Rottman v. Old Second Bancorp, Inc.

• Decision Date: 25 August 2010
• Docket Number: No. 09 C 7840,09 C 7840
• Citation: 735 F.Supp.2d 988
• Parties: Joseph and Roberta ROTTMAN, individually, and on behalf of all others similarly situated, Plaintiffs, v. OLD SECOND BANCORP, INC., Defendant.
• Court: U.S. District Court — Northern District of Illinois

735 F.Supp.2d 988

Joseph and Roberta ROTTMAN, individually, and on behalf of all others similarly situated, Plaintiffs,

v.OLD SECOND BANCORP, INC., Defendant.

No. 09 C 7840.

United States District Court,

N.D. Illinois,

Eastern Division.

Aug. 25, 2010.

Matthew R. Crimmins, Walters Bender Strohbehn & Vaughan, P.C., Kansas City, MO, Kenneth C. Apicella, Apicella & Malatesta LLC, Chicago, IL for Plaintiffs.

Jeffrey A. Risch, Rebecca L. Dobbs, SmithAmundsen LLC, St. Charles, IL, Jennifer M. Reddien, Molly Anne Arranz, Sara Marie Stertz, SmithAmundsen, LLC, Chicago, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

ELAINE E. BUCKLO, District Judge.

Plaintiffs Joseph and Roberta Rottman ("the Rottmans") have brought this action, individually and on behalf of all others similarly situated, against defendant Old Second Bancorp, Inc. ("Old Second"), alleging violations of the overtime and minimum wage provisions of the Fair Labor Standards Act ("FLSA," "the Act"), 29 U.S.C. § 201, et seq. They also assert claims individually against Old Second for common law promissory estoppel andfraudulent misrepresentation. The Rottmans have moved pursuant to section 16(b) of the FLSA, 29 U.S.C. § 216(b), to conditionally certify the suit as a collective action and to authorize their proposed class notice. For the reasons discussed below, the motion is granted.

I.

The Rottmans are former home mortgage loan officers or "loan originators" employed by Old Second, a bank and trust company with branches throughout the State of Illinois. The Rottmans allege that Old Second has failed to pay them and other loan officers for overtime hours that they have worked during the past three years. Under the FLSA, "employers must pay overtime to employees working on an hourly basis." Kennedy v. Commonwealth Edison Co., 410 F.3d 365, 369 (7th Cir.2005). The Act provides that "[i]f such an employee works more than 40 hours in a week, she must receive at least one and a half times her regular wage for every extra hour worked." Id. (citing See 29 U.S.C. § 207(a)(1)).

Section 16(b) of the FLSA "permits plaintiffs to bring a 'collective action' against an employer for unpaid overtime compensation on behalf of him or herself and 'other employees similarly situated.' " Hundt v. DirectSat USA, LLC, No. 08 C 7238, 2010 WL 2079585, at *2 (N.D.Ill. May 24, 2010) (citing 29 U.S.C. § 216(b)). Although "[n]either the FLSA nor the Seventh Circuit has set forth criteria for determining whether employees are 'similarly situated' ... courts in this district and around the country have settled on a two-step procedure for dealing with collective actions under the FLSA." Id.

In conducting the first step of the inquiry, "[c]ourts have interpreted the 'similarly situated' requirement ... leniently." Anyere v. Wells Fargo, Co., Inc., No. 09 C 2769, 2010 WL 1542180, at *2 (N.D.Ill. April 10, 2010) (citations, quotation marks, and brackets omitted); Howard v. Securitas Security Services, USA Inc., No. 08 C 2746, 2009 WL 140126, at *5 (N.D.Ill. Jan. 20, 2009) ("[T]he court looks for no more than a 'minimal showing' of similarity."). "Plaintiffs do not have to show that the potential class members have identical positions for conditional certification to be granted; plaintiffs can be similarly situated for purposes of the FLSA even though there are distinctions in their job titles, functions, or pay." Jirak v. Abbott Laboratories, Inc., 566 F.Supp.2d 845, 848-49 (N.D.Ill.2008). Since the "similarly situated" standard is a liberal one, it "typically results in conditional certification of a representative class." Cameron-Grant v. Maxim Healthcare Services, Inc., 347 F.3d 1240, 1243 n. 2 (11th Cir.2003) (quotation marks omitted); Smallwood v. Illinois Bell Telephone Co., 710 F.Supp.2d 746, n. 4 (N.D.Ill.2010). "Although the inquiry is undemanding, the court is under no obligation, as it would be on a motion to dismiss, to accept the plaintiff's allegations as true." Hundt, 2010 WL 2079585, at *2 (brackets, citations and quotation marks omitted). "Rather, the court evaluates the record before it, including the defendant's oppositional affidavits, to determine whether the plaintiffs are similarly situated to other putative class members." Id.

After discovery, the court conducts the second, more stringent step of the inquiry. "Once it is known which employees will be part of the class, the Court must reevaluate the conditional certification to determine whether there is sufficient similarity between the named and opt-in plaintiffs to allow the matter to proceed to trial on a collective basis." Jirak, 566 F.Supp.2d at 848 (quotation marks omitted). Specifically, "[a]t step two, theCourt must consider: (1) whether the plaintiffs share similar or disparate employment settings; (2) whether affirmative defenses raised by the defendant would have to be individually applied to each plaintiff; and (3) any fairness and procedural concerns." Id. District courts have "wide discretion" to manage collective actions. Alvarez v. City of Chicago, 605 F.3d 445, 448 (7th Cir.2010).

II.

The Rottmans seek conditional certification of the following class:

All current and former residential mortgage loan originators employed by Old Second and/or its affiliates and subsidiaries within the previous three years. This class specifically includes all loan officers or loan originators who reported to a regional sales manager, but specifically excludes any loan originator which [sic] had the title of regional sales manager.

Pls.' Mot. for Cond. Certification at 10. Since this is the first step of the conditional certification inquiry, the Rottmans "need only make a modest factual showing sufficient to demonstrate that they and potential plaintiffs together were victims of a common policy or plan that violated the law." Smallwood v. Illinois Bell Telephone Co., 710 F.Supp.2d 746, 750 (N.D.Ill.2010).

The Rottmans have passed this test. They have adduced evidence showing that Old Second loan officers were subject to the same basic loan-processing policies and requirements. Among other things, the Rottmans point to Old Second's so-called "Lock Policy," which sets forth requirements concerning loan approval and cancellation, and the use of Old Second's pricing engine. See Pls.' Mem., Ex. P. They have also cited evidence that all loan originators were required to be "on call" at all times to answer calls to Old Second's customer service line. See, e.g., Ex. H ¶ 14; Ex. I ¶ 14; Ex. J ¶ 13. The Rottmans have also produced evidence showing that Old Second misclassified loan originators as exempt from the FLSA's overtime requirements and failed to pay them overtime when they worked more than forty hours per week. See, e.g., Ex. H ¶¶ 16-18; Ex. J ¶¶ 15-17.

Old Second opposes conditional certification on two grounds. The first is based on its contention that members of the proposed class are "outside salesmen" under the FLSA and are therefore exempt from the Act's overtime requirements. See 29 U.S.C. § 213(a)(1). Under Department of Labor regulations, an "outside salesman" is an employee:

(1) Whose primary duty is:

(i) making sales within the meaning of section 3(k) of the [FLSA], or

(ii) obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and

(2) Who is customarily and regularly engaged away from the employer's place or places of business in performing such primary duty.

Jirak v. Abbott Laboratories, Inc., No. 07 C 3626, 2010 WL 2331098, at *4 (N.D.Ill. June 10, 2010) (citing 29 C.F.R. § 541.500(a)).

Old Second maintains that determining whether given class members meet these criteria will necessitate individualized inquiries into the nature of each loan officer's employment. For example, Old Second claims that it will be necessary to consider the job duties actually performed by each loan officer on a daily basis; the time spent by each loan officer performing his/her daily tasks; the location where the officer performed his/her duties; and theand amount of time he/she worked outside of the office. Since these determinations cannot be made on a class-wide basis, Old Second claims, the suit should not be certified as a collective action.

This argument is premature at this stage of the litigation. Courts have consistently held that questions about the applicability of FLSA exemptions are typically not addressed during the first step of the conditional certification inquiry. See, e.g., Jirak, 566 F.Supp.2d at 850 ("Defendant's argument about dissimilarities in the class is more appropriately decided at step two, after it is known who the class will consist of, and after some of the factual issues can be fleshed out in discovery."); see also Pressler v. FTS USA, LLC, 2010 WL 1904974, at *4 (E.D.Ark.2010) (collecting cases); Olmsted v. Residential Plus Mortg. Corp., Nos. 08 C 142, 08 C 419, 2008 WL 5157973, at *3 (N.D.Ill. Dec. 9, 2008); Neary v. Metropolitan Property and Cas. Ins. Co., 517 F.Supp.2d 606, 620 (D.Conn.2007) (collecting cases). Questions concerning the application of the "outside salesperson" exemption to the proposed class is a bridge to be crossed later.

Old Second's second argument is that certification should be denied based on differences between the Rottmans and the other class members, and differences within the proposed class itself. In particular, Old Second claims that "[n]o other loan originators other than the Rottmans had an incentive compensation plan," Resp. at 4; that, unlike other loan officers, the Rottmans had the help of an assistant, Jackie Box ("Box"); that loan officers "at Old Second developed business, contacted customers and procured loans in different manners, which involves a significant individual analysis that the Court will have to endure," Resp. at 11; and that Old Second's loan officers had varying levels of access to a computer software program called "MorVision," which loan originators used as part of the...