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Krupp v. Impact Acquisitions LLC

United States District Court, E.D. Wisconsin

December 12, 2016

LINDA KRUPP, individually and on behalf of all others similarly situated, Plaintiff,
v.
IMPACT ACQUISITIONS LLC, IMPACT NETWORKING INDIANA, LLC, and IMPACT NETWORKING LLC Defendants,

         ORDER GRANTING PLAINTIFF'S MOTION FOR CONDITIONAL CERTIFICATION AND COURT-AUTHORIZED NOTICE (DKT. NO. 42); DENYING AS MOOT DEFENDANTS' MOTION FOR PROTECTIVE ORDER (DKT. NO 63); DENYING AS MOOT PLAINTIFF'S AMENDED MOTION FOR LEAVE TO FILE A SUR-REPLY BRIEF (DKT. NO 69); AND SCHEDULING HEARING ON DEFENDANTS' MOTION TO STRIKE, FOR PROTECTIVE ORDER, AND FOR SANCTIONS (DKT. NO. 35)

          HON. PAMELA PEPPER United States District Judge.

         Introduction

         The plaintiff, Linda Krupp, brings this putative collective and class action on behalf of herself and current and former digital service technicians (DSTs) who were employed and classified as salaried non-exempt by the defendants, but were not compensated at one and one-half times their rate of pay when they worked over 40 hours. She alleges that the defendants failed to pay overtime wages, which violated the Fair Labor Standards Act (FSLA), 29 U.S.C. §§201-219, and its Wisconsin counterparts, Wis.Stat. §§103.02 and 109.03, and Wis. Admin. Code §DWD 274.03. Dkt. No. 1. The court has federal question jurisdiction over the FLSA claims and supplemental jurisdiction over the state law claims pursuant to 28 U.S.C. §§1331 and 1367, respectively.

         The following motions are ready for resolution: (1) the defendants' motion to strike, for protective order, and for sanctions (Dkt. No. 35); (2) the plaintiff's motion for conditional collective action certification (Dkt. No. 42); (2) the defendants' motion for a protective order quashing or staying the deposition of Patrick Roth (Dkt. No. 63); and (3) the plaintiff's amended motion for leave to file a sur-reply brief (Dkt. No. 69).

         I. Motion for Conditional Class Certification and Court-Authorized Notice (Dkt. No. 42)

         Pursuant to 29 U.S.C. §216(b), the plaintiff seeks conditional certification of the collective overtime class of all persons employed as salaried non-exempt DSTs by any defendant at any time since March 22, 2013. She also requests (1) appointment of her counsel as collective action counsel; (2) approval of the proposed notice of right to join lawsuit;[1] and (3) an order directing the defendants to disclose identifying information regarding any persons of whom they are aware who meet the collective class definition.

         Factual Background[2]

         The defendants operate digital office equipment service and repair businesses in Wisconsin, Indiana, and Illinois. Dkt. Nos. 45-1 at 9, 18; 45-2 at 19. The defendants are separate legal entities, but they share upper management (including a chief executive officer who approves all salaries), they have related ownership, and they operate under the same “Impact Networking” brand. Dkt. No. 45-2, 8, 13, 16. Impact Acquisitions LLC's (“Acquisitions”) vice president of operations, who works primarily out of Impact Networking LLC's (“Impact”) Illinois office and occasionally out of Acquisitions' Brookfield office, processes the defendants' entire payroll, including for DSTs. Dkt. No. 45-2, 6-7. Impact's Lake Forest, Illinois office handles the defendants' human resources and sets the policies and procedures that apply to all DSTs. Dkt. Nos. 45-1, 38, 230-31; 45-2, 17.

         The defendants have employed DSTs since June 2012, and the job description is the same for all of them: to “[p]rovide onsite customer service, field repair, and maintenance of digital office equipment at [Impact's] customers' facilities.” Dkt. Nos. 45-1, 28; 45-3, 1. Acquisitions employs DSTs who work in Wisconsin. Impact LLC employs DSTs who work in Illinois, and Impact Networking Indiana, LLC (“Impact Indiana”) employs DSTs who work in Indiana. Id. at 9-10.

         The plaintiff resides in Racine, Wisconsin, and Acquisitions employed her from about June 2012 until June 2014. Dkt. No. 43. Wendell Walton, who has opted into this action, resides in Marion County, Indiana, and worked as a DST for Impact Indiana from about February 2014 through April 2014. At that time, Impact Indiana terminated his employment because he had not completed enough on-line training certifications. Dkt. No. 44.

         The defendants have an Employee Handbook, [3] and all DSTs must sign an acknowledgement that they have received a copy and understand the policies they contain. Dkt. No. 41-1, 37. Those policies set forth work requirements, and apply in the same manner to all DSTs. Id. at 35-36. Pursuant to the Handbook, the workweek starts on Monday and ends on Friday, and each workday begins at 8 a.m. and ends at 5 p.m. The workday includes an unpaid hour for lunch, which an employee generally may schedule between 11 a.m. and 1 p.m. Dkt. No. 45-9, Bates Nos. 000346-47.

         The Handbook also states that a manager can notify an employee that overtime work may be required. Id. at Bates No. 000346. In order for an employee to receive overtime pay, the employee's manager must authorize the overtime work in advance. Id. at Bates No. 000344. The defendants do not have a formal mechanism or procedure for DSTs to report working overtime or through meal periods. Dkt. Nos. 45-1, 232; 45-2, 75.

         All DSTs are paid on a semi-monthly basis. Dkt. No. 45-2, 21. With the exception of a few hourly DSTs employed by a company acquired in 2015 who continue to be paid on an hourly basis, [4] DSTs have been classified as “salar[ied]” “non-exempt” employees since 2012. Dkt. No. 45-1, 115-16.

         The defendants categorize DSTs as “non-exempt” for purposes of overtime compensation under the FLSA, and are aware that DSTs are entitled to overtime compensation when they work more than forty hours in a workweek. Dkt. Nos. 45-1, 116; 45-2, 23-24.

         When processing payroll, the defendants do not determine each DST's actual start and/or end time each workday, the actual start and/or end time of a meal period each workday, or the actual number of hours and minutes that each DST worked each workday or workweek within the payroll period. Dkt. No. 45-2, 86. Instead, the defendants assume that the DSTs work the regular work hours outlined in the Employee Handbook - Monday through Friday from 8 a.m. to 5 p.m. minus a one-hour lunch each workday, Dkt. No. 45-2, 68 - and their salaries compensate them for a forty-hour workweek, Dkt. Nos. 45-1, 39, 120; 45-2, 31. Each DST's salary is divided evenly between the twenty-four pay periods per year. Dkt. No. 45-2, 28. Overtime is added when a manager calls or otherwise notifies payroll that the DST has worked overtime.

         The defendants' payroll software has the ability to track start and end times for each DST each workday. Dkt. No. 45-2, 87-88. The defendants once attempted to use the software to require DSTs to punch in and out at the start and end of their respective shifts. Since 2012, they have not done so for payroll purposes. Dkt. No. 45-2, 36-37, 73.

         The defendants use a merit review system to set goals and areas of improvement for each DST. Dkt. No. 45-1, 41-42. DSTs are awarded a number of points based on performance in four categories: (1) training, (2) activity, (3) performance, and (4) manager evaluation. Dkt. Nos. 45-1, 43; 45-10, Bates No. 000528. DSTs who fall below a certain percentage of points on their review may be subject to termination. Dkt. Nos. 45-1, 47-50; 45-10, Bates No. ...


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