1012-00004 · Stonefield Logistics Group · Pleadings & Court Filings

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UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

DECLARATION OF KAREN LUND IN SUPPORT OF DEFENDANT STONEFIELD LOGISTICS GROUP INC.'S RESPONSE IN OPPOSITION TO PLAINTIFF'S MOTION FOR CONDITIONAL CERTIFICATION

I, Karen Lund, hereby declare as follows:

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 corporate headquarters at 4200 Commerce Gateway Blvd., Suite 800, Irving, Texas 75039.

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 relationships with its drivers; (c) driver communications, including the dissemination of policy updates, operational bulletins, and platform notifications; (d) the review and processing of subcontracting requests submitted by drivers; (e) performance matters, including the administration of performance reviews triggered by acceptance-rate thresholds; and (f) offboarding procedures when a driver's relationship with SLG concludes. In carrying out these duties, I work closely with SLG's Chief People Officer, Aaron Turcotte, and the Vice President of Operations, Trevor Sandoval. I also coordinate regularly with the hub managers at each of SLG's fourteen distribution hubs.

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 these hubs, and I regularly review driver records, hub-level operational data, and reports generated by SLG's proprietary dispatch platform, RouteSync, in connection with my duties.

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 employment counsel, the law firm of Pennfield & Daye LLP, located in Fort Worth, Texas, in connection with the drafting of the original ICOA template (v1.0) and subsequent revisions (v2.0 and v3.0). I participated in numerous meetings and conference calls with attorneys at Pennfield & Daye LLP concerning the structure and content of each version, and I coordinated the rollout of each new version to the driver population.

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 subcontracting provisions contained in each ICOA version and the practical application of those provisions; and (d) the mandatory individual arbitration clause and collective action waiver introduced in ICOA v3.0, which was signed by a substantial portion of the drivers in the proposed collective.

OVERVIEW OF THE INDEPENDENT CONTRACTOR OPERATING AGREEMENT VERSIONS

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 standards, subcontracting rights, termination provisions, and any applicable dispute resolution mechanisms. Since SLG began utilizing ICOAs, there have been three versions of the ICOA template, each of which is described in detail below.

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 Compensation. Drivers were 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 residential delivery versus white-glove delivery, the latter involving inside placement, assembly, or installation assistance).

(c) Vehicle Requirements. Drivers were required to provide and use their own personal vehicles meeting SLG's specifications, which required a cargo van or box truck with a model year of 2015 or newer that had passed SLG's safety inspection. All costs associated with vehicle acquisition, maintenance, fuel, insurance, and repairs were borne by the driver.

(d) Uniform and Branding. Drivers were required to wear Stonefield-branded uniforms and identification badges and to display SLG-branded vehicle placards while performing deliveries for SLG.

(e) Dispatch Platform. Deliveries were assigned through SLG's proprietary dispatch platform, RouteSync, which transmitted delivery assignments to drivers' mobile devices.

(f) Delivery Windows. The ICOA established daily delivery windows of 7:00 AM to 8:00 PM, Monday through Saturday. Drivers had discretion to choose which days and hours within those windows they would work, subject to accepting a sufficient number of delivery assignments to meet the minimum acceptance rate.

(g) GPS Tracking. Drivers were required to install and maintain an SLG-provided telematics device in their vehicles for GPS tracking purposes during delivery operations.

(h) Minimum Acceptance Rate. Drivers were required to maintain a minimum acceptance rate of 85% per rolling 30-day period as measured through RouteSync. Failure to maintain this threshold triggered a performance review process, not automatic termination.

(i) Non-Compete Clause. ICOA v1.0 contained a 12-month, 50-mile-radius post-termination non-compete clause. Importantly, this clause applied only after the driver's relationship with SLG ended; it did not restrict drivers from performing work for other companies or delivery platforms during the term of their ICOA.

(j) No Arbitration Clause or Collective/Class Action Waiver. ICOA v1.0 did not contain an arbitration clause or a collective or class action waiver of any kind.

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 reasons — including personal preference, the timing of their engagement relative to the rollout of later versions, or a decision not to execute the updated agreements — never transitioned to ICOA v2.0 or v3.0. The named Plaintiff, Marcus Delano, is among this group of drivers, as discussed further below.

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 provisions are detailed in Section IV of this declaration, below.

(b) Vehicle Specifications. The vehicle specifications were updated to reflect advances in vehicle technology and to accommodate a broader range of qualifying vehicles, while maintaining SLG's safety and capacity standards.

(c) Training Requirements. ICOA v2.0 included clarifications regarding training requirements. All drivers were required to complete 16 hours of initial safety and customer-service training prior to commencing deliveries, as well as 4 hours of quarterly training thereafter. These training requirements were designed to ensure compliance with applicable safety standards and to maintain consistent customer-service expectations across SLG's delivery network.

(d) Performance Review Process. The performance review process tied to the 85% minimum acceptance rate was adjusted. Under v2.0, the process included more structured documentation and an opportunity for the driver to provide written input before any action was taken.

(e) No Arbitration Clause or Collective/Class Action Waiver. Like its predecessor, ICOA v2.0 did not contain an arbitration clause or a collective or class action waiver.

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 arbitration provision requiring that all disputes arising out of or relating to the agreement, or arising out of or relating to the driver's relationship with SLG, be resolved through binding individual arbitration. The arbitration clause is described in further detail in Section V of this declaration, below.

(b) Class/Collective Action Waiver. ICOA v3.0 added a provision in which the driver agreed to waive the right to participate in any class, collective, or representative action against SLG, and agreed to bring any claims solely on an individual basis. This waiver is described in further detail in Section V of this declaration, below.

(c) Updated Subcontracting Provisions. The subcontracting provisions were further liberalized to allow broader subcontracting under certain conditions, including an expedited pre-approval process. The specific changes are detailed in Section IV of this declaration, below.

(d) Delivery Window Flexibility. At certain hubs, ICOA v3.0 introduced refinements to the delivery window, permitting designated hubs to offer expanded or alternative delivery windows based on local demand patterns.

(e) Updated Per-Delivery Rate Schedule. The per-delivery rate schedule was updated to reflect changes in market conditions, fuel costs, and competitive benchmarks. The range remained generally within the $14.50 to $38.00 band established under v1.0, with adjustments to the rates for specific delivery types and distances.

The addition of the arbitration clause and collective action waiver was the single most significant change introduced in ICOA v3.0.

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 forth in a clearly identified section of the agreement (Section 14, titled "Dispute Resolution — Mandatory Individual Arbitration"). Drivers were also provided a one-page summary document, in plain language, highlighting the key changes from the prior version, with the arbitration and waiver provisions prominently featured. Drivers were informed that the agreement contained new terms, including an arbitration provision and a waiver of class and collective action rights, and were given a minimum of fourteen calendar days to review the agreement and consult with an attorney or other advisor before signing. Drivers who chose not to sign ICOA v3.0 were permitted to continue operating under their existing ICOA version — either v1.0 or v2.0, as applicable — and were not terminated, penalized, or subjected to any adverse action as a result of their decision. Approximately 547 drivers (representing the difference between the total of 1,187 and the 640 who signed v3.0) remained on earlier ICOA versions (v1.0 or v2.0) during the Relevant Period.

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 services for SLG in September 2024. Because Mr. Delano operated under ICOA v1.0 throughout his tenure, his agreement does not contain an arbitration clause or a collective action waiver.

SUBCONTRACTING PROVISIONS AND PRACTICAL APPLICATION

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 contact information; (b) the proposed subcontractor was required to submit to and pass a background check conducted by SLG's third-party screening vendor; (c) the proposed subcontractor's vehicle was required to be inspected by SLG to confirm compliance with the same vehicle specifications applicable to the contracting driver (cargo van or box truck, model year 2015 or newer, passing SLG safety inspection); and (d) the proposed subcontractor was required to furnish proof of personal automobile liability insurance with coverage limits meeting SLG's minimum requirements. Upon satisfactory completion of all four steps, SLG would issue a written approval authorizing the driver to subcontract specific deliveries to the approved subcontractor. The approval was valid for a period of six months and could be renewed upon submission of updated documentation.

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 abandoned by the requesting driver before the approval process was completed (i.e., the driver did not submit the required documentation or the proposed subcontractor did not appear for the vehicle inspection). The infrequency of subcontracting under v1.0 was attributable in significant part to drivers simply not submitting requests, rather than to SLG systematically denying such requests. Many drivers either were unaware of the subcontracting provision, did not have a suitable individual to propose as a subcontractor, or chose not to pursue subcontracting for their own business reasons.

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 written subcontracting request form, any email or written communication from Mr. Delano requesting approval to subcontract, or any notation by any SLG employee indicating that Mr. Delano made an oral inquiry about subcontracting. I do not offer this observation to characterize the experience of all drivers, but rather to note the specific facts as they pertain to the named Plaintiff.

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 to a separate SLG vehicle inspection; instead, the driver was permitted to self-certify that the subcontractor's vehicle met SLG's specifications, subject to SLG's right to conduct a subsequent inspection. The background check and insurance verification requirements remained in place. The approval validity period was extended from six months to twelve months. These changes were intended to reduce the administrative burden on drivers and to encourage greater utilization of the subcontracting provision. During the Relevant Period, a total of 41 subcontracting requests were submitted by drivers operating under ICOA v2.0 across all fourteen hubs. Of those 41 requests, 27 were approved, 8 were denied, and 6 were abandoned before completion of the approval process.

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 through the RouteSync platform and receive a preliminary approval or denial within 48 hours; (b) the elimination of the self-certification requirement for vehicles in favor of a streamlined online vehicle registration process; (c) the allowance of "standing subcontractor" designations, permitting a driver to maintain up to two pre-approved subcontractors who could be deployed without requiring a new request for each instance of subcontracting; and (d) the reduction of insurance documentation requirements to a single annual submission. These changes were designed to enhance drivers' entrepreneurial opportunity and to reinforce the independent contractor nature of the relationship by giving drivers greater ability to build and manage their own delivery operations. During the Relevant Period, a total of 137 subcontracting requests were submitted by drivers operating under ICOA v3.0 across all fourteen hubs. Of those 137 requests, 112 were approved, 14 were denied, and 11 were pending or incomplete at the time of this declaration. The substantially higher volume and approval rate of subcontracting under v3.0 reflects the impact of the liberalized provisions.

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. The Dallas hub (HUB-02, 168 drivers) accounted for 36 subcontracting requests, of which 29 were approved. By contrast, smaller hubs saw considerably fewer subcontracting requests. The Lubbock hub (HUB-13, 29 drivers) received only 2 subcontracting requests during the entire Relevant Period, of which 1 was approved. The Shreveport hub (HUB-11, 34 drivers) received 3 subcontracting requests, of which 2 were approved. These disparities reflect differences in hub size, delivery volume, delivery mix, driver demographics, and local market conditions that influenced whether and how drivers chose to exercise their subcontracting rights.

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 accessible subcontracting rights than drivers operating under v1.0 or v2.0. And even among drivers operating under the same ICOA version, the practical exercise of subcontracting rights varied considerably based on hub location, delivery volume, and individual driver initiative. These differences are material to the question of whether all 1,187 drivers can properly be treated as a single collective of "similarly situated" individuals for purposes of FLSA conditional certification.

ARBITRATION CLAUSE AND COLLECTIVE ACTION WAIVER IN ICOA v3.0

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 local statutes, regulations, or common law), shall be resolved exclusively through final and binding arbitration on an individual basis. The arbitration clause specifies that it is governed by the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq., and that the arbitration shall be administered by JAMS (Judicial Arbitration and Mediation Services, Inc.) in accordance with its then-current Comprehensive Arbitration Rules and Procedures, unless the parties mutually agree to an alternative arbitration administrator. The arbitration clause further provides that SLG shall bear all arbitration filing fees and administrative costs, regardless of the outcome of the arbitration, and that the arbitration shall take place in the metropolitan area closest to the hub where the driver primarily performed services, thereby minimizing travel burden on the driver.

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 arbitral forum. The waiver applies to claims under the FLSA, state wage-and-hour laws, and any other federal, state, or local statute, regulation, or common-law theory. The provision states: "You agree that any Covered Dispute will be resolved only on an individual basis and not as part of any purported class, collective, or representative proceeding. You waive any right to bring or participate in a class action, collective action, or representative action against SLG in any forum."

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 incorporates by reference the JAMS rules applicable to the determination of arbitrability, consistent with the framework articulated by the United States Supreme Court in Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (2010), and its progeny.

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 in Exhibit A to ICOA v3.0, which reflected adjustments to delivery rates. These mutual obligations constitute adequate and independent consideration for the arbitration and waiver provisions.

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 Section 14 of ICOA v3.0 in its entirety, including the mandatory individual arbitration clause, the collective action waiver, and the delegation clause; (b) that the driver understood the terms and effect of these provisions, including the waiver of the right to bring or participate in class, collective, or representative actions; (c) that the driver had been given the opportunity to consult with an attorney or other advisor of the driver's choosing before signing; and (d) that the driver voluntarily and knowingly agreed to be bound by the arbitration clause, the collective action waiver, and the delegation clause. SLG's records contain signed acknowledgment pages for each of the approximately 640 drivers who executed ICOA v3.0.

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 collective of approximately 547 drivers. This is a material reduction: over half — approximately 53.9% — of the proposed collective is subject to binding individual arbitration agreements that require those drivers to pursue their claims in individual arbitration rather than as part of a collective action under FLSA Section 216(b). The existence of these arbitration agreements and collective action waivers presents a significant threshold issue that weighs against conditional certification of the proposed collective in its current form.

RANGE OF DRIVER INDEPENDENCE REFLECTED IN SLG RECORDS

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 drivers worked five or six days per week; others worked only three or four days per week. Weekly hours varied significantly across the driver population. Based on my review of RouteSync platform data and GPS telematics records for the Relevant Period, some drivers averaged fewer than 30 hours per week, while others averaged in excess of 55 hours per week. The named Plaintiff, Marcus Delano, averaged approximately 58 hours per week according to GPS and RouteSync data logged during his engagement, placing him at the higher end of the distribution. By contrast, numerous drivers at the same Fort Worth hub (HUB-01) where Mr. Delano was assigned averaged between 32 and 40 hours per week during overlapping periods. This variation in scheduling demonstrates that drivers exercised meaningful discretion over the amount of time they devoted to SLG deliveries.

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 "performance review" — a structured process in which the driver is notified of the shortfall, given an opportunity to discuss the circumstances, and provided a remediation period. SLG's records show that actual acceptance rates varied widely across the driver population during the Relevant Period. Some drivers maintained acceptance rates at or near 100%, accepting virtually every delivery offered. Other drivers regularly operated near the 85% threshold, strategically declining certain deliveries — for example, declining deliveries with long distances or low per-delivery rates in favor of waiting for more favorable assignments. A smaller subset of drivers fell below the 85% threshold at various points, triggering performance reviews. The variability in acceptance rates reflects the exercise of individual business judgment by drivers.

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 their own knowledge of local traffic patterns, road conditions, customer preferences, or other factors. Analysis of GPS log data for the Relevant Period shows significant route deviation across the driver population. Many drivers consistently deviated from RouteSync's suggested routes, sometimes substantially, indicating the exercise of independent judgment in performing their deliveries. The degree of route deviation varied by driver, by hub, and by delivery area, further underscoring the individualized nature of each driver's operations.

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 and varies from driver to driver depending on the type and condition of the vehicle purchased or leased. Based on information gathered during onboarding, drivers' vehicles ranged in value from approximately $15,000 to over $60,000. Drivers bear the economic risk of vehicle breakdown, depreciation, and obsolescence. This investment of capital in a depreciating asset, and the assumption of associated economic risk, is a hallmark of independent contractor status and distinguishes the drivers' relationship with SLG from a typical employment arrangement.

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's relationship with SLG has ended. Because the ICOA does not restrict outside work, my department does not comprehensively track drivers' engagement with other platforms. However, information gathered from driver communications, onboarding intake forms (which ask whether the driver performs work for other entities), and incidental communications from hub managers indicates that multi-platform engagement is not uncommon, particularly at larger hubs such as Houston (HUB-03), Dallas (HUB-02), and Fort Worth (HUB-01). Drivers at these hubs have reported performing delivery services for competing logistics companies, national package delivery services, and app-based delivery platforms concurrently with their SLG deliveries.

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 does not restrict drivers from performing work for other companies or delivery platforms during the term of their ICOA. Drivers are free to engage in other business activities, including delivery work for non-competing entities, throughout their relationship with SLG. The non-compete applies only post-termination, and its enforceability is subject to applicable state law.

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 completing deliveries. Drivers who accept a higher proportion of white-glove deliveries — which command per-delivery rates at the upper end of the range — earn significantly more per delivery than drivers who limit themselves to standard residential deliveries. During the Relevant Period, average weekly gross earnings across the 1,187-driver population ranged from approximately $680 per week at the lower end to approximately $2,350 per week at the higher end. Earnings varied not only among individual drivers but also across hubs: drivers at hubs with a higher proportion of white-glove deliveries (such as the Dallas and Houston hubs) tended to earn more per delivery than drivers at hubs that handled predominantly standard residential deliveries (such as the Lubbock and Little Rock hubs). This variation in earnings reflects the entrepreneurial nature of the drivers' relationship with SLG — drivers who made more strategic decisions about which deliveries to accept and how many hours to work earned more.

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 facilities. Other hubs, particularly smaller and more geographically dispersed hubs such as Lubbock (HUB-13) and Little Rock (HUB-10), offer online training modules that drivers can complete at their own pace and on their own schedule. The content of the training focuses on safety protocols (including vehicle safety, loading procedures, and accident prevention), customer-service standards, and use of the RouteSync platform. These training requirements are designed to ensure compliance with safety standards and to maintain consistent service quality across SLG's delivery network, which is consistent with independent contractor relationships in the logistics industry, where safety training is standard and does not, standing alone, convert an independent contractor relationship into an employment relationship.

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 performing deliveries for other platforms, when traveling to and from their homes, or during personal time. SLG provides the initial set of uniforms, badges, and vehicle placards at no cost to the driver. Replacement uniforms and badges may be purchased by the driver at cost.

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 differences in driver count, the hubs differ in their delivery mix. For example, the Dallas and Houston hubs handle a significantly higher proportion of white-glove deliveries — involving bulky items such as furniture, appliances, and exercise equipment requiring inside placement or assembly — compared to hubs such as Lubbock, Little Rock, and Corpus Christi, which handle predominantly standard residential package deliveries. The customer bases served by each hub also differ, with some hubs serving primarily commercial accounts and others serving primarily residential customers. Managerial practices vary among hub managers as well. While my department provides guidelines and policies that apply across all hubs, individual hub managers exercise discretion in areas such as the scheduling of training sessions, the frequency and format of driver communications, and the handling of customer-service issues. These hub-level differences further undermine the premise that all 1,187 drivers across fourteen hubs can be treated as a single, undifferentiated collective.

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 publicly available information and general industry practice, many drivers file IRS Schedule C (Profit or Loss From Business) in connection with their individual income tax returns, reporting their SLG earnings as business income and deducting vehicle expenses, fuel costs, insurance premiums, and other business-related expenditures. SLG does not withhold federal or state income taxes, Social Security taxes, or Medicare taxes from payments made to drivers.

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 scope of their subcontracting rights; (b) the distribution hub they operate out of, which affects the delivery mix available to them, the managerial oversight they experience, and the operational practices applicable to their work; (c) the number of hours they choose to work and the days they make themselves available; (d) their per-delivery earnings, which are a function of the deliveries they accept and the delivery types they choose to perform; (e) their acceptance rates, which reflect individualized decisions about which deliveries to accept or decline; (f) their use (or non-use) of the subcontracting provisions; and (g) their engagement with other delivery platforms and companies. These differences are not trivial or incidental — they go to the heart of the factual and legal inquiry under the FLSA and demonstrate that individualized analysis, not collective treatment, is required to determine the employment status of each driver.

CONCLUSION

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. This single difference alone means that over half of the proposed collective is subject to binding individual arbitration agreements that preclude their participation in any class or collective action. In addition, the subcontracting provisions differ meaningfully across the three ICOA versions, with v3.0 providing substantially broader and more practically accessible subcontracting rights than v1.0 or v2.0. Driver independence varies widely across the fourteen hubs and among individual drivers, as reflected in differences in scheduling patterns, acceptance rates, route choices, earnings, vehicle investments, subcontracting activity, and multi-platform engagement. These differences make blanket treatment of all 1,187 drivers as a single collective inappropriate and weigh strongly against conditional certification of the proposed collective.

I declare under penalty of perjury under the laws of the United States that the foregoing is true and correct.

Executed on August 11, 2025, in Irving, Texas.

________________________________________

Karen Lund Director of Driver Relations Stonefield Logistics Group Inc. 4200 Commerce Gateway Blvd., Suite 800 Irving, TX 75039

CERTIFICATE OF SERVICE

I hereby certify that on August 13, 2025, a true and correct copy of the foregoing Declaration of Karen Lund in Support of Defendant's Opposition to Conditional Certification was served upon all counsel of record via the Court's CM/ECF electronic filing system, which will send notification of such filing to the following:

Claudia Hartwell HARTWELL & BRASHEAR PLLC 500 N. Akard Street, Suite 1750 Dallas, TX 75201 Counsel for Plaintiff Marcus Delano

________________________________________

Bernard Crawford CALDERWOOD & HARKNESS LLP 2200 Ross Avenue, Suite 3600 Dallas, TX 75201 Telephone: (214) 555-8200 Facsimile: (214) 555-8201 bcrawford@calderwoodharkness.com

Counsel for Defendant Stonefield Logistics Group Inc.

MARCUS DELANO, individually and on behalf of all others similarly situated,

Plaintiff,

STONEFIELD LOGISTICS GROUP INC.,

Defendant.	Hon. Rebecca Chen
Hub Designation	Location	Drivers During Relevant Period
HUB-01	Fort Worth, TX	142
HUB-02	Dallas, TX	168
HUB-03	Houston, TX	195
HUB-04	San Antonio, TX	121
HUB-05	Austin, TX	98
HUB-06	Oklahoma City, OK	87
HUB-07	Tulsa, OK	64
HUB-08	Baton Rouge, LA	53
HUB-09	New Orleans, LA	71
HUB-10	Little Rock, AR	46
HUB-11	Shreveport, LA	34
HUB-12	El Paso, TX	41
HUB-13	Lubbock, TX	29
HUB-14	Corpus Christi, TX	38
Total	1,187

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION
DECLARATION OF KAREN LUND IN SUPPORT OF DEFENDANT STONEFIELD LOGISTICS GROUP INC.'S RESPONSE IN OPPOSITION TO PLAINTIFF'S MOTION FOR CONDITIONAL CERTIFICATION
I, Karen Lund, hereby declare as follows:
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 corporate headquarters at 4200 Commerce Gateway Blvd., Suite 800, Irving, Texas 75039.
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 relationships with its drivers; (c) driver communications, including the dissemination of policy updates, operational bulletins, and platform notifications; (d) the review and processing of subcontracting requests submitted by drivers; (e) performance matters, including the administration of performance reviews triggered by acceptance-rate thresholds; and (f) offboarding procedures when a driver's relationship with SLG concludes. In carrying out these duties, I work closely with SLG's Chief People Officer, Aaron Turcotte, and the Vice President of Operations, Trevor Sandoval. I also coordinate regularly with the hub managers at each of SLG's fourteen distribution hubs.
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 these hubs, and I regularly review driver records, hub-level operational data, and reports generated by SLG's proprietary dispatch platform, RouteSync, in connection with my duties.
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 employment counsel, the law firm of Pennfield & Daye LLP, located in Fort Worth, Texas, in connection with the drafting of the original ICOA template (v1.0) and subsequent revisions (v2.0 and v3.0). I participated in numerous meetings and conference calls with attorneys at Pennfield & Daye LLP concerning the structure and content of each version, and I coordinated the rollout of each new version to the driver population.
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 subcontracting provisions contained in each ICOA version and the practical application of those provisions; and (d) the mandatory individual arbitration clause and collective action waiver introduced in ICOA v3.0, which was signed by a substantial portion of the drivers in the proposed collective.
OVERVIEW OF THE INDEPENDENT CONTRACTOR OPERATING AGREEMENT VERSIONS
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 standards, subcontracting rights, termination provisions, and any applicable dispute resolution mechanisms. Since SLG began utilizing ICOAs, there have been three versions of the ICOA template, each of which is described in detail below.
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 Compensation. Drivers were 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 residential delivery versus white-glove delivery, the latter involving inside placement, assembly, or installation assistance).
(c) Vehicle Requirements. Drivers were required to provide and use their own personal vehicles meeting SLG's specifications, which required a cargo van or box truck with a model year of 2015 or newer that had passed SLG's safety inspection. All costs associated with vehicle acquisition, maintenance, fuel, insurance, and repairs were borne by the driver.
(d) Uniform and Branding. Drivers were required to wear Stonefield-branded uniforms and identification badges and to display SLG-branded vehicle placards while performing deliveries for SLG.
(e) Dispatch Platform. Deliveries were assigned through SLG's proprietary dispatch platform, RouteSync, which transmitted delivery assignments to drivers' mobile devices.
(f) Delivery Windows. The ICOA established daily delivery windows of 7:00 AM to 8:00 PM, Monday through Saturday. Drivers had discretion to choose which days and hours within those windows they would work, subject to accepting a sufficient number of delivery assignments to meet the minimum acceptance rate.
(g) GPS Tracking. Drivers were required to install and maintain an SLG-provided telematics device in their vehicles for GPS tracking purposes during delivery operations.
(h) Minimum Acceptance Rate. Drivers were required to maintain a minimum acceptance rate of 85% per rolling 30-day period as measured through RouteSync. Failure to maintain this threshold triggered a performance review process, not automatic termination.
(i) Non-Compete Clause. ICOA v1.0 contained a 12-month, 50-mile-radius post-termination non-compete clause. Importantly, this clause applied only after the driver's relationship with SLG ended; it did not restrict drivers from performing work for other companies or delivery platforms during the term of their ICOA.
(j) No Arbitration Clause or Collective/Class Action Waiver. ICOA v1.0 did not contain an arbitration clause or a collective or class action waiver of any kind.
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 reasons — including personal preference, the timing of their engagement relative to the rollout of later versions, or a decision not to execute the updated agreements — never transitioned to ICOA v2.0 or v3.0. The named Plaintiff, Marcus Delano, is among this group of drivers, as discussed further below.
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 provisions are detailed in Section IV of this declaration, below.
(b) Vehicle Specifications. The vehicle specifications were updated to reflect advances in vehicle technology and to accommodate a broader range of qualifying vehicles, while maintaining SLG's safety and capacity standards.
(c) Training Requirements. ICOA v2.0 included clarifications regarding training requirements. All drivers were required to complete 16 hours of initial safety and customer-service training prior to commencing deliveries, as well as 4 hours of quarterly training thereafter. These training requirements were designed to ensure compliance with applicable safety standards and to maintain consistent customer-service expectations across SLG's delivery network.
(d) Performance Review Process. The performance review process tied to the 85% minimum acceptance rate was adjusted. Under v2.0, the process included more structured documentation and an opportunity for the driver to provide written input before any action was taken.
(e) No Arbitration Clause or Collective/Class Action Waiver. Like its predecessor, ICOA v2.0 did not contain an arbitration clause or a collective or class action waiver.
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 arbitration provision requiring that all disputes arising out of or relating to the agreement, or arising out of or relating to the driver's relationship with SLG, be resolved through binding individual arbitration. The arbitration clause is described in further detail in Section V of this declaration, below.
(b) Class/Collective Action Waiver. ICOA v3.0 added a provision in which the driver agreed to waive the right to participate in any class, collective, or representative action against SLG, and agreed to bring any claims solely on an individual basis. This waiver is described in further detail in Section V of this declaration, below.
(c) Updated Subcontracting Provisions. The subcontracting provisions were further liberalized to allow broader subcontracting under certain conditions, including an expedited pre-approval process. The specific changes are detailed in Section IV of this declaration, below.
(d) Delivery Window Flexibility. At certain hubs, ICOA v3.0 introduced refinements to the delivery window, permitting designated hubs to offer expanded or alternative delivery windows based on local demand patterns.
(e) Updated Per-Delivery Rate Schedule. The per-delivery rate schedule was updated to reflect changes in market conditions, fuel costs, and competitive benchmarks. The range remained generally within the $14.50 to $38.00 band established under v1.0, with adjustments to the rates for specific delivery types and distances.
The addition of the arbitration clause and collective action waiver was the single most significant change introduced in ICOA v3.0.
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 forth in a clearly identified section of the agreement (Section 14, titled "Dispute Resolution — Mandatory Individual Arbitration"). Drivers were also provided a one-page summary document, in plain language, highlighting the key changes from the prior version, with the arbitration and waiver provisions prominently featured. Drivers were informed that the agreement contained new terms, including an arbitration provision and a waiver of class and collective action rights, and were given a minimum of fourteen calendar days to review the agreement and consult with an attorney or other advisor before signing. Drivers who chose not to sign ICOA v3.0 were permitted to continue operating under their existing ICOA version — either v1.0 or v2.0, as applicable — and were not terminated, penalized, or subjected to any adverse action as a result of their decision. Approximately 547 drivers (representing the difference between the total of 1,187 and the 640 who signed v3.0) remained on earlier ICOA versions (v1.0 or v2.0) during the Relevant Period.
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 services for SLG in September 2024. Because Mr. Delano operated under ICOA v1.0 throughout his tenure, his agreement does not contain an arbitration clause or a collective action waiver.
SUBCONTRACTING PROVISIONS AND PRACTICAL APPLICATION
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 contact information; (b) the proposed subcontractor was required to submit to and pass a background check conducted by SLG's third-party screening vendor; (c) the proposed subcontractor's vehicle was required to be inspected by SLG to confirm compliance with the same vehicle specifications applicable to the contracting driver (cargo van or box truck, model year 2015 or newer, passing SLG safety inspection); and (d) the proposed subcontractor was required to furnish proof of personal automobile liability insurance with coverage limits meeting SLG's minimum requirements. Upon satisfactory completion of all four steps, SLG would issue a written approval authorizing the driver to subcontract specific deliveries to the approved subcontractor. The approval was valid for a period of six months and could be renewed upon submission of updated documentation.
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 abandoned by the requesting driver before the approval process was completed (i.e., the driver did not submit the required documentation or the proposed subcontractor did not appear for the vehicle inspection). The infrequency of subcontracting under v1.0 was attributable in significant part to drivers simply not submitting requests, rather than to SLG systematically denying such requests. Many drivers either were unaware of the subcontracting provision, did not have a suitable individual to propose as a subcontractor, or chose not to pursue subcontracting for their own business reasons.
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 written subcontracting request form, any email or written communication from Mr. Delano requesting approval to subcontract, or any notation by any SLG employee indicating that Mr. Delano made an oral inquiry about subcontracting. I do not offer this observation to characterize the experience of all drivers, but rather to note the specific facts as they pertain to the named Plaintiff.
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 to a separate SLG vehicle inspection; instead, the driver was permitted to self-certify that the subcontractor's vehicle met SLG's specifications, subject to SLG's right to conduct a subsequent inspection. The background check and insurance verification requirements remained in place. The approval validity period was extended from six months to twelve months. These changes were intended to reduce the administrative burden on drivers and to encourage greater utilization of the subcontracting provision. During the Relevant Period, a total of 41 subcontracting requests were submitted by drivers operating under ICOA v2.0 across all fourteen hubs. Of those 41 requests, 27 were approved, 8 were denied, and 6 were abandoned before completion of the approval process.
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 through the RouteSync platform and receive a preliminary approval or denial within 48 hours; (b) the elimination of the self-certification requirement for vehicles in favor of a streamlined online vehicle registration process; (c) the allowance of "standing subcontractor" designations, permitting a driver to maintain up to two pre-approved subcontractors who could be deployed without requiring a new request for each instance of subcontracting; and (d) the reduction of insurance documentation requirements to a single annual submission. These changes were designed to enhance drivers' entrepreneurial opportunity and to reinforce the independent contractor nature of the relationship by giving drivers greater ability to build and manage their own delivery operations. During the Relevant Period, a total of 137 subcontracting requests were submitted by drivers operating under ICOA v3.0 across all fourteen hubs. Of those 137 requests, 112 were approved, 14 were denied, and 11 were pending or incomplete at the time of this declaration. The substantially higher volume and approval rate of subcontracting under v3.0 reflects the impact of the liberalized provisions.
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. The Dallas hub (HUB-02, 168 drivers) accounted for 36 subcontracting requests, of which 29 were approved. By contrast, smaller hubs saw considerably fewer subcontracting requests. The Lubbock hub (HUB-13, 29 drivers) received only 2 subcontracting requests during the entire Relevant Period, of which 1 was approved. The Shreveport hub (HUB-11, 34 drivers) received 3 subcontracting requests, of which 2 were approved. These disparities reflect differences in hub size, delivery volume, delivery mix, driver demographics, and local market conditions that influenced whether and how drivers chose to exercise their subcontracting rights.
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 accessible subcontracting rights than drivers operating under v1.0 or v2.0. And even among drivers operating under the same ICOA version, the practical exercise of subcontracting rights varied considerably based on hub location, delivery volume, and individual driver initiative. These differences are material to the question of whether all 1,187 drivers can properly be treated as a single collective of "similarly situated" individuals for purposes of FLSA conditional certification.
ARBITRATION CLAUSE AND COLLECTIVE ACTION WAIVER IN ICOA v3.0
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 local statutes, regulations, or common law), shall be resolved exclusively through final and binding arbitration on an individual basis. The arbitration clause specifies that it is governed by the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq., and that the arbitration shall be administered by JAMS (Judicial Arbitration and Mediation Services, Inc.) in accordance with its then-current Comprehensive Arbitration Rules and Procedures, unless the parties mutually agree to an alternative arbitration administrator. The arbitration clause further provides that SLG shall bear all arbitration filing fees and administrative costs, regardless of the outcome of the arbitration, and that the arbitration shall take place in the metropolitan area closest to the hub where the driver primarily performed services, thereby minimizing travel burden on the driver.
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 arbitral forum. The waiver applies to claims under the FLSA, state wage-and-hour laws, and any other federal, state, or local statute, regulation, or common-law theory. The provision states: "You agree that any Covered Dispute will be resolved only on an individual basis and not as part of any purported class, collective, or representative proceeding. You waive any right to bring or participate in a class action, collective action, or representative action against SLG in any forum."
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 incorporates by reference the JAMS rules applicable to the determination of arbitrability, consistent with the framework articulated by the United States Supreme Court in Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (2010), and its progeny.
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 in Exhibit A to ICOA v3.0, which reflected adjustments to delivery rates. These mutual obligations constitute adequate and independent consideration for the arbitration and waiver provisions.
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 Section 14 of ICOA v3.0 in its entirety, including the mandatory individual arbitration clause, the collective action waiver, and the delegation clause; (b) that the driver understood the terms and effect of these provisions, including the waiver of the right to bring or participate in class, collective, or representative actions; (c) that the driver had been given the opportunity to consult with an attorney or other advisor of the driver's choosing before signing; and (d) that the driver voluntarily and knowingly agreed to be bound by the arbitration clause, the collective action waiver, and the delegation clause. SLG's records contain signed acknowledgment pages for each of the approximately 640 drivers who executed ICOA v3.0.
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 collective of approximately 547 drivers. This is a material reduction: over half — approximately 53.9% — of the proposed collective is subject to binding individual arbitration agreements that require those drivers to pursue their claims in individual arbitration rather than as part of a collective action under FLSA Section 216(b). The existence of these arbitration agreements and collective action waivers presents a significant threshold issue that weighs against conditional certification of the proposed collective in its current form.
RANGE OF DRIVER INDEPENDENCE REFLECTED IN SLG RECORDS
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 drivers worked five or six days per week; others worked only three or four days per week. Weekly hours varied significantly across the driver population. Based on my review of RouteSync platform data and GPS telematics records for the Relevant Period, some drivers averaged fewer than 30 hours per week, while others averaged in excess of 55 hours per week. The named Plaintiff, Marcus Delano, averaged approximately 58 hours per week according to GPS and RouteSync data logged during his engagement, placing him at the higher end of the distribution. By contrast, numerous drivers at the same Fort Worth hub (HUB-01) where Mr. Delano was assigned averaged between 32 and 40 hours per week during overlapping periods. This variation in scheduling demonstrates that drivers exercised meaningful discretion over the amount of time they devoted to SLG deliveries.
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 "performance review" — a structured process in which the driver is notified of the shortfall, given an opportunity to discuss the circumstances, and provided a remediation period. SLG's records show that actual acceptance rates varied widely across the driver population during the Relevant Period. Some drivers maintained acceptance rates at or near 100%, accepting virtually every delivery offered. Other drivers regularly operated near the 85% threshold, strategically declining certain deliveries — for example, declining deliveries with long distances or low per-delivery rates in favor of waiting for more favorable assignments. A smaller subset of drivers fell below the 85% threshold at various points, triggering performance reviews. The variability in acceptance rates reflects the exercise of individual business judgment by drivers.
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 their own knowledge of local traffic patterns, road conditions, customer preferences, or other factors. Analysis of GPS log data for the Relevant Period shows significant route deviation across the driver population. Many drivers consistently deviated from RouteSync's suggested routes, sometimes substantially, indicating the exercise of independent judgment in performing their deliveries. The degree of route deviation varied by driver, by hub, and by delivery area, further underscoring the individualized nature of each driver's operations.
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 and varies from driver to driver depending on the type and condition of the vehicle purchased or leased. Based on information gathered during onboarding, drivers' vehicles ranged in value from approximately $15,000 to over $60,000. Drivers bear the economic risk of vehicle breakdown, depreciation, and obsolescence. This investment of capital in a depreciating asset, and the assumption of associated economic risk, is a hallmark of independent contractor status and distinguishes the drivers' relationship with SLG from a typical employment arrangement.
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's relationship with SLG has ended. Because the ICOA does not restrict outside work, my department does not comprehensively track drivers' engagement with other platforms. However, information gathered from driver communications, onboarding intake forms (which ask whether the driver performs work for other entities), and incidental communications from hub managers indicates that multi-platform engagement is not uncommon, particularly at larger hubs such as Houston (HUB-03), Dallas (HUB-02), and Fort Worth (HUB-01). Drivers at these hubs have reported performing delivery services for competing logistics companies, national package delivery services, and app-based delivery platforms concurrently with their SLG deliveries.
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 does not restrict drivers from performing work for other companies or delivery platforms during the term of their ICOA. Drivers are free to engage in other business activities, including delivery work for non-competing entities, throughout their relationship with SLG. The non-compete applies only post-termination, and its enforceability is subject to applicable state law.
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 completing deliveries. Drivers who accept a higher proportion of white-glove deliveries — which command per-delivery rates at the upper end of the range — earn significantly more per delivery than drivers who limit themselves to standard residential deliveries. During the Relevant Period, average weekly gross earnings across the 1,187-driver population ranged from approximately $680 per week at the lower end to approximately $2,350 per week at the higher end. Earnings varied not only among individual drivers but also across hubs: drivers at hubs with a higher proportion of white-glove deliveries (such as the Dallas and Houston hubs) tended to earn more per delivery than drivers at hubs that handled predominantly standard residential deliveries (such as the Lubbock and Little Rock hubs). This variation in earnings reflects the entrepreneurial nature of the drivers' relationship with SLG — drivers who made more strategic decisions about which deliveries to accept and how many hours to work earned more.
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 facilities. Other hubs, particularly smaller and more geographically dispersed hubs such as Lubbock (HUB-13) and Little Rock (HUB-10), offer online training modules that drivers can complete at their own pace and on their own schedule. The content of the training focuses on safety protocols (including vehicle safety, loading procedures, and accident prevention), customer-service standards, and use of the RouteSync platform. These training requirements are designed to ensure compliance with safety standards and to maintain consistent service quality across SLG's delivery network, which is consistent with independent contractor relationships in the logistics industry, where safety training is standard and does not, standing alone, convert an independent contractor relationship into an employment relationship.
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 performing deliveries for other platforms, when traveling to and from their homes, or during personal time. SLG provides the initial set of uniforms, badges, and vehicle placards at no cost to the driver. Replacement uniforms and badges may be purchased by the driver at cost.
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 differences in driver count, the hubs differ in their delivery mix. For example, the Dallas and Houston hubs handle a significantly higher proportion of white-glove deliveries — involving bulky items such as furniture, appliances, and exercise equipment requiring inside placement or assembly — compared to hubs such as Lubbock, Little Rock, and Corpus Christi, which handle predominantly standard residential package deliveries. The customer bases served by each hub also differ, with some hubs serving primarily commercial accounts and others serving primarily residential customers. Managerial practices vary among hub managers as well. While my department provides guidelines and policies that apply across all hubs, individual hub managers exercise discretion in areas such as the scheduling of training sessions, the frequency and format of driver communications, and the handling of customer-service issues. These hub-level differences further undermine the premise that all 1,187 drivers across fourteen hubs can be treated as a single, undifferentiated collective.
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 publicly available information and general industry practice, many drivers file IRS Schedule C (Profit or Loss From Business) in connection with their individual income tax returns, reporting their SLG earnings as business income and deducting vehicle expenses, fuel costs, insurance premiums, and other business-related expenditures. SLG does not withhold federal or state income taxes, Social Security taxes, or Medicare taxes from payments made to drivers.
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 scope of their subcontracting rights; (b) the distribution hub they operate out of, which affects the delivery mix available to them, the managerial oversight they experience, and the operational practices applicable to their work; (c) the number of hours they choose to work and the days they make themselves available; (d) their per-delivery earnings, which are a function of the deliveries they accept and the delivery types they choose to perform; (e) their acceptance rates, which reflect individualized decisions about which deliveries to accept or decline; (f) their use (or non-use) of the subcontracting provisions; and (g) their engagement with other delivery platforms and companies. These differences are not trivial or incidental — they go to the heart of the factual and legal inquiry under the FLSA and demonstrate that individualized analysis, not collective treatment, is required to determine the employment status of each driver.
CONCLUSION
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. This single difference alone means that over half of the proposed collective is subject to binding individual arbitration agreements that preclude their participation in any class or collective action. In addition, the subcontracting provisions differ meaningfully across the three ICOA versions, with v3.0 providing substantially broader and more practically accessible subcontracting rights than v1.0 or v2.0. Driver independence varies widely across the fourteen hubs and among individual drivers, as reflected in differences in scheduling patterns, acceptance rates, route choices, earnings, vehicle investments, subcontracting activity, and multi-platform engagement. These differences make blanket treatment of all 1,187 drivers as a single collective inappropriate and weigh strongly against conditional certification of the proposed collective.
I declare under penalty of perjury under the laws of the United States that the foregoing is true and correct.
Executed on August 11, 2025, in Irving, Texas.
________________________________________
Karen Lund Director of Driver Relations Stonefield Logistics Group Inc. 4200 Commerce Gateway Blvd., Suite 800 Irving, TX 75039
CERTIFICATE OF SERVICE
I hereby certify that on August 13, 2025, a true and correct copy of the foregoing Declaration of Karen Lund in Support of Defendant's Opposition to Conditional Certification was served upon all counsel of record via the Court's CM/ECF electronic filing system, which will send notification of such filing to the following:
Claudia Hartwell HARTWELL & BRASHEAR PLLC 500 N. Akard Street, Suite 1750 Dallas, TX 75201 Counsel for Plaintiff Marcus Delano
________________________________________
Bernard Crawford CALDERWOOD & HARKNESS LLP 2200 Ross Avenue, Suite 3600 Dallas, TX 75201 Telephone: (214) 555-8200 Facsimile: (214) 555-8201 bcrawford@calderwoodharkness.com
Counsel for Defendant Stonefield Logistics Group Inc.
MARCUS DELANO, individually and on behalf of all others similarly situated,
Plaintiff,
v. | Case No. 3:25-cv-01847-RBC
STONEFIELD LOGISTICS GROUP INC.,
Defendant. | Hon. Rebecca Chen
Hub Designation | Location | Drivers During Relevant Period
HUB-01 | Fort Worth, TX | 142
HUB-02 | Dallas, TX | 168
HUB-03 | Houston, TX | 195
HUB-04 | San Antonio, TX | 121
HUB-05 | Austin, TX | 98
HUB-06 | Oklahoma City, OK | 87
HUB-07 | Tulsa, OK | 64
HUB-08 | Baton Rouge, LA | 53
HUB-09 | New Orleans, LA | 71
HUB-10 | Little Rock, AR | 46
HUB-11 | Shreveport, LA | 34
HUB-12 | El Paso, TX | 41
HUB-13 | Lubbock, TX | 29
HUB-14 | Corpus Christi, TX | 38
Total | 1,187

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

OVERVIEW OF THE INDEPENDENT CONTRACTOR OPERATING AGREEMENT VERSIONS

SUBCONTRACTING PROVISIONS AND PRACTICAL APPLICATION

RANGE OF DRIVER INDEPENDENCE REFLECTED IN SLG RECORDS

CONCLUSION

CERTIFICATE OF SERVICE

STONEFIELD LOGISTICS GROUP INC.,

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