
RAB also required Fast Pace and the installers to wear
uniforms that only bore the RAB logo, drive trucks purchased
from RAB that only bore the RAB logo and use all of RAB's
supplies for projects. Id. at 9-11. Mr. John claims
that the agreement with RAB was a deliberate attempt to cause
Mr. John to waive his rights under the FLSA and to avoid
liability for violating federal and state employment laws.
Id. at 12.
filed a motion to strike or sever RAB's third-party
claims arguing: (1) that the third-party complaint should be
struck as a whole because it encroaches on the
Secretary's power to enforce the FLSA; (2) that in the
alternative Counts IV, V, and VI should be stricken because
employers have no right to contribution, indemnification, or
unjust enrichment under the FLSA; and (3) that should Counts
IV, V, and VI be stricken but none of the other claims, the
remaining third-party claims should be severed and tried
separately because the facts and legal issues in the
third-party claims are “different from those in the
Secretary's case.” (ECF No. 13 at 3-4, 6). RAB
argues that the Secretary's motion is premature because
this Court has not yet determined that Fast Pace is an
employer or is liable. (ECF No. 17 at 5-6).
Rule of Civil Procedure 14(a)(4) provides that “[a]ny
party may move to strike the third-party claim, to sever it,
or to try it separately.” Fed.R.Civ.P. 14. The Court
has the discretion to decide “whether to permit
impleader of third parties.” Fed. Home Loan Mortg.
Corp. v. Kantz, No. 3:15-CV-00932, 2018 WL 1535465, at
*3 (M.D. Tenn. Mar. 29, 2018), report and recommendation
adopted, No. 3:15-CV-00932, 2018 WL 1881254 (M.D. Tenn.
Apr. 19, 2018).
Sixth Circuit has observed, the purpose of Rule 14 “is
to permit additional parties whose rights may be affected by
the decision in the original action to be joined so as to
expedite the final determination of the rights and
liabilities of all the interested parties in one suit.”
Am. Zurich Ins. Co. v. Cooper Tire & Rubber Co.,
512 F.3d 800, 805 (6th Cir. 2008). Third-party claims are
appropriate “where the third-party defendant's
liability to the third-party plaintiff is dependent on the
outcome of the main claim; one that merely arises out of the
same set of facts does not allow a third-party defendant to
be impleaded.” Id.
LAW AND ANALYSIS
Secretary argues that: (1) Defendant's counterclaims
should be stricken as a whole because it encroaches on
Secretary's power to enforce the FLSA; (2) there is no
express or implied right to indemnity, contribution, or
unjust enrichment in the FLSA; and (3) should the Court only
strike some but not all of the claims, the Court should
choose not to exercise its supplemental jurisdiction over any