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Farmer v. Directsat USA

October 4, 2010

GERALD FARMER, POMPEY HICKS, ANTWON WILLIAMS, INDIVIDUALLY, AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, AND STEVEN EMLING, SILAS JUNIOUS, AND ODELL STIFFEND, INDIVIDUALLY, PLAINTIFFS,
v.
DIRECTSAT USA, LLC, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Amy J. St. Eve, District Court Judge

MEMORANDUM OPINION AND ORDER

On February 1, 2010, Plaintiffs filed the instant five-count Third Amended Complaint alleging that Defendants DirectSat USA, LLC ("DirectSat"), Unitek USA, LLC ("Unitek"), Jay Heaberlin, Lloyd Riddle, and Dan Yannantuono violated the Illinois Minimum Wage Law ("IMWL"), 820 ILCS § 105, et seq., and the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq. Plaintiffs also allege common law claims of unjust enrichment, quantum meruit, and breach of implied contract. Before the Court is Plaintiffs' Motion for Partial Summary Judgment and Defendants' Motion for Summary Judgment pursuant to Federal Rule of Civil Procedure 56(c). Also before the Court is Defendants' Motion for Decertification and Plaintiffs' Motion to Strike.

For the following reasons, the Court denies Plaintiffs' Motion for Partial Summary Judgment and grants in part and denies in part Defendants' Motion for Summary Judgment. In particular, the Court grants Defendants' Motion for Summary Judgment as to Plaintiffs' common law claims of unjust enrichment, quantum meruit, and breach of implied contract as alleged in Counts II, III, and IV of the Third Amended Complaint. The Court also denies Defendants' Motion for Decertification and grants Plaintiffs' Motion to Strike.

BACKGROUND

I. Northern District of Illinois Local Rule 56.1

Northern District of Illinois Local Rule 56.1 assists the Court by "organizing the evidence, identifying undisputed facts, and demonstrating precisely how each side propose[s] to prove a disputed fact with admissible evidence." Bordelon v. Chicago Sch. Reform Bd. of Trs., 233 F.3d 524, 527 (7th Cir. 2000). Local Rule 56.1(a)(3) requires the moving party to provide "a statement of material facts as to which the moving party contends there is no genuine issue." Cracco v. Vitran Exp., Inc., 559 F.3d 625, 632 (7th Cir. 2009). "The opposing party is required to file 'a response to each numbered paragraph in the moving party's statement, including, in the case of any disagreement, specific references to the affidavits, parts of the record, and other supporting materials relied upon.'" Id. (citing N.D. Ill. R. 56.1(b)(3)(B)). In addition, Local Rule 56.1(b)(3)(C) requires the nonmoving party to present a separate statement of additional facts that require the denial of summary judgment. See Ciomber v. Cooperative Plus, Inc., 527 F.3d 635, 643-44 (7th Cir. 2008). Pursuant to the Local Rules, the Court will not consider any additional facts proposed in the nonmoving party's Local Rule 56.1(b)(3)(B) Response, but instead must rely on the non-movant's Local Rule 56.1(b)(3)(C) Statement of Additional Facts when making factual determinations. See id. at 643; Cichon v. Exelon Generation Co., L.L.C., 401 F.3d 803, 809 (7th Cir. 2005) ("Local Rule 56.1 requires specifically that a litigant seeking to oppose a motion for summary judgment file a response that contains a separate 'statement . of any additional facts that require the denial of summary judgment.'") (emphasis in original).

Moreover, the purpose of Rule 56.1 statements is to identify the relevant evidence supporting the material facts, not to make factual or legal arguments, see Cady v. Sheahan, 467 F.3d 1057, 1060 (7th Cir. 2006), and thus the Court will not address the parties' arguments made in their Rule 56.1 statements and responses. Also, the requirements for responses under Local Rule 56.1 are "not satisfied by evasive denials that do not fairly meet the substance of the material facts asserted." Bordelon, 233 F.3d at 528. Further, the Court may disregard statements and responses that do not properly cite to the record. See Cichon, 401 F.3d at 809-10. Finally, it is well-established that courts may only consider admissible evidence in determining motions for summary judgment. See Gunville v. Walker, 583 F.3d 979, 985 (7th Cir. 2009). Indeed, a "party may not rely upon inadmissible hearsay to oppose a motion for summary judgment." Id. With these standards in mind, the Court turns to the relevant facts of the case.*fn1

II. Evidentiary Objections

With regard to their Motion for Partial Summary Judgment, Plaintiffs contend that in each instance where Defendants responded to Plaintiffs' Statement of Facts without a corresponding record cite, the Court should deem the facts admitted. Specifically, in response to the factual statements contained in ¶¶ 1-12, 14, 28-30, 37-38 of Plaintiffs' Statement of Facts, Defendants provide no cite to any record evidence. This is contrary to both the letter and spirit of Local Rule 56.1. As the Seventh Circuit has explained:

The requirements of such rules are not onerous, but they are exacting. Local Rule 56.1 makes explicit the responding party's burden of controverting the movant's position with adequate citations to the record. . . . [W]e have often repeated, that a party contesting summary judgment has a responsibility under such rules to "highlight which factual averments are in conflict as well as what record evidence there is to confirm the dispute." It is reasonable to assume that just as a district court is not required to "scour the record looking for factual disputes," it is not required to scour the party's various submissions to piece together appropriate arguments. A court need not make the lawyer's case.

Little v. Cox's Supermarkets, 71 F.3d 637, 641 (7th Cir. 1995). Here, directly contrary to Local Rule 56.1's requirement that they make "specific references to the affidavits, parts of the record, and other supporting materials relied upon," Defendants do not support their responses with any record evidence. The "consequence for noncompliance" with Local Rule 56.1 is that "the movants' assertions of material fact are deemed admitted . . . regardless of what contrary evidence is in the record." Bordelon, 233 F.3d at 529. Similarly, and also with regard to Plaintiffs' Motion for Partial Summary Judgment, Plaintiffs failed to provide a response to Defendants' Statement of Additional Facts. The Court thus deems those facts as admitted. Finally, while the deficiencies in the parties' responses, or lack thereof, require admission of some of the facts proffered by the parties, "the court did not turn a blind eye to the facts elsewhere available, though it is permitted to do so by non-compliance with the local rule." Little, 71 F.3d at 641.

III. Relevant Facts

A. Factual Background

Defendant DirectSat is a limited liability company with its principal place of business in King of Prussia, Pennsylvania. (R. 180, Defs. Rule 56.1 Stmt. Facts ¶ 1.) DirectSat provides fulfillment services to DirectTV. Id. at ¶ 2. UniTek, DirectSat's parent company, is a Delaware limited liability company with corporate offices located in Blue Bell, Pennsylvania. Id. at ¶¶ 3-4. Jay Heaberlin is Vice President of Operations, Dan Yannantuono is CEO, and Lloyd Riddle was CEO of DirectSat. Id. at ¶¶ 5-7. Heaberlin, Riddle, and Yannantuono are individual Defendants in this lawsuit.

At its field offices, DirectSat employs project managers, field supervisors, and technicians. Id. at ¶ 13. DirectSat divides technicians into "tech teams," which the field supervisors oversee. Id. at ¶¶ 14-15. Plaintiffs Gerald Farmer, Pompey Hicks, Antwon Williams, Steven Emling, Silas Junious, and Odell Stiffend (collectively "Named Plaintiffs") worked as full-time, non-exempt satellite technicians for DirectSat. Id. at ¶ 8; R. 176, Pls. Rule 56.1 Statement of Facts, ¶ 1. Plaintiffs Farmer, Hicks, and Stiffend worked out of DirectSat's Bedford Park, Illinois field office, and Plaintiffs Williams, Emling, and Junious worked out of DirectSat's Bolingbrook, Illinois field office. (R. 180, ¶¶ 10-11.) None of the Named Plaintiffs worked at DirectSat's Algonquin, Illinois field office. Id. at ¶ 12.

Defendant UniTek, the parent company of Defendant DirectSat, provided Human Resources, Finance, Payroll, and Risk Management departments, as well as personnel policies relating to timekeeping, overtime, and use of company vehicles to DirectSat. Id. at ¶ 3. UniTek officers Scott Hisey, Elizabeth Downey, and Cathy Lawley had authority to hire and fire, direct and supervise work, make decisions regarding wage and hour classifications and employee compensation, and to devise, direct, implement, and supervise wage and hour practices relating to DirectSat employees. Id. at ¶ 4. Defendants Yannantuono, Riddle, and Heaberlin were officers of DirectSat during the relevant time period and applied Defendants DirectSat and UniTek's policies to the technicians. Yannantuono, Riddle, and Heaberlin also had authority to hire and fire employees and to direct and supervise work of employees. Yannantuono and Riddle further had authority to make decisions regarding wage and hour classifications and authority to act on behalf of and in the interest of DirectSat in directing, implementing, and supervising the wage and hour practices and policies relating to its technicians. Id. at ¶ 5.

While employed by Defendants, technicians worked remotely at the homes of DirectTV customers. (R. 180, ¶ 47.) During their employment with DirectSat, DirectSat technicians wore DirectTV uniforms and drove company assigned vans bearing a DirectTV logo. Id. at ¶ 2. Defendants sent daily job assignments to Plaintiffs' homes via facsimile or email that the technicians reviewed prior to planning their route for the day. Id. at ¶ 7. After reviewing the daily work assignments, technicians traveled to customers' homes to service or install satellite dish systems. Id. at ¶ 8. Defendants had a policy requiring Illinois technicians to call dispatch or the first customer of the day prior to arrival at the customer's location (R. 176, ¶ 12), and Defendants required Plaintiffs to comply with the policies in Defendants' employee handbook. Id. at ¶ 11. Yannantuono testified that DirectSat required technicians to call either dispatch or the first customer before the technician recorded work time on his time sheet. (R. 176-2, Ex. 4, 177-78.) Typically, Plaintiffs contacted the customer or Defendants' call center as they first started up their company assigned vans for the day. (R. 180, ¶ 9.) In addition, prior to reporting to the day's first job, technicians would occasionally report to weekly meetings with supervisors at the office location. (R. 193, ¶ 62.) Some technicians would also come to the office each day to pick up equipment and/or their daily assignments. Id. at ¶ 63. DirectSat instructed technicians to go home after they completed their final job for the day. Id. at ¶ 64.

Defendants' policies also required employees to remove tools or equipment from DirectSat's vehicles at the end of the day and informed technicians that they had the sole responsibility for any theft of tools or equipment left in the vehicles. (R. 176-4, Ex. 22, ¶ 8.) Defendants assigned full-sized vans to Plaintiffs to carry a week's supply of equipment (forty to fifty boxes), ladders, and tools. (R. 180, ¶ 6.) The Named Plaintiffs declared that they loaded and unloaded equipment and satellite dishes from their company vans at the beginning and end of the workday. (R. 176, ¶ 10.) Yannantuono and Heaberlin testified that DirectSat's technicians were not required to load and unload equipment to and from their vehicles on a daily basis (R. 193, ¶ 13, 65), but the plain language of the policies contradicts their testimony. Defendants' company-owned vehicle policy also prohibited personal use of company owned vehicles. (R. 176, ¶ 14.)

To compensate technicians for their work, DirectSat paid technicians an effective hourly rate or an employee's total production divided by total hours worked in a week. (R. 17-62, Ex. 5, 221-24.) DirectSat calculated an employee's total production by assigning a dollar amount to each type of task performed by an employee. Id. Yannantuono testified, for example, that the "piece rate" for an installation was a portion of what the customer paid for the installation. (R. 176-2, Ex. 4, 11-13.) The piece rates varied based on the technician's designated level -- the higher the technician's level, the more money earned per installation. Id. At the end of the week, DirectSat aggregated the value of the work performed to determine the technician's production value for the week. (R. 193-1, ¶ 42.) When a technician's effective hourly rate was less than the applicable state or federal minimum wage, DirectSat would adjust the technician's hourly rate so that the technician received the appropriate minimum wage. (R. 180, ¶ 28.) DirectSat also paid technicians an additional hourly component for overtime when they worked over forty hours per week, which was also dependent on the effective hourly rate. (R. 176-2, Ex. 4, 11-13.) DirectSat calculated overtime by multiplying a technician's effective hourly rate by one-and-one-half. (R. 180, ¶ 29.) DirectSat then multiplied the number of hours worked over forty for the week by the overtime rate to calculate the amount payable in overtime to the employee. Id. at ¶ 30.

To ensure that it properly compensated its technicians in compliance with federal and state law, DirectSat tracked its technicians' time on weekly time sheets that it collected at local field offices and forwarded to payroll in Blue Bell, Pennsylvania. (R. 193-1, ¶ 43.) DirectSat required field supervisors to verify the completed time sheets prior to submitting them to payroll.

(R. 180, ¶ 23.) Project Managers conveyed DirectSat's time keeping system, which included completion of time sheets by technicians, verification of time sheets by field supervisors, and forwarding of time sheets to payroll to technicians via Project Managers, who also held weekly "PA" calls with company executives. (R. 193-1, ¶ 45; R. 193-2, Ex. C, 69-74.) In addition to these PA calls and the direction provided at the local field offices, DirectSat would, on occasion, attach memoranda to technicians' pay stubs to remind them of the DirectSat time-keeping policy.

(R. 193, ¶ 46.)

With regard to the type of work for which DirectSat compensated technicians and the recording of employee hours on time sheets, Yannantuono testified that DirectSat paid technicians for closing out jobs, selling insurance, selling DirectTV, and all hours worked on their time sheets, including attendance at meetings. Id. at 77-80. In fact, Yannantuono testified that DirectSat paid employees for non-production work to the extent that the employees included those hours worked on their time sheets. Id. Downey testified that payroll and project administrators informed technicians to record non-production hours. (R. 193-10, Ex. K, 37-40.) Downey also testified that DirectSat told employees to record all time worked, and that typically, as a guideline, DirectSat informed technicians to record either the time they arrived at the warehouse or the time they arrived at the first customer job site of the day as the start time of a particular morning. Id. at 17-18. Downey, however, also testified that DirectSat separately compensated technicians for "non-productive" work time. (R. 180-3, 37-40.)*fn2 Heaberlin similarly testified that DirectSat did not pay technicians for the time it took them to drive to their first site, but that if technicians recorded their time for loading and unloading their vehicles that DirectSat "absolutely" paid for that time. (R. 193-4, Ex. D, at 198.) Heaberlin also explained that supervisors informed technicians about their initial daily start times at weekly meetings. (R. 176-2, Ex. 6, 150.) Yannantuono and Heaberlin further testified that they were unaware of any written policy informing technicians how to complete a time sheet. (R. 176-1, ¶ 20.) In addition, Heaberlin testified that a time sheet is likely inaccurate if it reflects exactly eight hour days every day. (R. 176-2, Ex. 6, 248.) Meanwhile, Defendants did not conduct any state-wide audits to confirm the time spent by technicians on various tasks, including time spent loading equipment into vehicles, attending meetings, receiving work-related emails at home, and calling customers in advance of service jobs. (R. 176-2, Ex. 2, RTA, ¶¶ 98-111.)

Defendants required Plaintiffs to submit the days and hours the employee claimed as worked on hand-written time sheets on an honor system basis. (R. 176-1, ¶ 23.) The Named Plaintiffs' time sheets document the total hours the technicians claimed as work each day, but do not include daily start or stop times. Id. at ¶ 28. Defendants' payroll records indicate that the following class members worked the following hours for the week ending April 26, 2008: (i) DeCount Lamar Daniels, 27 hours; (ii) William G. Hlavka, 28 hours; (iii) Carlos Vaca Moreno, 27 hours; (iv) John Albert Myers, 30 hours; (v) Randall Calmese, 38.75 hours; (vi) Derrick James Evans, 32 hours; (vii) Hiraldo Irizarry Jr., 40 hours, 14.5 hours overtime; (viii) Marquisio M. Robinson, 26.5 hours; and (ix) Daniel Jones, 28 hours. Id. at ¶ 29.

B. Named Plaintiffs' Testimony

Plaintiffs have produced testimony from six individuals, three of whom worked at DirectSat's Bolingbrook location and three of whom worked at DirectSat's Bedford Park location. (R. 193, ¶ 50.) None of the Named Plaintiffs worked at the Bolingbrook location after October 2007, and none of the Named Plaintiffs worked at the Bedford Park location after February 2008. (R. 193, ¶¶ 58-59.) Darrick Hundt, a field supervisor at the Bedford Park location, testified that he did not instruct technicians to record less than they actually worked. Id. at ¶ 53. None of the Named Plaintiffs worked in the Algonquin field office and none of the testimony proffered by the Named Plaintiffs directly demonstrates that an illegal wage and compensation policy applied in Algonquin or that such a policy was uniform in application. Id. at ¶ 57.

Named Plaintiff Gerald Farmer testified that supervisors and management encouraged technicians to stick to 40 hours per week when recording time and not to document either travel time or time spent putting together equipment for jobs from previous days. (R. 193-5, Ex. E, 81-84.) He also testified that "chances are, if you didn't go to a job site, you weren't being paid." Id. at p. 99. Farmer further testified that although, in some instances, executives at DirectSat instructed him to record all of his time, he received varying instructions from a host of individuals. (R. 180, ¶ 31.) In fact, when he asked whether DirectSat was paying him properly, he received different responses from different individuals. Id. at ¶ 37. Farmer stated that "I feel if [DirectSat] ha[s] a policy in place, then it should be only one answer." Id. Farmer explained that he was implicitly encouraged to under report his hours to appear more efficient, but that there were times when he was permitted to record in excess of forty hours in a given week. (R. 180, ¶ 36.) Farmer testified that he worked 8 to 12 hour days on average, and that many times he worked 12 to 14 hour days. (R. 180-2, Ex. E, 122; R. 192-1, Ex. 41, 103.) He was unaware as to the hours that other technicians reflected on their time sheets. (R. 180, ¶ 39.)

Further, Named Plaintiff Pompey Hicks testified that he was among a group of technicians who initially recorded drive time on their time sheets, but then "Theresa" told him that he could not do so. (R. 176-3, Ex. 11, 43-44). Hicks also testified that he never heard his supervisor tell anyone to record a pre-determined number of hours. (R. 193, ¶ 51.) Hicks, however, stopped recording his time because he did not want to submit to a consultation with his supervisor. Id. at ¶ 52. He testified that he worked between 10 to 12 hours a day. (R. 180-2, 43.) Hicks admitted that he never heard field supervisor Brian Bramson tell any technicians that they could not record more than forty hours in a single week. (R. 180, ¶ 34.)

Named Plaintiff Steven Emling testified that the DirectSat CEO informed technicians to record all time worked, but that other supervisors told the technicians that the CEO was just "covering bases" and that "we all know if you go above 40, your hourly is going to fall and that's kind of why everybody stays at 40." (R. 176-3, Ex. 12, 37; R. 93, ¶ 54.) In addition to the other Named Plaintiffs, Emling identified Jeremy Stipp and Gary Shear as individuals with whom he had worked at DirectSat. (R. 180, ¶ 52.)

Also, Named Plaintiff Antwon Williams testified that he spent a portion of his time with DirectSat following a different company's time recording policies. (R. 180, ¶ 43.) He also testified that he was not paid for the time between jobs, the time at meetings, or the time spent driving home. (R. 176-2, Ex. 10, 63.) He claimed that, in a given week, his time-sheet could be missing anywhere from 10 to 15 hours of work. (R. 180, ¶ 45.) He also stated that Emling did his "own thing' when it came to recording time. Id. at ¶ 44. Williams identified Gary Shear, Eddie Rude, "Jeremy," and "Corey," as technicians who joined him at meetings. (R. 180,¶ 51.)

Named Plaintiff Silas Junious testified that he initially recorded all the time he worked, but subsequently his supervisors instructed him that he could not include driving time or time spent putting dishes together. He did, however, still record his drive time when his jobs were local. He also testified that the only time DirectSat paid its technicians was when they were at the job site. (R. 176-3, Ex. 13, 64-66; R. 93, ¶ 55). In addition, Junious testified that he was required to report 40 hours on his time-sheet regardless of the number of hours he actually worked. (R. 180, ¶ 46.) Aside from the individuals identified by Williams, Junious only identified "Chris" as a co-worker at DirectSat. Id. at ¶ 53.

In addition, Named Plaintiff Stiffend testified that his supervisor instructed him not to include time for constructing dishes, travel time between work sites, or time for planning routes on his time sheets. (R. 176-3, Ex. 8, 73, 102-04, 117.) He also asserted that he was told that he could not record more than 42 hours in a given week and that he recorded the accurate number of hours he worked whenever he worked less than 40 hours per week. (R. 180, ¶¶ 40-41.) Stiffend identified Frank Kane, Robert Deeds, Twon Bridges, Joey Carpenter, "Laron," "Raymond," "Cornelius," and "Nicole" as individuals who worked at DirectSat during his employment. Id. at ¶ 54.

The Named Plaintiffs also testified that they did not include the time they spent driving between assignments on their time sheets, though Hicks had initially done so before an instructor told him not to. (R. 176-1, ¶ 2.) Also, the Named Plaintiffs declared under oath that they each typically worked six days a week and 10-12 hours per day. (R. 176-1, ¶ 33.) In addition, the Named Plaintiffs admitted that DirectSat paid them for all of the time, including recorded overtime, that they submitted on their time sheets. (R. 193, ¶ 61.) Moreover, at least some of the time recorded on the Named Plaintiffs' time sheets is accurate, and Named Plaintiffs are unable to discern which of their times sheets are inaccurate. (R. 180, ¶¶ 49-50.)

C. GPS Tracking

DirectSat owned vehicles that it assigned to technicians that contained a global positioning system ("GPS"). (R. 176-3, Ex. 20.) @Road, Inc. provided DirectSat with Daily Activity Reports ("DARs") that provided the starting position, time of each movement, distance traveled, speed of travel, and location and duration of any stops for each vehicle contained in its contract. (R. 176-3, Ex. 20, ¶ 20.) DirectSat could access a website operated by @Road, Inc. and print out DARs for any vehicle in its fleet, but DirectSat only received the reports when it accessed the website. (R. 193-1, Ex. B, ¶ 7.) DirectSat also received daily Exception Reports from @Road, Inc. which indicated when a monitored vehicle violated a specific, pre-determined, set parameter. (R. 193-1, Ex. B, ¶ 5.) DirectSat only downloaded DARs if a person with access to the Exception Reports believed that an exception required investigation. Id. at ¶ 8. DirectSat terminated class member Dontez Josey's employment after the GPS on his assigned vehicle indicated that someone was using the vehicle off hours. (R. 176-1, ¶ 37.)

D. Plaintiffs' Expert Report

Plaintiffs have served a Preliminary Expert Report dated June 14, 2010 on Defendants.

(R. 192, ¶¶ 20-21.) In the expert report, Oran Clemons opines that Defendants' practice of "inform[ing] named plaintiffs and class members that they were to use the time they finished the last job and not their return to home as their ending time on their timesheets . . . ignores the continuous workday rule" because the practice "does not allow the named plaintiffs and class member to capture the time transporting tools and equipment back home [and] unloading tools and equipment." (R. 192-2, Ex. 46 at 18.) Attached to Clemons' report is a summary of the GPS data that Defendants provided to Plaintiffs. (Id., Ex. 46.) After reviewing the GPS data and comparing it to related payroll records produced by Defendants, Clemons found that class members worked off-the-clock, on average, over 15 hours per week. (R. 192, ¶ 24; 192-2, Ex. 46, 17.) Clemons explained that Plaintiffs only ...


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