Contract analysis

I. PARTIES Response to Paragraph 1 (Plaintiff Marcus Delano)

1. SLG admits that Marcus Delano is a natural person who, upon information and belief, resides at 3417 Calmont Avenue, Fort Worth, Texas 76107.

2. SLG admits that Delano performed delivery services for SLG from approximately March 2021 through September 2024 pursuant to a written Independent Contractor Operating Agreement ("ICOA") executed by Delano and SLG. SLG further admits that Delano operated out of SLG's Fort Worth distribution hub, designated internally as "HUB-01," located at 1015 Railhead Parkway, Fort Worth, Texas 76106.

3. SLG denies that Delano was at any time during the relevant period an "employee" of SLG within the meaning of the FLSA, the Texas Payday Law, or any other federal or state employment statute. Delano was at all relevant times an independent contractor, as expressly and unambiguously stated in the ICOA executed by both parties, which reflects the parties' mutual intent and the economic reality of their relationship.

4. SLG denies that Delano is "similarly situated" to other drivers who performed delivery services for SLG at distribution hubs other than HUB-01, or to drivers who performed services under different versions of the ICOA, or to drivers whose individual circumstances—including delivery types, geographic territories, capital investment, scheduling patterns, multi-platform engagement, and subcontracting activity—differ

5. SLG admits that it is a corporation duly incorporated under the laws of the State of Delaware, bearing Delaware Charter Number 6247183, with its principal place of business located at 4200 Commerce Gateway Boulevard, Suite 800, Irving, Texas 75039.

6. SLG admits that it is registered to do business in the State of Texas under Texas Secretary of State Filing Number 0803127465, and that it maintains distribution hub operations in the states of Texas, Oklahoma, Louisiana, and Arkansas.

7. SLG admits that it specializes in last-mile delivery, regional freight consolidation, and white-glove delivery services for retail and e-commerce clients.

8. SLG denies any characterization of itself as Plaintiff's "employer" within the meaning of the FLSA, the Texas Payday Law, or any other applicable statute. SLG's relationship with Plaintiff was at all relevant times that of a principal and an independent contractor, governed by the terms of the ICOA.

II. JURISDICTION AND VENUE Response to Paragraph 3 (Subject Matter Jurisdiction)

9. SLG admits that this Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331 to the extent that Plaintiff purports to assert claims arising under the FLSA, 29 U.S.C. § 201 et seq. This admission is limited to the existence of federal question jurisdiction and does not constitute an admission as to the merits of Plaintiff's claims or as to the propriety of this action proceeding as a collective action un

10. SLG expressly reserves all defenses, objections, and arguments with respect to the propriety of this action proceeding as a collective action under 29 U.S.C. § 216(b), including but not limited to the right to oppose conditional certification, to move for decertification at the conclusion of discovery, and to challenge the inclusion of any putative collective member who is bound by an arbitration agreement and co

11. SLG admits that this Court may exercise personal jurisdiction over SLG. SLG is a Delaware corporation with its principal place of business in Irving, Texas, within the Northern District of Texas, and maintains distribution hub operations throughout the State of Texas. This admission does not constitute a waiver of any defense or objection not specifically raised herein. Response to Paragraph 5 (Venue)

12. SLG admits that venue is proper in the Northern District of Texas, Dallas Division, pursuant to 28 U.S.C. § 1391(b), insofar as SLG's principal place of business is located within this District and a substantial part of the events giving rise to Plaintiff's claims allegedly occurred within this District.

III. FACTUAL ALLEGATIONS A. Response to Paragraphs Regarding SLG's Business Operations

13. SLG admits that it was founded in 2011 and that it currently operates fourteen (14) distribution hubs across the states of Texas, Oklahoma, Louisiana, and Arkansas.

14. SLG admits that, as of the date of the Complaint, it engages approximately 1,450 drivers under Independent Contractor Operating Agreements to perform delivery services throughout its service network.

15. SLG admits that its reported revenue for fiscal year 2024 was approximately $312.7 million.

16. SLG admits that Ridgepoint Capital Partners Fund III, LP ("Ridgepoint") acquired a controlling equity interest in SLG in or about July 2019. SLG further states that the terms and structure of Ridgepoint's investment are not relevant to the issues in this case and do not bear on the question of whether any individual driver was properly classified as an independent contractor.

17. SLG denies any allegation or inference that its corporate structure, private equity ownership, financial condition, revenue, or profitability is relevant to Plaintiff's individual or collective claims regarding worker classification. The FLSA economic reality test focuses on the nature of the working relationship between the putative employer and the putative employee, not on the financial success or corporate ca

18. SLG admits that it utilizes Independent Contractor Operating Agreements to govern its relationships with independent contractor drivers who perform delivery services through SLG's distribution hub network.

19. SLG admits that the original ICOA template was drafted in 2018 by Pennfield & Daye LLP, an employment and labor law firm located at 801 Cherry Street, Suite 1400, Fort Worth, Texas 76102. SLG further admits that the ICOA template was revised in August 2020 (designated as version 2.0, or "ICOA v2.0") and again in January 2023 (designated as version 3.0, or "ICOA v3.0"). Each revision was undertaken with the advice

20. SLG admits that the ICOAs, in all versions, expressly classify the drivers as independent contractors, not employees. This classification reflects the genuine economic reality of the relationship between SLG and its drivers, as further described herein and as will be demonstrated through discovery.

21. SLG admits that drivers are compensated on a per-delivery basis, with delivery rates ranging from $14.50 to $38.00 per delivery. The specific rate applicable to any given delivery is determined by a transparent rate schedule incorporated into the ICOA and is based on objective factors including package weight, delivery distance from the distribution hub, and delivery type (standard delivery versus white-glove del

22. SLG admits that the ICOA requires drivers to use Stonefield-branded uniforms, identification badges, and vehicle placards while performing deliveries on behalf of SLG's clients. SLG avers that these branding requirements are common and commercially necessary in customer-facing independent contractor relationships across the logistics industry, where brand consistency is essential to maintaining client contracts a

23. SLG admits that it utilizes a proprietary dispatch and logistics platform known as "RouteSync" to facilitate the assignment and tracking of available deliveries. SLG avers that RouteSync is a coordination and optimization tool that presents available delivery opportunities to drivers, who retain full discretion to accept or decline any individual delivery offered through the platform. RouteSync also provides opti

24. SLG admits that the ICOA references delivery windows of 7:00 AM to 8:00 PM, Monday through Saturday. SLG denies, however, that these delivery windows constitute mandatory work schedules imposed upon drivers. These windows reflect the hours during which SLG's clients require deliveries to be completed to satisfy consumer expectations. Drivers retain discretion as to which delivery windows to accept work during, wh

25. SLG admits that it provides a GPS telematics device for installation in drivers' vehicles for tracking and monitoring purposes during active deliveries. SLG denies that the provision and use of GPS telematics constitutes the degree of employer-level control characteristic of an employment relationship. The telematics serve legitimate and commercially necessary purposes, including ensuring driver safety, facilitat

26. SLG admits that the ICOA references a minimum delivery acceptance rate of eighty-five percent (85%) calculated over a rolling thirty-day period. SLG avers that this threshold is a commercially reasonable performance metric that is standard in independent contractor relationships in the logistics and delivery industry. The 85% acceptance rate threshold is designed to ensure reliability and service quality for SLG'

27. SLG admits that drivers may, and frequently do, use their own personal vehicles to perform delivery services, provided that such vehicles meet SLG's published vehicle specifications. These specifications require that the vehicle be a cargo van or box truck of model year 2015 or newer that has passed an SLG safety inspection conducted at the beginning of the contractual relationship and periodically thereafter. SL

28. SLG admits that the ICOA contains a non-compete provision restricting drivers from performing competing delivery services for a period of twelve (12) months following termination of the ICOA within a radius of fifty (50) miles from the driver's assigned distribution hub. SLG avers that non-compete provisions are permissible in independent contractor agreements and are commonly utilized in the logistics industry t

29. SLG admits that the January 2023 revision of the ICOA (ICOA v3.0) added a binding arbitration clause and a class and collective action waiver, both of which are enforceable under the Federal Arbitration Act, 9 U.S.C. § 1 et seq. The arbitration clause requires that any dispute arising out of or relating to the ICOA or the parties' relationship be resolved through binding individual arbitration administered by the

30. SLG denies any allegation or characterization that the terms and conditions of the ICOA, whether considered individually or in their totality, establish an employment relationship between SLG and its drivers. The ICOA was specifically designed—based on the advice of experienced employment counsel—to reflect and preserve the independent contractor nature of the relationship, and the actual working relationship bet

31. SLG admits that Plaintiff Delano signed the original 2018 version of the ICOA (ICOA v1.0) in or about March 2021, and that ICOA v1.0 did not contain an arbitration clause or collective action waiver. Accordingly, SLG does not assert the arbitration clause or collective action waiver as a defense against Plaintiff Delano individually, though it does assert such defenses with respect to putative collective members

32. SLG admits that Plaintiff performed last-mile residential delivery services out of SLG's Fort Worth distribution hub (HUB-01) from approximately March 2021 through September 2024.

33. SLG denies Plaintiff's allegation that he "regularly worked 55–65 hours per week" during his engagement with SLG. SLG's business records, including RouteSync activity logs, delivery completion data, and telematics records, require further analysis and review to determine the actual time Plaintiff spent actively performing deliveries. SLG further avers that Plaintiff's characterization of hours "worked" improperly

34. SLG avers that, according to SLG's pay records maintained in the ordinary course of business, Plaintiff's average weekly gross compensation during calendar year 2023 was approximately $1,247.00, reflecting the per-delivery compensation structure set forth in the ICOA. This figure represents Plaintiff's gross earnings before deduction of Plaintiff's own business expenses, including vehicle costs, fuel, insurance,

35. SLG denies that Plaintiff was entitled to overtime compensation under the FLSA at any time during his engagement with SLG. Plaintiff was an independent contractor, not an employee, and the overtime provisions of the FLSA apply only to employees. The FLSA does not impose overtime obligations on entities that engage independent contractors, regardless of the number of hours the contractor chooses to devote to perfo

36. SLG denies Plaintiff's calculation of an alleged effective hourly rate of $21.50 per hour and a corresponding overtime rate of $32.25 per hour (calculated at 1.5 times the alleged regular rate). These calculations are premised entirely on the legally incorrect assumption that Plaintiff was an employee of SLG subject to the FLSA's overtime provisions. Because Plaintiff was an independent contractor, the concepts o

37. SLG denies Plaintiff's allegation that SLG "dictated" daily delivery routes to its drivers. As described above, RouteSync is a dispatch platform that presents available delivery opportunities and generates optimized route suggestions based on geographic efficiency algorithms. Drivers retain full discretion to accept or decline any delivery offered through RouteSync, and drivers who accept deliveries are free to d

38. SLG admits that it requires drivers to wear branded uniforms, display identification badges, and affix vehicle placards bearing SLG's branding while performing deliveries. SLG avers, however, that these branding requirements are common, commercially necessary, and well-recognized features of independent contractor relationships in customer-facing logistics and delivery operations. SLG's clients—major retailers an

39. SLG admits that it provides an initial safety and customer-service orientation program of approximately sixteen (16) hours for new drivers and quarterly refresher sessions of approximately four (4) hours. SLG denies that these training programs constitute the kind of ongoing, supervisory, skill-building training that is indicative of an employment relationship. The initial orientation addresses regulatory safety

40. SLG denies Plaintiff's allegation that SLG "prohibited" subcontracting. The ICOA expressly permits drivers to subcontract their delivery obligations to qualified third parties, subject to prior written approval by SLG. The approval requirement exists to ensure that any subcontractor meets SLG's vehicle specifications, carries appropriate insurance coverage, and satisfies background check and safety requirements i

41. SLG admits that it sets customer-facing delivery windows and monitors delivery timeliness through the RouteSync platform, including tracking on-time delivery rates. SLG avers that these practices are inherent in the logistics industry, where timely delivery is a core performance metric required by SLG's commercial clients and expected by end consumers. Monitoring delivery timeliness is a quality assurance measure

42. SLG admits that it provides handheld scanners, access to the RouteSync software platform, and GPS telematics hardware to drivers for use during deliveries. SLG denies that the provision of these tools establishes an employment relationship. The scanners are necessary for tracking packages and obtaining customer delivery confirmations, RouteSync facilitates coordination between SLG's dispatch operations and its dr

43. SLG denies Plaintiff's allegation that drivers had "no ability to negotiate per-delivery rates." The ICOA establishes a transparent rate schedule that sets forth the per-delivery compensation for each delivery type, weight category, and distance tier. While individual per-delivery rates are set by the rate schedule rather than through ad hoc negotiation, the per-delivery compensation structure itself is character

44. SLG denies that approximately 1,200 drivers are "similarly situated" to Plaintiff for purposes of conditional certification of a collective action under 29 U.S.C. § 216(b). Plaintiff bears the burden of demonstrating that putative collective members are similarly situated, and SLG contends that Plaintiff cannot meet this burden.

45. SLG avers that its internal business records identify a total of 1,187 unique drivers who executed ICOAs during the period from April 30, 2022 to the present. However, SLG further avers that these 1,187 drivers operated under materially different circumstances that preclude collective treatment, including but not limited to: (a) ICOA Version. Drivers operated under three distinct versions of the ICOA (v1.0, v2.0,

46. SLG further avers that approximately 640 of the 1,187 drivers identified above signed ICOA v3.0 (the January 2023 revision), which contains a binding arbitration clause and a collective and class action waiver that is enforceable under the Federal Arbitration Act, 9 U.S.C. § 1 et seq., as interpreted by the Supreme Court in Granite Harbor Systems. v. Lewis, 584 U.S. 497 (2018). Accordingly, those approximately 64

47. SLG denies that Plaintiff or any driver who performed services for SLG as an independent contractor is owed any unpaid overtime compensation, unpaid wages, or any other form of damages or relief.

48. SLG denies Plaintiff's damages calculation methodology in its entirety. Specifically, SLG denies the accuracy, reasonableness, and legal basis of: (a) The alleged per-driver weekly unpaid overtime figure of $193.50; (b) The alleged per-driver estimated damages figure of $31,153.50; (c) The alleged collective-wide damages figure of $36,979,204.50; and (d) The alleged doubled liquidated damages figure of $73,958,40

49. SLG avers that Plaintiff's damages calculations are fundamentally flawed because they are premised on the incorrect legal assumption that Plaintiff and all putative collective members were employees of SLG rather than independent contractors. Additionally, Plaintiff's damages methodology improperly assumes uniform hours worked, uniform compensation structures, and uniform entitlement to overtime across all putati

50. SLG further avers that, even if any liability were found (which SLG vigorously denies), liquidated damages under 29 U.S.C. § 216(b) would be inappropriate and should not be awarded. SLG acted in subjective good faith and with objectively reasonable grounds for believing that its classification of drivers as independent contractors complied with the FLSA. Among other things, SLG relied upon the professional legal

51. SLG denies that any alleged violation of the FLSA, if established (which SLG denies), was "willful" within the meaning of 29 U.S.C. § 255(a). A willful violation requires that the employer either knew or showed reckless disregard for the matter of whether its conduct was prohibited by the FLSA. McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133 (1988). SLG's conduct does not meet this standard.

52. SLG avers that it reasonably and in good faith relied on the professional legal advice and classification analysis of Pennfield & Daye LLP. Pennfield & Daye LLP analyzed SLG's driver relationships under the FLSA economic reality test, considering all relevant factors, and concluded that SLG's drivers were properly classified as independent contractors. SLG relied on this analysis in structuring its driver relatio

53. SLG avers that, because its conduct was not willful, the applicable statute of limitations for Plaintiff's FLSA claims is two years, not three years. Accordingly, any claims arising before April 30, 2023 (two years prior to the filing of the Complaint on April 30, 2025) are time-barred and must be dismissed. H. General Denial

54. To the extent not specifically admitted in the foregoing paragraphs, SLG denies each and every allegation contained in the Complaint, whether express or implied.

55. SLG denies that Plaintiff or any putative collective member is entitled to any relief whatsoever, including but not limited to back pay, overtime compensation, liquidated damages, pre-judgment or post-judgment interest, attorneys' fees, costs, injunctive relief, declaratory relief, or any other form of relief sought in the Complaint or otherwise.

IV. AFFIRMATIVE DEFENSES Preliminary Statement Without assuming the burden of proof on any issue for which the burden properly rests with Plaintiff under applicable law, and without waiving or limiting the effect of its denials set forth above, SLG asserts the following Affirmative Defenses to Plaintiff's Complaint. SLG expressly reserves the right to assert additional affirmative defenses as they become known throug

56. Plaintiff's claims and the claims of all putative collective members are barred, in whole or in part, because Plaintiff and all putative collective members were bona fide independent contractors, not employees, under the FLSA economic reality test. The totality of the circumstances demonstrates that the economic reality of the relationship between SLG and its drivers is that of an independent contractor arrangeme