Contract analysis

1. My name is Karen Lund. I am the Director of Driver Relations at Stonefield Logistics Group Inc. ("SLG" or the "Company"). I make this declaration based on my personal knowledge and upon my review of records maintained by SLG in the ordinary course of business. If called as a witness, I could and would testify competently to the matters stated herein.

2. I have been continuously employed by SLG since August 2016. I initially joined the Company as a Driver Relations Coordinator, a position in which I was responsible for managing driver onboarding and communications at SLG's Fort Worth and Dallas distribution hubs. In June 2019, I was promoted to Director of Driver Relations, a position I have held continuously since that date. My office is located at SLG's corporat

3. As Director of Driver Relations, I oversee all aspects of SLG's relationships with its independent contractor drivers. My responsibilities include, but are not limited to: (a) the onboarding of new drivers, including background verification, vehicle inspections, and execution of contractual agreements; (b) the administration of the Independent Contractor Operating Agreements ("ICOAs") that govern SLG's business re

4. I am familiar with SLG's driver population across all fourteen of its distribution hubs, which are located in the states of Texas, Oklahoma, Louisiana, and Arkansas. During the period from April 30, 2022 to the present (the "Relevant Period"), SLG engaged a total of 1,187 unique drivers under ICOAs across all fourteen hubs. I have direct supervisory responsibility over the driver relations function at every one of

5. I am also familiar with the development and implementation of all three versions of the ICOA that SLG has utilized in its relationships with drivers. The three versions are: ICOA v1.0 (originally implemented in 2018), ICOA v2.0 (implemented in August 2020), and ICOA v3.0 (implemented in January 2023). I was personally involved in the development and implementation of each version. SLG worked with its prior employm

6. The purpose of this declaration is to provide the Court with information relevant to Defendant's opposition to Plaintiff's Motion for Conditional Certification under Section 216(b) of the Fair Labor Standards Act ("FLSA"). Specifically, this declaration describes: (a) the three ICOA versions and the material differences among them; (b) the range of driver independence reflected in SLG's records; (c) the subcontrac

7. SLG engages delivery drivers through written ICOAs. Each ICOA expressly classifies the driver as an independent contractor, not as an employee of SLG, and sets forth the terms of the business relationship between SLG and the driver. The ICOA governs, among other things, the scope of services to be performed, the compensation structure, vehicle and equipment requirements, insurance obligations, performance standard

8. ICOA v1.0 (2018). The original ICOA template, version 1.0, was drafted in 2018 by SLG's then-employment counsel, Pennfield & Daye LLP. ICOA v1.0 contained the following key provisions: (a) Independent Contractor Classification. The agreement expressly classified each driver as an independent contractor and stated that the driver was not an employee, agent, partner, or joint venturer of SLG. (b) Per-Delivery Compen

9. A subset of drivers during the Relevant Period remained on ICOA v1.0, having never signed either of the two subsequent revisions. Based on my review of SLG's contractual records, approximately 198 drivers who performed services during the Relevant Period were operating under ICOA v1.0 as their governing agreement. These drivers had originally signed v1.0 upon their initial engagement with SLG and, for various reas

10. ICOA v2.0 (August 2020). SLG implemented the first revision to the ICOA template in August 2020. ICOA v2.0 introduced several changes from v1.0, including the following: (a) Subcontracting Provisions. The subcontracting provisions were modified to streamline the approval process for drivers who wished to engage subcontractors to perform deliveries on their behalf. The specific changes to the subcontracting provis

11. Based on my review of SLG's contractual records, approximately 349 drivers who performed services during the Relevant Period signed ICOA v2.0 and did not transition to ICOA v3.0. These drivers remained on v2.0 as their governing agreement throughout the Relevant Period.

12. ICOA v3.0 (January 2023). SLG implemented the second and most recent revision to the ICOA template in January 2023. ICOA v3.0 introduced several significant changes, the most notable of which were the addition of a mandatory individual arbitration clause and a class/collective action waiver. The key changes in v3.0 included: (a) Mandatory Individual Arbitration Clause. ICOA v3.0 added a mandatory individual arbit

13. Approximately 640 of the 1,187 drivers who performed services during the Relevant Period signed ICOA v3.0 containing the mandatory individual arbitration clause and collective action waiver. These 640 drivers executed ICOA v3.0 on or after January 2023 and were bound by its terms, including the arbitration and waiver provisions, during the remainder of the Relevant Period.

14. The rollout of ICOA v3.0 was conducted over a period of approximately twelve weeks, from January 9, 2023 through March 31, 2023. During this period, each active driver was presented with the new agreement by his or her hub manager or a member of my driver relations team. Drivers were given a copy of the full agreement to review, including the new arbitration clause and collective action waiver, which were set for

15. The named Plaintiff, Marcus Delano, signed ICOA v1.0 — the original 2018 version — when he began performing delivery services for SLG in March 2021. Mr. Delano was assigned to SLG's Fort Worth distribution hub, designated internally as HUB-01, located at 1015 Railhead Parkway, Fort Worth, Texas 76106. Mr. Delano did not sign ICOA v2.0 or ICOA v3.0 at any time during his engagement with SLG. He ceased performing s

16. Subcontracting Under ICOA v1.0. Under ICOA v1.0, Section 7 ("Subcontracting"), drivers were permitted to subcontract deliveries to third-party individuals only with the prior written approval of SLG. The approval process under v1.0 required the following steps: (a) the driver was required to submit a written request to SLG's driver relations department identifying the proposed subcontractor by name, address, and

17. In practice, subcontracting under ICOA v1.0 was infrequent. Based on my review of SLG's records for the Relevant Period, a total of 23 subcontracting requests were submitted by drivers operating under ICOA v1.0 across all fourteen hubs. Of those 23 requests, 9 were approved, 6 were denied (primarily due to the proposed subcontractor's failure to pass the background check or vehicle inspection), and 8 were abandon

18. I am aware of Plaintiff Delano's allegation that zero subcontracting approvals were granted during his tenure with SLG (March 2021 through September 2024). Based on my review of SLG's records pertaining specifically to Mr. Delano, there is no record that Mr. Delano ever submitted a subcontracting request to SLG at any time during his engagement. SLG's driver relations files for Mr. Delano do not contain any writt

19. Subcontracting Under ICOA v2.0. ICOA v2.0, implemented in August 2020, modified the subcontracting provisions in Section 7 to streamline the approval process. Under v2.0, the driver was still required to obtain prior written approval from SLG before engaging a subcontractor. However, the documentation requirements were reduced. Specifically, v2.0 eliminated the requirement that the proposed subcontractor submit t

20. Subcontracting Under ICOA v3.0. ICOA v3.0, implemented in January 2023, further liberalized the subcontracting provisions. Under v3.0, Section 7 was retitled "Subcontracting and Business Delegation" and granted drivers a broader right to subcontract deliveries. The key changes included: (a) the introduction of an expedited pre-approval process under which a driver could submit a subcontractor's information throug

21. Subcontracting practices varied significantly across SLG's fourteen hubs. Larger hubs with higher delivery volumes and more complex delivery mixes saw higher rates of subcontracting requests and approvals. For example, during the Relevant Period, the Houston hub (HUB-03, 195 drivers) accounted for 47 subcontracting requests (approximately 23.4% of all requests across all ICOA versions), of which 38 were approved.

22. The variations in subcontracting provisions across ICOA versions and the significant disparities in subcontracting practices across hubs demonstrate that drivers within the proposed collective were not uniformly situated with respect to a key marker of independent contractor status — the right and ability to subcontract work to others. Drivers operating under ICOA v3.0 had materially broader and more practically

23. ICOA v3.0 includes a mandatory individual arbitration clause set forth in Section 14 of the agreement, titled "Dispute Resolution — Mandatory Individual Arbitration." The arbitration clause provides that any dispute, claim, or controversy arising out of or relating to the agreement, or arising out of or relating to the driver's relationship with SLG (including, without limitation, claims under federal, state, or

24. In addition to the arbitration clause, ICOA v3.0 includes a class/collective action waiver set forth in Section 14(d) of the agreement. The collective action waiver provides that the driver agrees to bring any claims against SLG solely on an individual basis and expressly waives the right to participate in, initiate, or be a member of any class action, collective action, or representative action in any court or a

25. ICOA v3.0 also includes a delegation clause in Section 14(e), which provides that any questions of arbitrability — including, without limitation, questions concerning the existence, scope, validity, or enforceability of the arbitration clause, the collective action waiver, or any other provision of Section 14 — shall be decided exclusively by the arbitrator, and not by any court. The delegation clause incorporate

26. The consideration supporting the arbitration clause and collective action waiver in ICOA v3.0 includes: (a) mutual promises to arbitrate — SLG likewise agreed to arbitrate any claims it might bring against the driver; (b) the driver's continued access to SLG's delivery platform, RouteSync, and continued route assignments through SLG's distribution network; and (c) the updated per-delivery rate schedule set forth

27. Each driver who signed ICOA v3.0 also executed a separate acknowledgment page, designated as Exhibit C to the agreement, titled "Acknowledgment of Arbitration Clause and Collective Action Waiver." This acknowledgment page was a standalone document, printed on a separate sheet, requiring the driver's individual signature and date. On this acknowledgment page, the driver confirmed: (a) that the driver had read Sect

28. Of the 1,187 drivers in the proposed collective identified by Plaintiff, approximately 640 signed ICOA v3.0 containing the mandatory individual arbitration clause and collective action waiver. This means that if the arbitration agreements are enforced — as SLG contends they must be under the Federal Arbitration Act — the proposed collective would be reduced by approximately 640 members, leaving a proposed collect

29. SLG's business records reflect a wide range of driver independence across its fourteen distribution hubs and among its 1,187 drivers during the Relevant Period. The following paragraphs detail the key dimensions of variation that, taken together, demonstrate that drivers within the proposed collective were not uniformly situated with respect to the terms and conditions of their engagement with SLG.

30. Scheduling Flexibility. While the ICOA establishes a daily delivery window of 7:00 AM to 8:00 PM, Monday through Saturday, drivers have discretion to choose which days and how many hours within that window they will make themselves available for deliveries. The ICOA does not mandate a minimum or maximum number of hours per day or days per week. In practice, scheduling patterns varied widely among drivers. Some dr

31. Delivery Acceptance and Refusal. Under all three ICOA versions, drivers retain the right to decline individual delivery assignments offered through RouteSync. The 85% minimum acceptance rate per rolling 30-day period permits drivers to refuse up to 15% of offered deliveries without any consequence. Falling below the 85% threshold does not result in automatic termination of the driver's ICOA; rather, it triggers a

32. Route Discretion. RouteSync assigns deliveries to drivers, but drivers retain latitude in determining the order in which they complete their assigned deliveries and the routing they follow. RouteSync provides a suggested route — an algorithmically optimized sequence and set of directions — but drivers are not required to follow it. Drivers may resequence their deliveries and select alternative routes based on the

33. Vehicle Ownership and Investment. All drivers engaged under all three ICOA versions are required to provide their own vehicles — a cargo van or box truck with a model year of 2015 or newer that passes SLG's safety inspection. Drivers bear all costs associated with vehicle acquisition, maintenance, fuel, insurance, and repairs. The capital investment required to participate in SLG's delivery network is substantial

34. Multi-Platform Engagement. SLG's records and information obtained through driver communications indicate that a number of drivers simultaneously performed delivery services for other platforms and companies during the Relevant Period. The ICOA does not prohibit drivers from performing work for other companies during the term of the agreement; the non-compete clause, discussed below, applies only after the driver'

35. Non-Compete Clause Context. As noted above, each ICOA version contains a 12-month, 50-mile-radius non-compete clause. It is important to clarify the scope of this provision. The non-compete clause restricts a driver from performing delivery services for a direct competitor of SLG within 50 miles of the driver's assigned hub for a period of twelve months after the driver's ICOA with SLG is terminated. The clause d

36. Pay Structure and Earnings Variation. Drivers are compensated on a per-delivery basis, with rates ranging from $14.50 to $38.00 per delivery depending on package weight, distance from the distribution hub, and delivery type (standard versus white-glove). Earnings vary based on the number and type of deliveries a driver accepts, the days and hours the driver chooses to work, and the driver's efficiency in completi

37. Training Requirements. All three ICOA versions require drivers to complete 16 hours of initial safety and customer-service training prior to beginning deliveries, as well as 4 hours of quarterly training thereafter. However, the nature and format of training varies by hub. Some hubs, particularly larger hubs such as Dallas (HUB-02) and Houston (HUB-03), conduct in-person training sessions at dedicated training fa

38. Uniform and Branding Requirements. All three ICOA versions require drivers to wear Stonefield-branded uniforms, display SLG identification badges, and affix SLG-branded vehicle placards to their vehicles while performing deliveries for SLG. These requirements apply only while the driver is actively performing SLG deliveries. Drivers are not required to wear SLG uniforms at any other time — for example, when perfo

39. Hub-Level Operational Differences. SLG's fourteen distribution hubs vary significantly in size, delivery volume, delivery mix, customer base, geographic coverage area, and managerial practices. These differences create materially dissimilar working conditions and business environments for drivers at different hubs. The following table summarizes the driver count at each hub during the Relevant Period: Beyond the

40. Tax Treatment. Consistent with their classification as independent contractors, all drivers are issued IRS Form 1099-NEC reflecting the total amounts paid to them by SLG during each calendar year. Drivers are not issued IRS Form W-2. Drivers are responsible for their own federal, state, and local tax obligations, including the payment of self-employment taxes under the Self-Employment Contributions Act. Based on

41. The foregoing demonstrates that SLG's driver population is not a monolithic group that can be treated as uniformly situated for purposes of FLSA conditional certification. Drivers differ materially across multiple dimensions, including: (a) the version of ICOA they signed, which affects, among other things, whether they are subject to a mandatory individual arbitration clause and collective action waiver and the

42. In summary, SLG has utilized three materially different versions of its Independent Contractor Operating Agreement during the Relevant Period. The three ICOA versions differ in significant respects, including — most importantly — the addition of a mandatory individual arbitration clause and collective action waiver in ICOA v3.0, which was signed by approximately 640 of the 1,187 drivers in the proposed collective