Niiranen et al v. Carrier One, Inc. et al

Filing 52

MEMORANDUM Opinion and Order Signed by the Honorable Andrea R. Wood on 1/11/2022. Mailed notice (dal, )

Case: 1:20-cv-06781 Document #: 52 Filed: 01/11/22 Page 1 of 19 PageID #:461

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
CLIFF NIIRANEN, et al., individually and
on behalf of all others similarly situated,
Plaintiffs,
v.
CARRIER ONE, INC., et al.,
Defendants.

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No. 20-cv-06781
Judge Andrea R. Wood

MEMORANDUM OPINION AND ORDER
Plaintiffs Cliff Niiranen and Robert Treadway are both former over-the-road drivers for
Defendant Carrier One, Inc. Plaintiffs allege that, during their employment, Carrier One, Inc. and
Defendant Ivan Samarov (collectively, “Carrier One”) failed to pay Plaintiffs and similarly
situated drivers compensation owed to them and took unlawful deductions from their wages,
thereby violating the Illinois Wage Payment and Collection Act (“IWPCA”), 820 ILCS 115/1 et
seq., and the Truth-in-Leasing regulations, 49 C.F.R. § 376.1 et seq., as well as breaching Carrier
One’s contracts with Plaintiffs. Now before the Court is Carrier One’s motion to dismiss Count I,
Count III, and any claims on behalf of a putative class in Plaintiffs’ first amended class action
complaint (“FAC”), pursuant to Federal Rule of Civil Procedure 12(b)(6). (Dkt. No. 37.) For the
reasons that follow, Carrier One’s motion is granted in part and denied in part.
BACKGROUND
For purposes of the motion to dismiss, the Court accepts all well-pleaded facts in the FAC
as true and views those facts in the light most favorable to Plaintiffs as the non-moving parties.
Santiago v. Walls, 599 F.3d 749, 756 (7th Cir. 2010). Plaintiffs allege as follows.

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Defendant Carrier One, Inc. is a flatbed transportation services company serving the
Chicago metropolitan area. (FAC ¶ 1, Dkt. No. 30.) It is owned wholly or in part by Defendant
Ivan Samarov, who also serves as the company’s president. (Id. ¶ 2.) Carrier One’s drivers pick
up freight, such as steel and heavy equipment, from its customers and transport it across the
United States. (Id. ¶¶ 1, 2(2).) 1 Carrier One was headquartered in Illinois until it moved to Indiana
in January 2020. (Id. ¶ 10.) Most of Carrier One’s customers are located in the Chicago
metropolitan area. (Id. ¶ 6(2).)
Plaintiffs Niiranen and Treadway are former Carrier One over-the-road drivers who are
not residents of Illinois. (Id. ¶¶ 3, 6–7.) Both Plaintiffs began working for Carrier One in 2017.
(Id. ¶¶ 6–7, 3(2)–4(2).) As a part of the onboarding process, Plaintiffs were required to attend a
mandatory, unpaid orientation held at Carrier One facilities in Alsip, Illinois over a period of three
or four days. (Id. ¶¶ 7(2)–11(2).) To work as a Carrier One driver, Plaintiffs were required to lease
a truck from Impel Union, an Illinois corporation that shared a headquarters with Carrier One. (Id.
¶ 13(2).) At the same time, Plaintiffs entered into a standard-form contract with Carrier One titled
“Independent Contractor Equipment Lease Agreement” (“Equipment Lease”) and a separate
“Authorization Form” that directed Carrier One to make payments to Impel Union for Plaintiffs’
truck rental and associated insurance costs. (Id. ¶¶ 16(2)–17(2), 18–19, 23.) Carrier One would
deduct those payments to Impel Union from Plaintiffs’ weekly wages. (Id. ¶ 17(2).) All three
agreements were presented to Plaintiffs and all members of the putative class on a take-it-orleave-it basis with no opportunity for negotiation. (Id. ¶¶ 18–19, 22–23.)

The paragraph numbers in Plaintiffs’ FAC reset back to 1 after paragraph 17, resulting in duplicate
paragraph numbers 1 through 17. For purposes of this opinion, citations to the second instance of a
paragraph number are denoted by “(2).”

1

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Under Carrier One’s Equipment Lease, Plaintiffs were to be paid weekly in an amount
equal to 80 percent of the gross revenue for all that week’s loads. (Id. ¶ 20.) Further, the
Equipment Lease listed several deductions that would be taken from Plaintiffs’ weekly paychecks.
(Id. ¶ 21.) While the Equipment Lease referred to Plaintiffs as contractors who owned trucks that
were being leased by Carrier One, other terms of the agreement provided that Plaintiffs were also
agreeing to perform services for Carrier One under its direction and control. (Id. ¶¶ 24–26.)
Each week, Plaintiffs were paid through settlement statements issued by Carrier One. (Id.
¶ 30.) The settlement statements listed the gross pay for the order, but Plaintiffs allege that Carrier
One took a cut of the gross revenue before determining Plaintiffs’ 80 percent share, in
contravention of the Equipment Lease. (Id. ¶¶ 31–32.) Thus, according to Plaintiffs, Carrier One
failed to pay all compensation owed to them. (Id. ¶ 33.) Carrier One also took additional
deductions and chargebacks from the settlement statements beyond those disclosed in the
Equipment Lease. (Id. ¶¶ 34–39, 48–49.) Those deductions were not authorized by the drivers and
routinely exceeded 25 percent of their net payment. (Id. ¶ 40.) Moreover, Carrier One made
escrow fund deductions but failed to fulfill its obligations to pay interest on those deductions and
return the deductions in full at the conclusion of the employment relationship. (Id. ¶¶ 50–53.)
DISCUSSION
To survive a Rule 12(b)(6) motion, “a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). This
pleading standard does not necessarily require a complaint to contain detailed factual allegations.
Twombly, 550 U.S. at 555. Rather, “[a] claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable inference that the defendant is liable

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for the misconduct alleged.” Adams v. City of Indianapolis, 742 F.3d 720, 728 (7th Cir. 2014)
(quoting Iqbal, 556 U.S. at 678).
Plaintiffs allege that Carrier One violated the IWPCA and the Truth-in-Leasing
regulations, and also breached its contracts with Plaintiffs, and they seek to assert those claims on
behalf of themselves and a putative class. While Carrier One’s motion to dismiss seeks dismissal
of the entire FAC, it makes no arguments as to Plaintiffs’ individual breach of contract claims.
Instead, it targets only Plaintiffs’ individual IWPCA and Truth-in-Leasing claims and all three of
Plaintiffs’ claims insofar as Plaintiffs seek to bring those claims on behalf of a class. The Court
first addresses whether Plaintiffs adequately pleaded IWPCA and Truth-in-Leasing claims before
turning to whether a class action can be maintained.
I.

IWPCA

The IWPCA allows employees to sue their employer for the timely and complete payment
of earned wages and prohibits employers from taking unauthorized deductions from employees’
wages. Enger v. Chi. Carriage Cab Corp., 812 F.3d 565, 568 (7th Cir. 2016); Costello v. BeavEx,
Inc., 810 F.3d 1045, 1050 (7th Cir. 2016). It applies to all “employers and employees in
[Illinois].” 820 ILCS 115/1. The Seventh Circuit, however, has concluded that the IWPCA does
not have an “extraterritorial reach.” Glass v. Kemper Corp., 133 F.3d 999, 1000 (7th Cir. 1998).
Rather, the IWPCA’s “evident purpose is to protect employees in Illinois from being stiffed by
their employers.” Id. Carrier One therefore contends that Plaintiffs, non-Illinois-resident
employees of an Illinois employer, cannot bring an IWPCA claim unless they have performed a
substantial amount of their work in Illinois. Carrier One claims that Plaintiffs’ allegations that

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they attended a one-time training in Illinois and that most of Carrier One’s customers are in the
Chicago metropolitan area do not suffice to plead that the IWPCA applies to them. 2
In response, Plaintiffs first argue that the Seventh Circuit’s interpretation of the IWPCA
has been superseded by a more recent decision by the Illinois Appellate Court, which rejected a
quantum of work requirement for IWPCA coverage so long as the employee works for an
employer located in Illinois. Watts v. ADDO Mgmt., LLC, 97 N.E.3d 75, 82 (Ill. App. Ct. 2018)
(“[I]t is clear that the [IWPCA’s] application is not limited to any specific quantum of work
performed in Illinois but, in fact, may apply in certain circumstances even where all of the work is
performed outside of this state.”). However, this Court is bound by the Seventh Circuit’s
interpretation of Illinois law even if a subsequent Illinois Appellate Court decision is contrary to
the Seventh Circuit’s interpretation. See Cilliers v. Cobalt Holdings, Inc., No. 18 C 2428, 2019
WL 1514977, at *2–3 (N.D. Ill. Apr. 8, 2019) (declining to apply Watts’s interpretation of the
IWPCA). “Just as the court of appeals must follow decisions of the Supreme Court whether or not
[the court of appeals] agree[s] with them, so district judges must follow the decisions of [the
Seventh Circuit] whether or not they agree.” Reiser v. Residential Funding Corp., 380 F.3d 1027,
1029 (7th Cir. 2004) (citations omitted) (concluding that decisions from state appellate courts
“assuredly . . . do not themselves liberate district judges from the force of [the Seventh Circuit’s]
decisions”). Only a subsequent ruling by the Illinois Supreme Court would supersede the Seventh
Circuit’s interpretation of state law. Id. Since the Illinois Supreme Court has not spoken on this
issue, the Court must follow the Seventh Circuit precedent.

The IWPCA defines the term “employee” broadly, such that “all individuals are considered to be
employees of an employer, unless the employer can prove all three prongs” of the statute’s independent
contractor exemption. Costello, 810 F.3d at 1050, 1059 (citing 820 ILCS 115/2). Although the Equipment
Lease refers to Plaintiffs as contractors (FAC ¶ 24), Carrier One does not contest—at least with respect to
this motion—that Plaintiffs are employees for purposes of the IWPCA.
2

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The Seventh Circuit has held that the IWPCA does not apply to out-of-state residents who
conduct no work in Illinois. Glass, 133 F.3d at 1000. At the same time, the IWPCA’s
“applicability to nonresidents who perform their work in Illinois for an instate employer is
sufficiently clear.” Adams v. Catrambone, 359 F.3d 858, 864 (7th Cir. 2004). Carrier One
acknowledges that the IWPCA applies to non-Illinois residents like Plaintiffs but argues that
under Glass and Adams Plaintiffs must plead that “most” of their work occurred in Illinois. To
find otherwise would be contrary to Glass’s holding that the IWPCA does not have extraterritorial
reach.
This Court does not understand either Glass or Adams as setting the bar as high as Carrier
One urges. Importantly, the employee in Glass was not an Illinois resident and performed all of
his alleged work in Spain. Glass, 133 F.3d at 1000. It was in that context that the Seventh Circuit
held that the IWPCA’s protection did not extend to employees abroad, as “[e]ven federal statutes
presumptively lack extraterritorial reach.” Id. But Adams clarified that the IWPCA applies to nonresidents who perform work in Illinois. 359 F.3d at 862–63. While Carrier One correctly notes
that the plaintiff in Adams alleged that he did “substantial work” for the defendant, with “most” of
that work occurring in Illinois, id. at 861, Carrier One incorrectly extrapolates from the mention
of those allegations that Adams imposes a quantum of work requirement at the motion to dismiss
stage. The Seventh Circuit only noted the quantity of the plaintiff’s work performed in Illinois in
setting out the factual allegations, id., but that allegation was not a factor in its IWPCA analysis.
Instead, Adams simply recognized “what Glass implied and what the language of the statute
makes plain: nonresidents of Illinois who work in that state for an in-state employer may qualify
as employees [under the IWPCA].” Id. at 863.

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Accordingly, district courts have applied Glass and Adams to find that the IWPCA “does
not apply simply because an employee has performed ‘any work in Illinois for an Illinois
employer.’” Cohan v. Medline Indus., Inc., 170 F. Supp. 3d 1162, 1174–75 (N.D. Ill. 2016)
(quoting Vendetti v. Compass Env’t, Inc., No. 06 CV 3556, 2006 WL 3694852, at *2 (N.D. Ill.
Dec. 14, 2006)). Nonetheless, “[n]o court of binding authority has set forth a minimum quantum
of work in Illinois to qualify as an employee under the [IWPCA].” Yata v. BDJ Trucking Co., No.
17 cv 3503, 2018 WL 3303290, at *5 (N.D. Ill. July 5, 2018). Consequently, courts in this District
have rejected the argument that an employee did not perform enough work in the state at the
motion to dismiss stage. Cohan v. Medline Indus., Inc., No. 14 CV 1835, 2014 WL 4244314, at
*4 (N.D. Ill. Aug. 27, 2014). Rather, district courts have found that non-resident employees need
only plead that they have done some work for an Illinois employer while physically present in
Illinois to state an IWPCA claim. See Spaulding v. Abbott Lab’ys, No. 10 C 199, 2010 WL
4822894, at *6 (N.D. Ill. Nov. 22, 2010). Arguments about whether enough work was performed
in Illinois are more appropriately raised at the summary judgment stage. Id.
Here, unlike the plaintiff in Glass, Plaintiffs have pleaded that at least some of their work
occurred in Illinois. For instance, Plaintiffs allege that they attended a mandatory, unpaid
orientation at Carrier One’s headquarters in Alsip, Illinois. (FAC ¶ 7(2)–11(2)); see Cohan, 2014
WL 4244314, at *4 (accounting for the plaintiff’s twice-yearly attendance at Illinois-based
meetings as work performed in Illinois). Additionally, it is reasonable to infer that Plaintiffs
performed other work in Illinois because most of Carrier One’s customers are in the Chicago
metropolitan area and Plaintiffs performed work “within the usual course of business of Carrier
One.” (FAC ¶¶ 6(2), 27.) Viewing these factual allegations together, Plaintiffs have adequately

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alleged that they performed some work in Illinois. 3 That is enough at the pleading stage. Cohan,
2014 WL 4244314, at *4 (noting that the plaintiff “was not required to plead every fact
concerning his work in Illinois” and that “there may be more” in-state work adduced after
discovery).
Because Plaintiffs have adequately alleged that they performed some work in Illinois for
an in-state employer, the Court denies Carrier One’s motion to dismiss the IWPCA claims. Of
course, discovery will allow Carrier One to ascertain the precise amount of work Plaintiffs
performed in Illinois. If the evidence suggests that Plaintiffs failed to perform enough work to be
considered “employees in this State,” Carrier One may raise that argument on summary judgment.
Yata, 2018 WL 3303290, at *5.
II.

Truth-in-Leasing Regulations

Under 49 U.S.C. § 14102(a)(4), the United States Secretary of Transportation has the
authority to “issue regulations governing the lease of vehicles between authorized carriers and
owners-operators”— “owners-operators” meaning “trucker drivers who own their trucks and lease
them to shippers or authorized carriers.” Shimko v. Jeff Wagner Trucking, LLC, No. 11-cv-831wmc, 2013 WL 10075919, at *2 (W.D. Wis. June 28, 2013). The Truth-in-Leasing regulations, 49
C.F.R. § 376.1 et seq., were promulgated pursuant to that statutory authority. Relevant here, “the
regulations protect owners-operators by requiring carriers to enter written leases with certain
mandatory terms.” Shimko, 2013 WL 10075919, at *2.

Although the FAC does not expressly allege that Plaintiffs did any work in Illinois other than one threeto-four-day orientation, Plaintiffs’ allegations that they performed work in Carrier One’s usual course of
business and that most of Carrier One’s clients were in Chicago, taken together, allow the Court
reasonably to infer that Plaintiffs did other work in Illinois besides the orientation.

3

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Plaintiffs contend that Carrier One failed to comply with the Truth-in-Leasing regulations
by making chargebacks and escrow deductions to Plaintiffs’ pay that were not disclosed in the
Equipment Lease. The Truth-in-Leasing regulations require authorized carriers like Carrier One to
disclose in their leases with owners-operators all chargeback items, meaning those items “that
may initially be paid for by the authorized carrier, but ultimately deducted from the lessor’s
compensation at the time of payment,” along with how each chargeback was computed. 49 C.F.R.
§ 376.12(h). Similarly, any payments to escrow funds must also be specified in the lease under 49
C.F.R. § 376.12(k)(1). Further, when an authorized carrier makes escrow deductions, it must pay
interest on those deductions and return them in full to the owner-operator when their relationship
ends. Id. § 376.12(k)(5)–(6). Yet Plaintiffs contend that Carrier One neither paid interest on
amounts deducted in escrow nor returned those funds in full.
According to Carrier One, Plaintiffs’ Truth-in-Leasing claim must be dismissed because
they fail to plead that they sustained actual damages as a result of any violation of the regulations.
Plaintiffs’ private right of action for Truth-in-Leasing violations is supplied by 49 U.S.C.
§ 14704(a)(2), which makes a carrier “liable for damages sustained by a person as a result of an
act or omission of that carrier . . . in violation of this part.” See, e.g., Owner-Operator Indep.
Drivers Ass’n v. Swift Transp. Co. (AZ), 632 F.3d 1111, 1113–14 (9th Cir. 2011) (observing that
§ 14704(a) provides a private right of action to enforce the Truth-in-Leasing regulations). While
the Seventh Circuit has not squarely addressed the issue, the majority of courts that have
considered it “have reached the conclusion that § 14704(a)(2) requires evidence of actual
damages.” Owner-Operator Indep. Drivers Ass’n v. Landstar Sys., Inc., 622 F.3d 1307, 1325
(11th Cir. 2010) (collecting cases). Consequently, those courts have required owners-operators to

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do more than simply point to the carrier’s undisclosed profits. Id. Rather, they must “show how
they sustained damages because of the violations.” Id.
Plaintiffs cite Brinker v. Namcheck, 577 F. Supp. 2d 1052, 1063 (W.D. Wis. 2008), where
the district court held that “the motor carrier is responsible for expenses that it has failed to
‘specify’ or ‘clearly specify’ as being the responsibility of the owner-operator.” However, that
case is an outlier. See Goodwin v. Am. Marine Exp., Inc., No. 1:18-CV-01014, 2021 WL 848948,
at *38 n.12 (N.D. Ohio Mar. 5, 2021) (finding Brinker to be unpersuasive “given the strength of
authority holding that actual damages are required”). Plaintiffs also rely on Bonkowski v. Z
Transport, Inc., No. 00 C 5396, 2004 WL 524723, at *3 (N.D. Ill. Mar. 5, 2004), where the
district court awarded “the total business and operating expenses that Plaintiff incurred during the
period he was driving the tractor pursuant to the lease agreement” as damages for the defendant’s
Truth-in-Leasing violations. But the district court in Bonkowski also explained that the defendant
“waived its ability to contest the amount of damages when it elected not to appear for trial.” Id.
Finally, Plaintiffs cite Yata v. BDJ Trucking Co., No. 17-cv-03503, 2021 WL 1738520, at *2–4, 6
(N.D. Ill. May 3, 2021), but there the district court held only that the defendants violated the
Truth-in-Leasing regulations and stated that it would “address damages later in the proceedings.”
This Court believes that the courts in the majority requiring actual damages have the
stronger argument. Requiring actual damages is consistent with the language of § 14704(a)(2),
which makes carriers liable only for “damages sustained by a person as a result of an act or
omission” in violation of the Truth-in-Leasing regulations. 49 U.S.C. § 14704(a)(2) (emphasis
added); see, e.g., Landstar, 622 F.3d at 1325 (“The Owner-Operators’ argument that it is entitled
to [the carrier’s] undisclosed profits is akin to statutory or presumed damages, rather than

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sustained damages as required by § 14704(a)(2).”). However, adopting an actual damages
requirement does not necessarily compel dismissal of Plaintiffs’ Truth-in-Leasing claims.
As an initial matter, most courts have addressed whether an owner-operator has sustained
actual damages as a result of a carrier’s Truth-in-Leasing violations at the summary judgment
stage. See Carter v. Paschall Truck Lines, Inc., 324 F. Supp. 3d 900, 912 & n.8 (W.D. Ky. 2018)
(collecting cases). In any case, Plaintiffs here have adequately alleged that Carrier One’s
violations caused them actual damages. Broadly, Plaintiffs have alleged that Carrier One’s Truthin-Leasing violations resulted in them being compensated “at a rate that was less than the rate
promised in their [Equipment Lease].” (FAC ¶ 95.) Owners-operators have been found to plead
actual damages adequately when they allege that the carrier’s Truth-in-Leasing violations resulted
in them being underpaid. E.g., Carter, 324 F. Supp. 3d at 912; Davis v. Colonial Freight Sys.,
Inc., No. 3:16-CV-674, 2017 WL 11572196, at *7 (E.D. Tenn. Nov. 22, 2017). Moreover, it is
reasonable to infer that Plaintiffs sustained actual damages from Carrier One’s failure both to pay
interest on its escrow deductions and then to return those deductions in full after Plaintiffs stopped
working for it. See Owner-Operator Indep. Drivers Ass’n v. Ledar Transp., Inc., No. 00-258-CVW-2-FJG-ECF, 2008 WL 857758, at *4 (W.D. Mo. Mar. 31, 2008) (“The unrecovered net balance
in the escrow account is the amount of damage suffered by the Plaintiffs as a result of the
Defendant’s wrongdoing.” (internal quotation marks omitted)). These allegations suffice to plead
actual damages. Plaintiffs will, of course, have to prove their damages moving forward. But for
now, Carrier One’s motion to dismiss Plaintiffs’ Truth-in-Leasing claims is denied.
III.

Class Claims

Plaintiffs seek to bring all three of their claims on behalf of themselves and a putative
class. However, Carrier One notes that Plaintiffs’ FAC alleges that Plaintiffs signed an updated

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version of the Equipment Lease in 2019. (FAC ¶ 62.) The updated Equipment Lease contains the
following provision:
CONTRACTOR AND CONTRACTOR’S WORKERS WAIVE ANY RIGHT
TO INITIATE, JOIN (I.E., OPT IN TO), REMAIN IN (I.E., NOT OPT OUT
OF), OR OTHERWISE PARTICIPATE IN ANY CLASS ACTION,
COLLECTIVE ACTION, CONSOLIDATED ACTION, OR
REPRESENTATIVE ACTION BROUGHT AGAINST CARRIER ONE,
INCLUDING BUT NOT LIMITED TO SUCH ACTIONS BROUGHT
UNDER STATE OR FEDERAL LAW AND THOSE ARISING UNDER THE
FAIR LABOR STANDARDS ACT.
(FAC, Ex. 3 § 26(b), Dkt. No. 30-3.) 4 Carrier One argues that pursuant to this provision, Plaintiffs
waived their right to bring any claims on behalf of a class. In response, Plaintiffs contend that the
class-action waiver cannot be enforced, either because the waiver conflicts with Illinois and
federal law or because the provision is unconscionable. 5 And to the extent the class-action waiver
is enforceable, Plaintiffs contend that it cannot be applied to claims arising prior to when
Plaintiffs signed the updated Equipment Lease in 2019.
A.

Waivability of IWPCA and Truth-in-Leasing Class Actions

According to Plaintiffs, an employee cannot contract away his right to bring or participate
in a class action because such a waiver conflicts with federal and Illinois law. First, Plaintiffs
argue that the Seventh Circuit has recognized that Sections 7 and 8 of the National Labor
Relations Act (“NLRA”), 29 U.S.C. §§ 157–58, render class and collective-action waivers in
employment agreements unenforceable. Specifically, in Lewis v. Epic Systems Corp., 823 F.3d
Because the updated Equipment Lease was attached to the FAC, the Court may consider its contents in
deciding Carrier One’s Rule 12(b)(6) motion. Williamson v. Curran, 714 F.3d 432, 436 (7th Cir. 2013).

4

Plaintiffs also suggest that Carrier One is prohibited from asserting its class-action-waiver argument
because it did not raise it in its original motion to dismiss. Under Rule 12(g)(2), “a party that makes a
motion under this rule must not make another motion under this rule raising a defense or objection that
was available to the party but omitted from its earlier motion.” It suffices to say that Carrier One’s waiver
defense was not available to it when it first moved to dismiss because the updated Equipment Lease was
first mentioned in (and attached to) the FAC.
5

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1147, 1151–54 (7th Cir 2016), rev’d, 138 S. Ct. 1612 (2018), the Seventh Circuit held that filing a
collective or class action lawsuit is one of the “concerted activities” protected by Section 7 of the
NLRA, and thus Section 8 “renders unenforceable any contract provision purporting to waive
employees’ access to such remedies.” The Seventh Circuit therefore ruled that an arbitration
provision in an employment agreement that mandated claims be arbitrated on an individual basis
was unenforceable. Id. at 1154–56.
As Plaintiffs acknowledge, the Supreme Court reversed the Seventh Circuit’s decision,
holding that the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq., required the arbitration
agreement to be enforced as written (i.e., as permitting individual arbitration only) and Congress
did not intend the NLRA to displace the legislative judgment embodied by the FAA. Epic Sys.
Corp. v. Lewis, 138 S. Ct. 1612, 1632 (2018). Nonetheless, Plaintiffs contend that because the
Supreme Court’s decision concerned a class-action waiver in an arbitration agreement and hinged
on the legislative purpose behind the FAA, the Seventh Circuit’s decision in Lewis retains vitality
outside of the arbitration context. Put differently, Plaintiffs contend that where, as here, there is a
class-action waiver in an employment agreement but no arbitration agreement, the FAA is
inapplicable and Sections 7 and 8 of the NLRA control. The problem with Plaintiffs’ argument is
that the Supreme Court did not simply conclude that the FAA was not displaced by the NLRA.
Rather, it observed that the “notion that Section 7 confers a right to class or collective actions
seems pretty unlikely.” Epic Sys., 138 S. Ct. at 1624. While the Supreme Court did not squarely
reject the possibility, its decision repeatedly expressed substantial doubt that Section 7 of the
NLRA affords any protection to class and collective action procedures. See, e.g., id. at 1625–26
(“[I]t is hard to fathom why Congress would take such care to regulate all the other matters
mentioned in Section 7 yet remain mute about this matter alone—unless, of course, Section 7

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doesn’t speak to class and collective action procedures in the first place.”). Thus, there is no
reason to believe that any part of the Seventh Circuit’s rationale in Lewis survives such that it
would preclude enforcement of a class-action waiver outside of the arbitration context.
In addition, Plaintiffs assert that enforcing the class-action waiver would undermine the
policies underlying the IWPCA and the Truth-in-Leasing regulations. They rely on a Sixth Circuit
case invalidating a collective-action waiver in an employment separation agreement as
impermissibly limiting employees’ rights under the Fair Labor Standards Act (“FLSA”), 29
U.S.C. § 201 et seq. See Killion v. KeHE Distribs., LLC, 761 F.3d 574, 590–92 (6th Cir. 2014).
However, the FLSA includes a provision expressly authorizing employees to proceed collectively.
29 U.S.C. § 216(b) (“An action to recover the liability prescribed in the preceding sentences may
be maintained against any employer . . . in any Federal or State court of competent jurisdiction by
any one or more employees for and in behalf of himself or themselves and other employees
similarly situated.”). The Sixth Circuit explained that by including that provision, Congress stated
its policy that FLSA plaintiffs should have the opportunity to proceed collectively. Killion, 761
F.3d at 590. Neither the IWPCA nor the Truth-in-Leasing regulations contain such express
authorization for class or collective actions. See 49 U.S.C. § 140704(a)(2); 820 ILCS 115/14.
Moreover, even as to the FLSA, several courts in this Circuit have held that § 216(b) does not
give a plaintiff an unwaivable right to bring a collective action. E.g., Copello v. Boehringer
Ingelheim Pharms. Inc., 812 F. Supp. 2d 886, 894 (N.D. Ill. 2011) (“[W]hile FLSA prohibits
substantive wage and hour rights from being contractually waived, it does not prohibit
contractually waiving the procedural right to join a collective action.”); Brown v. Sears Holdings
Mgmt. Corp., No. 09 C 2203, 2009 WL 2514173, at *3 (N.D. Ill. Aug. 17, 2009). This Court

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therefore finds no conflict between the class-action waiver and either the IWPCA or the Truth-inLeasing regulations that would preclude enforcement of the waiver.
B.

Unconscionability

Plaintiffs also argue that the class-action waiver cannot be enforced because it is
unconscionable under Illinois law. In Illinois, a contract can be either procedurally
unconscionable, substantively unconscionable, or a combination of both. Razor v. Hyundai Motor
Am., 854 N.E.2d 607, 622 (Ill. 2006). “Procedural unconscionability refers to a situation where a
term is so difficult to find, read, or understand that the plaintiff cannot fairly be said to have been
aware he was agreeing to it, and also takes into account a lack of bargaining power.” Id. On the
other hand, substantive unconscionability “concerns the actual terms of the contract and examines
the relative fairness of the obligations assumed.” Kinkel v. Cingular Wireless LLC, 857 N.E.2d
250, 267 (Ill. 2006).
The only argument Plaintiffs make as to the procedural unconscionability of the classaction waiver concerns the fact that the Equipment Lease was presented to Plaintiffs on a take-itor-leave-it basis. Plaintiffs claim they had no meaningful choice in agreeing to waive their right to
pursue class actions because their continued employment with Carrier One depended on them
signing the updated Equipment Lease with the waiver. However, the Illinois Supreme Court has
been clear that such “contracts of adhesion” are “a fact of modern life” and “[i]t cannot
reasonably be said that all such contracts are so procedurally unconscionable as to be
unenforceable.” Id. at 266. Instead, the procedural unconscionability analysis “should be
examined with reference to all the circumstances surrounding the transaction.” Id. at 265; see also
Copello, 812 F. Supp. 2d at 895 (“Illinois law . . . holds that proposing an unfavorable contract

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provision on a take-it-or-leave-it basis can be procedurally unconscionable only if some other
factor is present, such as the provision being hidden in fine print.”).
Here, there are no other aspects of the class-action waiver that tend to suggest any degree
of procedural unconscionability. The provision is set out in a separately numbered section of the
updated Equipment Lease and differentiated from other provisions by the fact that it is printed in
bold, all-capital letters. See, e.g., Mathys v. Hartford Gold Grp., LLC, No. 20 C 3927, 2020 WL
7183744, at *3 (N.D. Ill. Dec. 7, 2020) (finding that arbitration clauses were not so inconspicuous
as to make them procedurally unconscionable when they were bolded and in all capital letters);
Bess v. DirecTV, Inc., 885 N.E.2d 488, 497 (Ill. App. Ct. 2008) (observing that nothing in the
record suggested that the plaintiff could not locate, read, or understand an arbitration provision
when it was printed in capital letters and in boldface type). Further, Plaintiffs initialed the bottom
of each page of the updated Equipment Lease, indicating that they had read and agreed to the
terms on that particular page. See Mathys, 2020 WL 7183744, at *3; Davis v. Fenton, 26 F. Supp.
3d 727, 738 (N.D. Ill. 2014) (“[B]y signing the retainer agreement, Plaintiff acknowledged that
she read and understood the terms of the agreement including the arbitration clause. Therefore,
Plaintiff’s argument that no one informed her that there was an arbitration clause in the agreement
or what that arbitration clause meant is immaterial.”). Finally, the class-action waiver is written in
plain English and easy to understand. Thus, the Court finds that the waiver is not procedurally
unconscionable.
That the class-action waiver is not procedurally unconscionable does not mean that it
might not be unenforceable due to substantive unconscionability. “Indicative of substantive
unconscionability are contract terms so one-sided as to oppress or unfairly surprise an innocent
party, an overall imbalance in the obligations and rights imposed by the bargain, and significant

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cost-price disparity.” Kinkel, 857 N.E.2d at 267. The Illinois Supreme Court has specifically
addressed the substantive unconscionability of class action waivers and explained that
a class action waiver will not be found unconscionable if the plaintiff had a
meaningful opportunity to reject the contract term or if the agreement containing
the waiver is not burdened by other features limiting the ability of the plaintiff to
obtain a remedy for the particular claim being asserted in a cost-effective manner.
Id. at 274.
Plaintiffs contend that the class-action waiver is substantively unconscionable because it
deprives Carrier One drivers of their only effective mechanism for vindicating their claims. In
Kinkel, the Illinois Supreme Court invalidated a class-action waiver where other provisions in the
contract “operate[d] together to create a situation where the cost of vindicating the claim [was] so
high that the plaintiff’s only reasonable, cost-effective means of obtaining a complete remedy
[was] as either the representative or a member of the class.” Id. at 275. But Kinkel involved a
plaintiff with a $150 claim and a contract that required her to arbitrate the claim but did not
disclose that arbitration would cost $125. See id. at 267–68, 274–75. By contrast, here, Plaintiffs
have alleged that they seek damages in excess of $75,000 in connection with their claims—as
they must, since their claims are brought under this Court’s diversity jurisdiction. (FAC ¶ 13.)
Thus, “[t]his is not a case where plaintiff’s damages are so small that neither he nor a lawyer
would be interested in pursuing an individual action.” Powell v. Payday Loan Store of Ill., Inc.,
No. 09 C 4146, 2010 WL 3893894, at *6 (N.D. Ill. Sept. 28, 2010). Moreover, Plaintiffs are
entitled to recover costs and reasonable attorney’s fees should they prevail on their IWPCA and
Truth-in-Leasing claims. 49 U.S.C. § 14704(e); 820 ILCS 115/14(a); see Copello, 812 F. Supp. 2d
at 896 (“The magnitude of [the plaintiff’s] claimed damages, together with the attorney fee
provision, leaves [the plaintiff] eminently capable of attracting counsel to help vindicate her
individual claims.”). Given the circumstances, it cannot be said that the class-action procedure

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provides the only reasonable, cost-effective means for Plaintiffs to obtain a complete remedy for
their claims. For that reason, the Court finds that the class-action waiver is not substantively
unconscionable.
C.

Claims Arising Prior to Plaintiffs’ Execution of Updated Equipment
Lease

Given the lack of procedural and substantive unconscionability, the Equipment Lease’s
class-action waiver must be enforced. Yet Plaintiffs contend that even if the waiver is enforceable,
it cannot serve to waive class claims predating Plaintiffs’ execution of the updated Equipment
Lease in 2019. As Carrier One notes, however, the updated Equipment Lease contains the
following provision stating that it supersedes all previous agreements: “This Agreement
constitutes the entire agreement between CARRIER ONE and CONTRACTOR pertaining to the
subject matter contained herein and fully replaces and supersedes all prior and contemporaneous
agreements, representations, and understandings, except as provided in Section 27 of this
Agreement.” (FAC, Ex. 3 § 20(e).) Moreover, the class-action waiver itself provides that
Plaintiffs waive their right to initiate or participate in any class action brought against Carrier
One. Thus, reading these two provisions together demonstrates that Plaintiffs are precluded from
bringing any claims on behalf of a class, no matter when those claims arose. As a result, the Court
grants Carrier One’s motion to dismiss the entirety of Plaintiffs’ claims insofar as they are brought
on behalf of a class of similarly situated Carrier One drivers.

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CONCLUSION
For the foregoing reasons, Carrier One’s motion to dismiss (Dkt. No. 37) is granted in part
and denied in part. Carrier One’s motion is denied as to Plaintiffs’ individual claims but granted to
the extent that Plaintiffs seek to bring their claims on behalf of a class of similarly situated Carrier
One drivers.
ENTERED:

Dated: January 11, 2022

__________________________
Andrea R. Wood
United States District Judge

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