Hendricks v. Total Quality Logistics, LLC

• Docket Number: Case No. 1:10cv649
• Decision Date: 26 September 2023
• Citation: Hendricks v. Total Quality Logistics, LLC, 694 F.Supp.3d 1005 (S.D. Ohio 2023)
• Parties: Robert HENDRICKS, et al., Plaintiffs, v. TOTAL QUALITY LOGISTICS, LLC, et al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

694 F.Supp.3d 1005

Robert HENDRICKS, et al., Plaintiffs, v. TOTAL QUALITY LOGISTICS, LLC, et al., Defendants.

Case No. 1:10cv649

United States District Court, S.D. Ohio, Western Division

Filed September 26, 2023

Bruce H. Meizlish, Deborah R. Grayson, Meizlish & Grayson, Cincinnati, OH, Lynn D. Pundzak, Cincinnati, OH, Brennan Clay Grayson, Cincinnati Workers Rights Project, Cincinnati, OH, Adam Hansen, Pro Hac Vice, Apollo Law LLC, Minneapolis, MN, Caitlin Loughry Opperman, Pro Hac Vice, Helen Clara Coleman, Pro Hac Vice, Rachhana T. Srey, Pro Hac Vice, Reena I. Desai, Pro Hac Vice, Nichols Kaster, PLLP, Minneapolis, MN, for PlaintiffsRobert Hendricks, Scott Spitler, Nathan Parr, Nicholas Cherry, Matt Bowlin, Patrick Foley, Matthew Laughter, William Trevino, Steven Prince, Jason Brown, Sherri Hardin, Beverly Sexton, Patrick McNichols, Juston Ackerman, Alando Chambers, Drew Donner, Greg Martin, Shawn Gross, Shaun Hoskins, Lucas Miller, Billy Paskal, John J. Pershing, Joseph V. Hoffman, Elliott Holmes, Ryan Kosek, Logan Wallace, Stephen Maynard, Daniel Parren, Ryan Towns, Joshua D. Hackenberg, Michael Horejs, Anthony Rice, Joe Shelby, Lynne Woehrle Stephenson, John Wills, Amanda Roach, Ryan Stacy, Raymond Peters, David Lang, Shanita Vickers, Deanna Jester, Michael Postell, Eric Reverman, Adam Mersch, James D. Smith, Tyler Milbee, Joseph Reid Yearwood, Mark Minton, Cecilie Hughes, Shelby Newhouse-Smith, William J. Mathews, Justin Harrod, Jason McIntyre, Jason L. Jones, Jeremy McKenzie, Jason Tate, Patrick May, David Sheridan, Andre D. White, John Maier, Dan Ollberding, Emily Hennings, Kevin Monroe, Brandi Heilman, Christopher Verzella, Dennis Mathis, II, Timothy Mast, Victoria L. Goshert, Benjamin Donald Hartung, Jason Polite, Seth Ketcham, Andrew Ward, Jason Molnar, Valerie Spicciati, Scott Heck, David Rehberger, Angela Johnson, Chahnna Johnson, Jay McGinnis, Nicholas McKenzie, William Johnson, Gregory Skillman, Justin Monak, David Martter, Ashley Paetz, Austin Jensen, Kyle Warrenburg, Larry Weir, Trevor Robinson, Cory Zavagno, Sean Lesson, Nathan Johnson, William D. IV Holton, Catherine Phillips, Patrick Sweny, Mathew Newton, John Ziza, Todd Rude, Leland McRoberts, Michael Grenda, Richard Neises, Karl Hager, Samuel Hernandez, Joann Harmon, David Walls, Karen Sheldon, Guillermo Retana, Heather Reisner, Stephen Micheli, Denise Bennett, Brian Goff, Patrick Deal, Amanda Ferguson, Carlo Eastin, John Armstrong, Chase Cruse, Bobbie Carlson, Lucius Baker, Donnie Lee Angel, Kris Fowler, Sloane Gerrity, Lauren Bronner, Ryan Deller, Mary Fazioli, Jason Felts, Douglas Dewey, Kim Franxman, Chelsea Dawson, Tammy Cook, Jonathan Ross Cochran, Ryan Garvey, Stephen Cotton, Adam Benner, Michael Durinsky, Iii, Gary Ennis, Matthew Duffy, Eric Eves, John Davis, Nathaniel Bergman, Ross Flynn, Steven Berendsen, Stephen Ericson, Melissa Cunningham, Matthew Crimmel, William Freeman, Reid Clasen.

Bruce H. Meizlish, Deborah R. Grayson, Meizlish & Grayson, Cincinnati, OH, Lynn D. Pundzak, Cincinnati, OH, Brennan Clay Grayson, Cincinnati Workers Rights Project, Cincinnati, OH, Adam Hansen, Pro Hac Vice, Apollo Law LLC, Minneapolis, MN, Caitlin Loughry Opperman, Pro Hac Vice, Helen Clara Coleman, Pro Hac Vice, Rachhana T. Srey, Pro Hac Vice, Nichols Kaster, PLLP, Minneapolis, MN, for PlaintiffsJames Wood, Emily Wallace, Adam Weber.

Bruce H. Meizlish, Deborah R. Grayson, Meizlish & Grayson, Cincinnati, OH, Lynn D. Pundzak, Cincinnati, OH, Brennan Clay Grayson, Cincinnati Workers Rights Project, Cincinnati, OH, Randolph Harry Freking, Freking Myers & Reul LLC, Cincinnati, OH, Adam Hansen, Pro Hac Vice, Apollo Law LLC, Minneapolis, MN, Caitlin Loughry Opperman, Pro Hac Vice, Helen Clara Coleman, Pro Hac Vice, Rachhana T. Srey, Pro Hac Vice, Reena I. Desai, Pro Hac Vice, Nichols Kaster, PLLP, Minneapolis, MN, for PlaintiffTimothy Schmidt.

Gregory Michael Utter, Joseph M. Callow, Jr., Callow & Utter, LLC, Cincinnati, OH, Rachael Anne Rowe, Bryce James Yoder, Lori Goetz Heilman, Sarah V. Geiger, Joseph B. Womick, Keating Muething & Klekamp PLL, Cincinnati, OH, for DefendantsTotal Quality Logistics, LLC, Kenneth Oaks.

DECISION & ORDER

MICHAEL R. BARRETT, JUDGE

This matter is before the Court following the thirteen-day bench trial held from February 15, 2022, to March 4, 2022.The parties filed Post-Trial Briefs (Docs. 567, 569) and Responses in Opposition to the Post-Trial Briefs (Docs. 570, 571).Subsequent to this briefing, the parties filed supplemental authority.(Docs. 575, 576).

Rule 52 of the Federal Rules of Civil Procedure provides that a court conducting a bench trial "must find the facts specially and state its conclusions of law separately," and that "[j]udgment must be entered under Rule 58."Fed. R. Civ. P. 52(a)(1).In a bench trial, the Court acts as the finder of fact and is entitled to make credibility findings as to witnesses and testimony.Therefore, the Court considers among other things, the witnesses' appearance and manner of testifying, whether the witness has anything to gain or lose from the outcome of the case, does the witness give truthful answers, or rather slant testimony in its favor, is a witness's testimony supported or contradicted by other testimony or evidence that the Court found to be credible.Based on a review of the trial testimony, exhibits, and the record in this matter, the Court hereby enters the following findings of fact and conclusions of law.

I.FINDINGS OF FACT

DefendantTotal Quality Logistics LLC("TQL") is a third-party logistics provider.DefendantKenneth Oaks has been TQL's Chief Executive Officer since he founded the company in 1997.PlaintiffRobert Hendricks is a former employee who worked for TQL as a Logistics Account Executive Trainee ("LAET") and a Logistics Account Executive ("LAE").Plaintiff brings claims under the Federal Labor Standards Act of 1939 ("FLSA"), 29 U.S.C. §§ 201, et seq. and the Ohio Minimum Wage Standards Act, Ohio Revised Code §§ 4111.01, et seq.

Plaintiff brings his claims on behalf of himself and other employees similarly situated pursuant to Federal Rule23(b)(3) and 29 U.S.C. § 216(b).The Court has certified two Rule 23 subclasses: (1) all LAETs who worked for TQL in the State of Ohio between September 21, 2008 and April 15, 2016; and (2) all "Junior LAEs" who worked for TQL in Ohio between September 21, 2008 and April 15, 2016.(Doc. 378).The Court also certified two § 216(b) FLSA collectives using the same definitions, but covering the time period from February 14, 2008 to April 15, 2016.(Doc. 395).Defendants have separately filed a motion to decertify the Rule 23and§ 216(b) LAET and Junior LAE subclasses and sub-collectives.(Doc. 568).

During the relevant time period, TQL provided logistics services to customers by acting as a "middle man" who connected carriers with customers.(Doc. 551, Kyle Tharp, PAGEID 109).This work was performed primarily by LAEs and LAETs.(Doc. 551, Kyle Tharp, PAGEID 109-110).LAEs earned a base salary and commission.Commission was based on a percentage of the profit TQL made on a load.(PX-54, "Logistics Account Executive Compensation Program,"TOTQUAL097724)(explaining that commission is based on a percentage of "the collected gross profit that TQL makes on a load for customers").LAETs were in training to become LAEs.LAETs were paid on a salary-only basis.As to "Junior LAEs,"Defendants maintain that "Junior LAE" is not a position or classification that TQL has ever used.(Doc. 568, PAGEID 22865-22866).¹However, for purposes of class and collective certification, this Court designated a Junior LAE as: "a newly promoted LAE who is paid on a salary-only basis up until the point at which he or she declares or receives his or her first commission and therefore no longer is considered to be 'Junior.' "(Doc. 379, PAGEID 11307).All LAETs, Junior LAEs and LAEs were a part of a TQL sales team led by a Group Sales Manager ("GSM").(Doc. 560, Keith Mills, PAGEID 21911;Doc. 548, Victor Nichols, II, PAGEID 20515).

TQL has a variety of customers, including food growers, manufacturers and commodities brokers.(Doc. 543, Kerry Byrne, PAGEID 20172).During the relevant time period, each LAE had their own group of customers, otherwise known as the LAE's "book of business."(Doc. 543, Kerry Byrne, PAGEID 20293).LAEs were responsible for providing logistics services to these customers.(Doc. 543, Kerry Byrne, PAGEID 20291).LAEs would find customers and build their book of business by making a series of cold calls to potential customers—which TQL calls "prospecting."(Doc. 543, Kerry Byrne, PAGEID 20172, 20294).TQL expected all LAEs, Junior LAEs, and LAETs to prospect for customers.(Doc. 543, Kerry Byrne, PAGEID 20294).

Because TQL does not own its own trucks, it must find carriers to move its customers' goods.(Doc. 543, Kerry Byrne, PAGEID 20172).TQL makes its profit by moving loads of goods for customer at a price that is higher than the price it pays the carrier to move it.(Doc. 548, John Maier, PAGEID 20723;Doc. 550, Stephen Alger, PAGEID 20893).Therefore, the goal in negotiating with carriers was to book them at the lowest possible rate.(Doc. 544, Wesley Harrison, PAGEID 20375;Doc. 550, Richard Cooke, PAGEID 20937).

All LAETs begin their employment in TQL's training program.(Doc. 559, Cristina Wigmore, PAGEID 21883).For most LAETs, this training program was 26 weeks.²Training covered logistics and sales.(Doc. 548, Victor Nichols, II, PAGEID 20542).Training consisted of both in-class and on-the-job training.(Doc. 548, Victor Nichols, II, PAGEID 20569).For the on-the-job training, LAETs were assigned to an LAE mentor and worked on their LAE mentor's account.(Doc. 543, Kerry Byrne, PAGEID 20211, 20287).LAETs sat next to their assigned LAE and interacted with their LAE throughout the day.(Doc. 554, David Weiman, PAGEID 21246).LAETs are "strongly encouraged" to work sixty hours per week, work on Saturdays,...