Salzmann et al v. GuerraWilson Group LLC et al
Filing
42
DECISION AND ORDER signed by Judge William C Griesbach on 5/10/2024 GRANTING Plaintiffs' 26 Motion for Summary Judgment. The Clerk is directed to enter judgment accordingly. (cc:all counsel and mailed to pro se Defendants)(Griesbach, William)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
ANDREA SALZMANN,
STEPHANIE PRITCHARD, and
BENJAMIN SANDERS,
Plaintiffs,
v.
Case No. 22-C-894
GERALD WERGIN,
NICHOLAS WILSON, and
STAXOS, LLC,
Defendants.
DECISION AND ORDER GRANTING PLAINTIFFS’
MOTION FOR SUMMARY JUDGMENT
Plaintiffs Andrea Salzmann, Stephanie Pritchard, and Benjamin Sanders brought this
action against Defendants Staxos, LLC, formerly known as GuerraWilson Group, LLC (GWG),
as well as GWG’s owner, president, and Chief Executive Officer, Nicholas Wilson, and its vice
president of government solutions, Gerald Wergin. Plaintiffs allege that Defendants failed to pay
their statutorily required minimum and agreed upon wages, including bonuses, in violation of the
Fair Labor Standards Act (FLSA), 29 U.S.C. § 201, et seq., and Wisconsin’s Wage Payment and
Collection Laws, Wis. Stat. ch. 109. The court has jurisdiction over Plaintiffs’ FLSA claims
pursuant to 28 U.S.C. § 1331 and supplemental jurisdiction over the state law claims pursuant to
28 U.S.C. § 1367.
Wilson and Wergin appeared pro se in this case and filed answers to the amended
complaint on February 13, 2023, and April 6, 2023, respectively. Staxos, as a limited liability
company, was legally incapable of appearing in court unless represented by counsel. See Philos
Techs., Inc. v. Philos & D, Inc., 645 F.3d 851, 857–58 (7th Cir. 2011) (citation omitted). Because
Staxos did not appear by counsel or file an answer in this case, the Clerk entered default as to
Staxos on March 23, 2023. This matter comes before the court on Plaintiffs’ motion for summary
judgment against Wergin and Wilson. For the following reasons, the motion for summary
judgment will be granted.
PRELIMINARY MATTERS
Before turning to the substance of Plaintiffs’ motion for summary judgment, the court must
address Plaintiffs’ argument that their facts be deemed admitted for the purposes of summary
judgment because Defendants failed to comply with the court’s summary judgment procedures.
In this case, Defendants did not submit an affidavit or cite any evidence in response to the majority
of Plaintiffs’ proposed findings of fact. Pursuant to the local rules, the party opposing a motion
for summary judgment must file a response to the moving party’s statement of undisputed facts
which is intended to make clear which, if any, of those facts are in dispute, and to set forth any
additional facts that bear on the motion. The opposing party’s response must reproduce each
numbered paragraph of the moving party’s statement of facts followed by a response to each
paragraph. Civil L.R. 56(b)(2)(B). If the fact is disputed, the party must include a specific
reference to an affidavit, declaration, or other part of the record that supports the claim that a
genuine dispute exists as to the fact stated by the moving party. Id. If the opposing party believes
there are additional facts that prevent the entry of summary judgment, he should include a
statement, consisting of short, numbered paragraphs that set forth each additional fact and include
references to the affidavits, declarations, or other parts of the record that support the assertion.
Civil L.R. 56(b)(2)(B)(ii).
2
The Seventh Circuit has “routinely held that a district court may strictly enforce compliance
with its local rules regarding summary judgment motions.” Schmidt v. Eagle Waste & Recycling
Inc., 599 F.3d 626 (7th Cir. 2010) (citing Patterson v. Ind. Newspapers Inc., 589 F.3d 357, 360
(7th Cir. 2009)). The court will deem as admitted Plaintiffs’ proposed findings of fact to which
Defendants did not properly respond in accordance with the local rules. With these considerations
in mind, the court turns to Plaintiffs’ motion for summary judgment.
BACKGROUND
GWG 1 was a master agent for AT&T. AT&T offers wireless phone lines and wireless
device upgrades to customers through a direct channel—sales with an AT&T employee—or
indirect channel—sales through an independent vendor such as a master agent or solutions
provider. To sell AT&T services and products, a master agent, such as GWG, must have an
“alliance channel contract” with AT&T that allows the master agent, as well as its representatives,
to submit orders for wireless phone lines and wireless device upgrades through AT&T’s ordering
portal. The alliance channel contract dictates the type of customers to whom the master agent, and
anyone associated with it, can sell these services and products. GWG’s alliance channel contract
with AT&T permitted GWG to sell wireless phone lines and wireless device upgrades to smalland medium-sized businesses and governments.
Plaintiffs worked in sales and account management for GWG and worked remotely in
Wisconsin. Salzmann and Pritchard were salespeople, and they sold AT&T wireless phone lines
and wireless device upgrades through phone and email communications. Salzmann and Pritchard
would assess the customer’s wireless device needs, develop a plan to meet those needs, enter an
1
On May 9, 2022, Wilson changed the name of GuerraWilson Group, LLC, to Staxos, LLC.
Wilson remained owner, president, and CEO of Staxos LLC. But at all times relevant to this
action, the entity was operating as GWG.
3
order for the new lines or device upgrades on AT&T’s ordering portal after the customer approved
the quote, and help the customer activate the new line or device once it was received from AT&T.
They also provided customer service and technical support when customers contacted them with
questions about their devices or services. Sanders worked in a sales support role for GWG. His
primary duties included preparing quotes for Salzmann and Pritchard, transferring phone numbers
from a customer’s old telecommunications provider to AT&T, placing orders for Salzmann and
Pritchard on AT&T’s ordering portal, and providing customer service and technical support when
customers had questions about their devices or services. Salzmann worked with customers in New
York, Wisconsin, Missouri, Maryland, Texas, North Carolina, Illinois, and Colorado; Pritchard
worked primarily with customers in Texas; and Sanders worked with both of their customers.
GWG did not require that Plaintiffs have a specific degree or license to perform their jobs.
To perform their work, Plaintiffs needed a phone, a computer, an internet connection, an email
address, and access to AT&T’s ordering portal. Plaintiffs paid for their own cellphones and
internet connection, but GWG paid for Plaintiffs’ desk phones, computers, computer monitors,
computer docking stations, and email addresses and invested the time and effort to secure the
alliance channel contract with AT&T. Plaintiffs did not make any financial investments in GWG,
nor did they risk losing any investments or other financial amounts from their work.
Sanders worked for GWG from September 2018 through February 28, 2021. GWG agreed
to pay Sanders a monthly salary of $4,750.00. Salzmann worked for GWG from August 2018
through February 12, 2021, and Pritchard worked for GWG from May 2018 through January 17,
2021. GWG agreed to compensate Salzmann and Pritchard with a monthly base pay of $4,000.00
and a monthly bonus of $2.00 per wireless line activation or wireless device upgrade they entered
into AT&T’s ordering portal. From May 2020 through her final day at GWG, Salzmann entered
4
the following line activations or wireless device upgrades into AT&T’s ordering portal: 119 in
May 2020; 196 in June 2020; 1,302 in July 2020; 95 in August 2020; 86 in September 2020; 46 in
October 2020; 82 in November 2020; zero in December 2020; five in January 2021; and zero in
February 2021. From May 2020 through her final day at GWG, Pritchard entered the following
number of wireless line activations or wireless device upgrades into AT&T’s ordering portal: 213
in May 2020; 295 in June 2020; 262 in July 2020; 149 in August 2020; 108 in September 2020;
165 in October 2020; 94 in November 2020; 160 in December 2020; and one in January 2021.
Wilson was responsible for making decisions regarding payments to Plaintiffs. He would
calculate the bonuses due to each Plaintiff and direct his bookkeeper to send Plaintiffs the amount
calculated. GWG agreed to pay Plaintiffs half of their base salary on the first of the month and the
remaining half plus their full commission, if any, on the twentieth of the month. GWG did not
keep any time records for Plaintiffs. Plaintiffs claim that GWG required them to work at least 40
hours per workweek and that, on average, they worked eight-hour days, Monday through Friday.
GWG timely paid Plaintiffs their monthly salary and bonuses through the July 1, 2020, pay
date. But, due to GWG’s cashflow problems, Wilson decided that GWG would stop paying
Plaintiffs after July 1, 2020. Instead, Wilson requested that Wergin make payments to Plaintiffs
with his own personal funds and advised that GWG would pay Wergin back. Wergin began
making payments on behalf of GWG to Plaintiffs in July 2020 and August 2020 from funds
transferred from Wilson as well as from his personal funds. Defendants failed to make certain
payments to Plaintiffs, however. Salzmann claims to be owed $2,494.00 in unpaid minimum
wages and $10,094.00 in unpaid base salary and commissions. Pritchard claims to be owed
$3,132.00 in minimum wages and $16,692.00 in unpaid base salary and commissions. Sanders
claims to be owed $4,350.00 in minimum wages and $17,600.00 in unpaid salary.
5
LEGAL STANDARD
Summary judgment is appropriate when the moving party shows that there is no genuine
dispute as to any material fact and that the movant is entitled to judgment as a matter of law. Fed.
R. Civ. P. 56(a). An issue is genuine if a reasonable trier of fact could find in favor of the
nonmoving party. Wollenburg v. Comtech Mfg. Co., 201 F.3d 973, 975 (7th Cir. 2000). A fact is
material only if it might affect the outcome of the case under governing law. Anweiler v. Am. Elec.
Power Serv. Corp., 3 F.3d 986, 990 (7th Cir. 1993). In deciding a motion for summary judgment,
the court must view the evidence and make all reasonable inferences in the light most favorable to
the nonmoving party. Johnson v. Advoc. Health & Hosps. Corp., 892 F.3d 887, 893 (7th Cir.
2018) (citation omitted). Summary judgment is properly entered against a party “who fails to
make a showing to establish the existence of an element essential to the party’s case, and on which
that party will bear the burden of proof at trial.” Austin v. Walgreen Co., 885 F.3d 1085, 1087–88
(7th Cir. 2018) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)).
ANALYSIS
Plaintiffs assert that GWG failed to compensate them at the required minimum wage rate
in various workweeks between July 2020 and the end of Plaintiffs’ employment in violation of the
FLSA. The FLSA requires employers to pay their covered employees a federal minimum hourly
wage. See 29 U.S.C. § 206(a)(1) (“Every employer shall pay to each of his employees who in any
workweek is engaged in commerce or in the production of goods for commerce, or is employed in
an enterprise engaged in commerce or in the production of goods for commerce, wages . . . not
less than . . . $7.25 an hour[.]”).
Under the FLSA, an “employee” is defined as “any individual employed by an employer,”
29 U.S.C. § 203(e)(1), and “employ” means to “suffer or permit to work,” § 203(g). Defendants
6
maintain that Plaintiffs were independent contractors, not employees. The economic realities test
separates employees, who are subject to the FLSA’s protections, from independent contractors,
who are not. See Sec’y of Labor, U.S. Dep’t of Labor v. Lauritzen, 835 F.2d 1529, 1534–35 (7th
Cir. 1987). The factors the court weighs in assessing the economic reality of the employment
arrangement, in addition to consideration of the totality of the circumstances, include (1) the degree
and nature of control that the employer has over the manner in which the alleged employee
performs the work; (2) the chance that the alleged employee has for profit or loss depending on
his skill; (3) the alleged employee’s own investment in the equipment or materials needed to
complete the work; (4) whether the service at issue requires special skill; (5) whether the
employment relationship is permanent; and (6) the extent to which the alleged employee’s service
is an “integral part” of the employer’s business. Id. (citation omitted).
In this case, the undisputed facts demonstrate that Plaintiffs were employees of GWG.
Plaintiffs worked for GWG for close to three years. See Wenckaitis v. Specialty Contractors, Inc.,
No. 20-CV-3743, 2023 WL 4472567, at *5 (N.D. Ill. July 11, 2023) (“A longer relationship
between the worker and a company weighs in favor of employment rather than independent
contractor status.” (citing Lauritzen, 835 F.2d at 1537)). As to the degree of control GWG had
over the manner in which Plaintiffs’ work was to be performed, GWG’s alliance contract with
AT&T clearly governed the manner in which Plaintiffs could sell AT&T products and to whom
those products could be sold to, and GWG retained the authority to remove Plaintiffs’ access to
the AT&T ordering portal. Plaintiffs’ sales and support services related to the sale of AT&T
products and services were essential to GWG’s business as a master agent for AT&T. Plaintiffs’
opportunity for profit or loss depended not on their managerial skills but instead on their ability to
make sales, and their roles did not require any specialized skill. In addition, Plaintiffs made no
7
financial investment in GWG. Although Plaintiffs paid for their own cellphones and internet
connection, these expenses were negligible. GWG paid for Plaintiffs’ desk phones, computers,
computer monitors, computer docking stations, and email addresses. Based on the totality of the
circumstances, Plaintiffs were GWG employees.
Plaintiffs have also established that they are employees “covered” under the FLSA. To be
covered under the FLSA, the employee must be (1) engaged in interstate commerce; (2) engaged
in the production of goods for commerce; or (3) employed by an enterprise engaged in commerce
or in the production of goods for commerce. See 29 U.S.C. § 206(a). Plaintiffs assert that they
are covered by the FLSA because they were engaged in commerce. “Employees are ‘engaged in
commerce’ . . . when they are performing work involving or related to the movement of persons
or things (whether tangibles or intangibles, and including information and intelligence) among the
several States or between any State and any place outside thereof,” which includes employees who
“regularly use the mails, telephone or telegraph for interstate communication.”
29 C.F.R.
§ 779.103. Here, it is undisputed that Plaintiffs worked from Wisconsin and worked with and
made sales to customers outside of Wisconsin.
Finally, Plaintiffs have shown that GWG failed to pay them the minimum wage. The
employee bears the burden of “proving that he performed work for which he was not properly
compensated.” Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 686–87 (1946), superseded
on other grounds by Portal-to-Portal Act of 1947, 29 U.S.C. §§ 251–62. Where, as here, an
employer fails to maintain time and payroll records, the employee meets his burden “if he proves
that he has in fact performed work for which he was improperly compensated and if he produces
sufficient evidence to show the amount and extent of that work as a matter of just and reasonable
inference.” Id. at 687. An employee may rely on his recollection to establish the hours he worked.
8
Melton v. Tippecanoe Cnty., 838 F.3d 814, 819 (7th Cir. 2016) (citing Mt. Clemens, 328 U.S. at
687). If the employee demonstrates that he performed work for which he was improperly
compensated, the burden shifts to the employer to “come forward with evidence of the precise
amount of work performed or with evidence to negative the reasonableness of the inference to be
drawn from the employee’s evidence.” Mt. Clemens, 328 U.S. at 687–88.
Salzmann, Pritchard, and Sanders worked on average Monday through Friday, 8:00 a.m.
to 4:30 p.m., with a 30-minute break for lunch. Plaintiffs have submitted charts, which detail that
GWG failed to pay Salzmann $2,494.00 in minimum wages for the pay dates ranging from
November 1, 2020, to February 20, 2021; failed to pay Pritchard $3,132.00 in minimum wages for
the pay dates ranging from July 20, 2020, to January 20, 2021; and failed to pay Sanders $4,350.00
for the pay dates ranging from November 1, 2020, through March 1, 2021. Pls.’ Br. in Supp. at
18–20, Dkt. No. 27. Although Wergin and Wilson generally dispute the amounts of unpaid wages
Plaintiffs argue they are owed, they have not offered evidence to rebut Plaintiffs’ calculations.
Based on the record before the court, Salzmann is entitled to $2,494.00 in unpaid minimum wages
and $2,494.00 in liquidated damages; Pritchard is entitled to $3,132.00 in unpaid minimum wages
and $3,132.00 in liquidated damages; and Sanders is entitled to $4,350.00 in unpaid minimum
wages and $4,350.00 in liquidated damages for GWG’s violations of the FLSA. See 29 U.S.C.
§§ 206(a)(1); 216(b).
Plaintiffs also assert that Defendants violated Wisconsin law by failing to pay their agreedupon salary and bonuses. See Wis. Stat. § 109.03. Section 109.03 provides that “[e]very employer
shall as often as monthly pay to every employee engaged in the employer’s business, except those
employees engaged in logging operations and farm labor, all wages earned by the employee to a
day not more than 31 days prior to the date of payment.” An employer who fails to pay appropriate
9
wages is liable to the employee in the amount of the unpaid wages, in addition to up to fifty percent
of the unpaid wages as civil penalties, and attorney fees and costs. Wis. Stat. §§ 109.03;
109.11(2)(a).
Defendants again dispute that Plaintiffs were employees under Wis. Stat. ch. 109.
“Employer” is defined as “any person engaged in any activity, enterprise or business employing
one or more persons within the state, including the state and its political subdivisions and
charitable, nonprofit or tax-exempt organizations and institutions.” Wis. Stat. § 109.01(2).
“Employee” is defined as “any person employed by an employer.” Wis. Stat. § 109.01(1r). Like
the FLSA, Wisconsin’s minimum wage law defines employer with a focus on control. See Pope
v. Espeseth, Inc., 228 F. Supp. 3d. 884, 891 (W.D. Wis. 2017) (noting that Wisconsin’s minimum
wage law requires “at least as much of a showing of control as the FLSA”). As the court explained
earlier, GWG controlled the manner in which Plaintiffs’ work was to be performed.
The
undisputed evidence demonstrates that Plaintiffs were employees of GWG.
Plaintiffs have also established that GWG failed to pay their wages. Section 109.01(3)
defines “wages” as “remuneration payable to an employee for personal services, including
salaries, . . . bonuses and any other similar advantages agreed upon between the employer and the
employee or provided by the employer to the employees as an established policy.” GWG agreed
to pay Salzmann a monthly salary of $4,000.00 and a monthly bonus of $2.00 per activation or
upgrade she entered into AT&T’s ordering portal. Salzmann has submitted a chart showing that
GWG failed to pay her a total of $10,094.00 in salary and bonuses for the pay dates ranging from
August 20, 2020, to February 20, 2021. See Pls.’ Br. in Supp. at 25. GWG also agreed to pay
Pritchard a monthly salary of $4,000.00 and a monthly bonus of $2.00 per activation or upgrade
she entered into AT&T’s ordering portal. Pritchard has submitted a chart showing that GWG
10
failed to pay her a total of $16,692.00 in salary and bonuses for the pay dates ranging from July
20, 2020, to January 20, 2021. Id. at 27. GWG agreed to pay Sanders a monthly salary of
$4,750.00. Sanders has submitted a chart showing that GWG failed to pay him a total of
$17,600.00 in salary for the pay dates ranging from July 20, 2020, to March 1, 2021. Id. at 29.
Though Wergin and Wilson generally dispute the amounts of unpaid wages Plaintiffs argue they
are owed under Wisconsin law, they have not offered evidence to rebut Plaintiffs’ calculations. In
short, Plaintiffs have established that GWG violated Wis. Stat. ch. 109 by failing to pay their
agreed-upon salary and bonuses.
Plaintiffs assert that the court should award civil penalties of fifty percent of their unpaid
salary and bonuses pursuant to Wis. Stat. § 109.11(2)(a). “Only wrongful withholding of wages
for dilatory or other unjust reasons should be penalized.” Wolnak v. Cardiovascular & Thoracic
Surgeons of Cent. Wis., S.C., 2005 WI App 217, ¶ 54, 287 Wis. 2d 560, 706 N.W.2d 667. “The
decisions whether to impose a penalty under Wis. Stat. § 109.11(2)(a) . . . [is] committed to the
trial court’s discretion.” Id. In this case, Plaintiffs acknowledge that GWG stopped paying them
because AT&T stopped paying GWG. But they argue that GWG acted for dilatory reasons by
stringing Plaintiffs along, through promises made by Wilson that he would make everyone whole
when he received payment from AT&T, and by delaying the inevitable, “that it would not pay
them for work performed.” Pls.’ Br. in Supp. at 30. Without more, the court is unpersuaded that
making a promise to pay Plaintiffs what they were owed once AT&T paid GWG shows a dilatory
or unjust reason to withhold wages. Thus, an award of civil penalties is unwarranted in this case.
Recovery under both the FLSA and Wisconsin law would constitute an impermissible
double recovery. See DeKeyser v. Thyssenkrupp Waupaca, Inc., 589 F. Supp. 2d 1026, 1031 (E.D.
Wis. 2008). Plaintiffs request that the court award them damages under Wis. Stat. ch. 109 because
11
it is the statutory scheme that results in the highest recovery. Pls.’ Br. in Supp. at 31 n.3. In sum,
Salzmann is entitled to the amount of $10,094.00; Pritchard is entitled to the amount of $16,692.00;
and Sanders is entitled to the amount of $17,600.00.
Finally, Plaintiffs argue that Wergin and Wilson should be held liable for GWG’s
violations. The FLSA broadly defines “employer” to permit naming another employee rather than
the employer as a defendant, “provided the defendant had supervisory authority over the
complaining employee and was responsible in whole or in part for the alleged violation.” Riordan
v. Kempiners, 831 F.2d 690, 694 (7th Cir. 1987). Although no Wisconsin court has addressed
whether an individual can be held liable for a company’s violation of Wis. Stat. ch. 109, Wisconsin,
like the FLSA, broadly defines “employer” to include “any person engaged in any activity,
enterprise or business employing one or more persons within the state, including the state and its
political subdivisions and charitable, nonprofit or tax-exempt organizations and institutions.” Wis.
Stat. § 109.01(2). Here, it is undisputed that Wilson was GWG’s owner, president, and CEO, was
responsible for making decisions regarding payments to Plaintiffs, made the decision to stop
paying Plaintiffs after July 1, 2020, and directed Wergin to begin making payments to Plaintiffs.
Wergin, the vice president of government solutions, supervised Plaintiffs and began making
payments to Plaintiffs on behalf of GWG with funds Wilson transferred to him as well as with his
own personal funds. But these amounts did not fully compensate Plaintiffs for their wages.
Because Wilson and Wergin had supervisory authority over Plaintiffs and were responsible for the
violations of Wis. Stat. ch. 109, they are personally liable for such violations. See Montana v. JTK
Restorations, LLC, No. 14-C-487, 2015 WL 5444945 (E.D. Wis. Sept. 14, 2015) (finding that the
owner of the company, as well as the company itself, were liable for unpaid wage violations under
the FLSA and Wis. Stat. ch. 109).
12
CONCLUSION
For these reasons, Plaintiffs’ motion for summary judgment (Dkt. No. 26) is GRANTED
against Defendants Gerald Wergin, Nicholas Wilson, and Staxos, LLC. Andrea Salzmann is
entitled to judgment in the amount of $10,094.00; Stephanie Pritchard is entitled to judgment in
the amount of $16,692.00; and Benjamin Sanders is entitled to judgment in the amount of
$17,600.00. The Clerk is directed to enter judgment accordingly.
SO ORDERED at Green Bay, Wisconsin this 10th day of May, 2024.
s/ William C. Griesbach
William C. Griesbach
United States District Judge
13
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?