Facing a growing number of lawsuits over its alleged treatment of assistant store managers, sub sandwich restaurant chain Jimmy John’s has asked a Chicago federal judge to determine exactly how much responsibility it should bear for how its franchisees classify, pay and manage those assistant managers.
U.S. District Judge Charles P. Kocoras is expected to soon weigh in on that legal question, as the legal team for Champaign-based Jimmy John’s and attorneys representing a putative class of assistant store managers are squaring off over whether the sandwich chain should be considered a joint employer of its franchisee’s workers under federal labor law.
Since 2014, Jimmy John’s has contested two primary class action lawsuits, brought by assistant managers who alleged the sandwich chain should be held responsible for the decision to classify the ASMs as management employees exempt from the overtime and other wage requirements under the federal Fair Labor Standards Act.
The plaintiffs have contended the classification was improper, as assistant managers at Jimmy John’s rarely, if ever, actually manage anyone or anything. Rather, plaintiffs estimated at least 90 percent of the ASMs’ duties are little different from those of hourly, so-called non-exempt restaurant employees, who qualify for overtime under the FLSA.
The first such action was brought in Ohio federal court by attorneys with the firm of Landskroner Grieco Merriman LLC, of Cleveland, representing named plaintiff Scott Watson. That case was transferred in 2015 to Chicago federal court.
A second class action lawsuit was filed in Chicago federal court by a group of attorneys with various law firms, including Myron M. Cherry & Associates, of Chicago; Foote, Mielke, Chavez & O'Neil, of Geneva; Werman Salas, of Chicago; Klafter Olsen & Lesser, of Rye Brook, N.Y.; and Outten & Golden, of Chicago. They represented named plaintiff Emily Brunner and others who were employed as “second assistant store managers” at Jimmy John’s restaurants.
In 2016, the cases were consolidated, and putative classes were conditionally certified, over the objections of franchisee defendants, who said they feared “financial ruin” from the cases.
However, at the same time, other cases have sprung up, as others have sought to bring similar actions against specific Jimmy John’s franchisees in other federal court districts. Those filings prompted the court in March to grant Jimmy John’s request for an injunction blocking those cases from moving forward while the primary litigation proceeds.
Most recently, however, Jimmy John’s has asked the court to declare the plaintiffs can’t sue the sandwich chain for decisions it says were made by franchise owners who actually hired and managed the workers who are suing in the pending actions.
In May, Jimmy John’s moved for summary judgment, arguing it should not be considered a “joint employer” along with its franchisees, and thus should not be liable to answer for the alleged misclassification of the ASMs.
“Plaintiffs are unable to establish a genuine issue of material fact as to any of the factors that this Court articulated and considered in dismissing claims against (Jimmy John’s founder Jimmy John Liautaud), including: (1) whether Jimmy John’s has the power to hire and fire franchisee employees; (2) whether Jimmy John’s exercises supervision and control over franchisee employee work schedules or conditions of payment; (3) whether Jimmy John’s determines the rate and method of payment to franchisee employees; and (4) whether Jimmy John’s maintains employment records of franchisee employees,” Jimmy John’s wrote in a memorandum in support of its summary judgment motion.
“Moreover, fatal to their joint-employer theory is Plaintiffs’ inability to show that Jimmy John’s imposes any requirements – under the authority of its franchise agreements or otherwise – with respect to how assistant store managers are to be classified and paid, which is the alleged FLSA violation at issue in this case.”
“The undisputed evidence here shows that there is no requirement that franchisees even employ someone as an ‘Assistant Store Manager,’ much less a requirement that the assistant manager be classified and compensated in a specific way, further confirming how far removed Jimmy John’s is from the franchisee-level conduct of which Plaintiffs complain.”
The plaintiffs, however, fired back in a memorandum of their own, filed in late June, asserting Jimmy John’s argument relies on “ four old, artificial and formalistic” standards for determining joint employer status.
In more recent rulings on the question, the plaintiffs said, courts have found franchisers and others can be considered joint employers, even if they never “hired, fired or paid” any of the workers.
In this case, the plaintiffs said Jimmy John’s should be considered a joint employer because the standards and “checklists” it applies to franchisee shops actually define the work environment at such restaurants.
“In this case, what ASMs do day-in-and-day out is the product of Jimmy John’s direction of store operations,” the plaintiffs wrote in the memo, signed by attorney Seth R. Lesser, of Klafter Olsen & Lesser. “Jimmy John’s defines the work like of ASMs - what they do, how they do it, and when they do it. Franchisees may cut the paychecks, but Jimmy John’s exercises control over working conditions.”
Judge Kocoras has not indicated when he might rule on the question.
Jimmy John’s is represented in the action by attorneys with the firm of Seyfarth Shaw LLP, of Chicago.