EAST ST. LOUIS – Chief U.S. Judge Nancy Rosenstengel redacted portions of an order denying a class action for 600,000 Jimmy John’s workers, but didn’t redact plaintiff Robert Conrad’s last words at work.
He said f---ing bitch according to Rosenstengel, who fully spelled it out in an order she unsealed on July 30.
Rosenstengel signed it on July 23, and sealed it for a week to allow requests for redactions.
She found many reasons not to certify Conrad as class representative, including a conflict of interest within the class.
She separately found she couldn’t certify a class due to material error in the damage calculation of economist Hal Singer.
The action started in 2018, with attorney Derek Brandt of Edwardsville filing suit for Sylas Butler of Madison County in association with a national legal team.
Butler claimed a policy that prohibited workers from switching to nearby Jimmy John’s stores, in effect from 2014 to 2018, violated antitrust law.
He sued after Jimmy John’s dropped the “no poaching” policy nationwide under pressure from the attorney general of Washington State.
In 2019, Brandt asked former district judge Michael Reagan for leave to amend the complaint and substitute Conrad as class representative.
“Butler no longer wishes to bear the burden of serving as a class representative and wishes to become an absent class member,” Brandt wrote.
“As has been true several times during the discovery process, plaintiff’s counsel experienced difficulty contacting Butler to secure a deposition date.”
Reagan granted the motion, extended all deadlines nine months, and retired.
The court clerk assigned Rosenstengel.
Jimmy John’s moved to exclude economist Singer’s report last year, claiming he mixed wages of workers on hourly pay with those on shift pay.
At a hearing this January, attorney Dean Harvey of the Lieff Cabraser firm in San Francisco claimed Singer properly adjusted data with a fixed variable effect.
He said it was two percent of the class and couldn’t affect the result, “unless that change is correlated with the conduct versus the benchmark period.”
Jimmy John’s counsel Rachel Brass of the Gibson Dunn firm said Harvey assumed a worker was paid hourly or salary throughout the conspiracy period.
“People changed over time whether they were paid on a salary basis with more and more operators over time going to paying all of their employees on an hourly basis,” she said.
“It did change on both sides of the equation and his fixed effect variable cannot solve for that very fundamental mistake he made.”
Brass said Conrad himself was paid on a shift basis.
Rosenstengel excluded Singer’s report in February.
She denied a motion to exclude Jimmy John’s economist Janusz Ordover, who reported that he adjusted for the error and greatly reduced the impact.
She denied a motion to exclude Jimmy John’s economist Justin McCrary, who reported that most workers likely benefited from the policy.
Conrad moved for reconsideration and Rosenstengel denied it in May.
She began her July order with Singer’s error and listed other issues that precluded class certification.
Rosenstengel’s order also found the following:
The policy was irrelevant to Conrad.
A potential conflict existed between managers and hourly employees.
Several individual questions existed that couldn’t be answered using common proof.
Jimmy John’s has nearly 3,000 stores across 40 states, and it isn’t responsible for employment matters.
Franchisees must maintain minimum brand standards to ensure a consistent customer experience across the country.
Terms of the policy changed over time.
In 2014, she found, it prohibited franchisees from recruiting or hiring anyone employed as a general or assistant manager at Jimmy John’s in the last 24 months without written permission.
Franchisees could force payment up to $50,000 for violations.
In 2015, she found, Jimmy John’s prohibited recruiting but not hiring and applied the policy to all employees.
In 2016, she found, the penalty applied only when a manager was solicited.
“With that in mind, about 88 percent of employee requests were approved without conditions,” Rosenstengel wrote.
She further found:
Conrad started working at Jimmy John’s in Winter Park, Florida at $8.25 an hour in February 2018.
He was promoted to person in charge at $9 a month later.
He was promoted to salaried manager at $91 per day a month after that.
The area manager asked him to switch to Orlando and he did, receiving a raise to $95 per day.
He didn’t get along with an owner’s niece who worked there and was fired for telling her he no longer cared for her opinions.
Rosenstengel based these findings on Conrad’s responses to interrogatories.
For the wording of Conrad’s final insult, she cited his deposition.
She found he alleged that Jimmy John’s prevented workers from changing locations for better jobs yet he wasn’t among those employees.
She found he didn’t leave Jimmy John’s in search of higher wages and he was never denied the opportunity to change locations.
She agreed with Jimmy John’s that many members of the potential class participated in the challenged employment decisions.
She found Conrad failed to establish that common evidence would show a conscious commitment of franchisees to suppress labor mobility.
She found some franchisees took no part in enforcement.
She found 88 percent of releases, when requested, were granted.
She quoted this year’s Supreme Court decision in NCAA v. Alston, finding that mistaken condemnations of legitimate arrangements are especially costly.
She found it requires a court to look into circumstances, details, and logic of a restraint to ensure that it unduly harms competition before declaring it unlawful.
She found the relevant labor market included other quick service restaurants.
She found 99 percent of Jimmy John’s branded stores have at least 10 other quick service restaurant brands within 10 miles.
She found the policy protected the investments of franchisees in training.
She quoted a witness from Jimmy John’s who said the policy kept peace among franchisees and reduced friction within the system.