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Nassis v. Lasalle Executive Search Inc.

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

April 30, 2018

TOM D. NASSIS, Plaintiff,


          John Robert Blakey, United States District Judge.

         This case arises from the end of a business relationship between the parties. Plaintiff Tom Nassis, a former recruiter at LaSalle Executive Search (LaSalle), sued Defendants for unpaid wages, alleging violations of: (1) the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq.; (2) the Illinois Minimum Wage Law (IMWL), 820 ILCS § 115/1 et seq.; and (3) the Chicago Minimum Wage Ordinance (CMWO), Chicago, Ill., Municipal Code § 1-24-010 (2014). [1]. Plaintiff's claims turn upon whether an employer-employee relationship existed between Plaintiff and Defendants, or whether Plaintiff qualified as an independent contractor. Plaintiff moved for summary judgment. [36]. For the reasons explained below, this Court denies Plaintiff's motion.

         I. Background

         A. LaSalle Executive Search

         LaSalle is a recruiting company that matches job applicants with companies seeking employees. DSAF ¶ 1.[1] Defendants Tod McElhaney and Brian Viehland own LaSalle but run it as a side project and do not receive compensation from the company. Id. ¶¶ 2, 3. LaSalle operates out of an office provided by McElhaney's trading company, LaSalle Futures Group. Id. ¶ 6; see also [38-4] at 10-12.

         LaSalle recruiters earn commissions when they successfully place a candidate with a company. See [38-4] at 9, 12. LaSalle and the recruiter split commissions, which cover some of LaSalle's overhead costs. Id.; see also DSAF ¶ 7. LaSalle does not file unemployment wage reports for its recruiters. See DSAF ¶ 7. LaSalle issued IRS 1099 forms for the commission payments it made to recruiters. See [42-1] ¶ 3. Though LaSalle pays most of its recruiters on a commission-only basis, Viehland testified that on “a few” occasions LaSalle brought in recruiters on an “employee status.” [38-6] at 22.

         When Plaintiff worked for LaSalle, LaSalle's recruiters were not entitled to a specific number of vacation or personal days or any health benefits. DSAF ¶ 20; see also [38-4] at 36-37; [38-6] at 71-72. Recruiters could create their own titles, but Viehland provided sample language to describe their roles. See PSOF ¶ 24; DSAF ¶ 11; [38-6] at 46. LaSalle also provided training documents giving a broad overview of “what recruiting is” to new recruiters. [38-6] at 28, 32. LaSalle gave each of its recruiters access to a phone and computer at its offices, id. at 45, as well as Microsoft Office 365 accounts (a cloud-based suite of services including e-mail and other Microsoft applications such as Word), id. at 10. Defendants expected recruiters to secure placements for candidates using those resources and their own initiative and skill. See id. at 38; [38-4] at 32. According to Plaintiff, he did some of his own research but also pursued leads provided by Viehland. PSOF ¶ 19. Defendants claim that recruiters did not have to work at LaSalle's offices, see [38-4] at 42; DSAF ¶ 20, but Plaintiff declares that he “had to be in the office during normal business hours” each day, PSOF ¶ 20.

         B. This Case

         Plaintiff began working as a LaSalle recruiter in the fall of 2015. [38-5] ¶¶ 4-5. Plaintiff, a college graduate, previously spent many years as a proprietary and independent trader in the Chicago Board of Trade (CBOT). See [38-9] at 4-5.

         Before joining LaSalle, Plaintiff worked as a trader for Kottke Associates. Id. at 5-6. Plaintiff did not have a written contract with Kottke. Id. at 5. Rather, Plaintiff made trades at the CBOT, which were guaranteed by Kottke. Id. at 6-7. Kottke did not pay Plaintiff a salary or hourly wages, did not give him a W-2 form, and did not withhold taxes from his pay. DSAF ¶ 17. Instead, Kottke paid Plaintiff solely based upon his trading profits and losses. Id.

         Around August 2015, Plaintiff began looking for new employment. [38-9] at 9. A friend connected Plaintiff with McElhaney. Id. During an initial meeting around September 2015, Plaintiff expressed interest in McElhaney's trading company-LaSalle Futures Group-but McElhaney told Plaintiff that LaSalle's recruiting work would become a bigger business than McElhaney's futures trading business, which did not then have any openings. See [38-4] at 33; [38-9] at 10.

         In the following days, Plaintiff exchanged calls and e-mails with Viehland and McElhaney about LaSalle's recruiting business. DSAF ¶ 19. In at least one phone call, McElhaney discussed pay and hours expectations. See [38-4] at 36-37. Viehland participated by phone in at least one meeting with Plaintiff and McElhaney in early September 2015. [38-6] at 28. Following that phone call, on September 11, Viehland e-mailed Plaintiff written materials about the recruiting business generally and about LaSalle's policies and procedures. See id.; see also DSAF ¶ 23. LaSalle's incoming recruiters did not typically sign written agreements before beginning their work at the firm. [38-4] at 11, 12. Defendants assert that Plaintiff did not sign an employment agreement and the record contains no evidence suggesting otherwise. See R. DSAF ¶ 20.

         Between September and October 2015, Viehland sent numerous training documents to Plaintiff, including introductory manuals, scripts for recruiting calls, and other training books to familiarize Plaintiff with successful recruiting practices. See [38-6] at 28, 30-35; DSAF ¶ 23; [38-5] ¶ 14. LaSalle also bought Plaintiff a Kindle to use to review his training materials, scripts, and other resources. See [38-6] at 33, 45. Plaintiff read many of these materials and also pursued “independent learning opportunities” outside of those materials, which he incorporated into his eventual recruiting efforts. DSAF ¶¶ 24, 28.

         Defendants say that Plaintiff began working for them around late October 2015, [38-3] ¶ 17, and McElhaney set up a workstation at LaSalle's offices for Plaintiff on November 2, [38-6] at 109. On or about that date, Plaintiff wrote in his personal journal that he “was mentally prepared to receive little or no direction” from McElhaney and others at LaSalle. [38-9] at 48-49.

         Plaintiff knew that he would be paid on straight commission for the job placements he made. R. DSAF ¶ 29. Plaintiff asserts that although he understood his compensation would come from recruitment commissions, other LaSalle recruiters were not paid on a straight commission basis. PSOF ¶ 57. The commission itself was generally set according to a standard contract between LaSalle and the company with whom a candidate was placed. Id. ¶ 30. Recruiters could negotiate to alter the terms of the fee agreement with the company, but some changes required approval from McElhaney or Viehland. Id.; [38-6] at 68. On occasion, recruiters used fee agreements provided by the company. [38-6] at 21.

         Plaintiff worked sporadically in LaSalle's offices during the final two months of 2015, but the record contains conflicting testimony as to whether he also worked from home during that time. See [38-4] at 42; [38-6] at 41, 71; [42-1] ¶ 9. Plaintiff declares that he worked “exclusively” and “full-time” for LaSalle from November 2015 to early May 2016. PSOF ¶ 51. Defendants allege that Plaintiff did not work full-time, often leaving LaSalle's offices around 2:00 p.m. DSAF ¶ 33. Plaintiff declares that his regular practice was to leave work around 5:00 p.m. [45-1] ¶ 3. LaSalle's building security required employees to swipe into the building, but not out; their records show that Plaintiff typically arrived around 8:50 a.m. on days he worked on-site. See [38-6] at 175-81.

         As part of his training, Plaintiff shadowed Abel Lopez, a fellow recruiter, in early November 2015. [42-1] ¶¶ 9-11. Lopez began with LaSalle in 2013 but took time off periodically for side projects. Id. ¶ 2. Although Lopez explained the importance of spending at least two hours per day on the phone to be successful making job placements, Lopez stated in his affidavit that, by January 2016, Plaintiff still did not seem comfortable on the phone and spent “more time reading and sending emails.” [42-1] ¶ 11. Plaintiff understood that it was important to make as many calls as he could each day from his training with Lopez, training documents, and conversations with Viehland. [38-9] at 45-46. Another recruiter, Dan Prinn, worked at LaSalle at the same time and in a similar role as Plaintiff. PSOF ¶ 58. The parties agree that Prinn also received a percentage of recruiting fees and “did not do any recruiting work” that differed “in any way” from other LaSalle recruiters. Id.; see also R. PSOF ¶ 58.

         Defendants contend that they did not control recruiters' day-to-day schedules or tasks. DSAF ¶¶ 10, 30; see also [38-4] at 19; [38-6] at 72-73. Plaintiff asserts that he “had to be in the office” in normal business hours, and that recruiters were expected to put in “3-4 hours of phone time daily.” See PSOF ¶ 21. The parties agree that in November and December 2015, Plaintiff took time off to visit with his brother, but dispute the nature of his leave. See, e.g., DSAF ¶ 33; R. DSAF ¶ 33.

         Defendants acknowledge that they provided guidance to recruiters, including the training materials and resources discussed above. See DSAF ¶ 23. They also answered questions, resolved disputes among recruiters, and provided feedback and approval for the recruiters' fee arrangements with the companies they recruited for. See [38-6] at 42-44; 57-58; 68; PSOF ¶¶ 22-23, 30-31. On some occasions, Viehland provided Plaintiff with “leads” on available openings for job candidates. [38-6] at 54; PSOF ¶ 19. Viehland also played some role in dividing up work among recruiters: in December 2015, he sent the recruiters an email about who was responsible for which candidates and companies, in part to resolve any disputes among recruiters if their work overlapped. See PSOF ¶ 27; [38-6] at 51-52.

         In January 2016, Viehland introduced LaSalle's recruiters, including Plaintiff, to Big Biller, a website that combined contact management and applicant tracking in one piece of software that recruiters could access remotely. Id. at 124- 27. In an email to recruiters notifying them about LaSalle's implementation of this software, Viehland told the recruiters that watching the accompanying ...

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