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Case: 1:11-cv-08465 Document #: 96 Filed: 07/31/13 Page 1 of 17 PageID #:1086

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

JASON BALLOU, Individually and on
Behalf of All Others Similarly Situated,


Plaintiff,

v.




ITALK, LLC d/b/a I-TALK
WIRELESS, LLC and AMIR BISHAI


Defendants.






No. 11 C 8465


Judge John J. Tharp, Jr.



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MEMORANDUM OPINION AND ORDER

Plaintiff Jason Ballou alleges that his former employer, iTalk, LLC (“i-Talk”),1 violated

the Fair Labor Standards Act by failing to pay overtime to employees who worked over 40 hours

in a workweek and by failing to pay the minimum wage, or any wage at all, for the time

employees spent in training. Ballou moves to conditionally certify a collective action comprising

all similarly-situated employees who were subjected to i-Talk’s allegedly wrongful policies. For

its part, i-Talk has asserted three counterclaims against Ballou individually, alleging that he

breached a non-compete agreement, breached a contract to repay a loan, and committed fraud.

Ballou moves for summary judgment on each of i-Talk’s counterclaims.

For the reasons explained in detail below, Ballou’s motion for conditional certification is

granted with respect to his claims that i-Talk (1) failed to pay for time spent in introductory

training, (2) deducted $125 from employees’ pay for start-up costs, (3) automatically deducted

60 minutes per day for meal breaks, and (4) “shaved” employees’ time through its clock in and


1 Ballou also names i-Talk’s owner and president, Amir Bishai, as a defendant. For purposes of
this opinion, the Court will refer to both defendants jointly as i-Talk.

Case: 1:11-cv-08465 Document #: 96 Filed: 07/31/13 Page 2 of 17 PageID #:1087

out policy. Ballou’s motion for summary judgment on i-Talk’s counterclaims is denied in all

respects.

BACKGROUND

i-Talk sells wireless services, products, and accessories to customers throughout the state

of Illinois, and is an “employer” within the meaning of the FLSA. At its fifteen retail stores, i-

Talk employs retail sales representatives who are tasked with selling Verizon products and

services. All of i-Talk’s retail sales representatives share a common job description and are

classified as “nonexempt” from the FLSA, meaning that i-Talk must pay them overtime if they

work more than 40 hours in a workweek. Retail sales representatives are paid an hourly wage

(generally $9.13 per hour), and they are also eligible to receive commissions or bonuses. They

are all subject to a common set of general policies known as the “Do’s and Do Not’s.”

According to Ballou, i-Talk subjected its retail sales representatives to five standard

practices in order to withhold their wages and reduce i-Talk’s payroll obligations. First, i-Talk

required most of its retail sales representatives (other than those with previous experience in

wireless) to complete 80 hours of training before they were allowed to begin employment with i-

Talk. Prior to November 2011, i-Talk’s practice was not to pay the retail sales representatives for

their 80 hours of training time, but to provide a “discretionary signing bonus” in an amount

sufficient to provide the minimum wage for time spent in training to employees who remained

employed with i-Talk for 90 days after completing the training. Second, i-Talk deducted $125

from each retail sales representative’s initial paycheck as an “on-boarding expense deduction” to

offset the costs of providing the employees with name tags, lanyards, business cards, etc. Third,

i-Talk automatically deducted 60 minutes per day from each retail sales representative’s

compensable time for an unpaid meal break regardless of whether the employee actually worked



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during their allotted meal break. i-Talk’s email policy required the retail sales representatives to

check their emails at least once every 30 minutes throughout their shifts, and as a result, Ballou

claims, employees’ meal breaks were interrupted and were less than 60 minutes in length.

Fourth, i-Talk maintained a policy that prohibited retail sales representatives from clocking in

more than five minutes before the start of their shifts or from clocking out more than ten minutes

after the end of their shifts. When the retail sales representatives clocked in too early or clocked

out too late i-Talk would not compensate them for the extra time worked unless the employee

sent an email to a timekeeper to inform them that they had worked outside of their regularly

scheduled hours. Fifth, Ballou alleges that i-Talk engaged in a common scheme to withhold

commissions and final wages owed to retail sales representatives who left the company by failing

to pay employees their final paychecks.

Ballou worked as a retail sales representative for i-Talk at one of its retail locations

between August 19, 2011, and approximately October 11, 2011. Before starting on the sales

floor, Ballou participated in a two-week (80 hour) training period which was uncompensated

pursuant to his employment agreement. Rather than pay employees directly for this training

period, i-Talk’s policies provided that employees, like Ballou, were eligible for a “bonus”

payment of $660 (calculated to equal the Illinois minimum wage of $8.25 per hour times 80

hours) after 90 days of employment. This payment was tied to the training program; employees

who did not go through the training program (because they had previous experience) did not

receive the bonus payment. But rather than waiting, Ballou asked for and received his $660

bonus on September 13, 2011, less than a month after he had completed the training. At the time

that he asked for his bonus, Ballou was actively seeking employment with other employers.

Ballou ultimately received an offer to work at Wal-Mart, which he accepted. On approximately



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October 11, 2011, Ballou notified i-Talk that he was quitting effective immediately. i-Talk

withheld Ballou’s final paycheck of $585 because Ballou had been paid his $660 bonus early and

he left i-Talk prior to completing a full 90 days of employment.

The parties agree that Ballou entered into an employment agreement with i-Talk on

August 19, 2011.2 The employment agreement contains a Non-Competition clause stating that

for six months after his termination from i-Talk Ballou could not directly or indirectly:

conduct, engage in, have any interest in, or aid or assist anyone else to conduct,
engage in, or have an interest in the Wireless Business within a fifty (50) mile
radius of the location or locations at which [Ballou] worked for [i-Talk].

The employment agreement defined the term “Wireless Business” as follows:

THAT, WHEREAS, [i-Talk] and its Affiliated Entities, as defined below, are
engaged primarily in the business of selling wireless products and services (the
“Wireless Business”) under an agreement with Cellco Partnership d/b/a Verizon
Wireless Services . . . .

Soon after leaving i-Talk, Ballou began working at a Wal-Mart store approximately 30

miles away from the i-Talk location at which he had previously worked. At Wal-Mart, Ballou

sold cell phones and cell phone services, but he claims that he never sold Verizon products or

services.

After Ballou brought this lawsuit, but before he moved to preliminarily certify it as a

collective action, i-Talk paid Ballou an unconditional sum of $1,620 to compensate him for (1)

the 15 overtime hours he claimed to have worked without pay because of i-Talk’s time system

policies ($206), (2) his final paycheck that had been withheld ($585), (3) liquidated damages

($670), and (4) interest ($159).


2 Ballou claims that he began working for i-Talk on August 8, 2011, Ballou Dec. (Dkt. 35-2) ¶ 2,
so he presumably signed the employment agreement after he had begun his training.



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Ballou now moves to conditionally certify his claim as a collective action under the

FLSA, allowing other retail sales representatives to “opt-in” as plaintiffs. Ballou also moves for

summary judgment on each of i-Talk’s three counterclaims. i-Talk opposes both motions.

I.

Ballou’s Motion for Conditional Certification

DISCUSSION

Under the FLSA, plaintiffs may bring a collective action to recover unpaid overtime

compensation on behalf of “themselves and other employees similarly situated.” 29 U.S.C. §

216(b). Additional would-be plaintiffs in FLSA collective actions must “opt in” to the lawsuit if

the court allows conditional class certification. Alvarez v. City of Chicago, 605 F.3d 445, 448

(7th Cir. 2010).

Neither Congress nor the Seventh Circuit has specified the procedure courts should use to

decide FLSA certification and notice issues, but collective FLSA actions in this district generally

proceed under a two-step process. See, e.g., Salmans v. Byron Udell & Assoc., Inc., No. 12 C

3452, 2013 WL 707992, *2 (N.D. Ill. Feb. 26, 2013); Russell v. Illinois Bell Tel. Co., 575 F.

Supp. 2d 930, 933 (N.D. Ill. 2008); Mielke v. Laidlaw Transit, Inc., 313 F. Supp. 2d 759, 762

(N.D. Ill. 2004).

First, the plaintiff has the burden of showing that there are other similarly situated

employees who are potential claimants. Russell, 575 F. Supp. 2d at 933; Mielke, 313 F. Supp. 2d

at 762. To meet this burden, “the plaintiff must make ‘a modest factual showing sufficient to

demonstrate that they and potential plaintiffs together were victims of a common policy or plan

that violated the law.’” Russell, 575 F. Supp. 2d at 933 (quoting Flores v. Lifeway Foods, Inc.,

289 F. Supp. 2d 1042, 1045 (N.D. Ill. 2003)). Courts apply a “lenient interpretation” of the term

“similarly situated” in deciding whether a plaintiff has made the required showing. Jirak v.



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Abbott Labs., Inc., 566 F. Supp. 2d 845, 848 (N.D. Ill. 2008). If the plaintiff is able to show that

other potential plaintiffs are similarly situated, the court may conditionally certify the case as a

collective action and allow the plaintiff to send notice of the case to similarly situated employees

who may then opt in as plaintiffs. Heckler v. DK Funding, LLC, 502 F. Supp. 2d 777, 779 (N.D.

Ill. 2007).

In the second step of the collective action certification process, following the completion

of the opt in period and discovery, the defendant may ask the court to “reevaluate the conditional

certification to determine whether there is sufficient similarity between the named and opt-in

plaintiffs to allow the matter to proceed to trial on a collective basis.” Nehmelman v. Penn Nat.

Gaming, Inc., 822 F. Supp. 2d 745, 751 (N.D. Ill. 2011). During the second step, if the court

finds insufficient similarities between the plaintiffs, it may revoke conditional certification or

divide the class into subclasses. Id.; Russell, 575 F. Supp. 2d at 933.

This case is currently at step one of the analysis. Ballou claims that he has satisfied the

“modest factual showing” necessary for conditional certification, but i-Talk argues that he has

failed to carry his burden.

A.

i-Talk Subjected Retail Sales Representatives to Four Common Policies.

Ballou has satisfied his burden to show that he and other sales representatives were

subject to certain common policies because i-Talk’s part owner in charge of day-to-day

operations, Amir Bishai, admitted in his deposition that i-Talk maintained the alleged common

policies and that they were generally applicable to all retail sales representatives.

Ballou first seeks to certify a collective action of all retail sales representatives that i-Talk

failed to compensate for their initial training hours. Bishai admitted that prior to November 2011,

i-Talk maintained a policy of not compensating its retail sales representatives for their 80 hours



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of training unless they remained employed by i-Talk for at least 90 days after the training was

complete. Bishai Dep. (Dkt. 35-1) at 93. In his declaration, Ballou alleges that he, likewise, was

not compensated for the time he spent in i-Talk’s training program.3 Ballou Decl. (Dkt. 35-2) at ¶

5. Therefore, Ballou has demonstrated that he and other retail sales representatives were victims

of a common policy allegedly in violation of the law, which is all that is required for conditional

certification.

Bishai further admitted that i-Talk deducted $125 from new retail sales representatives’

paychecks as an “on-boarding expense deduction.” Bishai Dep. (Dkt. 35-1) at 58. And Bishai

also admitted that i-Talk each day deducted 60 minute unpaid lunch breaks from its employees’

paychecks despite a policy requiring retail sales representatives to check their emails every 30

minutes. Id. at 55-56, 117-18. Finally, Bishai admitted that i-Talk had a policy of “shaving” retail

sales representatives’ hours if they punched in more than five minutes prior to the beginning of a

scheduled shift or punched out more than ten minutes after the end of a scheduled shift. Id. at 48-

51. Therefore, because i-Talk does not dispute that it subjected its retail sales representatives,

including Ballou, to these common policies, the Court will conditionally certify a collective

action on behalf of all retail sales representatives who were harmed by any of these allegedly

illegal policies.

B.

Ballou Fails to Show that i-Talk Withheld Commissions or Final Wage
Payments From Other Sales Representatives.

Ballou fails, however, to make the required “modest factual showing” that other retail

sales representatives were subject to i-Talk’s policy of “fail[ing] to pay all wages due, including


3 i-Talk disputes this allegation, and claims that Ballou is not similarly situated to other retail
sales representatives because Ballou was compensated for his training time. The Court discusses
i-Talk’s argument in detail, and ultimately rejects it. See infra pp. 10-11.



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commissions earned and final pay.” In his declaration, Ballou alleges that i-Talk failed to pay

him the wages and commissions that were due at the time of his separation from the company.

Ballou Decl. (Dkt. 35-2) ¶ 9. But he presented no evidence whatsoever that other similarly

situated employees suffered from the same policy. “Unless defendant admits in its answer or

briefs that other similarly situated employees exist, plaintiffs cannot rely on their allegations

alone to make the required modest factual showing.” Molina v. First Line Solutions LLC, 566 F.

Supp. 2d 770, 786 (N.D. Ill. 2007). Because “[s]ome evidence is required” to show that other

similarly situated employees exist, Ballou fails to meet his burden with respect to his claim that

i-Talk fails to pay commissions and final pay to its retail sales representatives. Boyd v. Alutiiq

Global Solutions, LLC, No. 11 C 753, 2011 WL 3511085, *6 (N.D. Ill. Aug. 8, 2011) (emphasis

in original). Therefore, the Court will not conditionally certify this claim, and it will not be part

of the FLSA collective action that the plaintiffs pursue against i-Talk.

C.

i-Talk’s Objections to Certification Are Not Persuasive.

Though i-Talk has admitted to subjecting its retail sales representatives to many of the

common policies that Ballou complains of, it nonetheless raises several objections to conditional

certification. First, i-Talk argues that Ballou is not similarly situated with other retail sales

representatives with respect to his training hours because Ballou “was in fact paid for the

[training] time in the form of the bonus paid to him on September 13, 2011.” Resp. Br. (Dkt. 44-

1) at 5. But i-Talk’s own filings undercut that assertion: in its response to Ballou’s Rule 56.1

statement of undisputed facts, i-Talk denied that Ballou’s bonus was “training compensation,”

and stated that the bonus was “a discretionary amount which the company voluntarily paid.” Dkt.

79 ¶ 23. Thus, it is unclear whether Ballou was compensated for his training hours. And i-Talk

cannot have it both ways; i-Talk either compensated Ballou for his training hours or it paid him a



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discretionary bonus amount, but it did not do both. The Court need not conclusively determine at

this stage whether i-Talk compensated Ballou for his training hours. Rather, it is enough for the

Court to find that Ballou has made a “modest factual showing” that he, like the other potential

plaintiffs, was not compensated for the time he spent in training.

Second, i-Talk argues that Ballou’s allegations that it required retail sales representatives

to work off the clock—by automatically deducting a 60 minute unpaid lunch and “shaving” time

worked before or after a scheduled shift—are not susceptible to collective treatment because of

the highly individualized analysis of each potential opt-in plaintiff’s circumstances. According to

i-Talk, to determine whether an FLSA violation occurred a fact-finder will have to determine

what uncompensated hours an employee actually worked, when the employee performed that

work, and how many other hours the employee worked within that same week. i-Talk argues that

these inquiries are too individualized to address as a collective action. However, courts in this

district have previously rejected similar arguments that collective actions should not be

conditionally certified because they “may later require a more individualized inquiry.” Allen v.

City of Chicago, No. 10 C 3185, 2013 WL 146389, *8 (N.D. Ill. Jan. 14, 2013) (conditionally

certifying collective action seeking overtime for time off duty police officers spent working via

BlackBerry); Brand v. Comcast Corp., No. 12 C 1122, 2012 WL 4482124, *6 (N.D. Ill. Sep. 26,

2012) (conditionally certifying collective action seeking overtime pay for work performed prior

to and after scheduled shifts and during unpaid lunch breaks); Heckler v. DK Funding, LLC, 502

F. Supp. 2d 777, 780 (N.D. Ill. 2007) (conditionally certifying collective action alleging that

employer had illegal practice of editing employee time sheets to remove overtime work). While

the amount of overtime each retail sales representative was unfairly denied may have varied, “the

policy that allegedly violated the FLSA did not vary.” Allen, 2013 WL 146389 at *8. “At this



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stage, the court is tasked with determining whether it can ‘envision a scenario’ where [Ballou]

and potential collective action members are similarly situated.” Brand, 2012 WL 4482124 at *5

(quoting Persin v. CareerBuilder, LLC, No. 05 C 2347, 2005 WL 3159684, *1 (N.D. Ill. Nov.

23, 2005)). Here, it can. Though the possibility exists that individual issues will eventually

predominate in Ballou’s “off the clock” claims, he has shown a common policy affecting other

retail sales representatives, and therefore conditional certification is appropriate.

Third, i-Talk claims that Ballou is subject to individual defenses because he signed a

general release of all claims and because his own “off the clock” claims were rendered moot

when i-Talk gave him an unconditional payment to compensate him for the 15 hours of overtime

that it allegedly owed to him. i-Talk first made this argument in a motion to dismiss, which it

thereafter abandoned.4 See Dkt. 46-47. Ballou, however, denies that he signed the release and

also denies that i-Talk has fully compensated him for all of his time worked, including time

worked through unpaid meal breaks and time that was shaved from his pay. As things currently

stand, the Court cannot determine whether Ballou released his claims.

Further, Ballou’s claim is not moot. A payment from the defendant to the plaintiff will

render a complaint moot only if the defendant’s payment is sufficient to make the plaintiff

whole. See Gates v. City of Chicago, 623 F.3d 389, 413 (7th Cir. 2010) (“A tender is sufficient

when it makes the plaintiff whole.”). Ballou requested that the Court award not only the relief

that i-Talk has tendered, but also, among other damages, “all costs and reasonable attorneys’ fees

incurred prosecuting [his] claim.” Am. Cmplt. (Dkt. 17) at 14. Thus, to moot Ballou’s claim, i-

Talk’s tender should have at the very least “include[d] the filing fees and other costs under 28


4 i-Talk never presented its motion or prosecuted it in any way, and the Court issued an order on
March 22, 2013 indicating its understanding that i-Talk had withdrawn its motion. See Dkt. 90. i-
Talk did not object or otherwise respond to the Court’s order.



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U.S.C. § 1920.” Gates v. Towery, 430 F.3d 429, 431 (7th Cir. 2005). Since i-Talk’s payment to

Ballou apparently did not include these amounts, i-Talk has not satisfied Ballou’s demands and

the case is not moot. See id. at 432 (“To eliminate the controversy and make a suit moot, the

defendant must satisfy the plaintiffs’ demands; only then does no dispute remain between the

parties.”) (emphasis in original). And i-Talk cannot save its mootness argument by couching it in

terms of an individualized defense that would render Ballou dissimilar from the proposed class.

i-Talk failed to take the necessary steps to moot Ballou’s claim when it had the chance (i.e., prior

to Ballou filing his motion for conditional certification); it cannot now prevent certification by

claiming that Ballou’s claim is subject to an individualized defense of mootness. As explained

above, the individualized “mootness” defense fails, and any other Ballou-specific defenses i-Talk

raises are, at most, potential issues of fact that may later require an individualized inquiry (if i-

Talk pursues them). Conditional certification is appropriate, however, even though these

individualized issues could conceivably require decertification at a later stage. See Allen, 2013

WL 146389 at *8; Brand, 2012 WL 4482124 at *6; Heckler, 502 F. Supp. 2d at 780.

Fourth, i-Talk argues that its $125 “on-boarding expense deduction” does not implicate

the FLSA because the deduction did not necessarily reduce hourly wages below the federal

minimum wage, nor did it cause i-Talk to fail to pay overtime at a rate of one-and-a-half times

the retail sales associates’ regular rate of pay. This, however, is an argument as to the merits of

Ballou’s claims, and it is premature to consider that argument at this time. See Allen, 2013 WL

146389 at *9; Brand, 2012 WL 4482124 at *7 (“The question of whether Comcast violated the

FLSA with its on-call policy . . . is a question for another day.”); Nehmelman, 822 F. Supp. 2d at

751 (“the court does not consider the merits of a plaintiff’s claims” at the conditional

certification stage); Russell, 575 F. Supp. 2d at 935 (“determination of the merits of the case is



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premature” at the conditional certification stage). i-Talk is free to later argue that its $125

deduction did not violate the FLSA; for now, however, because Ballou has identified other

similarly situated employees subject to the same policy, conditional certification is appropriate.

Fifth and finally, i-Talk argues that Ballou and/or his counsel have committed discovery

misconduct severe enough to render him unable to provide fair and adequate representation to

class members. According to i-Talk, Ballou failed to produce a notebook in which he maintained

personal notes of the hours he had worked for i-Talk and the commissions he believed he had

earned, and he also admitted that certain pages of notes regarding his training period no longer

existed. Further, Ballou produced “screen shots” from the timekeeping system at i-Talk in such a

way that it was impossible to link the shots to particular dates, although Ballou retained

electronic records that did identify the dates of the screen shots. Based on this alleged

misconduct, i-Talk argues that Ballou has failed to fully and adequately participate in the

discovery process, and therefore that he is an inappropriate class representative.

i-Talk’s fifth argument fails for several reasons. First, as i-Talk recognized, there is no

“adequacy of representation” requirement for FLSA certification. See, e.g., Butler v. DirectSAT

USA, LLC, 876 F. Supp. 2d 560, 573 n. 14 (D. Md. 2012) (“Most courts articulating the

requirements for conditional certification of a collective action . . . have concluded that the FLSA

does not incorporate Rule 23’s adequacy criterion for conditional certification.”) (internal

quotation and alterations omitted). An inadequate class representative is, at most, “an equitable

consideration at issue in determining whether to certify a putative class.” In re FedEx Ground

Package Sys., Inc., 662 F. Supp. 2d 1069, 1082 (N.D. Ind. 2009).

Next, i-Talk fails to identify any authority from any jurisdiction supporting its argument

that an FLSA class representative may be disqualified for discovery misconduct. The only FLSA



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cases it cites on this point state that conditional certification should be denied where the class

representative is not similarly situated to the proposed plaintiff class. See, e.g., id. at 1082; White

v. Osmose, Inc., 204 F. Supp. 2d 1309, 1315 (M.D. Ala. 2002). Ballou does not have that

problem; he appears to be similarly situated to the proposed plaintiff class. And finally, the sort

of alleged discovery misconduct i-Talk complains of here is more appropriate for a motion to

compel or a motion for sanctions as opposed to an argument against conditional class

certification. The Court certainly does not condone discovery misconduct, and i-Talk is free to

raise its discovery issues in the proper context after conducting a Rule 37 meet and confer with

Ballou. But this alleged discovery misconduct is not sufficient grounds to deny Ballou’s motion

for conditional class certification.

D.

Form of Class Notice

i-Talk has raised several objections to Ballou’s proposed form of notice and consent, and

Ballou responds that he is willing to make some changes to the notice. The Court directs the

parties to meet and confer regarding the notice, and to file a motion within 14 days, agreed or

setting forth the parties’ respective positions, as to the form of the notice.

II.

Ballou’s Motion for Summary Judgment on i-Talk’s Counterclaims

A.

Count I: Breach of Non-Compete Agreement

i-Talk first claims that Ballou violated the non-compete agreement by selling cell phones

and cell phone services for a competitor shortly after leaving i-Talk. Ballou moves for summary

judgment on that count based solely on an argument that the restrictive covenant he signed with

i-Talk did not purport to bar his work selling phones at Wal-Mart. Ballou makes no challenge to

the legal validity of the restrictive covenant, so the viability of i-Talk’s counterclaim turns on

interpretation of the disputed term included in the agreement, namely the meaning of “Wireless

Business.”



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It is undisputed that Ballou entered into an employment agreement that, for six months

after his termination from i-Talk, restricted his ability to directly or indirectly:

conduct, engage in, have any interest in, or aid or assist anyone else to conduct,
engage in, or have an interest in the Wireless Business within a fifty (50) mile
radius of the location or locations at which [Ballou] worked for [i-Talk].

Ballou argues that the agreement limits the meaning of the term “Wireless Business” to the sale

of Verizon wireless products or services, while i-Talk argues that the term refers to the sale of

any wireless products or services.

i-Talk’s interpretation is plainly correct. Read objectively, “Wireless Business”

unambiguously refers to the sale of any wireless products or services:

THAT, WHEREAS, [i-Talk] and its Affiliated Entities, as defined below, are
engaged primarily in the business of selling wireless products and services (the
“Wireless Business”) under an agreement with Cellco Partnership d/b/a Verizon
Wireless Services . . . .

The definition of the defined term appears in the clause just before the term; the remainder of the

sentence following the defined term merely describes i-Talk’s activities relating to the defined

term. In other words, the “Wireless Business” is “the business of selling wireless products and

services.” i-Talk participates in the Wireless Business under an agreement with Verizon.

Therefore, the plain language of the agreement prohibited Ballou from engaging in the business

of selling wireless products and services within six months of leaving i-Talk and his challenge to

i-Talk’s counterclaim on the basis that the covenant did not bar his work for Wal-Mart must be

denied. The fact issue of whether Ballou sold Verizon products is immaterial to the resolution of

this particular dispute.

B.

Count II: Breach of Contract to Repay a Loan

Next, i-Talk alleges that Ballou breached a contract to repay the $660 “loan” it gave him

in the form of an early bonus. To succeed on a cause of action for breach of contract, a plaintiff



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must establish: “(1) the existence of a valid and enforceable contract; (2) substantial performance

by the plaintiff; (3) a breach by the defendant; and (4) resultant damages.” TAS Distrib. Co., Inc.

v. Cummins Engine Co., Inc., 491 F.3d 625, 631 (7th Cir. 2007). Ballou argues that he is entitled

to summary judgment because there was never a contract to repay the $660. But viewing the

record in the light most favorable to i-Talk and drawing all inferences in its favor, as the Court

must on Ballou’s motion for summary judgment, Trinity Homes LLC v. Ohio Cas. Ins. Co., 629

F.3d 653, 656 (7th Cir. 2010), i-Talk has adequately shown the existence of a contract requiring

Ballou to repay the loan.

As an exhibit to its counterclaims, i-Talk attached a payroll deduction form in which

Ballou allegedly “agree[d] to repay the full amount [of the signing bonus] if he left [i-Talk’s]

employ prior to the ninetieth day of his employment.” Counterclaim (Dkt. 18) ¶ 9; Payroll

Deduction Form (Dkt. 18-2). i-Talk now admits, however, that it required Ballou to sign the

“blank” payroll deduction form on his first day of employment for use in the event that i-Talk

would later pay Ballou his bonus “early” but Ballou would leave i-Talk before ninety days of

employment. i-Talk Resp. to Facts (Dkt. 79) ¶¶ 27-28. i-Talk later filled in the form with details

specific to Ballou. Ballou claims that these facts negate the import of the form, but that is wrong.

At the time he signed it, the “blank” payroll deduction form read: “Employee did not complete

the necessary number of days employed with Company to keep the Employment Signing

Bonus.” Payroll Deduction Form (Dkt. 18-2); Bess Dep. (Dkt. 67-2) at 82-83. Further, i-Talk

employee Sierra Bess testified that she explained the payroll deduction form to Ballou before he

signed it.5 Bess Dep. (Dkt. 67-2) at 86. When he signed it, then, Ballou knew or should have


5 Ballou notes that Bess’s testimony is unclear as to the substance of Bess’s explanation of the
form. Reply Br. (Dkt. 81) at 2-3. While Bess’s testimony is indeed ambiguous, for the purposes
of summary judgment the Court draws the permissible inference that Bess explained to Ballou

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Case: 1:11-cv-08465 Document #: 96 Filed: 07/31/13 Page 16 of 17 PageID #:1101

known that the form would allow i-Talk to deduct the amount of the loan from his paycheck if he

left the company within ninety days.

Therefore, i-Talk has presented sufficient evidence of a contract, and Ballou’s motion for

summary judgment as to this count is denied.

C.

Count III: Fraud

Ballou also moves for summary judgment on i-Talk’s fraud claim, arguing that i-Talk had

no right to withhold the $660 that he requested because the funds were compensation for the time

he spent in orientation. Motion (Dkt. 66) at 6. Ballou’s argument, however, depends on a

successful resolution of his affirmative claim against i-Talk for failing to pay him for the time he

spent in training. Ballou has not moved for summary judgment on that claim, and he has not

advanced evidence sufficient to eliminate any factual dispute as to whether he is entitled to

payment for that time. See, e.g., McLaughlin v. Ensley, 877 F.2d 1207, 1209 (4th Cir. 1989)

(explaining that question whether trainees must be paid for orientation time depends on “whether

the employee or the employer is the primary beneficiary of the trainees’ labor”). Therefore,

Ballou’s argument that he could not have committed fraud because he was entitled to the $660

fails.

Further, i-Talk has propounded sufficient evidence to maintain its fraud claim. “[M]aking

a promise while planning not to keep it is fraud.” United States ex rel. Lusby v. Rolls-Royce

Corp., 570 F.3d 849, 854 (7th Cir. 2009) (emphasis omitted). Ballou admits that he requested

that i-Talk immediately pay his signing bonus beginning in early September 2011, and he further

admits that at that same time he was actively looking for employment at employers other than i-


the plain meaning of the form’s language—that by signing the form he agreed that i-Talk would
be entitled to recover the signing bonus amount if he did not complete the necessary number of
days employed.



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Case: 1:11-cv-08465 Document #: 96 Filed: 07/31/13 Page 17 of 17 PageID #:1102

Talk and that he received an offer to work for Wal-Mart, which he accepted in mid-September

2011. Resp. to Add’l Facts (Dkt. 82) ¶¶ 1-2, 4-5. As explained above, i-Talk has presented

evidence that Ballou at least implicitly promised to return i-Talk’s $660 payment if he left his

employment prior to spending ninety days with the company. And Ballou’s promise can be

imputed to his requests that i-Talk pay him the bonus early; i-Talk could have reasonably

understood Ballou’s request to include an implied promise to return the money if he resigned

early. But there is substantial evidence that that Ballou made that promise with a present intent to

leave his employment within the ninety day period while keeping the money. Therefore, Ballou

cannot establish an entitlement to summary judgment on i-Talk’s fraud claim.

*

*

*

For the reasons set forth above, Ballou’s motion for certification is granted in part, and

this action is conditionally certified as a collective FLSA action. Ballou’s motion for summary

judgment is denied.





Entered: July 31, 2013



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John J. Tharp, Jr.
United States District Judge