Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—N.D. Ill.: Employment class actions against Jimmy John’s consolidated, (Jan 21, 2016)

By Michael Menzhuber, J.D., LL.M.

Jimmy John’s motion for reassignment and consolidation with another class action against it that also alleged Fair Labor Standards Act (FLSA) violations, was granted by the federal district court in Chicago. In granting the motion, the court determined that both the requirement for consolidation under Federal Rule of Civil Procedure 42 and the requirement for reassignment under Northern District of Illinois Local Rule 40.4 were met (Brunner v. Jimmy John’s, LLC, January 14, 2016, Kocoras, C.).

After Emily Brunner’s and Caitlin Turowski’s class action suit, which alleged violations of the FLSA and certain Illinois state wage and hour laws by Jimmy John’s Enterprises, Inc. and certain of its franchisees, was consolidated with Alexander Whiton’s class action suit, Jimmy John’s filed a motion for reassignment and to consolidate the combined class actions with a similar class action filed by Scott Watson, Watson v. Jimmy John’s LLC, 15-cv-6010. Watson’s suit alleged violations of the FLSA and certain Ohio state wage laws.

In opposing the consolidation, the Brunner franchise defendants argued that the claims in the separate cases did not neatly overlap. The court, however, noted that: (1) Rule 42 provides for consolidation of cases that involve a common issue of law or fact; and (2) Local Rule 40.4, which provides for reassignment, requires only some of the same issues of fact or law. The court found the argument that the parties in the two cases were not the same, because the franchise defendants were not defendants in the Watson case, unpersuasive because both cases involved nationwide FLSA collectives of Jimmy John’s assistant managers seeking unpaid overtime which would plainly benefit from consolidation.

The franchise defendants also argued that they would be prejudiced if the court ordered consolidation. The court determined that: (1) potential prejudices identified by the franchise defendants had little to do with consolidation; and (2) it would be in a better position to protect the all of the parties’ interests if notice in the Brunner and Watson cases was harmonized and the parties crafting and sending the notices were joined before the court.

The Watson plaintiffs objected to the consolidation on the basis that the process of harmonizing the proposed Watson’s notice with the Brunner notice could cause significant further delay. The court noted that the Watson plaintiffs did not oppose consolidation altogether but only until they were able to dispatch their notice alerting a nationwide FLSA collective about their case alone.

The court determined that the notices in both actions needed to be harmonized to prevent confusion among recipients as to whether the suits covered the same claims, whether they might recover twice, and whether it would be necessary to opt-in to both or risk forfeiting some rights. The best way to prevent delay would be to consolidate the cases, lest notice proceedings and related motion practice in both cases go on for long periods in separate courts. The court also noted that, while a notice form had been approved in Watson, the Watson plaintiffs were still in the process of collecting information to identify the intended recipients and had not yet begun to issue that notice.

The cases are Nos. 14 C 5509 and 15 C 1681.

Attorneys: Jacie C. Zolna (Myron M. Cherry & Associates) for Emily Brunner. Gerald L. Maatman, Jr. (Seyfarth Shaw LLP) for Jimmy Johns LLC, Jimmy John's Enterprises LLC, and Jimmy Johns Franchise, LLC. Anand C. Mathew (Honigman Miller Schwartz And Cohn LLP) for JS Fort Group, Inc., JJ Severson Affiliates Five, Inc. and JJ Severson Affiliates, Inc.

Companies: Jimmy Johns LLC; Jimmy John's Enterprises LLC; Jimmy Johns Franchise, LLC; JS Fort Group, Inc.; JJ Severson Affiliates Five, Inc.; JJ Severson Affiliates, Inc.

Cases: FranchisingDistribution IllinoisNews