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Charlot v. Ecolab, Inc.

United States District Court, D. New Jersey

December 17, 2019

ANTHONY CHARLOT, ALAN REMACHE, JOSE TEJADA, GREGORY GERMUSKA, GARWYN RICHMOND, MATT RIGGS, CHRISTOPHER HENDLEY, AND KRISTOFFER WRIGHT, Plaintiffs,
v.
ECOLAB, INC., Defendant.

          OPINION

          Hon. Kevin McNulty, United States District Judge.

         This motion for class certification arises from the decision of Defendant Ecolab, Inc. to classify certain of its employees as exempt from the overtime-wage requirements of New Jersey state law. The employees believe that they are primarily service technicians, entitled to overtime pay; Ecolab maintains that they are primarily salespeople. Plaintiffs move for class certification and seek to represent a putative class whose members allegedly suffered uniform harm because they were all misclassified by Ecolab. Ecolab alleges that this case is not appropriate for class certification. For the reasons that follow, the motion for class certification is GRANTED.

         I. BACKGROUND[1]

         A. The Parties

         1. Ecolab

         Ecolab, Inc., a Delaware corporation headquartered in Minnesota, sells commercial sanitation products. (DE 1 ¶¶ 18-19; DE 388-22 ¶¶ 2-5). Ecolab contracts with its customers to install its equipment and keep it in good working order by providing routine and emergency maintenance. (DE 388-4 at 3; DE 388-20 ¶¶ 11 & 20; DE 388-7 at 113:13-17). In return, Ecolab's clients commit to exclusively purchase Ecolab's chemical cleaning products. (DE 388-4 at 1-2).

         2. Proposed Class Representatives.

         Plaintiffs Alan Remache and Kristoffer Wright worked in New Jersey for two Ecolab divisions that sell specialized cleaners and sanitizers to the hospitality industry. (DE 388-7 at 39:14-25; DE 388-20 ¶ 2; DE 388-3 at 20:25-22:1). They were employed by Ecolab as dishwasher repair technicians, positions that Ecolab refers to as "route sales managers" and "service and sales route managers" (collectively, "route managers" or "RMs"). RMs install, maintain, and repair commercial dishwashers as provided in the lease agreements Ecolab signs with its customers. (DE 388-10 at 61:3-6; 70:7-8; DE 388-3 at 122:4-12; 148:13-18; 159:14-21; 167:8-13).

         The two named New Jersey plaintiffs are former Ecolab RMs. Remache worked for Ecolab as an RM in New Jersey from approximately February 2012 to February 2013. (DE 388-6 at 75:14-24). Wright worked for Ecolab as an RM in New Jersey from approximately 2003 through October 2012. (DE 388-7 at 17:25-18:4 & 206:7-9).

         The proposed class consists of anyone who was employed by Ecolab in New Jersey as a route manager, route sales manager, or service and sales route manager between September 11, 2010 and the present. (DE 388-46). Approximately 106 people meet those criteria. (DE 388-8).

         B. Factual Background

         1. Classification of RMs and the New Jersey Wage and Hour Law

         New Jersey's Wage and Hour Law ("NJWHL") incorporates certain exemptions of the federal Fair Labor Standard Act ("FLSA"), which allow employers to avoid paying overtime wages to exempted employees. See N.J. Admin. Code § 12:56-7.2(a).[2] In particular, it incorporates the outside-sales exemption, which applies to employees whose primary duty is sales and who are "customarily and regularly engaged away from the employer's place or places of business in performing such primary duty." 29 C.F.R. § 541.500.[3]

         Ecolab classifies all New Jersey RMs based on a uniform job description and compensation plan-without an individualized inquiry into the RMs duties-as exempt from the NJWHL's overtime provisions. (DE 388-9 ¶ 2). As a result, it does not pay overtime wages-across the board-to any RM for hours worked overtime. (DE 388-5 at 18:6-19:8; DE 388-9 ¶ 2).

         2. Ecolab's Non-RM Salesforce

         Aside from its RM workforce, Ecolab employs a salesforce dedicated to selling Ecolab's products and leases for those products. This salesforce includes territory managers, street sales development managers, sales development managers, distributor sales and development managers, area route managers, account executives, corporate account managers, and vice presidents. (DE 388-3 at 108:21-109:19 & 111:22-112:16; DE 388-10 at 44:3-46:22; DE 388-11 at 35:2-10 & 48:12-49:2 & 87:4-88:10 94:4-95:9 8s 99:20-100:7; DE 388-28; DE 388-29; DE 388-30). These employees' responsibilities include selling leases and products to existing clients and cold-calling prospective clients. (DE 388-11 at 48:12-49:2 & 87:4-88:10 & 87:11-19; DE 388-27).

         These non-RM employees are further divided into salespeople, who sell leases to individual customers, and corporate account representatives, who negotiate agreements for corporate accounts:

Ecolab has two types of accounts: (1) independent operators, or 'street' accounts and (2) corporate accounts. Street accounts, though not an official name, refer to independent operators with one location or unit, whereas corporate accounts are multi-location customers that are owned or operated by a centralized management team,

(DE 237 at 10). Ecolab's corporate account representatives interact with people at the customer's headquarters and are responsible for corporate accounts. (DE 388-10 at 43:9-14). A corporate agreement usually governs services for multiple locations and may contain uniform rebates or discounts for all covered locations. (DE 388-10 at 116:3-22). As part of these corporate agreements, Ecolab offers installation, maintenance, replacement parts, and repairs twenty-four hours a day, seven days a week. (DE 388-4 at 3).

         Ecolab's fulltime salesforce "pushes" new sales opportunities; an RM's position, by contrast, is designed to "pull" sales from regular on-site visits to Ecolab's customers. (DE 393-3 Ex. 4 at 130:19-131:7; DE 393-7 Ex. 15 ¶¶ 13 & 16; DE 393-8 Ex. 16 ¶¶ 6 8s 7; DE 393-8 Ex. 18 ¶ 6). Under this model, existing customers can order supplies either through RMs, through Ecolab's service center, or through an outside distributor. (DE 393-8 Ex. 19 ¶ 11).

         3. Ecolab's Products and Distributors

         If a customer elects to place an order through an RM, the RM is responsible to ensure that the order is delivered to the customer by Ecolab or by a distributor. (DE 393-8 Ex. 19 ¶ 11).

         In fact, many Ecolab customers obtain Ecolab products from distributors and not from RMs. (DE 388-6 at 139:5-140:23; DE 388-7 at 129:22-130:19; DE 388-10 at 25:3-15 & 27:23-28:18; DE 388-14 at 48:16-23; DE 388-15 at 51:15-22; DE 388-45). These so-called "indirect" product sales are fulfilled by third parties and not by Ecolab employees. (DE 388-11 at 218:16-219:7). Distributors account for over half of Ecolab's sales; in New Jersey in particular, more than half of the RMs' accounts obtain Ecolab products from distributors. (DE 388-6 at 139:5-140:23; DE 388-7 at 129:22-130:19; DE 388-14 at 48:16-23; DE 388-15 at 51:15-22; DE 388-45). Regardless of the sale's source, however, in recognition of the RM's existing and ongoing relationships with the customer, Ecolab awards a commission to the RM assigned to the account. Thus even sales through distributors generate commissions for the RM assigned to the account. (DE 388-12; DE 388-3 at 90:12-19; DE 388-45; DE 393-2 Ex. 1 at 25:1-27:1 & 29:9-19; DE 393-6 Ex. 13 at ¶¶ 14 & 31).).

         4. Leases

         Ecolab's leases commit it to install, train, maintain, and repair the commercial equipment leased to its customers. (DE 388-4 at 3). RMs provide these services. When an Ecolab customer signs a lease, the customer is assigned to a route, and the RM working the route takes responsibility for installing the equipment, training the staff, making monthly maintenance calls to ensure the equipment's proper operation, and responding to emergency repair call twenty-four hours a day, seven days a week. (DE 388-3 at 122:4-12 & 148:13-18 86 159:14-21 & 167:8-13; DE 388-10 at 61:3-6 & 70:7-8; DE 388-7 at 113:13-17; DE 388-20 ¶¶ 11 & 20).

         Ecolab leases also include a commitment by the customer to purchase a set amount of Ecolab products each month. (DE 388-41). Before an account is assigned to an RM, Ecolab's non-RM salespeople negotiate the product-purchase commitment with the customer. (DE 388-21¶ 4).

         5. RMs' Job Duties

         The members of the proposed class of New Jersey RMs had identical job titles, descriptions, codes, and classifications. For instance, every RM was responsible for routine preventive maintenance ("RPM") (DE 388-4 ¶¶ 7 8b 14 8s 15), emergency service requests ("ESR") (DE 388-3 at 167:8-13), and equipment installation (DE 388-4 ¶ 9). All class members had the same duties and responsibilities, which they were required to perform pursuant to uniform rules and instructions. (DE 388-4 at 4-5).

         Ecolab's RMs primarily service accounts by installing, maintaining, and repairing commercial equipment along their routes. (DE 388-3 at 143:11-149:5; DE 388-6 at 133:15-135:1; DE 388-11 at 156:12-157:25 86 171:2-22). RMs spend the vast majority of their time carrying out these tasks. (DE 388-7 at 112:22-114:6; DE 388-11 at 207:14-209:5; DE 388-43; DE 388-13; DE 388-14 at 306:10-18; DE 388-20 ¶¶ 5 8& 9-14; DE 388-15 at 70:10-74:2 8s 132:20-22; DE 388-21 ¶¶ 5-15). Each RM is assigned approximately one hundred to one-hundred-twenty accounts. (DE 388-4 at 4; DE 388-6 at 134:10-16; DE 388-7 at 131:18-21; DE 388-11 at 181:12-18 & 182:3-9; DE 388-14 at 61:23-62:2; DE 388-15 at 50:9-51:14; DE 388-16 at 46:7-20).

         Each Ecolab lease provides for regular visits by the RM-visits that Ecolab refers to as routine preventative maintenance ("RPM").[4] (DE 388-3 at 148:13-149:7 8e 158:6-21; DE 388-4 at 3-5; DE 388-22 ¶¶ 13-14). Also pursuant to the leases, RMs are required to respond to emergency service requests ("ESR"), to install and reclaim equipment, and to train customers' employees to use Ecolab equipment. (DE 388-4 at 2-3; DE 388-13 ¶ 8; DE 388-21 ¶¶ 6-15; DE 388-23.).

         RPM requires the RM to travel to a client's business location, check and record chemical ratios, check for proper product usage, inspect the dishwasher, disassemble and reassemble machines per the service protocol, enter meter readings, titrate chemicals and dispensers, and record results. (DE 388-3 at 158:14-160:11; DE 388-13; DE 388-21 ¶ 10; DE 388-24). RMs regularly work more than forty hours a week on such maintenance work. (DE 388-6 at 79:16-80:3; DE 388-7 at 424:19-425:20; DE 388-14 at 174:6-9; DE 388-15 at 132:20-25).

         In addition to RPM, Ecolab requires RMs to remain on-call to respond to ESRs within sixty minutes of a customer call, and they must be available to do so twenty-four hours a day, seven days a week. (DE 388-3 at 171:21-174:3 & 183:2-185:22; DE 388-6 at 255:3-256:5; DE 388-11 at 184:3-185:17 & 207:14-209:5; DE 388-15 at 95:8-11; DE 388-20 ¶ 13; DE 388-42).

         An ESR often requires the RM to perform mechanical work, such as replacing dishwasher motors or other parts and disassembling and reassembling machines. (DE 388-6 at 361:16-22; DE 388-14 at 40:25-41:10; DE 388-15 at 116:10-21; DE 388-16 at 75:17-77:19 & 105:22-108:3; DE 388-21 ¶ 15; DE 388-25). ESRs often involve plumbing and electrical work. (DE 388-6 at 265:15-266:8; DE 388-13; DE 388-14 at 166:8-12; DE 388-16 at 56:9-25 & 106:8-108:3; DE 388-3 at 147:22-148:4). Ecolab quality-controls its RMs' ESR response rates by calling customers to ensure that the RMs timely responded. (DE 388-3 at 171:21-174:3).

         To ensure that it hires a workforce that is capable of carrying out the necessary tasks, Ecolab's job description for RMs demands "hands-on mechanical ability, which includes electrical, plumbing, and mechanical experience and problem-solving skills to troubleshoot and repair equipment and dispensing systems." (DE 388-44). The posted job requirements also include the ability to lift and carry seventy-five-pound loads, but the advertised requirements do not require sales experience. (DE 388-44).

         When a member of the Ecolab sales team sells a new lease, Ecolab requires an RM to install the equipment at the customer's location(s). (DE 388- 3 at 122:4-12; DE 388-7 at 53:17-24; DE 388-13; DE 388-15 at 98:21-99:8; DE 388-16 at 56:3-8; DE 388-20 ¶ 5; DE 388-21 ¶ 5}. Installations sometimes take more than an entire eight-hour workday and may also require assistance from RMs assigned to other routes. (DE 388-21 ¶ 8; DE 388-15 at 99:1-12 & 115:15-116:5; DE 388-3 at 148:5-12). Ecolab also requires RMs to reclaim machines when leases expire, a task that involves similar plumbing and electrical work. (DE 388-21 ¶ 9; DE 388-11 at 210:4-10; DE 388-3 at 143:11-22).

         The company also requires RMs to train Ecolab customers' employees how to use its commercial equipment and chemical products. (DE 388-4 at 2-3; DE 388-11 at 216:3-21; DE 388-3 at 181:5-13). RMs occasionally also perform service and repair work on routes that border their own. (DE 388-3 at 183:2-185:22; DE 388-11 at 184:3-185:17; DE 388-20 ¶¶ 10 & 13). During weekend rotations, RMs remain on-call to provide around-the-clock emergency service to customers on other RMs' routes while simultaneously servicing their own. (DE 388-4 at 2-3; DE388-11 at 207:14-208:11; DE 38-3 at 177:7-16; DE 388-20 ¶ 14; DE 388-26; DE 388-6 at 154:15-156:6). As a result of all the service and repair work Ecolab assigns them, RMs regularly work more than forty hours in a week. (DE 388-6 at 79:11-18 & 153:10-154:2 8s 155:8-156:6; DE 388-7 at 424:19-426:5; DE 388-14 at 174:6-9; DE 388-15 at 132:20-25; DE 388-20 ¶ 23; DE 161 ¶ 217).

         6. RMs' Training

         Ecolab requires all RMs to complete the same three-month training program. (DE 388-10 at 63:19-66:4). The Ecolab RM training consists of electrical and plumbing classes that cover the installation and repair of Ecolab's dishwashers. (DE 388-3 at 147:22-148:4; DE 388-38). Ecolab also requires all RMs to take specific online training, and Ecolab monitors each RM's progress. (DE 388-3 at 181:17-25; DE 388-10 at 66:18-67:9; DE 388-11 at 225:18-226:11; DE 388-39).

         Some RMs do not pursue sales training. (DE 393-4 Ex. 7 at 61:21-62:7 & 64:16-65:1 & 72:10-73:8; DE 393-2 Ex. 2 at 40:23-25; DE 393-12 Ex. 35; DE 393-10 Ex. 29; DE 393-12 Ex. 36; DE 393-10 Ex. 28). Some view sales as Ecolab's goal, not one that they were hired to pursue. (DE 393-4 Ex.6 at 277:5-15). Others actively pursue sales, seeing the RM role as one that requires both service and sales. (DE 393-2 Ex. 2 at 12:22-13:18; DE 393-4 Ex. 5 at 41:18-42:9). Some RMs come into the position with only sales experience and no technical experience. (DE 393-2 Ex. 2 at 43:2-12).

         7. Supervision and Evaluation of RMs

         Ecolab's district managers ("DM") supervise RMs. In 2017, there were thirteen DMs in New Jersey, responsible for forty individual territories; as of April 2019, there were eighteen DMs covering forty-eight territories. (DE 393-8 Ex. 19 at ¶¶ 5-6; DE 393-14 Ex. 44 ¶¶ 4-5). DMs assign their RMs different objectives and goals. (DE 393-4 at 237:24-239:3; DE 393-4 Ex. 6 at 305:23-306:6; DE 393-8 Ex. 18 ¶¶ 1 & 7; DE 393-8 Ex. 24 ¶ 5). Not all managers monitor RMs the same way, but RMs' service delivery reports ("SDRs") are centrally tracked to ensure that RMs complete RPMs regularly. (DE 388-10 at 18:15-24).

         Ecolab uses the same metrics and evaluation tools to track and evaluate all of the RMs' work. (DE 388-4 at 5-6). After every maintenance visit, an RM is required to file an SDR that describes the maintenance and repair work he or she performed. (DE 388-3 at 154:3-10 & 157:5-165:1; DE 388-10 at 19:6-15; DE 388-11 at 178:21-179:13; DE 388-23; DE 388-32 at 997). SDRs detail the RM's findings, and they also record any sales the RM made by ordering depleted or additional products and documenting recommendations of additional products. (DE 393-2 Ex. 1 at 19:6-15; DE 393-2 Ex. 2 at 63; DE 393-5 Ex. 8 at 154:10-14; DE 393-5 Ex. 9 at 60:8-16 & 61:21-62:19 & 67:9-68:19; DE 393-7 Ex. 15 at ¶ 19; DE 393-8 Ex. 16 at ¶ 10).

         Each RM's tablet feeds data about his or her visits to Ecolab every day. (DE 388-3 at 160:13-161:19; DE 388-6 at 253:23-254:10; DE 388-10 at 18:25-19:15; DE 388-11 at 208:19-209:10). DMs use that data to review the RM's work and to determine whether the RM made a sufficient number of RPMs each week. (DE 388-3 at 175:15-176:7 & 216:11-217:18; DE 388-10 at 21:15-25; DE 388-11 at 113:21-114:12 DE 388-20 ¶¶ 18 & 19; DE 388-33 ¶¶ 13-14).

         Ecolab uses data from SDRs to generate performance track reports, which measure the percentage of RPM calls and ESRs to which each RM responded. (DE 388-34; DE 388-21 ¶ 27; DE 388-11 at 268:9-270:8; DE 388-3 at 170:25-173:9). Ecolab also monitors both the time and quality of individual RMs' responses to ESRs. (DE 388-3 at 171:21-175:10; DE 388-11 at 208:21-209:10). In contrast, Ecolab does not track individual sales of RMs, how a sale was originated, or who originated the sale. (DE 388-3 at 153:11-156:22; DE 388-6 at 33:4-34:1; DE 388-10 at 26:5-17 & 51:10-18; DE 388-11 at 243:6-19; DE 388-40 at 3).

         SDRs represent the confluence of RMs' sales and service responsibilities. (DE 393-14 Ex. A). However, despite Ecolab's formally requiring RMs to complete SDRs, RMs neither always nor uniformly complete them. (DE 393-8 Ex. 22 at ¶¶ 7-8). Some RMs use SDRs to merchandise and take orders, but others use them as a service tool. (DE 393-1 Ex. 2 at 72:11-21; DE 393-4 Ex. 5 at 100:1-8; DE 393-8 Ex. 21 ¶ 23; DE 393-8 Ex. 22 ¶ 18). Nonetheless, each required element of an SDR corresponds to service work-not the sales work-performed by the RM. (DE 388-32).

         DMs also closely monitor RMs' hours and schedule. They review RMs' hour reports and review the monthly schedule of RPMs. (DE 388-3 at 216:11-217:18; DE 388-6 at 135:22-136:18; DE 388-11 at 266:12-267:5; DE 388-33 at ¶¶ 13 & 14). Ecolab supervisors reprimand RMs if they fall short of their hours requirements or do not complete enough RPMs. (DE 388-20 ¶ 18; DE 388-33 ¶¶ 13 & 14; DE 388-35; DE 388-36).

         However, RMs have a lot of discretion in carrying out their duties. While Ecolab expects RMs to track hours via the company's ESM program, tracking is managed at the local level, and not all RMs abide by it. (DE 393-2 Ex. 2 at 136:23-137:12; DE 393-3 Ex. 3 at 27:2-12 & 28:14-23; DE 393-4 Ex. 6 at 206:3-207:25; DE 393-4 Ex. 7 at 307:12-308:16; DE 393-5 Ex. 8 at 88:14-17 & 91:14-92:15; DE 393-8 Ex. 20 ¶ 13).

         Some RMs view the position as one that requires little more than maintenance of existing accounts, while others focus on growing sales in assigned territories. (DE 393-2 Ex. 2 at 56-57; DE 393-4 Ex. 6 at 40:4-15 & 43:2-44:24 & 105:1-9 & 159:20-160:23; DE 393-8 Ex. 24 at ¶¶ 8-9). For instance, Plaintiff Remache served as a DM and supervised RMs. (DE 393-5 Ex. 8 at 25:20-23). Remache testified that the RMs who reported to him performed their tasks differentiy, regardless of how he trained them: some reached sales goals, some did not; each had varying levels of ability, skill, and experience; and Remache's supervision varied according to die individual's ...


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