Hudgins et al v. Total Quality Logistics, LLC

Filing 205

MEMORANDUM OPINION AND ORDER signed by the Honorable Matthew F. Kennelly on 1/29/2019: For the reasons stated in the accompanying Memorandum Opinion and Order, the Court denies the defendant's motion to decertify the plaintiff collective [dkt. no. 182]. (mk)

Case: 1:16-cv-07331 Document #: 205 Filed: 01/29/19 Page 1 of 22 PageID #:2242

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
BRIAN HUDGINS and JONATHAN
RONDENO, on their own behalf and on
behalf of those similarly situated,
Plaintiffs,
vs.
TOTAL QUALITY LOGISTICS, LLC,
Defendant.

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Case No. 16 C 7331

MEMORANDUM OPINION AND ORDER
MATTHEW F. KENNELLY, District Judge:
Brian Hudgins and Jonathan Rondeno sued Total Quality Logistics, LLC (TQL)
on behalf of themselves and others similarly situated for violations of the Fair Labor
Standards Act's (FLSA) overtime requirements. They alleged that TQL misclassified
employees who served as logistics account executives—and trainees for that position—
as exempt from FLSA's overtime pay requirement under that Act's administrative
exemption. The plaintiffs moved to conditionally certify the case as a collective action,
and this Court granted that motion. See Hudgins v. Total Quality Logistics, LLC
(Hudgins I), No. 16 C 7331, 2016 WL 7426135 (N.D. Ill. Dec. 23, 2016). Counsel
subsequently sent notices to potential class members, more than 140 of whom opted
into the plaintiff collective, and the parties engaged in discovery. Based on that
discovery, TQL now moves to decertify the collective action. For the reasons stated
below, the Court denies the motion.

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Background
A.

Factual background
The following facts are undisputed except where otherwise noted. TQL is a firm

specializing in supply chain management and freight brokerage services.
Headquartered in Cincinnati, Ohio and with offices in twenty-two states, it is among the
largest such firms in the country. TQL does not own trucks that move freight but rather
acts as an agent connecting its customers to third-party carriers who transport
customers' goods. To accomplish this task, TQL maintains a sizable force of logistics
account executives (LAEs) who cultivate and maintain relationships with customers.
Aspiring LAEs must first spend several months as trainees before attaining the full
privileges and duties of the role.
Brian Hudgins and Jonathan Rondeno are former LAEs. Hudgins worked as a
trainee and then an LAE in TQL's Chicago office from May 2014 to June 2015.
Rondeno was a trainee and then an LAE in TQL's Orlando, Florida office from February
to November 2015. They allege that LAEs and trainees were required to work more
than 40 hours per week. They also allege that they were expected to be available
twenty-four hours a day, seven days a week to respond to customers. They never
received overtime pay. The plaintiffs allege that TQL misclassified them and every
other LAE and trainee as exempt administrators under the FLSA.
The broad contours of the LAE and trainee positions are not disputed.
Employees in both roles are paid a salary of $35,000 per year, and full LAEs are also
eligible to earn commissions. LAEs typically maintain their own books of business,
meaning that they "prospect" for clients, then maintain those relationships. The

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services they sell include advising customers on which third-party carriers to use,
negotiating prices with those carriers, assessing the applicability of relevant state and
federal regulations, acting as a liaison between their customers and third-party shippers,
and otherwise responding to customers' varying needs. Stated broadly, these duties
appear quite standard to all LAEs. See Def.'s Opening Br., dkt. no. 182, at 5-10
(describing the common duties of the LAE role). Trainees perform a somewhat
narrower subset of these same tasks, though the level of autonomy they are given
varies because they are each assigned to an LAE who dictates the pace of their
training.
Although there appears to be agreement, at least in broad terms, about what
LAEs and trainees do, the parties disagree both on how widely day-to-day
responsibilities vary between employees and on the importance of that variance. TQL
asserts that, because each LAE must develop her own book of business, some less
successful employees spend most or all of their time prospecting, while others spend
most or all of their time providing logistics services. (Significant later, those who
primarily provide logistics services allegedly exercise greater discretion than their
counterparts who mostly prospected.) The plaintiffs, on the other hand, characterize all
of the LAEs' and trainees' primary task as "sales." They emphasize that both
prospecting and providing logistics services are part of a single sale and thus frame the
variance among LAEs' daily activities as immaterial. To support this assertion, the
plaintiffs point to standardized job listings and other record evidence that describes the
LAE position as a sales job.

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B.

Procedural history
Hudgins and Rondeno sued TQL in July 2016. In September 2016, they moved

to certify a collective action including two subclasses under the FLSA. The first
subclass would include all LAEs employed by TQL nationwide in the preceding three
years, and the second would include trainees for the LAE position employed nationwide
in the same timeframe. They sought to exclude three groups: (1) otherwise qualified
LAEs who worked for TQL in Ohio, where a state-court collective action was already
underway; (2) otherwise qualified LAEs who had already joined the Ohio action; and (3)
any LAE who earned more than $100,000 per year for the entire three-year period.
The Court granted conditional certification of two subclasses. See Hudgins I,
2016 WL 7426135, at *5. The first subclass is made up of all LAEs meeting the
qualifications noted above, and the second is made up of current and former trainees
who worked during the three-year timeframe. Id. The Court directed TQL to provide the
names, last known addresses, phone numbers, and e-mail addresses of putative class
members to plaintiffs' counsel to facilitate reasonable notice by e-mail and first-class
mail. Id. at *6. TQL did so, and notice was sent to putative members.
In the meantime, TQL argued that arbitration agreements signed by some of the
putative class members precluded them from participating in the collective action. The
Court ordered briefing on the enforceability of those agreements and on the Court's
authority to rule on their validity. See id. at *7-8. Ultimately, the Court held that the
agreements were enforceable and removed from the class persons who had signed
arbitration agreements. See Hudgins v. Total Quality Logistics, LLC (Hudgins II), No.
16 C 7331, 2017 WL 5144191, at *4 (N.D. Ill. Feb. 8, 2017). That group included

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named plaintiff Rondeno. TQL subsequently supplemented its list of class members
that had signed arbitration agreements, knocking out two more members of the class.
See Hudgins v. Total Quality Logistics, LLC (Hudgins III), No. 16 C 7331, 2018 WL
1706368, at *3 (N.D. Ill. Apr. 9, 2018).
Although the collective group has gone through several expansions and
contractions, it currently includes 142 LAE and trainee members. TQL now moves to
decertify both subclasses of the collective, arguing that they are subject to insufficiently
common questions of law and fact to support a collective action under the FLSA.
Discussion
The FLSA requires an employer to pay an employee for the time she works
beyond forty hours in one week at one and one-half times the employee's regular pay
rate. 29 U.S.C. § 207(a)(1). The statute also authorizes "any one or more employees
for and on behalf of himself or themselves and other employees similarly situated" to
sue in a collective action to recover unpaid overtime wages. Id. § 216(b). "[D]istrict
court[s] ha[ve] wide discretion to manage collective actions" under this provision.
Alvarez v. City of Chicago, 605 F.3d 445, 449 (7th Cir. 2010); see also Hoffmann-La
Roche Inc. v. Sperling, 493 U.S. 165, 171 (1989) (discussing district courts' "discretion"
and "responsibility" to manage "joinder of additional parties to assure that [FLSA
collective action] is accomplished in an efficient and proper way").
Courts in this district and circuit commonly assess the viability of collective action
under the FLSA in two stages. See Russell v. Ill. Bell Tel. Co., Inc., 721 F. Supp. 2d
804, 811 (N.D. Ill. 2010) (Kennelly, J.). At the first stage, "plaintiffs only need to make a
minimal showing that others in the potential class were similarly situated." Id. (internal

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quotation marks omitted). The Court previously ruled that the plaintiffs satisfied this
requirement when it granted conditional certification. See Hudgins I, 2016 WL 7426135,
at *5.
After conducting significant discovery, TQL triggered second-stage review by
moving to decertify the collective action. At this second stage, "the court's inquiry is
more stringent"; it must assess whether the plaintiffs have presented sufficient evidence
of "an identifiable factual nexus that binds the plaintiffs together as victims of a particular
violation of the overtime laws" such that they are "similarly situated" for the purposes of
the collective action. Russell, 721 F. Supp. 2d at 811. Although the FLSA does not
define "similarly situated," the parties structure their arguments around a common
formulation that involves three factors: (1) the extent to which plaintiffs share common
"factual and employment settings"; (2) any defenses that are applicable to only some
individual plaintiffs; and (3) "fairness and procedural considerations." Id. (quoting
Thiessen v. Gen. Elec. Capital Co., 267 F.3d 1095, 1103 (10th Cir. 2001)).
The crux of the present dispute involves the application of the FLSA's
"administrative exemption" for overtime pay to LAEs and trainees. Specifically, section
213 provides that overtime pay requirements "shall not apply with respect to . . . any
employee employed in a bona fide . . . administrative . . . capacity." 29 U.S.C.
§ 213(a)(1). TQL argues that neither the LAE subclass nor the trainee subclass should
remain certified. It first asserts that members of the subclasses do not share sufficiently
common employment or factual settings because differences in performance resulted in
different day-to-day duties. It argues that those differences resulted in some members
of the collective clearly qualifying for the administrative exemption while others may not.

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TQL further argues that determining whether any given class member qualifies will
require extensive individualized factual analysis. It makes similar arguments regarding
damages. TQL contends that determining the wages to which each individual plaintiff is
owed will require individualized proof, rendering a collective action inappropriate.
The Court will assess the parties' arguments regarding each of the subclasses in
turn and will then discuss TQL's damages arguments.
A.

LAE subclass
1.

Common factual and employment circumstances

In assessing whether plaintiffs are similarly situated, the Court first considers
"similarities and differences in the employment and other factual settings of the various
plaintiffs, including whether plaintiffs had differing job titles or assignments, worked in
different locations, were under different supervisors or decisionmakers, or allege
different types of violative conduct." Vennet v. Am. Intercontinental Univ. Online, No. 05
C 4889, 2005 WL 6215171, at *7 (N.D. Ill. Dec. 22, 2005).
TQL argues that the members of the LAE subclass are not similarly situated
because individual class members' day-to-day duties varied from one another. That
variance is significant, TQL asserts, because it bears on whether the administration
exemption will apply to various members of the group. Specifically, it argues that LAEs
who developed robust books of business (and therefore spent little or no time
prospecting for new customers) spent most of their time performing logistics services,
advising clients, and otherwise exercising enough discretion related to the general
business operations of the company to satisfy the exemption's requirements. TQL also
argues that some members of the collective may even have exercised supervisory

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power, further buttressing their eligibility for the exemption. And it asserts that these
issues are not subject to the sort of common proof well-suited to collective adjudication
and that the Court should thus grant decertification.
The plaintiffs counter that the "primary duties" of LAEs and trainees were
perfectly uniform: they all made sales. Therefore, in the plaintiffs' view, the entire
collective is sufficiently similarly situated to support continued certification. They point
to substantial evidence that TQL paid all LAEs at the same base rate, presented the
LAE position to prospective employees as a sales job, and had several internal policies
that described it as a sales position. Plaintiffs also point to TQL's own decision to
categorically exempt all LAEs from overtime as evidence that they are similarly situated.
They contend that it would be incongruous to allow TQL to treat LAEs collectively for the
purpose of avoiding payment of overtime but not for the purpose of requiring payment of
illegally withheld wages.
But, although conceivably related to the question of whether members of the
collective share common factual or employment settings, the application of the
administrative exemption fits better under the individualized defenses element of the
applicable test. Thus rather than assessing the administrative exemption here, the
Court will address those arguments below.
Still, the Court must determine whether the members of the LAE subclass share
sufficiently common employment circumstances. Based on the record, the Court is
satisfied that the LAE subclass's claims satisfy this element. Specifically, the plaintiffs
have presented evidence that members of the subclass shared a common title, job
description, and basic responsibilities. Likewise, they allegedly suffered a common

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harm stemming from TQL's policy of classifying all LAEs as overtime exempt. To the
extent members of the subclass varied in employment and factual circumstances, it
appears that this can be attributed to individual LAEs' excelling at the common
responsibilities of their position, with the most successful employees spending more of
their time doing certain parts of the job than their less successful peers.
It is also probative that the entire LAE subclass was categorically classified as
exempt from overtime pay by TQL. That policy suggests that company itself viewed the
LAEs as similarly situated for the purposes of overtime pay. And, unlike in Russell,
where this Court decertified certain extraneous claims, see Russell, 721 F. Supp. 2d at
814, all of the claims brought by the plaintiffs in this case concern that single policy.
See also Vennet, 2005 WL 6215171, at *7.
This is not to suggest that there are no differences among members of the LAE
subclass. But some variances in individual employees' performance of responsibilities
common to their positions are inevitable and insufficient to call for decertification. See
Russell, 721 F. Supp. 2d 804, 812 ("Although certification requires a factual nexus,
plaintiffs in a FLSA collective action need not be situated identically."); see also O'Brien
v. Ed Donnelly Enters., Inc., 575 F.3d 567, 585 (6th Cir. 2009) (finding plaintiffs
sufficiently similarly situated "because their claims were unified by common theories of
defendants' statutory violations" even though "proofs of those theories are inevitably
individualized and distinct"). The Court therefore concludes that plaintiffs have satisfied
their burden under the first factor.
2.

Individualized defenses

Next, the Court considers TQL's contention that individual plaintiffs are subject to

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unique defenses not common to the class. "[T]he availability of defenses to some but
not all of the putative class members . . . poses significant case management
concerns." Anderson v. Cagle's, Inc., 488 F.3d 945, 954 n.8 (11th Cir. 2007) (internal
quotation marks and citation omitted). But courts have also noted that "[i]f one zooms in
close enough on anything, differences will abound; even for a single employee doing a
single job." Frank v. Gold'n Plump Poultry, Inc., No. 04-1018, 2007 WL 2780504, at *4
(D. Minn. Sept. 24, 2007); see also Russell, 721 F. Supp. 2d at 820.
TQL asserts two arguments that concern this factor. First, it argues that the
administrative exemption to FLSA's overtime requirements may apply to some LAE
subclass members and not others. Then it argues that a handful of specific named
members of the subclass are subject to yet other unique defenses. In assessing these
defenses, the Court does not determine their merits but rather focuses on whether they
are likely to be applicable to the subclass as a whole.
a.

Administrative exemption

TQL argues that the FLSA's administrative exemption, see 29 U.S.C. § 213(a)(1),
applies to at least some of the LAE subclass members and that determining to whom it
applies will be an individualized, fact-bound endeavor ill-suited for collective resolution.
The Department of Labor has promulgated regulations interpreting the exemption. See
29 C.F.R. § 541.200-203. Under the relevant regulation, "the term 'employee employed
in a bona fide administrative capacity'" means any employee:
(1) Compensated on a salary or fee basis at a rate of not less than $455
per week (or $380 per week, if employed in American Samoa by
employers other than the Federal Government), exclusive of board,

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lodging or other facilities 1;
(2) Whose primary duty is the performance of office or non-manual work
directly related to the management or general business operations of the
employer or the employer's customers; and
(3) Whose primary duty includes the exercise of discretion and
independent judgment with respect to matters of significance.
Id. § 541.200(a). The "[d]etermination of an employee’s primary duty must be based on
all the facts in a particular case, with the major emphasis on the character of the
employee’s job as a whole." Id. § 541.700(a). TQL will ultimately have to prove that the
plaintiffs satisfied every element of the regulation to prevail. See Hundt. v. DirectSat
USA, LLC, 294 F.R.D. 101, 110 (N.D. Ill. 2013).
The first requirement of the regulation is undisputed. TQL argues, however, that
the second and third elements require the Court to determine each employee's "primary
duty" on an individual basis. The plaintiffs argue that no such individualized inquiry is
necessary because all the subclass members shared work duties sufficient for their
claims to be resolved collectively.
i.

"Related

to

management

or

general

business

operations"
The regulation provides a helpful gloss on what it means for an employee's
"primary duty" to be "related to management or general business operations." 29
C.F.R. § 541.201. "To meet this requirement, an employee must perform work directly
related to assisting with the running or servicing of the business, as distinguished, for
example, from working on a manufacturing production line or selling a product in a retail
or service establishment." Id. § 541.201(a). The Seventh Circuit has explained that
1

The minimum compensation level was changed by regulation in 2016, but that
regulation was enjoined by a district court after this case was filed. See Nevada v. U.S.
Dep't of Labor, 218 F. Supp. 3d 520, 534 (E.D. Tex. 2016). In any case, the parties do
not dispute that the plaintiffs satisfy the first element.
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under this regulation "when an employee is engaged in the core function of a business,
his or her task is not properly categorized as administrative." Schaefer-LaRose v. Eli
Lilly & Co., 679 F.3d 560, 574 (7th Cir. 2012). "'Servicing' a business . . . denotes
employment activity ancillary to an employer's principal production activity . . . ."
Haywood v. N. Am. Van Lines, Inc., 121 F.3d 1066, 1072 (7th Cir. 1997) (quoting Martin
v. Cooper Elec. Supply Co., 940 F.2d 896, 904-05 (3d Cir. 1991)), overruled on other
grounds, Hill v. Tangherlini, 724 F.3d 965 (7th Cir. 2013).
The plaintiffs contend that they were misclassified because TQL's core business
is selling logistics services to its clients and the primary duty of LAEs is to make those
sales. Noting that LAEs are three quarters of all TQL's employees, the company
advertises the LAE position as a sales job, and several departments exist to support
LAEs' work, the plaintiffs further argue that their duties could not properly be
characterized as "ancillary to" TQL's principal business. TQL counters that each LAE
may have a different primary duty depending on her day-to-day activities. Some
successful LAEs, it argues, will have the primary duty of "logistics," but others who
spend more of their time scrounging for business may have "sales" or "prospecting" as
a primary duty. In TQL's view, an employee whose primary duty was "logistics" would
serve in an advisory role that would easily qualify for exemption under the regulation.
See Verkuilen v. MediaBank, LLC, 646 F.3d 979, 980-81 (7th Cir. 2011) (noting that
advisory duties often satisfy the standard).
Accepting for the sake of argument that an employee whose primary duty was
"logistics" would qualify under the second factor from 29 C.F.R. § 541.200, TQL's
contention nevertheless fails. The Court addresses here not the strength of TQL's

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defenses but rather their uniformity across the collective group. As TQL acknowledges,
the Seventh Circuit has rejected the proposition that the allocation of an employee's
time controls the determination of her "primary duty" for the purposes of the
administrative exemption. See Demos v. City of Indianapolis, 302 F.3d 698, 704-05
(7th Cir. 2002). The Court may, for instance, consider factors including "the relative
importance" of an employee's various duties "to [her] employer." Id. It is enough to
observe that the primary duty of the LAEs in the plaintiff class is unlikely to depend only
or even primarily on factual questions of how much time each individual LAE spent on
particular tasks. Without determining at this point what the LAEs' primary duty was or
is, it appears that a class-wide resolution is possible under the second element of the
administrative-exemption regulation.
The Court is also persuaded that TQL's decision to categorically exempt all LAEs
is probative. Despite TQL's efforts to cast this point as immaterial, such a "uniform
exemption policy is certainly relevant" in determining whether an exemption defense
would be individualized and thus undermine the effectiveness of collective action. See
Dailey v. Groupon, Inc., No. 11 C 05685, 2014 WL 4379232, at *5 (N.D. Ill. Aug. 27,
2014); cf. In re Wells Fargo Home Mortg. Overtime Pay Litig., 571 F.3d 953, 957 (9th
Cir. 2009) ("An internal policy that treats all employees alike for exemption purposes
suggests that the employer believes some degree of homogeneity exists among the
employees.").
To reiterate, the Court does not express an opinion on the relative strength or
weakness of TQL's defense with respect of the second regulatory element of the
administrative exemption. Instead, it concludes only that that defense is susceptible to

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collective resolution.
ii.

"Discretion or independent judgment"

TQL also argues individualized inquiries will be necessary under the third and
final element of the Department of Labor regulation. Again, a lengthy regulation
provides color and examples from which to glean the provision's meaning. See 29
C.F.R. § 541.202. In part, it says that "the exercise of discretion and independent
judgment involves the comparison and the evaluation of possible courses of conduct,
and acting or making a decision after the various possibilities have been considered."
Id. § 541.202(a). TQL will ultimately need to demonstrate that this regulatory factor is
satisfied to defeat the plaintiffs' claims that it misclassified them as exempt.
TQL's arguments sound familiar notes. It asserts that some LAEs (the more
successful ones) did primarily discretionary logistical work, while others spent their days
unsuccessfully cold calling prospective clients. And, as above, TQL argues that these
differences will result in disparate determinations of individual LAEs' primary duties for
the purposes of the exemption.
Without determining the relative strength of the defense, the Court concludes that
TQL's argument lacks merit. A wide range of self-paced jobs—many arguably more
circumscribed than even the most limited version of the LAE position—have been held
to involve sufficient discretion and independent judgment to satisfy this requirement.
See, e.g., Schaefer-LaRose, 679 F.3d at 577-83 (discussing the standard's application
in several contexts). For instance, in Schaefer-LaRose, the Seventh Circuit held that,
despite working within tightly controlled messaging guidelines, a pharmaceutical sales
representative exercised sufficient discretion because her work was not scripted. Id. at

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565-66. That is, because she could tailor each pitch to her audience, the representative
exercised enough discretion to satisfy the regulation. Id. at 583. Because the parties
agree that LAEs had freedom to determine which prospective customers to call and how
to pitch TQL's logistic services, it is not all that clear that the degree of discretion
exercised by LAEs is likely to be contested, let alone that any dispute on this point is
likely to be terribly significant in the overall analysis.
Moreover, even if prospecting involved insufficient discretion to satisfy the
regulation, whether any given LAE's primary duty was prospecting is not determined
simply be calculating what portion of her time she spent on it. See Demos, 302 F.3d at
704-05. Rather, the Court considers, other things, "the relative importance of [an
employee's] duties to the employer." Id. TQL categorically designated all of the LAEs
exempt, regardless of how much time they spent on the phone attempting to drum up
business. There is a fair argument that TQL would not have uniformly classified the
LAES if it believed that time spent on prospecting could change their primary duties and
create individualized questions about the exemption's applicability. Under the reasoning
of Demos, this common classification decision suggests that the question can be
resolved based on collective evidence.
The Court concludes, without determining the strength of the defense or what
exactly the LAEs' primary duties were, that the third regulatory factor's application to the
LAE subclass is susceptible to collective resolution. Under the FLSA, the plaintiffs need
not be identically situated to proceed collectively, so long as they are situated similarly
enough for collective resolution to be possible. Russel, 721 F. Supp. 2d at 812. This
factor therefore provides no basis for decertification.

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b.

Other defenses

TQL identifies three other relatively minor defenses it says are unique to specific
members of the LAE subclass. First, TQL argues that subclass members Justin Baker
and Desiree Rogers are subject to unique statute of limitations defenses. The plaintiffs
do not deny the statute of limitations problem and purport to "agree to dismiss these
class members." Pl.'s Resp. Br., dkt. no 197, at 24. But the plaintiffs have not filed a
formal notice of dismissal regarding these two plaintiffs. If plaintiffs mean what they
say, they should file such a notice immediately. If and when they do so, this defense
will no longer present any obstacle to continued collective litigation.
Second, TQL argues that subclass member Jonathan Tweed is subject to a
unique defense because of his military service. Specifically, it argues that Tweed was
away for periods of his employment as an LAE and that his claim will therefore be
subject to unique, individualized proof. This, however, bears only upon the amount
Tweed would be entitled to recover if plaintiffs prevail. Were this sort of difference
sufficient to require decertification, it would undermine FLSA's collective action
provision. See Alvarez, 605 F.3d at 450; Frank, 2007 WL 2780504, at *4. The Court
rejects this as a basis for decertification.
Third, TQL asserts in conclusory terms that subclass member Michael Pearce is
"potentially" subject to the unique defense that he was exempt from overtime
compensation as a highly compensated worker. See Def.'s Opening Br., dkt. no 182, at
26; 29 C.F.R. § 541.601. It bases this argument on evidence that Pearce made
$55,716.80 in the first twenty-five weeks of 2014, which TQL says put him on pace to
make nearly $116,000 had he worked through the year. The Court concludes, without

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assessing the strength of this defense, that it insufficient to support decertification. The
record indicates that Pearce worked at TQL before 2014 and that he was compensated
at the rate described above only for his final six months on the job. Even beyond the
fact that TQL has not yet met its burden to prove that the exemption applies, see
Schaefer-LaRose, 679 F.3d at 572, it has not demonstrated that Pearce's work before
2014 falls within the highly compensated worker exemption. Because of this shortfall,
the Court concludes that even if TQL does eventually prove that the exemption applies
to Pearce's 2014 earnings, that determination will bear only on Pearce's damages and
not on collective liability.
In sum, each of TQL's arguments based on purportedly individualized defenses
fails. Even so, the Court reserves the right to revisit this conclusion as the record in this
case develops. Cf. Alvarez, 605 F.3d at 449 ("A district court has wide discretion to
manage collective actions.").
3.

Fairness and procedural considerations

The third set of factors the Court assesses in evaluating the motion for
decertification are fairness and procedural considerations. The Court must "consider
whether proceeding as a collective would create fairness or procedural benefits."
Hundt, 294 F.R.D. at 108. "The collective action device is designed to promote judicial
economy and to protect the interests of plaintiffs whose damages claims might be too
small to justify the high costs of an individual lawsuit." Blakes v. Ill. Bell Tel. Co., No. 11
C 336, 2013 WL 6662831, at *16 (N.D. Ill. Dec. 17, 2013); see also Hoffmann-La
Roche, 493 U.S. at 171 (emphasizing the importance of efficiency). The Seventh
Circuit has indicated that district courts must take this mandate seriously, "sifting

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through the subclaims of each of the myriad plaintiffs" as necessary to ensure fairness.
Alvarez, 605 F.3d at 450.
Considerations of efficiency and fairness disfavor decertification. The collective
group is made up of about 140 individuals, all of whom served in the same position with
the same company and had the same basic responsibilities—including a minimum
required schedule exceeding forty hours per week—and all of whom were subject to a
categorical overtime exemption decision by TQL. Because TQL's liability and defenses
are subject to collective resolution, there is no need for the sort of inefficient "detailed
fact-specific inquiry" that this standard is intended to guard against. Id. at 449. Nor, as
discussed below, do TQL's arguments about damages warrant decertification. The
Court concludes that it is preferable as a matter of fairness and judicial economy to
continue a single collective action rather than sending 140 litigants out to file individual
lawsuits. Cf. Allen v. City of Chicago, No. 10 C 3183, 2014 WL 5461856, at *8
("[J]udicial economy would be better served by a collective action of fifty-three opt-in
plaintiffs than by fifty-three individual trials.").
B.

Trainee subclass
The trainee subclass is subject to much of the same analysis as the LAE

subclass. For instance, common basic responsibilities and collective classification as
overtime exempt again suggest that common factual and employment circumstances
predominate. Likewise, fairness and procedural considerations apply to this subclass
much as they did for the LAEs. Because the majority of the analysis mirrors that
already discussed above, the Court focuses on two potential differences.
Specifically, without deciding the merits of the defense, the Court notes that the

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administrative exemption's regulatory factors may apply somewhat differently to the
trainee subclass. First, the second factor—whether an employee's "primary duty" is
"related to management or general business operations"—may apply differently to
trainees because their primary duty is conceivably different from that of LAEs. The
trainees are, after all, training to become LAEs, and their primary duty may turn out to
be something akin to "training" rather than "sales" or "logistics." But this is no obstacle;
for the same reasons discussed above, the trainee subclass members' primary duty for
the purposes of applying the second regulatory factor appears amenable to collective
resolution.
The other potential difference relates to the third regulatory factor—whether the
trainees' "primary duty includes the exercise of discretion and independent judgment
with respect to matters of significance." 29 C.F.R. § 541.200(a)(3). TQL argues that
some of the trainees may have exercised insufficient discretion to qualify for the
exemption while others likely cleared the threshold. It points out that some trainees
worked as de facto LAEs during their training periods, while others were subject to
micromanagement by the LAEs assigned to train them. TQL asserts that determining
whether a given trainee exercised sufficient discretion will require individualized
evidence. The plaintiffs do not address this factor directly on this motion but mention in
their subsequent motion for summary judgment that they think the trainees as a class
exercised insufficient discretion to qualify for the exemption.
Ultimately, this question too appears subject to collective resolution. Again, since
the time each trainee spent a given task is not determinative of her primary duty within
the meaning of the statute, other considerations common to the subclass may be

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decisive. See Demos, 302 F.3d at 704-05. Furthermore, a key consideration in
whether an employee is eligible for exemption under this factor is the extent to which
she is subject to stringent "oversight and control." Blanchar v. Std. Ins. Co., 736 F.3d
753, 758 (7th Cir. 2013); see also 29 C.F.R. 541.202(c). Even accepting TQL's
contention that trainees enjoyed disparate degrees of freedom in their work, the key
here is that any freedom a trainee did enjoy was itself entirely at the discretion of the
LAE training her. See 29 C.F.R. § 541.202(c) ("The exercise of discretion and
independent judgment implies that the employee has authority to make an independent
choice, free from immediate direction or supervision."). Put another way, the record
suggests that the variance in trainees' day-to-day work was itself a product of their
subjection to their trainers' control.
Without assessing the strength of TQL's defense under this factor, the Court
concludes that resolution of common questions regarding supervision and control are
likely to be decisive. Application of the third regulatory factor therefore appears
amenable to collective resolution and thus does not require decertification.
C.

Damages issues
Finally, TQL argues that differences in the number of overtime hours worked by

various members of the collective will require fact-specific determinations of damages,
undermining the effectiveness of collective action. It cites Espenscheid v. DirectSat
USA, LLC, 705 F.3d 770, 776 (7th Cir. 2013), for the proposition that "inability to
demonstrate damages on a class-wide basis through representative evidence can be
grounds for decertification." Def.'s Opening Br., dkt no. 182, at 30. TQL retained an
expert, Paul White, to assess the depositions of members of the collective group to

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determine whether collective resolution of damages was possible. White opined that
the hours worked by members of the collective varied so widely that they would require
individual evidence to calculate.
The plaintiffs emphasize that liability is subject to collective resolution because all
members of the class worked in positions for which the baseline schedule required them
to work in excess of forty hours per week and are subject to the same exemption
defense, leaving only questions about to how much each plaintiff is entitled to recover.
And they argue that courts, including this Court, have held that such "variations in
damages . . . do not warrant decertification." Russell, 721 F. Supp. 2d at 820-21
(internal quotation marks and alterations omitted). The plaintiffs also disagree that
collective evidence is insufficient, urging the Court to allow representative testimony to
determine damages. They attack TQL's expert's testimony as unreliable in light of the
incompleteness of the records he assessed. Alternatively, the plaintiffs suggest that
decertification is either premature at this stage or that the Court should exercise its case
management discretion to bifurcate questions of liability and damages. See HoffmannLa Roche, 493 U.S. at 171 (acknowledging the broad discretion of district courts to take
such efficiency arguments into consideration).
The Court concludes that any individualized damages determinations necessary
in this case do not require decertification. Even accepting the accuracy of White's
determination that damages probably are not amenable to collective resolution, it
appears that, once collective liability issues are resolved, "calculation of each plaintiff's
award (if any) will be largely mechanical." Alvarez, 605 F.3d at 450. And, contrary to
TQL's characterization, Espenscheid supports this outcome. In that case, the Seventh

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Circuit held that "the district court must carefully explore the possible ways of
overcoming problems in calculating individual damages" before concluding that
collective action is not viable. Id. at 776. It upheld a district court's decision to decertify
a class of more than 2300 plaintiffs over damages issues because the plaintiffs
"opposed bifurcation and subclasses and refus[ed] to suggest a feasible alternative."
Espenscheid, 705 F.3d at 775-76. As the court emphasized, "if class counsel is
incapable of proposing a feasible litigation plan though asked to do so, the judge's duty
is at an end. And that's what happened" in Espenscheid. Id.
Not so here. The plaintiff collective has already been divided into subclasses to
facilitate collective resolution. And, even though the collective here is far smaller and
more homogenous than the one involved in Espenscheid, the plaintiffs have proactively
proposed alternative accommodations for damages calculations, if necessary, including
bifurcation of the damages question from the issue of liability.
It is not necessary or appropriate, for present purposes, to determine whether
bifurcation of the issue of damages will ultimately be needed. For now, it is enough to
observe that the damages issues raised by TQL are insufficient to warrant wholesale
decertification. See Espenscheid, 705 F.3d at 776.
Conclusion
For the foregoing reasons, the Court denies the defendant's motion to decertify
the plaintiff collective [dkt. no. 182].

________________________________
MATTHEW F. KENNELLY
United States District Judge

Date: January 29, 2019
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