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Calloway v. AT&T Corp.

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

September 26, 2019

DIANE CALLOWAY, et al., Plaintiffs,
v.
AT&T CORP., et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          HONORABLE EDMOND E. CHANG UNITED STATES DISTRICT JUDGE.

         Telephone-call center employees brought this collective action against five AT&T entities, alleging that the employees were deprived of overtime wages in violation of the Fair Labor Standards Act (FLSA), 29 U.S.C. § 216(b). R. 1, Collective Action Compl.[1] The Defendants responded with a motion to dismiss, arguing (among other things) that this Court lacked personal jurisdiction over the various AT&T companies. R. 24, Defs.’ Mot. Dismiss. The employees contend that they cannot respond to the Defendants’ motion without at least some limited discovery on personal jurisdiction. So the Plaintiffs have filed a motion to stay briefing and to take limited jurisdictional discovery. R. 28, Pls.’ Mot. Stay.

         I. Background

         For right now, the Court accepts as true the complaint’s allegations relevant to personal jurisdiction and draws all reasonable inferences in the employees’ favor. Central States, Se. & Sw. Area Pension Fund v. Phencorp Reinsurance Co., Inc., 440 F.3d 870, 878 (7th Cir. 2006).

         The Plaintiffs have worked at telephone-call centers in several Midwest states, including Illinois, Michigan, and Ohio, since at least October 2015.[2] Collective Action Compl. ¶ 136. During the proposed collective-action period, these call centers were operated by four AT&T entities: AT&T Corp., AT&T, Inc., AT&T Teleholdings, Inc., and AT&T Services, Inc.[3] Not surprisingly for call-center employees, the Plaintiffs’ main job duty was talking on the phone with customers about their AT&T services. Id. ¶ 141. The employees were usually scheduled to work at least 40 hours per week, and they had to take a daily 30-minute unpaid lunch break. Id. ¶ 142.

         The employees’ typical work day looks like this: they arrive before their scheduled shift and review any promotional or operational materials related to current customer offers, bonus structures, and system requirements. Collective Action Compl. ¶ 143. Then, the Plaintiffs log onto various computer programs that they need to use throughout the day, including two known as IEX and CTI. Id. ¶ 144. IEX generates the Plaintiffs’ work shifts, and CTI logs the time that call-center employees are on customer calls. Id. ¶¶ 124, 151. These tasks can take several minutes to do. Id. ¶ 144. And Plaintiffs must complete them all before they clock in at the start of their scheduled shift, at which point they are expected to be ready and available to take customer calls. Id. ¶ 145.

         When it is time for their lunch break, call-center workers are required to log out of every computer program and system, and then log back in when they return. Collective Action Compl. ¶ 148. At the end of their shift, the Plaintiffs must make sure to log out within one minute of their scheduled shift, unless they are in the middle of a customer call, as is often the case. Id. ¶¶ 149, 155. When logged out, whether it be during their lunch break or after the end of their shift, the employees often times continue to perform work related duties, including discussing work matters with managers and supervisors, reviewing call notes, and performing follow up work from prior call sessions. Id. ¶¶ 157-58.

         Despite all that extra work, however, call-center representatives’ payroll reflects only their scheduled shift hours, not the actual hours worked. Collective Action Compl. ¶¶ 163-69. This happens for two reasons. First, to be compensated for any time worked in addition to their scheduled shift hours, the Plaintiffs must send a request for overtime to a management group called the “Force Team.” Id. ¶¶ 159-162. Without this request, workers are not compensated for their overtime. Id. But supervisors often instruct employees to not submit overtime requests that are eight minutes or less. Id. ¶ 170. Second, when it comes time to process payroll, the IEX system does not automatically adjust a call-center representative’s IEX schedule to reflect the actual time logged into CTI. Id. ¶ 153. The way payroll processing works is that the IEX schedules are converted into payroll data using software called (using yet another acronym) TVI. Id. ¶ 28-29. And TVI uses a “rounding” function in the conversion process that rounds down the hours worked. Id. ¶ 30. In the end, the Plaintiffs miss out on getting paid for most of the overtime hours they work pre-shift, during their lunch break, and post-shift. Id. ¶ 175.

         On the whole, the Plaintiffs work less than eight minutes in overtime on a given day. Collective Action Compl. ¶ 166. But those eight minutes can add up. One of the plaintiffs, Doretta Wagner, for example, estimates that she worked about two or more hours of overtime per week. Id. ¶ 174. So the Plaintiffs brought this collective action, alleging that these pay practices violate the FLSA. The Defendants moved to dismiss the Complaint, arguing (among other things) that the Court lacks personal jurisdiction over all five defendants. Defs.’ Mot. Dismiss. The employees then filed motion to stay, arguing that they are unable to respond to the jurisdictional arguments without some discovery. Pls.’ Mot. Stay.

         II. Legal Standard

         A complaint need not allege personal jurisdiction, but once a defendant moves to dismiss on that ground, the plaintiff bears the burden of establishing that jurisdiction is proper. Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). Sometimes discovery limited to the personal-jurisdiction dispute is warranted: “it is within the discretion of the district court to allow a plaintiff to conduct limited discovery in order to establish that jurisdiction exists.” Sanderson v. Spectrum Labs, Inc., 248 F.3d 1159, 2000 WL 1909678, at *3 (7th Cir. 2000). At the same time, however, the “plaintiff must establish a colorable or prima facie showing of personal jurisdiction before discovery should be permitted.” Central States, 230 F.3d at 946. In other words, a plaintiff seeking jurisdictional discovery must advance “proof to a reasonable probability” of the facts necessary to establish federal jurisdiction. Anthony v. Sec. Pac. Fin. Servs., Inc., 75 F.3d 311, 316 (7th Cir. 1996); see also Indag GmbH & Co. v. IMA S.P.A, 150 F.Supp. 3d 946, 971 (N.D. Ill. 2015).

         Generally, courts grant jurisdictional discovery if the plaintiff can show that the factual record is at least ambiguous or unclear on the jurisdiction issue. See e.g., Wells v. Hospital Group of Illinois, Inc., No. 02 C 6111, 2003 WL 21704416, at *3 (N.D.Ill. July 23, 2003); Ticketreserve, Inc. v. viagogo, Inc., 656 F.Supp.2d 775, 782– 83 (N.D. Ill. 2009). The standard is not particularly onerous, but a plaintiff’s request will be denied if it is based only upon unsupported assertions of personal jurisdiction. See Central States, 230 F.3d at 946 (citing Andersen v. Sportmart, Inc., 179 F.R.D. 236, 242 (N.D.Ind.1998)).

         III. Analysis

         There are two types of personal jurisdiction: general and specific. uBID, Inc. v. GoDaddy Grp., Inc., 623 F.3d 421, 425 (7th Cir. 2010). The Plaintiffs do not explicitly say on which type of jurisdiction applies here, whereas the defense ...


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