Judge: Employees classified together for overtime exemption can sue together for overtime pay

By D.M. Herra | Feb 7, 2019

A federal judge refused to break up a class action lawsuit against freight service Total Quality Logistics, finding the company’s own policies undermine its argument that the class members are too different to qualify for class certification.

Total Quality Logistics, or TQL, is a third-party freight forwarder that acts as a medium between transportation companies and customers who require shipping. With offices in 22 states, the Ohio-based forwarder is one of the largest such companies in the nation. It was sued by two former salespeople who claim TQL sales staff are required to work more than 40 hours per week but are classified by the company as exempt from federal overtime requirements.

According to court documents, the sales staff - known as logistics account executives, or LAEs – make up about three-quarters of TQL’s total work force. The LAEs are charged with prospecting to drum up new customers for the business. Once a customer relationship is formed, the LAE is also responsible for maintaining that relationship, advising the customer and making sure their logistics needs are met.

In its motion to break up, or decertify, the plaintiffs’ class, TQL said that the day-to-day responsibilities of LAEs varies widely. The most successful executives have a robust customer list and spend most of their time advising and looking after logistics, while less-successful LAEs spend more time prospecting and trying to build their list.

In his analysis, U.S. District Judge Matthew Kennelly said federal regulations require all members of the class to have a similar “primary duty,” not to have identical responsibilities. Finding that class members share a common title, job description, basic responsibilities and common harm, he wrote that variations in their individual activities should not warrant decertification.

It is also telling, Kennelly wrote, that TQL’s own policies classify all LAEs as overtime exempt. That indicates the company itself finds the members of the class to be similarly situated when it comes to their right to overtime pay, he wrote.

TQL also argued that some LAEs may qualify for administrative exemption to overtime laws but not all, and that individuality makes class certification impossible. It turned again to the fact that some LAEs spend most of their time prospecting while others spend most of their time providing logistics services. Without addressing the merits of the defense, Kennelly noted it is not enough to cause decertification, as case law has established the allocation of an employee’s time does not necessarily determine his or her “primary duty.”

In attempting to decertify the approximately 140-person class, TQL pointed to four individual plaintiffs it said might have unique defenses that don’t apply to the rest of the class. Two are subject to statute of limitations defenses, one spent some time away from TQL due to his military service, and one made nearly enough to qualify for the highly compensated employee exemption. Kennelly noted that the plaintiffs had already offered to drop the first two from the class. The unique defenses of military service and high compensation would only affect the amount of damages those plaintiffs receive and are not enough to decertify the entire class, he wrote.

The suit includes a second subclass of LAE trainees, but Kennelly found the same arguments apply also to those plaintiffs. The trainees were also required to work more than 40 hours per week under direct supervision of an LAE mentor and performed much the same duties.

Plaintiffs are represented in the case by attorneys from the firms of Morgan & Morgan, of Orlando, Fla., and Stephan Zouras LLP, of Chicago.

TQL is represented by the firms of Barack Ferrazzano Kirschbaum & Nagelberg LLP, of Chicago; and Keating Muething & Klekamp PLL, of Cincinnati.

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Organizations in this Story

Barack Ferrazzano Kirschbaum & Nagelberg LLP Keating Muething & Klekamp Morgan & Morgan Stephan Zouras LLP U.S. District Court for the Northern District of Illinois

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