BlueJay TMS

CASE No. 1:22-cv-455 2024-02-02 Brad TOOKER and Debra Hahn, individually and on behalf of all others similarly situated, Plaintiffs, v. BLUEJAY SOLUTIONS, INC., and e2open, LLC, Defendants. Helen Coleman, Rachhana Srey, Nichols Kaster & Anderson PLLP, Minneapolis, MN, for Plaintiffs. Alan Lin, Desiree Brutocao, Edward Mason Smith, Cornell Smith Mierl Brutocao Burton, LLP, Austin, TX, Michael D. Almassian, Keller & Almassian PLC, Grand Rapids, MI, for Defendant BlueJay Solutions Inc. Edward Mason Smith, Cornell Smith Mierl Brutocao Burton, LLP, Austin, TX, for Defendant e2open, LLC. Helen Coleman, Rachhana Srey, Nichols Kaster & Anderson PLLP, Minneapolis, MN, for Plaintiffs. Alan Lin, Desiree Brutocao, Edward Mason Smith, Cornell Smith Mierl Brutocao Burton, LLP, Austin, TX, Michael D. Almassian, Keller & Almassian PLC, Grand Rapids, MI, for Defendant BlueJay Solutions Inc. Edward Mason Smith, Cornell Smith Mierl Brutocao Burton, LLP, Austin, TX, for Defendant e2open, LLC. OPINION AND ORDER ROBERT J. JONKER, UNITED STATES DISTRICT JUDGE. INTRODUCTION This is a collective action wage-and-hour case in which Plaintiffs Tooker and Hahn, former Logistics Coordinator (LC) employees of Defendant BlueJay, allege the company improperly treated them as exempt from federal overtime laws and thus deprived them of their overtime wages in violation of the Fair Labor Standards Act ("FLSA"). They, and nineteen other opt-in plaintiffs, sue BlueJay and Defendant e2open, LLC, which has since acquired BlueJay. On December 12, 2022, the Court granted Plaintiffs' motion for court-authorized notice (ECF No. 34). The Court subsequently approved a notice to the prospective opt-in plaintiffs and there are presently a total of twenty-one plaintiffs in this suit. Since then, both sides have filed motions relating to FLSA certification, the administrative exemption, and damages. Plaintiffs have also filed a motion for corrective notice. The Court heard argument on the motions on November 17, 2023, and ruled from the bench on some of them. Specifically, the Court denied the motions relating to FLSA certification and reserved ruling on the evidentiary issues until the final pretrial conference. The Court denied the portions of the motions for summary judgment relating to liquidated damages and willfulness, and took the remainder of the motions under advisement. What is left for decision are the summary judgment issues regarding the administrative exemption and the fluctuating workweek calculation with respect to damages. Also pending for decision is the motion for corrective notice. For the reasons that follow, the Court denies the motion for corrective notice. The Court also concludes that Plaintiffs are entitled to summary judgment in their favor on FLSA administrative classification. The Court further determines there are disputed fact issues that preclude summary judgment on the fluctuating workweek calculation of damages. BACKGROUND The summary judgment record from both sides details the organizational structure of BlueJay and e2open, and traces the events surrounding the classification decision leading to this lawsuit. Defendant BlueJay Solutions, which has since been acquired by Defendant e2open, LLC, provide logistics products and services for its customers. (Minner Decl. ¶ 3, ECF No. 99-3, PageID. 1274). BlueJay's Transportation Management System ("TMS") is one

At the company that are generating the day-to-day services customers pay for when they purchase LaaS rather than rely on the TMS software to handle the logistics themselves. The Logistics Coordinators are not engaged in any work or management functions aimed at the functional business operations of BlueJay or e2open; rather, they are engaged almost exclusively in providing services the business sells as LaaS. Applicable regulations from the Department of Labor provide that: [t]he phrase "directly related to the management or general business operations" refers to the type of work performed by the employee. To meet this requirement, an employee must perform work directly related to assisting with the running or servicing of the business, as distinguished, for example, from working on a manufacturing production line or selling a product in a retail or service establishment.Work directly related to management or general business operations includes, but is not limited to, work in functional areas such as tax; finance; accounting; budgeting; auditing; insurance; quality control; purchasing; procurement; advertising; marketing; research; safety and health; personnel management; human resources; employee benefits; labor relations; public relations, government relations; computer network, internet and database administration; legal and regulatory compliance; and similar activities. Some of these activities may be performed by employees who also would qualify for another exemption.An employee may qualify for the administrative exemption if the employee's primary duty is the performance of work directly related to the management or general business operations of the employer's customers. Thus, for example, employees acting as advisers or consultants to their employer's clients or customers (as tax experts or financial consultants, for example) may be exempt. 29 C.F.R. § 541.201(a)-(c). Defendants point out, however, that for the administrative exemption to apply, it is not necessary that they prove the Logistics Coordinators work on the management or general business operations of BlueJay or e2open. It is enough that their duties relate to the "management or general business operations of ... the employer's customers." 29 C.F.R. § 541.200(a). And applying the administrative-production dichotomy, Defendants reason, there can be no question that the Logistics Coordinators' primary job duties directly related to the management or general business operations of their customers. The Court disagrees. The summary judgment record shows that Plaintiffs' duties fall squarely into activities that are part of the output of the Defendants' business, not the running of the customers' operations. To be sure, the customers needed logistics to get their own products to market. But in buying LaaS, the customers effectively outsourced that function to Defendants. Because the customers bought the LaaS service package, they no longer had or needed their own logistics department. The Logistics Coordinators were not managing and could not manage this function for a customer's business operation because the customer's business no longer had such a function once they decided to outsource to Defendants and purchase LaaS. Defendants' own Logistics Coordinators then used Defendants' own TMS system to produce the service product that Defendants offered to their customers for an extra price. Logistics Coordinators,

Of the on-demand applications offered by BlueJay and e2open to their customers. (Id. at ¶ 4). The TMS application manages the "order to cash" lifecycle of shipments for customers. (Minner Dep. 35, ECF No. 95-4, PageID. 752; Minner Decl. ¶ 4, ECF No. 99-3, PageID. 1274-1725). "Order to cash" means that the software manages a shipment from when a customer places an order through payment to the carrier. In addition to the TMS software application, Defendants offer the option to purchase an add on service called "Logistics as a Service ("LaaS"). Customers who purchase LaaS are assigned a team of employees that assist the customers in executing their daily shipments. In this, LaaS functions as an outsourced third-party transportation department of the customer. (Minner Decl. ¶¶ 5-7, ECF No. 99-3, PageID. 1275). This case involves approximately fourteen LaaS customer accounts. There is an LaaS team for each customer account. At the top of the team hierarchy is a Director who reports to the LaaS Vice President. (ECF No. 95-9, PageID.799). Each Director is assigned a certain number of customer accounts and is primarily engaged in overseeing the strategy of how to handle an account. (Minner Dep. 12, ECF No. 95-4, PageID.747; Ordaz Dep. 41, ECF No. 95-6, PageID.781). The next tier consists of Logistics Analysts, Logistics Managers, and Carrier Specialists. (ECF No. 95-9, PageID.799). Each of these positions has separate responsibilities. Logistics Analysts, for example, are involved in data collection and software development. (ECF No. 95-12, PageID.810-811). Carrier Specialists serve as the primary point of contact with the carriers transporting a customer's order. (ECF No. 95-13, PageID.813-814). Logistics Managers perform a management role, and have customer facing responsibilities as well. (Loudin Dep. 15-16, ECF No. 95-8, PageID.790). They manage the Logistics Coordinators and also assist the customer by, among other things, updating the customer on market conditions that inform business decisions. (Minner Dep. 19, ECF No. 95-4, PageID.749). Logistics Coordinators are at the bottom in the hierarchy. Their primary responsibility is handling the day-to-day shipments for LaaS customers using the TMS software. This further entails building, tendering, and tracking the loads in their assigned customer's shipments. (Minner Decl. ¶ 6, ECF NO. 32-1, PageID.251). Defendants have classified Logistics Coordinators as exempt employees, meaning they are not required to pay overtime for hours worked in excess of forty hours a week. This lawsuit followed. CORRECTIVE NOTICE The Court begins with Plaintiffs' motion for corrective notice, which seeks to reopen the opt-in period based on an internal email that was sent to BlueJay's LaaS employees long before the Court approved the Notice in this case. Plaintiffs' motion lacks merit. By way of background, Plaintiffs filed this lawsuit on May 20, 2022. (ECF No. 1). A little less than a month later, on June 17, 2022, and before Defendants filed an Answer, Defendant's Vice President of Logistics as a Service, Matt Anderson, sent a company email to the Logistics Coordinators. The email began: "Team, please see below detail on pending litigation against the

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