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Dailey v. Groupon, Inc.

United States District Court, N.D. Illinois, Eastern Division

August 27, 2014

Ranita Dailey, John Daley II, Eric Hall, and Dominic Poggi, on behalf of themselves and all other persons similarly situated, Plaintiffs,
v.
Groupon, Inc., Defendant.

MEMORANDUM OPINION AND ORDER

EDMOND E. CHANG, District Judge.

Plaintiffs Ranita Dailey, John Daley II, Eric Hall, and Dominic Poggi filed this proposed class-action lawsuit against Defendant Groupon, Inc. for failing to pay them overtime compensation in alleged violation of the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq., and the Illinois Minimum Wage Law, 820 ILCS 105/1 et seq. [1] R. 96, Second Am. Compl. Plaintiffs have now moved for class certification. R. 179, Mot. Class Cert. For the reasons explained below, their class-certification motion is denied, but without prejudice to moving for certification of a class that is narrower than the currently proposed classes.

I. Background

Defendant Groupon is a [REDACTED/] website, [REDACTED/] [REDACTED/]. R. 182-3, Pls.' Exh. 1, May 2010 Sales Training Manual at GRP00548. [REDACTED/] Id. The plaintiffs in this lawsuit were Account Representatives and Account Executives[2] at Groupon. R. 99, Answer ¶ 19. Account Reps are [REDACTED/] [REDACTED/] See May 2010 Sales Training Manual at GRP00549. [REDACTED/] [REDACTED/] See id. [REDACTED/]

Significantly, Groupon's method of paying Account Reps has fluctuated over time. Before March 20, 2011, and then again after August 23, 2011, Groupon classified its Account Reps as "exempt" from state and federal overtime requirements and uniformly paid all Account Reps on a salary-plus-commission basis for all the time that they worked. During these two time periods, Groupon did not pay Account Reps overtime. Answer ¶¶ 3, 8. Plaintiffs allege that they are not exempt and are entitled to overtime pay. During a five-month period-from March 20 to August 23, 2011-Groupon did classify its Account Reps as "non-exempt" and paid Account Reps overtime pay. Id. ¶¶ 4-5. Plaintiffs, however, believe that the method Groupon used to calculate their overtime pay during this short time period was incorrect. Groupon admits that it calculated Account Reps' overtime pay using the following equation:

Salary ÷ 2080 hours = Regular Rate of Pay
Regular Rate of Pay × 1.5 = Overtime Rate

Id. ¶ 5. In other words, Groupon did not include Account Reps' earned commissions when calculating Account Reps' regular rate of pay for overtime purposes. See id. ¶¶ 5-6. During this five-month period, Groupon required Account Reps to record their daily hours in a timekeeping system, s ee, e.g., R. 180-3, Pls.' Exh. 2, Poggi Decl. ¶¶ 19, 21, but the company abandoned this timekeeping requirement in August 2011 when it decided once again to stop paying Account Reps overtime, see, e.g., R. 180-2, Pls.' Exh. 2, Hall Decl. ¶¶ 23-24. Groupon notified Account Reps of this payroll change in an email on August 19, 2011. See R. 182-6, Pls.' Exh. 1, 8/18/11 Georgiadis Email at GRP00010872-GRP00010873; R. 180-6, Pls.' Exh. 11, Dailey Dep. at 137-38 (explaining that Account Reps received the Georgiadis email on August 19).

On the same day that Groupon notified its Account Reps that it was going to stop paying them overtime, Plaintiffs filed this lawsuit. See R. 1. Plaintiffs argue that all of Groupon's Account Reps are entitled to overtime pay under the FLSA and the IMWL for weeks where they claim to have worked more than forty hours. See Second Am. Compl. Groupon, however, believes that the Account Reps are not entitled to overtime because they fall within the "administrative exemption" under both statutes. See Answer at 16-17; R. 191, Def.'s Resp. Br. at 1.

Plaintiffs now move for class certification. Mot. Class Cert. They propose the following two class definitions, the first for the time period when Account Reps were not paid overtime, and the second for the five months in 2011 when they were paid overtime:

Class #1 - All inside Account Representatives and Account Executives employed by Defendant from August 19, 2008, through March 19, 2011, and after August 22, 2011, to the present.
Class #2 - All inside Account Representatives and Account Executives employed by Defendant from March 20, 2011 through August 22, 2011.

R. 181, Pls.' Br. at 24. In response, Groupon opposes class certification, arguing that individualized inquiries will predominate when determining whether Account Reps fall under the administrative exemption. Def.'s Resp. Br. at 1-4. The Court will address ...


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