Hudgins et al v. Total Quality Logistics, LLC
MEMORANDUM OPINION AND ORDER signed by the Honorable Matthew F. Kennelly on 12/23/2016: For the reasons stated in the accompanying Memorandum Opinion and Order, and as further described therein, the Court grants plaintiffs' motion to conditional ly certify a collective action and the issuance of section 216(b) notices [dkt. no. 24]. The Court denies TQL's request to compel arbitration but requests supplemental briefing on its request to dismiss or stay certain plaintiffs' claims wi thout compelling arbitration. The Court directs plaintiffs to file a surreply by January 6, 2017 and directs TQL to file a response to the surreply by January 20, 2017. The case is set for a status hearing, to be conducted by telephone, on January 5, 2017 at 8:30 a.m. Counsel are to set up a call-in number and are to communicate it to chambers by 12:00 p.m. on January 4, 2017. (mk)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
BRIAN HUDGINS and JONATHAN
RONDENO, on their own behalf and on
behalf of those similarly situated,
TOTAL QUALITY LOGISTICS, LLC,
Case No. 16 C 7331
MEMORANDUM OPINION AND ORDER
MATTHEW F. KENNELLY, District Judge:
Brian Hudgins and Jonathan Rondeno are former employees of Total Quality
Logistics, LLC (TQL). Hudgins and Rondeno filed a class action complaint, alleging that
TQL failed to pay them overtime in violation of the Fair Labor Standards Act (FLSA).
Since the filing of the complaint, 26 more former TQL employees have joined as
plaintiffs. Plaintiffs have moved for conditional certification of two classes and ask the
Court to facilitate providing notice to potential class members. TQL has moved to
compel arbitration of the claims brought by nine of the named plaintiffs. For the reasons
stated below, the Court grants the plaintiffs' motion for conditional certification but
denies some of their requests related to discovery and notice. The Court denies TQL's
request to compel arbitration and orders additional briefing on TQL's request, made in
its reply brief, to dismiss the claims brought by certain plaintiffs.
TQL is a freight brokerage firm that connects companies that need to ship
products with carriers that can provide these services. TQL is headquartered in
Cincinnati, Ohio and has offices in 22 states. It employs Logistic Account Executives
(LAEs) to sell freight carrier services to new and current customers. LAEs are primarily
responsible for identifying potential carriers, negotiating prices with customers and
carriers, monitoring shipments during transit, addressing cargo claims, and addressing
any problems that arise during shipment. TQL gives LAEs wide autonomy to choose
which customers to target, the prices that customers are charged, how to monitor
shipments and resolve problems, and strategies for acquiring new business. TQL
contends that the work performed by LAEs varies widely from one LAE to the next. For
example, some LAEs are assigned to manage other TQL employees, a decision largely
left to the discretion of the manager in each office. LAEs receive a base salary of
$35,000 per year and have the opportunity to earn commissions on their sales.
Before becoming an LAE, an employee starts as an LAET, or Logistic Account
Executive Trainee. TQL assigns each LAET to an individual LAE who is responsible for
training the LAET. This LAE has discretion in determining which responsibilities to give
to the LAET during the training period, which lasts for approximately 22 weeks. LAETs
also earn a base salary of $35,000 per year and do not have the opportunity to earn
Hudgins worked as an LAET and then an LAE from May 2014 to June 2015 in
TQL's Chicago office. Rondeno worked as an LAET and then an LAE from February
2015 to November 2015 in TQL's Orlando, Florida office. Hudgins and Rondeno allege
that TQL's required schedule for LAEs and LAETs resulted in them having to work more
than 40 hours per week. They also allege that they were expected to be available 24
hours per day, seven days per week to respond to customers. Hudgins and Rondeno
allege that they never received overtime compensation for these additional hours.
Specifically, Hudgins and Rondeno allege that TQL improperly classified them and
others similarly situated as exempt from overtime payments required under the FLSA.
They allege that this is a company-wide policy that has affected LAEs and LAETs
across all of TQL's offices.
For this reason, plaintiffs seek conditional certification of two classes. The first
includes all LAEs employed by TQL nationwide within the last three years. The second
includes all LAETs employed by TQL nationwide within the last three years. Plaintiffs
would exclude from these two classes: 1) any qualifying employee who worked for TQL
in Ohio; 2) any qualifying employee who has already joined the collective action against
TQL in Ohio; and 3) any LAE who earned $100,000 or more per year for the entire
Additionally, plaintiffs have asked the Court to facilitate notice to potential
members of the conditionally-certified classes in order to give potential members the
possibility of opting in to the class. Plaintiffs provide a proposed notice and consent
form. They ask to send this form by both first-class mail and e-mail. They also request
posting of the notice at each of TQL's office locations and sending a reminder notice
halfway through the notice period. Plaintiffs request a notice period of 60 days to
accomplish these efforts. Finally, plaintiffs ask the Court to direct TQL to turn over
certain information related to the proposed class members in order to facilitate providing
notice. Specifically, plaintiffs request the names, addresses, phone numbers, social
security numbers, and e-mail addresses of all potential class members.
As mentioned above, a number of former TQL employees have joined Hudgins
and Rondeno as plaintiffs since the filing of this case. As of November 18, 2016, there
are 28 plaintiffs, spreading across 12 TQL offices. The list is as follows:
Chicago, IL: Malcolm Brown, Cody Carroll, Adrianne Schmidt, Brian
Hudgins, Brad Ostmeyer, and Brian Hodge
Orlando, FL: Jonathan Rondeno, Aaron Jacobs, Mike Ghebrehiwet, Chris
Mullen, Amber Cirelli, and Michael Harris
Tampa, FL: Joshua List, Matthew Castriotta, and Matthew Hodgson
Houston, TX: Dakota Thornton
Austin, TX: Jason Watts
Charlotte, NC: Christopher McEwan, Evan Finley, John Meadows, and
Denver, CO: Jason Wilds
Atlanta, GA: Scott Carasik
Pittsburgh, PA: Ben Gresco
Charleston, SC: Darren Bird
Las Vegas, NV: Prince Fajardo
Nashville, TN: Kevin Phillips and Louis Bunch
TQL alleges that nine of these employees signed an arbitration agreement, requiring
them to bring their claims in arbitration. These employees are: Rondeno, Carasik,
Cirelli, Finley, Ghebrehiwet, Hodgson, McGowan, Mullen, and Thornton.
reason, TQL has moved to compel arbitration of the claims brought by these nine
Section 7 of the FLSA requires employers to pay overtime to certain employees
who work more than 40 hours in a work week. Kellar v. Summit Seating Inc., 664 F.3d
169, 173 (7th Cir. 2011) (citing 29 U.S.C. § 207(a)). Plaintiffs allege that TQL has failed
to meet this requirement for LAEs and LAETs. They have filed a motion asking the
Court to conditionally certify two proposed classes of TQL employees and to authorize
notice to potential class members. TQL argues that the plaintiffs have not met the
standard for conditional certification and, in the alternative, that plaintiffs' proposed
notice and discovery is inappropriate. TQL also asks the Court to compel arbitration of
the claims brought by plaintiffs who have signed an arbitration agreement.
Plaintiffs' motion to conditionally certify collective action and facilitate
notice to potential class members
Under the FLSA, plaintiffs may bring a collective action on behalf of themselves
"and other employees similarly situated" to recover unpaid overtime compensation. 29
U.S.C. § 216(b). Those who wish to participate "must affirmatively opt-in to the suit by
filing a written consent with the court." Alvarez v. City of Chicago, 605 F.3d 445, 448
(7th Cir. 2010). Neither Congress nor the Seventh Circuit has established criteria for
deciding conditional certification or notice, "but district courts have wide discretion to
manage collective actions." Sylvester v. Wintrust Fin. Corp., No. 12 C 1899, 2013 WL
5433593, *2 (N.D. Ill. Sept. 30, 2013) (internal quotation marks omitted).
Courts in this district employ a two-step process for evaluating conditional
certification. Id.; see also Petersen v. Marsh USA, Inc., No. 10 C 1506, 2010 WL
5423734, *2 (N.D. Ill. Dec. 23, 2010). At the first stage, plaintiffs must show that there
are similarly situated employees who are potential claimants. Jenkins v. White Castle
Mgmt. Co., No. 12 C 7273, 2014 WL 12606150, *1 (N.D. Ill. Sept. 26, 2014). This
requires plaintiffs to make a "modest factual showing sufficient to demonstrate that
[they] and potential plaintiffs together were victims of a common policy or plan that
violated the law." Terry v. TMX Fin. LLC, No. 13 C 6156, 2014 WL 2066713, *2 (N.D.
Ill. May 19, 2014) (citing Russell v. Ill. Bell Tel. Co., 575 F. Supp. 2d 930, 933 (N.D. Ill.
2008)). If plaintiffs meet this burden, the court will conditionally certify the collective
action and authorize the plaintiff to give notice to putative members. Petersen, 2010
WL 5423734 at *3.
The second stage occurs after discovery and completion of the opt-in process.
Sylvester, 2013 WL 5433593 at *3. At that time, the Court "must reevaluate the
conditional certification to determine whether there is sufficient similarly between the
named and opt-in plaintiffs to allow the matter to proceed to trial on a collective basis."
Id. (citing Jirak v. Abbott Labs., Inc., 566 F. Supp. 2d 845, 848 (N.D. Ill. 2008)).
Plaintiffs argue that LAEs across all TQL offices are similarly situated, as are all
LAETs. Plaintiffs contend that all putative notice recipients for each class share the
same job title, the same responsibilities, and the same compensation structure. Pls.'
Reply at 11–16. Plaintiffs further contend that TQL misclassified all putative class
members as exempt from the overtime pay requirements of the FLSA. Compl. ¶ 26.
They allege that this constitutes a "common policy or plan" as required for conditional
certification. Pls.' Reply at 9–11.
TQL argues first that the evidence plaintiffs provide in support of their motion—
namely, employee declarations and TQL job postings—is insufficient to show a
"common policy or plan" that violates the FLSA. Def.'s Resp. at 8–10, 12–13. TQL
further argues that putative class members "do not share a common factual nexus
regarding their employment" and therefore are not similarly situated. Id. at 10, 10–12.
The Court concludes that plaintiffs have made a sufficient showing that they and
the putative notice recipients are similarly situated for purposes of stage one of the
certification analysis. Plaintiffs have provided numerous employee declarations from
former TQL employees that indicate employees with the job titles of LAE or LAET
shared common job duties and compensation structure. See generally Pls.' Mem. in
Support of Mot. to Conditionally Certify Collective Action and Facilitate Notice to
Potential Class Members, Ex. D (Employee Decls.). Each employee states that he or
she worked as an LAE, an LAET, or both; he or she earned a base salary of $35,000
with the ability to earn commissions as an LAE; and, for those who worked as LAEs, his
or her duties while employed with TQL included selling freight carrier services using a
TQL database known as "Rate Matrix." See, e.g., Employee Decls. at 1-3. Plaintiffs
also provide job postings from TQL's website that demonstrate that all LAEs and LAETs
are similarly situated for the purposes of this conditional certification, in particular with
regard to their duties and how they are paid. See Pls.' Mem. in Supp. of Mot. to
Conditionally Certify Collective Action and Facilitate Notice to Potential Class Members,
Ex. E (Job Postings). The first posting is for a "Sales Representative" and applies
nationwide. Id. at 1. The posting indicates that applicants can join "one of [TQL's] 31+
nationwide offices" and earn $35,000 plus commission. Id. Accepted applicants
undergo under a 22-week training and mentoring program. Id. After that, their duties
include making prospecting calls, negotiating with shippers and carriers, managing daily
shipments, and providing customer service. Id. Plaintiffs have also provided identical
job postings for the same position at six different TQL offices across the country. See
id. at 3–14. These employee declarations and job postings are sufficient to show that
TQL's LAEs and LAETs across the country had the same responsibilities and
compensation structure and therefore that they are similarly situated for the purposes of
the plaintiffs' proposed collective action.
TQL argues that this evidence overstates the similarities among its employees at
different offices, and that there is actually significant variability from office to office which
prevents plaintiffs from being similarly situated. TQL first argues that compensation is
not uniform for all LAEs, because LAE earnings can range from $35,000 to over $1
million per year due to the possibility of commission. Def.'s Resp. 10. But employees
need not earn precisely the same amount in order to be similarly situated for the
purposes of a collective action. Jirak, 566 F. Supp. 2d at 848–49. What matters is that
each putative class member was subject to the same compensation structure, with a
base salary and, for the LAE class, the possibility of commissions. See Garza v.
Chicago Transit Auth., No. 00 C 0438, 2001 WL 503036, *3 (N.D. Ill. May 8, 2001)
("That the Plaintiffs and other potential plaintiffs may . . . earn different amounts of
money . . . does not mean that they are not operating under the same policies that
allegedly entitle them to overtime pay.). Plaintiffs have sufficiently shown that the salary
for each LAE and LAET is determined using the same compensation structure.
TQL also disputes the plaintiffs' claim that all LAEs and LAETs share similar job
duties. Def.'s Resp. 10. TQL argues that some employees "spend the majority, if not
all, of their time performing logistics services for their customers," whereas the plaintiffs
in this case allegedly did not claim that they perform any logistics duties. Id. at 11, 10.
TQL also contends that some LAEs are given supervisory authority and some are not,
which it argues creates further variability within the LAE position. But courts find
plaintiffs to be similarly situated "despite some variations in their job duties" when it is
clear that they have the same essential responsibilities. Jirak, 566 F. Supp. 2d at 848;
see also Petersen, 2010 WL 5423734 at *4 (approving the use of job descriptions to
support a finding that plaintiffs are "similarly situated" despite defendant's allegations of
differences in actual duties). Further, TQL has not argued that any one of these
differences is determinative of whether an employee is exempt from overtime under the
The Court also concludes that plaintiffs have made the modest showing required
to show that they were subject to a common policy or plan. Each employee in his or her
declaration indicates that he or she regularly worked more than forty hours in a given
week and that TQL never compensated him or her for these hours. See, e.g.,
Employee Decls. at 1–3. Many of the employees also stated that they have personal
knowledge of other LAEs and LAETs who worked overtime hours without receiving
compensation. See, e.g., id. at 3, 7. The fact that these employees come from different
offices in different states gives rise to a reasonable inference that it was corporate
practice—and not the practice of individual offices or supervisors—that resulted in
nonpayment of overtime compensation. TQL argues that plaintiffs should be required to
produce "corporate-level evidence . . . such as an affirmative policy, handbook, or
protocol." Def.'s Resp. at 9. Such a requirement, however, is inappropriate for stage
one of the conditional certification analysis, as this occurs before discovery has taken
place, meaning that a plaintiff would be highly unlikely to have access to the type of
evidence TQL demands. Plaintiffs' declarations sufficiently support plaintiffs' claim that
LAEs and LAETs across TQL's offices were unlawfully denied overtime due to a
company-wide practice. Plaintiffs have thus shown that they are entitled to conditional
certification of two classes, one for LAEs and one for LAETs, in order to facilitate notice
to putative class members.
Plaintiffs request conditional certification of two classes:
(1) the class of [LAETs] who were paid a salary and who were not paid
overtime compensation as required by the [FLSA] as a result of TQL's
failure to pay overtime compensation for all overtime hours worked by
them during their employment within the statute of limitations; and (2) the
class of all [LAEs], excluding those who exclusively worked in Ohio, who
were paid a salary or a salary plus commissions, but whose earnings did
not exceed $100,000.00 per year for every year during the three year
statutory period, and who were not paid overtime compensation as
required by the FLSA as a result of TQL's failure to pay overtime
compensation for all overtime hours worked by them during their
employment within the statute of limitations.
Pls.' Mem. in Support of Mot. to Conditionally Certify Collective Action and Facilitate
Notice to Potential Class Members at 2. Plaintiffs exclude LAETs and LAEs who
worked in TQL's Ohio locations because there is another collective action currently
pending in the Southern District of Ohio. See id. at 1 n.1. Plaintiffs' proposed classes
otherwise include all LAETs and LAEs at TQL offices across the country.
TQL argues that any conditional certification should be limited to those offices
represented in the declarations of plaintiffs who have already joined in this action.
Def.'s Resp. 13–14. TQL contends that the plaintiffs have failed to show that practices
are similar across all of TQL and specifically that plaintiffs have not provided any
evidence of how the other offices were managed, what duties employees of those
offices had, or how those employees were compensated. Id. at 13.
But as the Court has discussed, potential differences in office management or
employee duties do not defeat plaintiffs' claim that employees of all offices are similarly
situated. Further, the employee declarations that plaintiffs provide span 12 TQL offices
across 10 different states, representing over 25% of TQL's offices nationwide. This
evidence gives rise to a reasonable inference that the practice of failing to pay overtime
to LAEs and LAETs who work more than 40 hours in a given week is not limited to a
select few offices and does not vary by office location. The job postings provide further
support, given that a single nationwide posting advertises the LAET-to-LAE position and
location-specific postings are identical. Finally, the plaintiffs have provided two job
postings for offices that are not currently represented in employee declarations. See
Job Postings at 3–4 (Savannah, GA) and 13–14 (Lexington, KY). The fact that these
offices post identical descriptions of the LAE and LAET positions and compensation
structure indicates that offices beyond those currently represented by plaintiffs'
declarants share the same overtime practices that plaintiffs allege violate the FLSA.
For these reasons, the Court grants plaintiffs' motion for conditional certification
and denies TQL's request to limit the certification to particular office locations. Plaintiffs
are authorized to send notice of the pendency of the case to current and former LAEs
and LAETs, excluding those who worked in TQL's Ohio offices and those who made in
excess of $100,000.00 per year in any year of the statutory period.
Having decided to grant plaintiffs' motion for conditional certification, the Court
next addresses whether plaintiffs' proposed form of notice is adequate and appropriate.
The effectiveness of a collective action depends on putative class members "receiving
accurate and timely notice concerning the pendency of the collective action, so that they
can make informed decisions about whether to participate." Hoffman-La Roche Inc. v.
Sperling, 493 U.S. 165, 170 (1989). District courts therefore have a responsibility to
"oversee the joinder of additional parties to assure that the task is accomplished in an
efficient and proper way." Id. at 170–71. In exercising this responsibility, courts must
"take care to avoid even the appearance of judicial endorsement of the merits of the
action." Id. at 174.
Plaintiffs have made a number of requests concerning notice. TQL challenges
the following four:
1. Plaintiffs request disclosure of the e-mail addresses and social security
numbers of all putative class members in order to look up their most
recent addresses. Pls.' Mem. in Support of Mot. to Conditionally Certify
Collective Action and Facilitate Notice to Potential Class Members 14.
2. In addition to notice via first-class mail, plaintiffs ask for notice to be
sent via e-mail. Id. at 11.
3. Plaintiffs also request posting of notice in every TQL office. Id. at 12.
4. Plaintiffs ask to send a reminder notice halfway through the notice
period. Id. at 12–13.
Def.'s Resp. 15–18.
The Court grants plaintiffs' request for discovery of putative class members' email addresses and to send notice by both first-class mail and e-mail. District courts
have split on the question of whether e-mail notice is appropriate in the FLSA collective
action context. Boltinghouse v. Abbott Labs., Inc., No. 15 CV 6223, 2016 WL 3940096,
*5 (N.D. Ill. July 20, 2016) (citing cases). In light of the prevalence of e-mail as a form of
communication, the Court concludes that it is appropriate to send notice by both firstclass mail and e-mail. This will increase the likelihood that all potential class members
will receive notice, particularly considering the geographical scope of the conditionallycertified classes.
The Court overrules plaintiffs' request to post notice at TQL locations and to send
a reminder notice halfway through the notification period. Absent any evidence that
notice via first-class mail and e-mail is ineffective, these additional forms of notice are
unnecessary and overly intrusive. See Binnissia v. ABM Indus., Inc., No. 13 C 1230,
2014 WL 793111, *6 (N.D. Ill. Feb. 26, 2014). Further, a reminder notice could be
interpreted as encouragement by the Court to join the lawsuit. See Smallwood v. Ill.
Bell Tel. Co., 710 F. Supp. 2d 746, 753–54 (N.D. Ill. 2010).
Finally, the Court denies plaintiffs' request for discovery of proposed members'
social security numbers. Social security numbers are sensitive personal data that
should not be released unless necessary. See Blakes v. Ill. Bell Tel. Co., No. 11 CV
336, 2011 WL 2446598, *7 (N.D. Ill. June 15, 2011). The Court is unpersuaded that
disclosure of this information is necessary for plaintiffs to accomplish effective notice.
TQL's motion to compel arbitration and stay proceedings
TQL has moved compel arbitration of a number of the plaintiffs' claims and to
stay cvourt proceedings on those claims pending resolution of the arbitration. TQL
alleges that nine of the twenty-two plaintiffs that have so far opted into the class signed
arbitration agreements with TQL, agreeing to arbitrate any claim arising out of their
employment. Def.'s Mem. in Support of Mot. to Compel Arbitration and Stay
Proceedings 1. Specifically, TQL alleges that it has arbitration agreements with
plaintiffs Rondeno, Carasik, Cirelli, Finley, Ghebrehiwet, Hodgson, McGowan, Mullen,
and Thornton. Id. TQL has provided a signed copy of each agreement to the Court.
See id. at Ex. A (Arbitration Agreements). TQL asks this Court to "issue an order . . .
compelling Plaintiffs to arbitration pursuant to the terms of their arbitration agreements
with TQL; and . . . staying all proceedings as to those Plaintiffs pending resolution of the
arbitrations." Id. at 10.
Plaintiffs do not dispute the existence of these agreements but argue instead that
they are unenforceable. Plaintiffs first argue that this Court lacks the authority to
compel arbitration of the claims of these nine plaintiffs, because their arbitrations would
be required to take place outside of this district. Pls.' Resp. at 2–5. Plaintiffs also argue
that even if this Court has the authority to compel these arbitrations, it should not do so
because it would contravene public policy against class action waivers in the
labor/employment context. Id. at 6–10.
TQL argues that the Court lacks the authority to adjudicate the enforceability of
the arbitration agreements because the agreements contain a delegation clause. Def.'s
Mem. in Support of Mot. to Compel Arbitration and Stay Proceedings 6–8. Specifically,
the arbitration agreements state that the arbitrator "shall have authority to resolve
disputes about discovery and how this Agreement was formed, applied, interpreted, or
enforced." Arbitration Agreements at 3.
A challenge to the enforceability of an arbitration agreement is presumptively
resolved by the court, not by an arbitrator. Janiga v. Questar Capital Corp., 615 F.3d
735, 737 (7th Cir. 2010). This is overcome by a term in the agreement that "clearly and
unmistakably" provides that an arbitrator will resolve disputes about enforceability.
Howasam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002); see also Rent-ACenter, West, Inc. v. Jackson, 561 U.S. 63, 68–70 (2010).
The delegation clauses in TQL's arbitration agreements do not "clearly and
unmistakably" assign to the arbitrator questions of enforceability. The clauses say only
that the arbitrator shall resolve disputes about "how this Agreement was formed,
applied, interpreted, or enforced." Arbitration Agreements at 3 (emphasis added). This
stands in contrast to the language courts typically have found to constitute a clear and
unmistakable delegation. See, e.g., Lee v. Uber Techs., Inc., No. 15 C 11756 2016, WL
5417215, *4 (N.D. Ill. Sept. 21, 2016) (considering a clause that provided that "disputes
arising out of or relating to interpretation or application of this Arbitration Provision,
including the enforceability, revocability or validity of the Arbitration provision . . . shall
be decided by an Arbitrator"). Because the arbitration clause does not clearly and
unmistakably assign questions of enforceability to an arbitrator, it is a decision for the
Court. See Janiga, 615 F.3d at 737.
The Court next considers what actions it may take when ruling on the issue of
enforceability. TQL's motion and supporting memorandum asked the Court—should it
conclude that the arbitration agreement is enforceable—to compel arbitration of these
nine claims and stay court proceedings on the claims until arbitration is completed.
Def.'s Mem. in Support of Mot. to Compel Arbitration and Stay Proceedings at 10. The
Court concludes, however, that it lacks authority to compel arbitration of these claims.
Each arbitration agreement states that arbitration shall be held in the county and state
where the employee most recently worked for TQL. See, e.g., Arbitration Agreements
at 3. None of the employees for whom TQL seeks to compel arbitration worked for TQL
in this district. Pls.' Resp. 3. The Seventh Circuit has held that when an arbitration
includes a forum selection clause such as this, "only the district court in that forum can
issue a § 4 order compelling arbitration." Merrill Lynch, Pierce, Fenner & Smith, Inc. v.
Lauer, 49 F.3d 323, 327 (7th Cir. 1995). The Court therefore cannot compel these nine
plaintiffs to pursue arbitration in other districts.
In its reply, TQL concedes this limitation on the Court's authority. Def.'s Reply 2.
It argues, however, that this does not require the Court to denyjits motion entirely. Id.
TQL argues that the Court instead can either dismiss the nine claims under Federal
Rule of Civil Procedure 12(b)(3) for improper venue or issue a stay under Section 3 of
the Federal Arbitration Act (FAA). Id. at 3. But TQL failed to properly request these
forms of relief in its motion and opening memorandum and therefore did not give
plaintiffs an adequate opportunity to respond. TQL argues that its motion was in fact
made pursuant to both Rule 12(b)(3) and section 3 of the FAA and that it should not be
penalized for its "inartful[ ] capition[ing]" in failing to include those requests in the
motion's title. Id. TQL did state in its motion that it was moving "[p]ursuant to Federal
Rule of Civil Procedure 12(b)(3) and the Federal Arbitration Act, 9 U.S.C. §§ 3 and 4."
Def.'s Mot. to Compel Arbitration and Stay Proceedings 1. But this single sentence is
TQL's only mention of Rule 12(b)(3) or section 3. TQL did not present any arguments
under these authorities in its opening memorandum. And throughout the motion and
memorandum, TQL requested only that the Court compel arbitration and stay the
proceedings. Because of TQL's failure to raise the option of dismissal, plaintiffs did not
have a fair opportunity address this in their response.
For this reason, the Court requests supplemental briefing on its authority to
dismiss the nine claims TQL seeks to arbitrate. The Court directs plaintiffs to file a
surreply and directs TQL to file a response to the surreply. The Court specifically
requests that the parties address the following three questions in their briefs:
1. Are the arbitration agreements enforceable?
2. If the agreements are enforceable, what courses of action—including
dismissal—are available to the Court, and which should the Court select?
3a. If the Court determines to dismiss the claims, does it have the
authority to rule on the validity of the class action waiver contained in the
3b. If the Court determines to stay the claims, does it have the authority to
rule on the validity of the class action waiver contained in the arbitration
For the foregoing reasons, the Court grants plaintiffs' motion to conditionally
certify a collective action and the issuance of section 216(b) notices [dkt. no. 24]. The
conditionally-certified classes are defined as: (1) all current and former LAETs and (2)
all current and former LAEs during the three-year statutory period, excluding those who
worked exclusively in Ohio, joined the Ohio collective action, or earned $100,000.00 or
more per year for each year of the statutory period. The Court directs TQL to provide
plaintiffs, by no later than January 9, 2017, the names, last known addresses, phone
numbers, and e-mail addresses of all putative class members who worked for TQL
within three years prior to this Order. The Court denies plaintiffs' request for social
security numbers. The Court authorizes the plaintiffs to send the notice and consent
form to all potential members of the classes by both first-class mail and e-mail. The
Court denies plaintiffs' request to post this notice in TQL offices and their request to
send a reminder notice halfway through the notice period, which will last for 60 days.
The Court further denies TQL's request to compel arbitration but requests
supplemental briefing on the issues outlined above. The Court directs plaintiffs to file a
surreply by January 6, 2017 and directs TQL to file a response to the surreply by
January 20, 2017. The case is set for a status hearing, to be conducted by telephone,
on January 5, 2017 at 8:30 a.m.
MATTHEW F. KENNELLY
United States District Judge
Date: December 23, 2016
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