Butler v. Jimmy John's Franchise, LLC

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ILLINOIS

DONALD CONRAD,

On Behalf of Himself & All Others

Similarly Situated,

Plaintiff,

v. Case No. 18-CV-00133-NJR

JIMMY JOHN’S FRANCHISE, LLC,

JIMMY JOHN’S ENTERPRISES, LLC,

and

JIMMY JOHN’S LLC,

Defendants.

MEMORANDUM AND ORDER

ROSENSTENGEL, Chief Judge:

This is an antitrust case brought by Plaintiff Donald Conrad against Defendants

Jimmy John’s Franchise, LLC; Jimmy John’s Enterprises, LLC; and Jimmy John’s LLC

(collectively “Jimmy John’s”). According to the Amended Complaint (Doc. 75), a “No-

Poach Provision” in Jimmy John’s Franchise Agreement effectively prohibited employees

from switching between rival locations, stifling competition for labor in violation of

Section 1 of the Sherman Act, 15 U.S.C. § 1.

Based on an expert report from economist Dr. Hal Singer, Conrad alleges that the

Provision suppressed wages for every Jimmy John’s employee by 8.4 percent, causing

in class-wide damages. (Doc. 115-13). But in an Order entered on

February 24, 2021 (Doc. 223), the Court excluded the report under Daubert. Without

expert testimony, Conrad cannot satisfy the predominance requirement under Rule 23.

Yet other issues also preclude class certification: Conrad’s claims are atypical of the

unnamed class members because the No-Poach Provision was admittedly irrelevant to

him; there is a potential conflict between managers and hourly employees; and several

individual questions exist that cannot be answered using common proof. So for the

reasons below, the Court denies Conrad’s Motion for Class Certification, as well as his

Motion to Strike.

BACKGROUND

Jimmy John’s is a franchised sandwich fast-food chain with nearly 3,000 stores

across 40 states. (Am. Compl. at 2). About 98 percent of those stores are independently

owned and operated by around 800 franchisees. (Id.). The individual franchisees—not

Jimmy John’s—determine how much their employees get compensated. (North Dep. at

56:19–21, Doc. 115-14). Simply put, Jimmy John’s “is not responsible for the employment

matters of franchisees” (id. at 60:3–6),

.” (JJE Bonus

Program at 2, Doc. 133-12; Franchise Operations at 6, Doc. 115-24).

Despite their relative independence, franchisees must maintain minimum brand

standards to ensure a consistent customer experience across the country. (North Dep.

at 70:19–22; McCrary Report ¶¶ 50, 85, Doc. 133-57). These brand standards include “a

set of specific training requirements on each franchisee” (McCrary Report ¶ 68), and on

“new and existing employees being promoted to the Certified Manager role.” (id. ¶ 72).

But Jimmy John’s will only pay to train “up to two employees”: “Franchisees must cover

both fees and expenses for each additional employee sent for training.” (Id. ¶ 80). The

estimated total cost to train a certified manager is between and (Id.).

From at least 2014 to 2018, Jimmy John’s included a so-called No-Poach Provision

in its Franchise Agreement. (Conrad’s Mem. in Supp. of Mot. for Class Cert. [hereinafter

“Conrad’s Mem.”] at 1, 8, Doc. 115). Its terms changed over time. In 2014, for example,

the Provision prohibited franchisees from recruiting or hiring anyone “who was

employed within the preceding twenty-four (24) months, as a General Manager or

Assistant Manager at a JIMMY JOHN’S® Restaurant . . . without obtaining the

employer’s prior written permission.” (2014 Franchise Agreement § 7(d), Doc. 115-17).

The Provision was enforced by the franchisees themselves, who could be forced to pay

up to $50,000 for violating it. (Id.). In 2015, the Provision was amended to only prohibit

recruiting (not hiring) but applied to all employees (not only managers). (2015 Franchise

Agreement § 7(d), Doc. 133-15). And in 2016, it was limited even more so that the $50,000

penalty applied only when a manager was solicited in violation of the Provision.

(2016 Franchise Agreement § 7(d), Doc. 133-26).

With that in mind, about 88 percent of employee release requests “were approved

without conditions;” and “[o]nly approved employee releases were associated with

conditions on reimbursement for training expenses.” (McCrary Report ¶ 96) (emphasis

omitted). In the rare case that “a release was refused for reasons other than poor

performance or was approved conditional on compensation, 74 percent . . . involved

managers—and training investments were explicitly mentioned in the negotiations for

approximately half of those managers.” (Id. ¶ 97) (emphasis omitted). On the other hand,

non-managers were released 94 percent of the time. (Id.). “In other words, . . . the requests

were almost always granted, and almost always without cost.” (Id.).

In February 2018, Conrad started working at a Jimmy John’s in Winter Park,

Florida, “as an in-shop employee at $8.25 per hour.” (Conrad’s Resp. to Jimmy John’s

Second Set of Interrogs. at 7, Doc. 133-43). A month later, “he was promoted to Person In

Charge and given a raise to $9.00 per hour.” (Id.). And a month after that, he was

“promoted to a salaried manager earning $91.00 per day.” (Id.). Then, the area manager

asked Conrad to switch to the Orlando location, where he would become a co-manager.

(Id.). He did, receiving “a raise to $95.00 per day . . . .” (Id.). But the new position was

short-lived: Conrad did not get along with the franchise co-owner’s niece, who worked

in the same store and supposedly “specifically targeted [Conrad’s] work

performance . . . .” (Id. at 5). In November, Conrad was fired after he told the niece “that

he no longer cared for her opinions.” (Id.). More accurately, he called her “a fucking

bitch.” (Conrad Dep. at 308:4–9, Doc. 133-48).

Now, Conrad alleges that the No-Poach Provision “reflects a naked restraint of

competition” in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. (Am. Compl.

at 1). In brief, he alleges that the No-Poach Provision had the effect of suppressing wages

and stifling worker mobility, leading to class-wide injury and damages. (Conrad’s Mem.

at 1). The crux of his claim is that without the Provision, franchisees would be pressured

to increase their wages to match competing locations or else risk losing their employees.

(Id. at 15). Even so, Conrad admits that he “made no efforts to obtain employment at

[another] Jimmy John’s restaurant,” (Conrad’s Resp. to Second Set of Interrogs. at 6;

Conrad Dep. at 61:10-12), and that the No-Poach Provision was “irrelevant” and “just

didn’t really have anything to” do with him. (Conrad Dep. at 189:9-14, 205:11-19). Still,

he claims that he “suffered reduced wages and inhibited employment opportunities due

to the” No-Poach Provision. (Am. Comp. at 7).

Conrad seeks to certify the following class under Federal Rules of Civil

Procedure 23(a) and 23(b)(3):

All persons in the United States who were employed at a

Jimmy John’s-branded restaurant at any time between

January 24, 2014 to July 12, 2018, whether owned and

operated as a corporate store or a franchise store.

(Conrad’s Mem. at 1).

To support his claim, Conrad points to an expert report prepared by Dr. Hal

Singer. (Singer Report at 1, Doc. 115-13). But the Court excluded Dr. Singer’s opinions

because his wage regressions suffered from a methodological flaw: Dr. Singer failed to

adjust for those two percent of the wage data that do not consistently record employee

wages as per-shift or per-hour, leading to inflated estimates of impact. (See Mem. & Order

at 40-46, Doc. 223). On the other hand, the Court admitted both of Jimmy John’s expert

reports prepared by Dr. Janus Ordover (Ordover Report at 1, Doc. 133-56) and Dr. Justin

McCrary (McCrary Report at 1, Doc. 133-57). (See Mem & Order at 46-65).

Finally, in responding to Conrad’s Motion for Class Certification, Jimmy John’s

attached declarations from 19 franchise owners. (See Scolnick Decl. at 14, Doc. 133-1). But

three purportedly never responded to Conrad’s “repeated attempts to obtain discovery

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from them.” (Conrad’s Mot. to Strike at 1, Doc. 186). He therefore asks the Court to strike

those franchisee-declarations under Federal Rule of Civil Procedure 37. (Id. at 5).

LAW AND ANALYSIS

A. Motion to Strike

In general, “a party must, without awaiting a discovery request, provide to the

other parties . . . the name and, if known, the address and telephone number of each

individual likely to have discoverable information . . . that the disclosing party may use

to support its claims or defenses . . . .” FED. R. CIV. P. 26(a)(1)(A). There is also a

continuing duty to supplement these disclosures “in a timely manner if the party learns

that in some material respect the disclosure or response is incomplete or incorrect, and if

the additional or corrective information has not otherwise been made known to the other

parties during the discovery process or in writing . . . .” FED. R. CIV. P. 26(e)(1)(A).

“If a party fails to” meet its disclosure obligations, then the Court may prohibit it

from using “that information or witness to supply evidence on a motion . . . unless the

failure was substantially justified or is harmless.” FED. R. CIV P. 37(c)(1). “The

determination of whether a Rule 26(a) violation is justified or harmless is entrusted to the

broad discretion of the district court.” Mid-America Tablewares, Inc. v. Mofi Trading Co.,

Ltd., 100 F.3d 1353, 1363 (7th Cir. 1996). “[T]he following factors should guide the district

court’s discretion: (1) the prejudice or surprise to the party against whom the evidence is

offered; (2) the ability of the party to cure the prejudice; (3) the likelihood of disruption

to the trial; and (4) the bad faith or willfulness involved in not disclosing the evidence at

an earlier date.” David v. Caterpillar, Inc., 324 F.3d 851, 857 (7th Cir. 2003).

Conrad claims that he “made numerous attempts to contact the remaining three

franchisee declarants—Butler, Finner, and Severson—regarding their document and

deposition subpoenas,” but they never responded. (Conrad’s Mot. to Strike at 3). He also

claims that Jimmy John’s counsel refused to accept service of subpoenas on the

declarants’ behalf. (Id. at 3). He thus argues that sanctions are warranted. (Id. at 6–9). The

Court disagrees.

First, the Court rejects Conrad’s contention that Jimmy John’s had to serve

subpoenas on third parties outside its control. At the center of this case is Conrad’s claim

that the franchisees “are independently owned and operated as separate and distinct

entities from Jimmy John’s.” (Am. Compl. at 2). Cf. Copperweld Corp. v. Indep. Tube Corp.,

467 U.S. 752, 769 (1984) (“[O]fficers or employees of the same firm do not provide the

plurality of actors imperative for a § 1 conspiracy.”). In fact, Jimmy John’s itself had to

serve subpoenas on franchisees when they wanted to depose them or request document

production. (See Rose Decl., Exs. 1–3, Docs. 195-1, 195-2, 195-3). Conrad also

acknowledges that his efforts to serve the other 16 franchisees were made through their

respective counsel. (Chan Decl. ¶ 7, Conrad’s Reply Ex. 1). In short, Jimmy John’s did not

have to serve any of the franchisees on Conrad’s behalf.

The Court also has reviewed the communications between the litigants and finds

that Conrad’s inability to depose the remaining three franchisees did not arise from any

willfulness, bad faith, or fault of Jimmy John’s counsel. Jimmy John’s supplemented its

initial disclosures in July 2020 with an address for each of the three franchisees. (Jimmy

John’s Supp. Rule 26(A)(1) Initial Disclosures at 5–7, Doc. 197-2). For Butler and Scott,

Jimmy John’s also included a store phone number. (/d. at 5, 7). True, these franchisees

owned several Jimmy John’s-branded stores; and Conrad first contacted Jimmy John’s

counsel on August 26 complaining of difficulties reaching them. (Email String at 1, Doc.

197-2, Ex. 2). But after a meet-and-confer on September 11, Jimmy John’s counsel

provided Butler and Finner’s personal email addresses and the email address for

Severson’s attorney. (Id. Ex. 5). When they supposedly tailed to respond (which Finner

disputes (Finner Decl. at 1, Doc. 197-1)), Conrad never sought court intervention, nor did

he seek an extension of the deadline. Instead, he waited tor the deadline to pass and now

asks the Court to exclude the testimony in whole cloth. Such a harsh remedy is

inappropriate given that Jimmy John’s provided additional points of contact for the three

franchisees. And while Conrad’s contentions are not without force, any prejudice is

harmless: Jimmy John’s did not explicitly rely on those ftranchisee-declarations in

opposing class certification, and the Court does not reference them below. In other words,

those declarations are in no way dispositive. The Court thus denies Conrad’s Motion to

Strike.

B. Motion for Class Certification

Federal Rule of Civil Procedure 23 provides a mechanism by which “[o]ne or more

members of a class may sue or be sued as representative parties on behalf of all

members....” FED. R. Civ. P. 23(a). But “[a]ggregation is not an end unto itself.”

Principles of the Law of Aggregation Litigation § 1.03 (2010). Rather, the objectives of

fidelity, finality, and feasibility guide district courts in determining whether class

certification is the fairest and most efficient mode of adjudication. Id. Ultimately, the

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Court is vested with “broad discretion to determine whether certification of a class-

action lawsuit is appropriate.” Keele v. Wexler, 149 F.3d 589, 592 (7th Cir. 1998) (cleaned

up); Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 630 (1997) (Breyer, J., concurring in part

and dissenting in part) (“The law gives broad leeway to district courts in making class

certification decisions, and their judgments are to be reviewed by the court of appeals

only for abuse of discretion.”).

Conrad seeks to certify a class under Rule 23(b). “To achieve certification, a

proposed class under Rule 23(b) must meet the requirements of Rule 23(a)—numerosity,

typicality, commonality, and adequacy of representation—and one of the alternatives

listed in Rule 23(b).” Howard v. Cook Cty. Sheriff’s Off., 989 F.3d 587, 597 (7th Cir. 2021).

Relevant here, Rule 23(b)(3) permits a class action if “the court finds that questions of law

or fact common to the members of the class predominate over any other questions affecting

only individual members, and that a class is superior to other available methods for the

fair and efficient adjudication of the controversy.” FED. R. CIV. P. 23(b)(3) (emphasis

added). “If the party certification fails to meet any of these . . . requirements, class

certification is precluded.” Kress v. CCA of Tenn., LLC, 694 F.3d 890, 893 (7th Cir. 2012).

“Rule 23 does not set forth a mere pleading standard. A party seeking class

certification must affirmatively demonstrate his compliance with the Rule—that is, he

must be prepared to prove that there are in fact sufficiently numerous parties, common

question of law or fact, etc.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011)

(emphasis in original). That said, “Rule 23 must be liberally interpreted”: “Its policy is to

favor maintenance of class actions.” King v. Kan. City S. Indus., Inc., 519 F.2d 20, 25–26

(7th Cir. 1975); Messner v. Northshore Univ. Health Sys., 669 F.3d 802, 815 (7th Cir. 2012)

(“[I]n antitrust cases, Rule 23, when applied rigorously, will frequently lead to

certification.”) (cleaned up). Even so, Conrad bears “the burden of proving by a

preponderance of the evidence that . . . the requirements of Rule 23” are met. Howard,

989 F.3d at 597.

i. Numerosity

“Determining whether the proposed class is sufficiently numerous for certification

is usually straightforward. Affidavits, declarations, or even reasonable estimates in briefs

are often sufficient to establish the appropriate size of the class and whether joinder might

be a practical and manageable alternative to class action litigation.” Manual for Complex

Litigation § 21.141. “Numerosity is generally presumed when the proposed class would

have at least 40 members.” Lapin v Goldman Sachs & Co., 254 F.R.D. 168, 175 (S.D.N.Y.

2008) (citing 1 Newberg on Class Actions § 3.05 (2d ed. 1985)); e.g., In re Gen. Motors Corp.

Dex-Cool Prods. Liability Litig., 241 F.R.D. 305 (S.D. Ill. 2007); Exhaust Unlimited, Inc. v.

Cintas Corp., 223 F.R.D. 506 (S.D. Ill. 2004).

The numerosity requirement is uncontested here. Conrad seeks to represent a

putative class of over 615,000 current and former Jimmy John’s employees. (Conrad’s

Mem. at 21). The Court agrees that the putative class is “so numerous that joinder of all

members is impracticable,” thus satisfying the numerosity requirement. See FED. R. CIV.

P.23(a)(1).

ii. Commonality

“Commonality requires the plaintiff to demonstrate that the class members have

suffered the same injury. This does not mean merely that they have all suffered a violation

of the same provision of the law.” Dukes, 564 U.S. at 350 (cleaned up). Rather, “[t]heir

claims must depend upon a common contention of such a nature that it is capable of

classwide resolution—which means that determination of its truth or falsity will resolve

an issue that is central to the validity of each one of the claims in one stroke.” Id.

“Identifying common questions typically requires examining the parties’ claims and

defenses, identifying the type of proof the parties expect to present, and deciding the

extent to which there is a need for individual, as opposed to common, proof.” Manual for

Complex Litigation § 21.141. “‘[E]ven a single [common] question’ will do.” Dukes,

564 U.S. at 359 (quoting Richard Nagareda, The Preexistence and the Structure of the Class

Action, 103 Colum. L. Rev. 149, 176 n.119 (2003)).

Courts often give “superficial treatment of” the commonality requirement given

that it “may be a superfluous provision, or at least partially redundant, since the existence

of common questions can be viewed as an essential ingredient of a finding that the case

falls within one of the three categories of class actions described in” Rule 23(b). Wright &

Miller, Federal Practice and Procedure § 1763. Relevant here, because predominance

(discussed below) is governed by “a more stringent standard than” commonality, some

“courts in actions brought under subdivision (b)(3) have not drawn a distinction between

the two requirements.” Id. Instead, they “either have dealt with the common-issue

question simultaneously with their inquiry into whether common questions predominate

or have assumed that Rule 23(a)(2) was satisfied and thought it necessary only to rule on

the question whether the suit fit within subdivision (b)(3).” Id.; accord Comcast Corp. v.

Behrend, 569 U.S. 27, 34 (2013) (noting that “[t]he same analytical principles govern

Rule 23(b)” and Rule 23(a), but “Rule 23(b)(3)’s predominance criterion is even more

demanding than Rule 23(a)”); Amchem, 521 U.S. at 609 (“The Third Circuit recognized

that Rule 23(a)(2)’s ‘commonality’ requirement is subsumed under, or superseded by, the

more stringent Rule 23(b)(3) requirement that questions common to the class

‘predominate over’ other questions.”).

Conrad contends that there are at least three common issues of law and fact:

(1)“[w]hether Jimmy John’s restaurants entered into an unlawful agreement not to poach

one another’s employees;” (2) “whether the No-Poach [Provision] should be judged

unlawful;” and (3) “whether the agreement suppressed Class members’ compensation;

and if it did, the magnitude of that effect.” (Conrad’s Mem. at 22).

In response, Jimmy John’s blurs its commonality and predominance arguments;

but it devotes most of its attention to arguing that common issues do not predominate.

(See Jimmy John’s Resp. at 13–30) (“Plaintiff also fails to meet his burden of establishing

Rule 23(a) commonality and Rule 23(b)(3) predominance.”). Given the low threshold for

commonality, the Court will not belabor this discussion and will instead focus on the

more stringent standard for predominance below.

iii. Typicality

The typicality requirement “primarily directs the district court to focus on whether

the named representatives’ claims have the same essential characteristics as the claims of

the class at large.” De La Fuente v. Stokely-Van Camp, Inc., 713 F.2d 225, 232 (7th Cir. 1983).

“‘A plaintiff’s claim is typical if it arises from the same event or practice or course of

conduct that gives rise to the claims of other class members and his or her claims are

based on the same legal theory.’” Id. (quoting H. Newberg, Class Actions § 1115(b) at 185

(1977)). “The typicality requirement may be satisfied even if there are factual distinctions

between the claims and the named plaintiffs and those of other class members. Thus,

similarity of legal theory may control even in the face of differences of fact.” Id. But

“[e]ven though some factual variations may not defeat typicality,” Oshana v. Coca-Cola

Co., 472 F.3d 506, 514 (7th Cir. 2006), there must still “be enough congruence between the

named representative’s claim and that of the unnamed members of the class to justify

allowing the named party to litigate on behalf of the group,” Spano v. Boeing Co., 633 F.3d

574, 586 (7th Cir. 2011).

Conrad simply alleges that the typicality requirement is satisfied because “he

worked in a Jimmy-John’s-branded restaurant . . . .” (Conrad’s Mem. at 22–23). But his

core allegation is that the No-Poach Provision prevented workers from changing

locations for better wages. Yet Conrad was not among those employees: He did not leave

his job at Jimmy John’s in search of higher wages, and he was never denied the

opportunity to change locations because of the Provision. Indeed, he admits that he

“made no efforts to obtain employment at [another] Jimmy John’s restaurant” (Conrad’s

Resp. to Second Set of Interrogs. at 6; see also Conrad’s Dep. at 61:10–12), and that the No-

Poach Provision was “irrelevant” and “just didn’t really have anything to” do with him

(Conrad’s Dep. at 189:9-14, 205:11-19). Rather, he was fired after he called a coworker—

his boss’s niece—“a fucking bitch.” (Id. at 308:4–9). So while some factual distinctions will

not preclude class certification, Conrad’s claim is atypical of those putative class members

who were actually denied the opportunity to change locations for better wages because

of the No-Poach Provision. The typicality requirement is therefore not met.

iv. Adequacy

“[A]dequacy of representation is composed of two parts: ‘the adequacy of the

named plaintiff’s counsel, and the adequacy of representation provided in protecting the

different, separate, and distinct interest’ of the class members.” Retired Chi. Police Ass’n v.

City of Chi., 7 F.3d 584, 598 (7th Cir. 1993) (quoting Sec’y of Labor v. Fitzsimmons, 805 F.2d

682, 697 (7th Cir. 1986) (en banc)). Only the second part is at issue here.

“Rule 23 contemplates, and the district court should insist on, a conscientious

representative plaintiff. All class suits create some conflict between the representative

and the class; the representative and counsel may be tempted to sell out the class for

benefits to themselves. Judges are on the lookout for persons who may pay inadequate

attention to the interests of the others they purport to represent.” Rand v. Monsanto Co.,

926 F.2d 596, 599 (7th Cir. 1991), overruled on other grounds, Chapman v. First Index, Inc.,

796 F.3d 783, 787 (7th Cir. 2015). “[T]he presence of even an arguable defense peculiar to

the named plaintiff or a small subset of the plaintiff class may destroy the required

typicality of the class as well as bring into question the adequacy of the named plaintiff’s

representation. The fear is that the named plaintiff will become distracted by the presence

of a possible defense applicable only to him so that the representation of the rest of the

class will suffer.” J.H. Cohn & Co. v. Am. Appraisal Assocs., Inc., 628 F.2d 994, 999 (7th Cir.

1980) (citations omitted).

To that end, “[a] class is not fairly and adequately represented if class members

have antagonistic or conflicting claims.” Rosario v. Livaditis, 963 F.2d 1013, 1018 (7th Cir.

1992). “The adequacy inquiry” thus “serves to uncover conflicts of interest between

named parties and the class they seek to represent.” Amchem, 521 U.S. at 625. In other

words, “a class representative must be part of the class and ‘possess the same interest and

suffer the same injury’ as the class members.” E. Tex. Motor Freight Sys., Inc. v. Rodriguez,

431 U.S. 395, 403 (1977) (quoting Schlesinger v. Reservists Comm. to Stop the War, 418 U.S.

208, 216 (1974)).

Jimmy John’s argues that Conrad failed to establish the adequacy requirement

because “there are significant economic conflicts between the interests of managers and

the employees they supervised.” (Jimmy John’s Resp. at 11). It points to two conflicts in

particular. First, Jimmy John’s contends that because managers were charged with

enforcing the allegedly anticompetitive No-Poach Provision, they cannot be in the same

class as nonsupervisory employees like in-shoppers and drivers. Put differently, “[a]t any

trial of this case, certain managers would be called as defense witnesses, testifying about

the very decisions at issue here, and explaining that [the No-Poach Provision] was

honored largely in the breach.” (Id. at 12). Jimmy John’s therefore argues that “[t]his is a

paradigmatic and preclusive intra-class conflict because many putative class members

participated in the challenged employment decisions.” (Id.) (cleaned up). The Court

agrees.

As a general matter, the litigants disagree about whether supervisory and

nonsupervisory employees can ever be part of the same class. For its part, Jimmy John’s

points to Randall v. Rolls-Royce Corp., 637 F.3d 818 (7th Cir. 2011). There, the plaintiff

sought to represent a putative class of “female employees of a Rolls-Royce plant” who

charged the company “with sex discrimination . . . in paying the members of the class less

than comparable male employees by setting the base pay of women employees . . . below

that of male employees” and “denying them promotions they would have received had

they been men.” Id. at 820. In affirming the district court’s denial of class certification, the

Seventh Circuit acknowledged two conflicts between female supervisors and female

nonsupervisory employees. Id. at 824. For one, the court was concerned that some female

supervisors might “deliberately depress the salary of female employees whom they

supervise, or increase the salary of male employees whom they supervise, in order

increase evidence of discrimination.” Id. at 824. Additionally, there was “even evidence

that the [female supervisors] participated in decisions concerning female employees’

compensation that, on their theory of the case, were” in fact “discriminatory.” Id. (citing

Wagner v. Taylor, 836 F.2d 578, 595 (D.C. Cir. 1987) (“Supervisory employees are often

inappropriate representatives of nonsupervisory employees because the structure of the

workplace tends to cultivate distinctly different interests between the two groups.”)).

Conrad tries to differentiate Randall by noting that this case turns on actions by

franchise owners, not managers. (Conrad’s Reply at 3). In other words, the owners were

the ones who entered into the supposedly anticompetitive Franchise Agreement, while

the managers were just neutrally applying it. (Id.). But that position contradicts testimony

suggesting that at least some managers were given broad discretion whether to enforce

the No-Poach Provision. For example, one delivery driver and member of the putative

class said that “[t]o apply for the job . . . , [he] simply walked into the store, told the

manager that [he] was currently working at” another Jimmy John’s location “and asked

if they needed any help. The manager’s response was, ‘when can you start?’” Indeed, the

manager did not “even notify” the franchise owner. (Hanzlik Decl. ¶ 7, Doc. No. 133-82)

(emphasis added). Another manager similarly stated that he “never received

instructions” from the franchise owner “to seek permission or releases when hiring

applicants with prior Jimmy John’s experience,” and he “recall[ed] hiring about a dozen

former Jimmy John’s employees.” (Arredondo Decl. ¶ 12, Doc. No. 133-78). While

Conrad points to Staton v. Boeing Co. 327 F.3d 938 (9th Cir. 2003), for the proposition that

“supervisors and nonsupervisors may be included in the same certified class when both

are subject to the policy or practice challenged by the lawsuit” (Conrad’s Reply at 2), the

Ninth Circuit there recognized that “whether employees at different levels of the internal

hierarchy have potentially conflicting interests is context-specific and depends upon the

particular claims alleged in a case.” Staton, 327 F.3d at 958. The court then said that to

satisfy the adequacy requirement, plaintiffs “‘must offer evidence of coextensive interests

or at least allege the existence of a general discriminatory policy.’” Id. at 959 (quoting 5

Herbert B. Newberg & Alba Conte, Newberg on Class Actions, § 24.42 at 24-170-71 (3d ed.

1992)). “Given that the named plaintiffs include[d] representatives of each major

employee sub-group,” the court found no conflicts. Id. at 959.

This Court too rejects the invitation to adopt a bright-line rule barring classes

representing both supervisory and nonsupervisory employees. Yet even under the Ninth

Circuit’s level-handed approach, Jimmy John’s has identified another significant conflict

between managers and nonsupervisory employees that precludes certification. Jimmy

John’s franchisees take part in a profit-sharing program

.”

(JJE Bonus Program at 2). Given that Conrad accuses the company of using the No-Poach

Provision as a tool to “keep labor costs low” (Am. Compl. ¶ 119, Doc. 75), Jimmy John’s

argues that managers would be encouraged to enforce the provision to increase store

profits. (Jimmy John’s Resp. at 12). Simply put, not unlike the complicit female employees

in Randall, “the fact that managers with profit-based bonuses allegedly made more money

during the class period by taking steps to lower employee wages would put those class

members against one another.” (Id.).

Conrad, on the other hand, says that the profit-sharing program does not present

a conflict because he “does not seek compensation for suppressed bonuses,” only

suppressed base pay. (Conrad’s Reply at 3–4). But even assuming Conrad’s theory—that

the No-Poach Provision suppressed base pay across the board—is correct, it may equally

be true that managers’ bonuses exceeded their suppressed base pay. By extension,

managers may be willing to suppress their own base pay if enforcing the No-Poach

Provision would lead to a greater bonus. And unlike in Staton, Conrad is the only named

plaintiff: He does not adequately represent the interest of managers who were motivated

to reduce labor mobility so they can reap the benefits of the profit-sharing program. This

conflict presents another reason why class certification is inappropriate.

v. Predominance

“The Rule 23(b)(3) predominance inquiry tests whether proposed classes are

sufficiently cohesive to warrant adjudication by representation.” Amchem, 521 U.S. at 623.

“While similar to Rule 23(a)’s requirements for typicality and commonality, ‘the

predominance criterion is far more demanding.’” Messner, 669 F.3d at 814 (quoting

Amchem, 521 U.S. at 623). “In order to meet the predominance requirement of

Rule 23(b)(3), a plaintiff must establish that ‘the issues in the class action that are subject

to generalized proof, and thus applicable to the class as a whole, . . . predominate over

those issues that are subject only to individualized proof.’” In re Visa Check/MasterMoney

Antitrust Litig., 280 F.3d at 136 (quoting Rutstein v. Avis Rent-A-Car Sys., Inc., 211 F.3d

1228, 1233 (11th Cir. 2000)). “Common issues may predominate when liability can be

determined on a class-wide basis, even when there are some individualized damage

issues.” Id. at 139 (collecting cases). But “[t]here is no mathematical or mechanical test for

evaluating predominance.” Messner, 669 F.3d at 814. “[A] court weighing class

certification must” therefore “walk a balance between evaluating evidence to determine

whether a common question exists and predominates, without weighing that evidence to

determine whether the plaintiff class will ultimately prevail on the merits.” Bell v. PNC

Bank, Nat’l Ass’n, 800 F.3d 360, 376 (7th Cir. 2015) (emphasis in original).

The “predominance requirement is satisfied when ‘common questions represent a

significant aspect of [a] case and . . . can be resolved for all members of [a] class in a single

adjudication.’” Id. at 815 (quoting 7AA Wright & Miller, Federal Practice & Procedure

§ 1778 (3d ed. 2011)). “Or, to put it another way, common questions can predominate if a

‘common nucleus of operative facts and issues’ underlies the claims brought by the

proposed class.” Id. (quoting In re Nassau Cnty. Strip Search Cases, 461 F.3d 219, 228

(2d Cir. 2006)) “‘If, to make a prima facie showing on a given question, the members of a

proposed class will need to present evidence that varies from member to member, then

it is an individual question. If the same evidence will suffice for each member to make a

prima facie showing, then it becomes a common question.’” Id. (quoting Blades v.

Monsanto Co., 400 F.3d 562, 566 (8th Cir. 2005)). That said, “[i]ndividual questions need

not be absent. The text of Rule 23(b)(3) itself contemplates that such individual questions

will be present. The rule requires only that those questions not predominate over the

common questions affecting the class as a whole.” Id.

“Analysis of predominance under Rule 23(b)(3) ‘begins, of course, with the

elements of the underlying cause of action.’” Messner, 669 F.3d at 815 (quoting Erica P.

John Fund, Inc. v. Halliburton Co., 563 U.S. 804, 809 (2011)). Here, the Court must examine

whether Conrad can “establish each of the three required elements of an antitrust claim—

(1)a violation of antitrust law; (2) injury and causation; and (3) damages—using common

evidence.” Id.

As for the first requirement, “Section 1 of the Sherman Act is designed to prevent

businesses from entering into collusive agreements . . . .” Omnicare, Inc. v. UnitedHealth

Grp., Inc., 629 F.3d 697, 705 (7th Cir. 2011). “By its terms, § 1 prohibits ‘[e]very contract,

combination . . . or conspiracy, in restraint of trade or commerce,’ though courts have

long restricted its reach to agreements that unreasonably restrain trade.” Id. (quoting

15 U.S.C. § 15). “To prevail under § 1 under any theory, plaintiffs generally must prove

three things: (1) that defendants had a contract, combination, or conspiracy (‘an

agreement’); (2) that as a result, trade in the relevant market was unreasonably restrained;

and (3) that they were injured.” Id.

In the first place, Conrad must present common evidence that Jimmy John’s and

its franchisees “had a conscious commitment to a common scheme designed to achieve

an unlawful objective.” See Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 768 (1984).

And because Conrad alleges a “hub-and-spokes conspiracy” (see Conrad’s Mem. at 1–2),

he must ultimately establish “both that there was a central coordinating party (the ‘hub’),

and that each participant (along the ‘rim’) recognized that it was part of the greater

arrangement, and it coordinated or otherwise carried out its duties as part of the broader

group,” Marion Healthcare, LLC v. Becton Dickenson & Co., 952 F.3d 832, 842 (7th Cir. 2020).

“In other words, a ‘hub-and-spokes conspiracy’ requires a ‘rim’ connecting the various

horizontal agreements.” Id. “[F]or such a conspiracy to exist, ‘those people who form the

wheel’s spokes must have been aware of each other and must do something in

furtherance of some single, illegal enterprise.’” United States v. Bustamante, 493 F.3d 879,

886–87 (7th Cir. 2007) (quoting United States v. Levine, 546 F.2d 658, 663 (5th Cir. 1977));

see also MM Steel, L.P. v. JSW Steel (USA) Inc., 806 F.3d 835, 844 (5th Cir. 2015) (noting that

the antitrust plaintiff must show that the spokes “knew the essential nature and general

scope of the joint plan”) (cleaned up). “[A] rimless wheel conspiracy,” on the other hand,

“is not a single, general conspiracy but instead amounts to multiple conspiracies between

the common defendant and each of the other defendants.” Dickson v. Microsoft Corp.,

309 F.3d 193, 203 (4th Cir. 2002) (citing Kotteakos v. United States, 328 U.S. 750, 768–69

(1946)). So in the end, “to secure class certification,” Conrad must “demonstrate (not

merely allege) that there is proof common to all class members, and that this proof would

show that they suffered ‘injuries that reflected the anticompetitive effect of either the

violation or the anticompetitive acts made possible by the violation.’” Kleen Prods. LLC v.

Int’l Paper Co., 831 F.3d 919, 926 (7th Cir. 2016) (quoting James Cap & Sons Co. v. PCC

Constr. Co., 453 F.3d 396, 399 (7th Cir. 2006)).

The predominance requirement is not satisfied here because, among other reasons,

Conrad failed to establish that common evidence will show that the Jimmy John’s

franchisees had a conscious commitment to suppress labor mobility. Given that the No-

Poach Provision was independently enforced (Jimmy John’s itself having no hand), some

franchisees took no part in doing so. For example, one franchisee suggested that he does

not enforce the Provision because “employees are allowed to work wherever they want.”

(Jimmy John’s Franchisee Forum Post from December 2017, Jimmy John’s Resp. at Ex.133-

19). Another posited, “Who really enforced that in their units? I’m not going to track

where each employee goes to work at next.” (Jimmy John’s Franchisee Forum Post from

July 2018, Jimmy John’s Resp. at Ex. 45). (See also McNulty Decl. ¶ 33, Jimmy John’s Resp.

at Ex. 133-69) (franchisee hired manager after receiving verbal consent from previous

franchisee-employer). Some also thought that the Provision only applied to managers—

possibly because some versions of the Provision did only apply to managers. (E.g., Email

from Franchisee to Jimmy John’s from August 2014, Jimmy John’s Resp. at Ex. 133-14).

These franchisees surely are not alone in their practice of not enforcing the Provision,

permitting employees to change locations without exercising their right of enforcement.

Indeed, Jimmy John’s expert, Dr. McCrary, determined that 88 percent of releases—when

requested at all—were granted. (McCrary Report ¶ 87, Jimmy John’s Resp. at Ex. 133-57).

While the evidence so far suggests that other franchisees did, in fact, enforce the Provision

(e.g., Jimmy John’s Franchisee Forum Post from December 2017) (“[W]e were already

sued last year for this.”), that only highlights the individualized nature of Conrad’s

claims. See United States v. Townsend, 924 F.2d 1385, 1391 (7th Cir. 1991) (“[M]ere

knowledge of the hub’s activities, or those of the other spokes, is not enough to tie the

conspiracy together.”).

Although “[t]here have been many antitrust class actions in which the relief sought

was damages, and the fact that the damages would generally be different for each

member of the class was not deemed an insuperable obstacle,” Hardy v. City Optical Inc.,

39 F.3d 765, 771 (7th Cir. 1994), separate proof would be needed to establish which

franchisees, if any, consciously acted to further the unlawful objective of suppressing

labor mobility. Along those lines, though “[t]he justification for cooperation is not

relevant to whether that cooperation is concerted or independent action,” id. at 199, the

circumstances must still reveal “a unity of purpose or a common design and

understanding, or a meeting of minds in an unlawful arrangement,” Am. Tobacco Co. v.

United States, 328 U.S. 781, 810 (1946). No such evidence exists here. In sum, Conrad has

not shown that common evidence will establish that each (or even most) of the franchisees

conspired with Jimmy John’s in the common pursuit of suppressing labor mobility.

Individual inquiries also arise from the changing face of the No-Poach Provision.

True, each of the nearly 800 franchisees signed a franchise agreement containing some

form of the Provision. But Conrad claims that there was a “standard franchise

agreement.” (Am. Compl. at 9). Not so. In 2014, for example, the No-Poach Provision

prohibited franchisees from hiring managers who had worked for another franchisee

within the past two years. In 2015, that prohibition was removed; from then on,

franchisees were simply not allowed to solicit other franchisee’s workers. While Conrad

contends that most franchisees were governed by a similar version of the Provision found

in the 2014 Franchise Agreement (Conrad’s Mem. at 8–9), the agreements expired every

10 years (see, e.g., 2007 Franchise Agreement § 1(D), Doc. 133-3; 2015 Franchise

Agreement § 1(D); 2016 Franchise Agreement § 1(D)). In other words, the class members

“‘held a multitude of jobs, at different levels of [Jimmy John’s] hierarchy, for variable

lengths of time, in [3,000] stores, sprinkled across [40] states,’” with each franchisee

having its own philosophy on enforcing the No-Poach Provision, “subject to a variety of

[agreements] that all differed . . . .’” See Dukes, 564 U.S. at 360 (quoting Dukes v. Wal-Mart

Stores, Inc., 603 F.3d 571, 652 (9th Cir. 2010) (Kozinski, C.J., dissenting)). Proof of impact

would thus vary among class members depending on their position and which version

of the Franchise Agreement they were governed by. Similarly, given that Conrad seeks

to certify a class of all Jimmy John’s employees from 2014 to 2018 whose franchisees

signed different agreements, overwhelming individualized inquiries would be required

to establish that each franchisee participated in the same “conspiracy.”

The Court also excluded Dr. Singer’s testimony because he used a flawed

methodology to predict antitrust impact. More specifically, the Court determined that

Dr. Singer’s regression models suffered from a systemic failure to adjust for those two

percent of the wage data that did not consistently record employee wages as per-shift or

per-hour, leading to inflated estimates of impact. Fatally, Conrad relies only on

Dr. Singer’s report to support his claim that the wages of every Jimmy John’s employee

nationwide were suppressed by the No-Poach Provision. On the other hand, the Court

admitted the testimony of Dr. Ordover, Jimmy John’s expert, who ably demonstrated

that—after adjusting for Dr. Singer’s error—“managers paid on an hourly basis had an

average wage suppression of approximately two percent, while salaried managers

suffered no suppression at all.” (Ordover Report at 21, Jimmy John’s Resp. at Ex. 133-67).

“Without presenting another methodology, [Conrad] cannot show Rule 23(b)(3)

predominance: Questions of individual damages calculations will inevitably overwhelm

questions common to the class.” See Comcast Corp., 569 U.S. at 34.

Additionally, the United States Supreme Court recently concluded in NCAA v.

Alston that the plaintiff’s monopsony claims were appropriately analyzed under the rule

of reason, not the per se rule. 141 S. Ct. 2141, 2157 (2021). In brief, a class of current and

former student-athletes sued the NCAA and 11 Division I conferences for using their

“monopsony power to cap artificially the compensation offered to recruits.” Id. at 2152

(cleaned up). Even though the defendants admitted that their conduct constituted

“horizontal price fixing in a market where [they] exercise monopoly control” id. at 2154,

the Court took “special care not to deploy” the per se rule given the “often hard-to-see

efficiencies attendant to complex business arrangements,” id. at 2156. Cf. Nat’l Collegiate

Athletic Ass’n v. Bd. of Regents of Univ. of Okla., 468 U.S. 85, 100 (1984) (“[A] per-se rule is

applied when ‘the practice facially appears to be one that would always or almost always

tend to restrict competition and decrease output.’”) (quoting Broad. Music, Inc. v. Columbia

Broad. Sys., Inc., 441 U.S. 1, 19–20 (1979)). Rather, the Supreme Court agreed with the

district court’s finding that the “fuller review” offered by the rule of reason was more

appropriate in a monopsony case involving “an industry in which some horizontal

restraints on competition are essential if the product is to be available at all.” Alston,

141 S. Ct. at 2157 (cleaned up); see also id. at 2158 (“Whether an antitrust violation exists

necessarily depends on a careful analysis of market realities.”).

Alston thus answers a question this Court punted at the motion-to-dismiss stage:

The rule of reason applies in this monopsony case challenging a nationwide franchise’s

use of intrabrand restraints that were arguably “designed to help [the company] more

effectively compete with other brands by ensuring cooperation and collegiality among

franchisees, and by encouraging investment in training.” (Jimmy John’s Resp. at 5). See

also United States’ Statement of Interest, Stigar v. Dough, Inc., No. 2:18-CV-00244-SAB,

Doc. 30, at 11–16 (E.D. Wash. Mar. 7, 2019) (arguing that no-poach provisions in franchise

agreements are subject to the rule of reason).

With that in mind, the rule of reason raises more individualized issues precluding

class certification. “Especially in view of the increasing complexity of corporate

operations, a business enterprise should be free to structure itself in ways that serve

efficiency of control, economy of operations, and other factors dictated by business

judgment without increasing its exposure to antitrust liability.” Copperweld Corp., 467 U.S.

at 773. To that end, “even under the best of circumstances, applying the antitrust laws

can be difficult—and mistaken condemnations of legitimate business arrangements are

especially costly, because they chill the very procompetitive conduct the antitrust laws

are designed to protect.” Alston, 141 S. Ct. at 2161. Indeed, “[t]he whole point of the rule

of reason is to furnish ‘an enquiry meet for the case, looking into the circumstances,

details, and logic of a restraint’ to ensure that it unduly harms competition before a court

declares it unlawful.” Id. at 2160 (quoting Cal. Dental Ass’n v. FTC, 526 U.S. 756, 781

(1999)); see also id. at 2164 (“[A]ntitrust courts must give wide berth to business judgments

before finding liability.”); Frank H. Easterbrook, The Limits of Antitrust, 63 Tex. L. Rev. 1,

15 (1984) (“For a number of reasons, errors on the side of excusing questionable practices

are preferable.”).

Here, Jimmy John’s expert Dr. McCrary persuasively described how most putative

class members likely benefited from the No-Poach Provision because it gave franchisees

an added incentive to provide more training, thus promoting employee advancement.

(McCrary Report ¶¶ 96–98). For example, the Senior Director of Marketing Execution and

Operations refused to release one certified manager because the franchisee “invested a

lot of time and money in training him and getting him certified”: The No-Poach Provision

protected the investment franchisees made in training their employees. (Email from

Buergler to Hooper at 1, Doc. 133-20) (emphasis added). Similarly, the Director of

Franchise Development understood the Provision as a means “to keep the peace among

franchisees,” thereby “reduc[ing] friction within the system.” (Morena Dep. at 12:16–18,

Doc. 133-53). In other words, the No-Poach Provision not only had the potential to

encourage investment in training, but it may also have promoted cooperation between

franchisees, increasing coordination and thus “increasing the overall demand for the

brand.” (McCrary Report ¶ 153; see id. § 6.2). (See also Hooper Dep. at 87:12–15) (“I think

that the brand is stronger when [franchisees support each other] instead of bickering and

squabbling over stuff that is external to serving customers freaky fast.”). Perhaps more

importantly, Dr. McCrary suggests that increasing the use of certified managers

“improves the speed at which orders are executed and the frequency of complaints with

the store.” (McCrary Report ¶ 147; see id. § 6.1). These procompetitive justifications,

coupled with the fact that most release requests were approved without conditions,

present overwhelming individualized questions precluding certification. See Kohen v. Pac.

Inv. Mgmt. Co. LLC., 571 F.3d 672, 677 (7th Cir. 2009) (“[A] class should not be certified if

it is apparent that it contains a great many persons who have suffered no injury at the

hands of the defendant . . . .”).

Along those lines, the Court noted in excluding Dr. Singer’s testimony that

Conrad’s baseline premise—that every Jimmy John’s employee nationwide was injured

by the No-Poach Provision, no matter their position or location—was mere ipse dixit.

Indeed, “[c]ommon proof of actual injury to each class member requires that all class

members operate in the same relevant market, otherwise, they could not be affected in a

common manner by the challenged conduct.” Exhaust Unlimited, Inc., 223 F.R.D. at 513.

And “[i]t is by now well established that any rule of reason analysis requires a showing

of anticompetitive market effect. To hold otherwise would ignore the very purpose of the

antitrust laws which were enacted for the protection of competition, not competitors.”

Lektro-Vend Corp. v. Vendo Corp., 660 F.2d 255, 268 (7th Cir. 1981) (applying the rule of

reason to noncompetition covenant).

With that in mind, the Court remains of the same mind as Dr. Ordover and Dr.

McCrary, whose prudent analyses revealed that the relevant labor market includes not

merely Jimmy John’s franchisees but also other quick-service restaurants (“QSRs”). Dr.

Ordover recognized, for example, that “it is likely that the putative class members seek

employment in a labor market (or multiple labor market) that is (or are) much

broader than Jimmy John’s branded stores.” (Ordover Report ¶ 91). He then aptly

demonstrated that “99 percent of Jimmy John’s branded stores have at least ten other

QSR brands within ten miles, with an average number of nearby brands of 53” (id. ¶

103), and “an average number of QSR locations of nearly 257” (id. ¶ 104).

Similarly, given that “[s]ome franchisees indicate that they compete with all other

employers in the local area hiring minimum wage employees,” Dr. McCrary explained

how “the only way an individual worker’s wage could be suppressed by the [No-Poach

Provision] is if the worker had developed specific skills at Jimmy John’s that raised their

productivity at Jimmy John’s more than at other competing brands. If not, then

competition from other brands would push the worker’s wage at Jimmy John’s up to the

competitive level associated with that worker’s skills.” (McCrary Report ¶ 93). Without

reaching the merits on that question here, individualized inquiries would still be needed

to determine whether a given Jimmy John’s employee could have been injured given the

varied and dynamic labor markets across the country. In sum, the Court agrees with

Jimmy John’s that Conrad’s “failure to offer classwide evidence of a relevant labor market

is case-ending.” (Jimmy John’s Resp. at 22).

i. Superiority

“Rule 23(b)(3) also conditions class certification on whether the class action device

is superior to other available methods for fairly and efficiently resolving the dispute in

question.” Messner, 669 F.3d at 814 n.5. Relevant considerations include:

(A) The class members’ interests in individually controlling

the prosecution or defense of separate actions;

(B) The extent and nature of any litigation concerning the

controversy already begun by or against class members;

(C) The desirability or undesirability of concentrating the

litigation of the claims in the particular forum; and

(D) The likely difficulties in managing a class action.

Fed. R. Civ. P. 23(b)(3).

The superiority requirement is satisfied when “a class action would achieve

economies of time, effort, and expense and promote . . . uniformity of decisions as to

persons similarly situated, without sacrificing procedural unfairness or bringing about

other undesirable results.” Amchem, 521 U.S. at 615. Indeed, “[t]he policy at the very core

of the class action mechanism is to overcome the problem that small recoveries do not

provide the incentive for any individual to bring a solo action prosecuting his or her

rights.” Id. at 617 (quoting Mace v. Van Ru Credit Corp., 109 F.3d 388, 344 (7th Cir. 1997)).

“But when a separate evidentiary hearing is required for each class member’s claim, the

aggregate expense may, if each claim is very small, swamp the benefits of class-action

treatment.” Pastor v. State Farm Mut. Auto. Ins. Co., 487 F.3d 1042, 1047 (7th Cir. 2007).

Jimmy John’s argues that the superiority argument is not satisfied because the

individualized questions discussed above—and more like them—would make a trial

unmanageable:

For instance, for any given class member, it would first be

necessary to identify her employer and determine if they were

aware of Section 7(d), and, if so, whether they enforced or

ignored it. What were that franchisee’s practices with respect

to hiring, pay, and retention of employees—e.g., did the

franchisee pay more than other QSRs in the area, or pay more

at one of its Jimmy John’s stores than others? Did the class

member work for only a few weeks before quitting—and if

so, could a reasonable factfinder still conclude that she would

have received a promotion or raise but-for 7(d)? For a longer-

tenured class member, did he receive a promotion, bonus, or

raise? Did he move between stores—if so, did he do it for

increased pay, or did he accept lower pay for other perceived

advantages, such as proximity to his home? Were there any

other separately-owned Jimmy John’s stores within a

reasonable commute of the class member’s store? Was she an

in-shopper or a manager—if the latter, what was her role in

setting pay for other class members? Did she keep wages low

in order to increase her own bonus?

(Jimmy John’s Resp. at 30).

The Court agrees. Conrad characterizes these assertions as a “fiction that [he] is

unable to quantify the wage suppression of each Class Member attributable to the

restraint.” (Conrad’s Reply at 14). But Jimmy John’s contentions go beyond mere

difficulties in assessing individual damages. See Mullins v. Direct Digit., LLC, 795 F.3d 654,

663 (7th Cir. 2015) (“It has long been recognized that the need for individual damages

determinations at this later stage of the litigation does not itself justify the denial of

certification.”).

True enough, individual actions for suppressed wages may ultimately prove

impractical, prohibitively expensive, or inefficient. Even so, a class action is hardly

desirable when predominance is so lacking. See Messner, 669 F.3d at 814 n.5 (citing Klay

v. Humana, Inc., 382 F.3d 1241, 1269 (11th Cir. 2004) (“Superiority analysis is intertwined

with predominance analysis; when there are no predominant common issues of law or

fact, class treatment would be either singularly inefficient or unjust.”) (cleaned up)).

The issue is not simply one of assessing individual damages—rather, it is one

where “it is apparent that [the class] contains a great many persons who have suffered

no injury” and “thus require more than a thousand separate hearings” to assess the

validity of each claim. See Kohen, 571 F.3d at 677. For example, the Court described above

how the No-Poach Provision changed over time; how enforcement practices differed

among franchisees; and how most class members—including Conrad—were never

actually denied the chance to change shops, either because the franchisees acquiesced or

because they did not seek a move in the first place. In the end, a class action is not superior

to individual suits when the class is “defined so broadly as to include many members

who could not bring a valid claim even under the best of circumstances.” See Messner,

669 F.3d at 824. Thus the superiority requirement, too, is unsatisfied.

CONCLUSION

For the reasons set forth above, the Court DENIES Conrad’s Motion to Strike

(Doc. 186) and Motion for Class Certification (Doc. 113).

IT IS SO ORDERED.

DATED: July 23, 2021 T| ( ) 0

NANCY J. ROSENSTENGEL

Chief U.S. District Judge

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