primary duty. (/d. at 7-10.) RadioShack argues that this constitutes a legal conclusion that will
determine the outcome of the case.’ (Def. Strike Mem., at 3.)

Plaintiffs disagree, noting that Mr. Speer nowhere states that RadioShack violated the
FLSA, or that Y store managers are entitled to overtime pay. (PI. Strike Resp., at 4-5.)° In
Plaintiffs’ view, Mr. Speer “simply analyzed the facts of this case through his specialized knowledge
and training as the facts apply to the issues of this case.” (/d. at 5.) Plaintiffs acknowledge,
however, that “[t]he key issue before the court is whether management is the primary duty of
individuals employed by Radio Shack as ‘Y’ Store Managers.” (/d. at 8.) Significantly, if
management is not the “primary duty,” Y store managers cannot be exempt executives and must
receive overtime pay. The mere fact that Mr. Speer does not expressly state as much does not
preclude a finding that he has opined on that legal issue.

The court finds that much of Mr. Speer’s August Report consists of improper legal

conclusions that will determine the outcome of the case. See Good Shepherd Manor Found., 323

7 RadioShack also makes much of the fact that in a previous case involving Y store

managers in Pennsylvania, the attorneys representing Plaintiffs in this case argued to exclude
opinions from RadioShack's experts stating that the employees’ primary duty was management:

An expert is simply not allowed to offer opinions as to the legal consequences of the
facts of the case when such opinions are not helpful. See Loeb v. Hammond, 407
F.2d 77[9], 781 (7th Cir. 1969). Where a jury is presented with all the facts needed
to render a proper verdict, expert opinion on the ultimate issues of “primary duty”
and “supervision of two or more employees’ is simply not helpful. See generally
Paul Morelli Design, Inc. v. Tiffany and Co., 200 F. Supp. 2d 482, 487 (E.D. Pa.
2002).

(Def. Strike Mem., at 4 (quoting Plaintiff's Memorandum of Law in Support of Plaintiff's Motion to
Disqualify RadioShack’s Proposed Expert Tammy D. McCutchen, Ex. 5 to Def. Strike Mem.).) To
the extent parties are free to make conflicting arguments in different cases involving different
plaintiffs, the court does not find this argument persuasive. Indeed, RadioShack does not suggest
that the plaintiffs in the Pennsylvania action succeeded in barring testimony from RadioShack's
expert, or that judicial estoppel applies here.

8 Plaintiffs’ Opposition to Defendant RadioShack’s Motion to Strike the Testimony and
Report of Plaintiffs’ Expert J. Dean Speer is cited as “PI. Strike Resp., at__.”

5


jury, however, will not be assisted by the information set out in section 2. On the other hand, Mr.
Speer may testify regarding the DOL's standards and practices in calculating overtime pay, which
is all he has commented upon in section 1 of the report. While RadioShack is correct that the
described methodology is largely set forth in the DOL regulations, Mr. Speer has worked as a WHD
employee for some 35 years, including 16 years as a District Director, and his testimony will “assist
the trier of fact to understand the evidence or to determine a fact in issue." Kempner Mobile
Electronics, Inc. v. Southwestern Bell Mobile Sys., 428 F.3d 706, 712 (7th Cir. 2005) (quoting Feo.
R. Evip. 702). (See also October Report, at 1.) That said, the court expects that before
determining the damages, if any, to which Plaintiffs are entitled, the jury will first be asked to
determine whether RadioShack has met its burden of showing that Plaintiffs have management
as their primary duty. Only if this issue is resolved in Plaintiffs’ favor will the jurors have occasion
to hear evidence relating to damages. Thus, Mr. Speer's testimony will only be relevant if a jury
first determines that management was not the “primary duty” of Y store managers.
CONCLUSION

For the reasons stated above, RadioShack’s motion to strike the August 30, 2005 and

October 12, 2005 expert reports from J. Dean Speer and any related testimony (Docket No. 324)

is granted in part and denied in part.

ENTER:

Dated: December 13, 2005 Reece Mf, Boom

REBECCA R. PALLMEY|
United States District -



A. August Report

RadioShack argues that Mr. Speer should not be permitted to offer an opinion regarding
a central jury question in this case; i.e., whether Y store managers had “management” as their
“primary duty.” RadioShack directs the court to McCabe v. Crawford & Co., 272 F. Supp. 2d 736
(N.D. tll. 2003), in which the court excluded an expert report that “expound[ed] on what complies
or does not comply with the FDCPA [Fair Debt Collection Practices Act].” /d. at 740. The court
explained

We emphasize that it is the fact finder's responsibility to examine each of the

FDCPA’s factors® to determine the amount of damages on statutory liability... . It

is inappropriate . . . for [the expert] to make legal conclusions regarding any of the

four factors or to opine on the seriousness of the violations or the amount of

damages. This responsibility lies solely with the fact finder.
Id. The court did, however, allow the expert to offer testimony regarding collection agency
standards and practices and the extent to which the noncompliance was intentional. /d. at 740-41.

In the August Report, Mr. Speer analyzes the four factors relevant in determining whether
an employee’s primary duty is management where he spends less than 50% of his time on
management: (1) the relative importance of managerial duties as compared with other types of
duties; (2) the frequency with which the employee exercises discretionary powers, (3) the relative
freedom from supervision; and (4) the relationship between the employee's salary and wages paid
other employees for the same kind of work performed by the supervisor. 29C.F.R § 541.103 (July

2004).° (See also August Report, at 7-10; Field Operations Manual § 22c02(a).) Mr. Speer

concludes that each factor weighs in favor of finding that management is not a Y store manager's

$ The factors include: (1) the frequency and persistence of noncompliance by the debt
collector; (2) the nature of such noncompliance; (3) the resources of the debt collector; (4) the
number of persons adversely affected; and (5) the extent to which the debt collector's
noncompliance was intentional. 15 U.S.C. § 1692k.

6

§ 541.700.

The definition of “primary duty” under the amended regulations is found at 29 C.F.R.


F.3d at 564. Mr. Speer may offer testimony regarding the DOL's standards and practices in
assessing whether an employee is an exempt executive for purposes of receiving overtime pay
See, e.g., Perez, 386 F. Supp. 2d at 987 (citing affidavits from former DOL employees detailing “the
witnesses’ understanding of the meaning of the FLSA and corresponding regulations, as well as
the enforcement practice of the Department of Labor's Wage and Hour Division in regards to the
executive exemption.”) He may not, however, testify as to his conclusion that Y store managers
do not have management as their primary duty.

B. October Report

With respect to Mr. Speer's October Report, RadioShack first moves to strike it as untimely.
Expert reports must be disclosed “at the times and in the sequence directed by the court.” Feb
R. Civ. P. 26(a)(2)(C). Pursuant to the court's schedule, Plaintiffs’ expert reports were due by
August 30, 2005, rebuttal reports were due by September 30, 2005, and expert discovery closed
on October 31, 2005. (Order of 8/15/05, Doc. No. 322.) Plaintiffs characterize the October 12,
2005 Report as a rebuttal report but, according to RadioShack, it neither rebuts the opinions of any
RadioShack experts, nor makes any reference to those opinions. (Def. Strike Reply, at 3 n.3.)
Regardless, an untimely expert report need not be excluded where the delay in disclosure was
justified or harmless. Feb. R. Civ. P. 37(¢){1), Dura Automotive Sys. of Ind., inc. v. CTS Corp., 285
F.3d 609, 615 (7th Cir. 2002). The court has broad discretion in making such a determination.
Baldwin Graphic Sys., Inc. v. Siebert, Inc., No. 03 C 7713, 2005 WL 1300763, at *1 (N.D. Ill. Feb.
22, 2005); David v. Caterpillar, inc., 324 F.3d 851, 857 (7th Cir. 2003).

RadioShack received the October 12, 2005 Report before the close of expert discovery, and
the parties have not yet filed their pretrial orders or motions in limine. RadioShack does not argue
that it has been prejudiced by Plaintiffs’ delay in producing the October Report, and the court will

grant additional time for RadioShack to prepare a responsive report, if necessary. On these facts,


UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

ALPHONSE L. PEREZ and DOUGLAS G.
PHILLIPS, individually, and on behalf of all
others similarly situated,
Plaintiffs,
v. No. 02 C 7884

RADIOSHACK CORPORATION,

)
)
)
)
)
)
)
)
) Judge Rebecca R. Pallmeyer
)

)

Defendant.

MEMORANDUM OPINION AND ORDER

Plaintiffs Alphonse L. Perez and Douglas G. Phillips filed suit against Defendant
RadioShack Corporation under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 207 et seq.,
seeking to recover overtime pay on behalf of an “opt-in” class of persons who routinely worked
more than 40 hours per week as “Y store” managers. RadioShack insists that Y store managers
are exempt from such overtime pay because they are “employed in a bona fide executive
capacity.” 29 U.S.C. § 213(a)(1). Under the “short test” applicable in this case, an individual
qualifies as an exempt executive if (1) his or her primary duties are management of the enterprise
or a Subdivision thereof; and (2) the employee regularly and customarily directs the work of two or
more other employees within that enterprise or subdivision thereof. 29 C.F.R. § 541.1(f) (July 1,

2004)."

‘ For purposes of this action, the parties agree that the FLSA “short test” applies

because Y store managers earn more than $250 per week. 29 C.F.R. §§ 541.1(f), 541.119 (July
1, 2004). The Department of Labor has since amended the regulations and significantly altered
the “short test” to provide that employees earning less than $100,000 annually are deemed exempt
only if they satisfy the following four-part test:

(1) the employee receives weekly compensation of at least $455; (2) the employee's
“primary duty’ is management of the enterprise or a recognized subdivision thereof,
(3) the employee “customarily and regularly directs the work of two or more other
employees”, and (4) the employee has the authority to hire and fire persons or his
or her recommendations and suggestions as to hiring, firing, and promotion “are


the court is satisfied that the delay in disclosing the October Report was harmless. See, @.9.,
Spearman Indus., Inc. v. St. Paul Fire and Marine Ins. Co., 138 F. Supp. 2d 1088, 1094-95 (N.D.
il. 2001) (admitting untimely expert report and testimony where there was no unfair surprise about
the identity of the expert, who had already been deposed, and ample time remained to prepare an
examination). Cf. Trustmark Ins. Co. v. General Cologne Life Reinsurance of Am., No. 00 Cc 1926,
2003 WL 21673934, at *1 (N.D. lil. July 16, 2003) (defendant's delay in disclosing expert rebuttal
report was not harmless where the plaintiff had time to depose the expert but the final pretrial order
and motions in limine had been filed almost two weeks before the disclosure)

RadioShack also argues that as with the August Report, the October Report invades the
province of the court and the jury by offering legal conclusions regarding the DOL's methodology
for determining overtime compensation due to non-exempt employees. (Def. Strike Reply, at 7.)
Section 1 of the October Report addresses the “Methodology Followed by DOL to Calculate
Overtime Owed.” (October Report, at 3.) Section 2 addresses “How DOL Investigates and
Determines the Employer-Employee Understandings on the Number of Hours for which the Salary
is Intended to Compensate.” (/d. at 5.) RadioShack asserts that Section 1 merely summarizes the
rules set forth in 29 C.F.R. §§ 778.113 and 778.114, and that “[nJeither the Court nor the jury will
be assisted by Mr. Speer’s testimony in this regard because his testimony only will parrot the
Court’s jury instructions.” (Def. Strike Reply, at 8.) RadioShack also objects that Section 2 merely
instructs jurors to “review and consider all of the testimonial and documentary evidence available
to them that is relevant to” determining the understanding between an employer and employee
regarding the number of hours the employee’s salary is intended to compensate. (id.)

In the court's view, the lawyers themselves may find guidance in section 2 of the October
Report regarding “How DOL Investigates and Determines the Employer-Employee Understandings
on the Number of Hours for which the Salary is Intended to Compensate. " The court presumes that
counsel will present evidence similar to what the DOL considers in reaching its determination. The

7


On August 30, 2005, Plaintiffs submitted an expert report from J. Dean Speer, a former
employee of the Wage and Hour Division (‘WHD") of the U.S. Department of Labor (‘DOL’), stating
his opinion that a Y store manager's primary duty is something other than management (the
“August Report’). (Speer Expert Report of 8/30/05, Ex. 1 to Def. Strike Mem.)? On October 12,
2005, Plaintiffs submitted a second expert report from Mr. Speer in which he describes “the
process or methodology used by the ["WHD"] in determining overtime compensation due to non-
exempt employees under section 13(a)(1) of the [FLSA]" (the “October Report”). (Speer Expert
Report of 10/12/05, Ex. A to Def. Strike Reply, at 1.)> RadioShack seeks to strike both reports and
all related testimony as invading the province of the court and the jury. RadioShack also argues
that the October 12, 2005 report is untimely. For the reasons set forth here, the motion is granted
in part and denied in part.

DISCUSSION‘
Expert testimony is admissible if “scientific, technical or other specialized knowledge will

assist the trier of fact to understand the evidence or to determine a fact in issue.” Miksis v.

given particular weight.”

29 C.F.R. § 541.100. See also 29 C.F.R. §§ 541.601(a), 541.601(b). To the extent this action
concerns a time period prior to these regulatory amendments, they do not alter the court's analysis
here. The court notes, however, that the new regulation contains provisions very similar to the
ones disputed here, and that it appears that all of the employees in question earn more than $455
per week.

2 The Memorandum of Points and Authorities in Support of Defendant RadioShack's
Motion to Strike the Testimony and Expert Report of Plaintiffs’ Expert J. Dean Speer is cited as
“Def. Strike Mem., at__.”

$ The Reply Memorandum in Support of Defendant RadioShack’'s Motion to Strike the
Testimony and Report(s) of Plaintiffs’ Expert J. Dean Speer is cited as “Def. Strike Reply, at _"

‘ The facts of this matter are set forth in detail in the court's June 13, 2003 and
November 1, 2005 Memorandum Opinions and Orders. Perez v. RadioShack Corp., No. 02 C
7884, 2003 WL 21372467 (N.D. Ill. June 13, 2003); Perez v. RadioShack Corp., 386 F. Supp. 2d
979, 981-83 (N.D. Ill. 2005), reconsideration denied, (Order of 11/2/05, Doc. No. 360). This opinion
assumes the reader's familiarity with the earlier decisions.

2


Howard, 106 F.3d 754, 763 (7th Cir. 1997) (quoting Feb. R. Evip. 702). It is well-established,
however, that “expert testimony as to legal conclusions that will determine the outcome of the case
is inadmissible.” Good Shepherd Manor Found., Inc. v. City of Momence, 323 F.3d 557, 564 (7th
Cir. 2003) (citing United States v. Sinclair, 74 F.3d 753, 758 n.1 (7th Cir. 1996)) ("Federal Rules
of Evidence 702 and 704 prohibit experts from offering opinions about legal issues that will
determine the outcome of a case. Thatis, they cannot testify about legal issues on which the judge
will instruct the jury.”)

RadioShack argues that both of Mr. Speer’s expert reports incorporate legal conclusions
that usurp the role of the court and the jury. In the August Report, Mr. Speer concludes:

In applying the four tests contained in both the prior and current [FLSA] regulations

and the guidance provided by the [WHD's] Field Operations Handbook [i.e.,

importance of work, exercise of discretionary powers, relative freedom from

supervision, and relationship between wages and salary], not only do the store

managers spend less than 50% of their time in management, but when the

additional tests are applied to their activity, it is clear management is not their

primary duty.
(August Report, at 10.) In the October Report, Mr. Speer explains the methodology used by the
WHD to calculate overtime pay owed to non-exempt employees paid on a salary basis. (October
Report.) RadioShack objects to the August Report because “the Court will instruct the jury on the
‘primary duty’ element of the executive exemption, and it will be the jury’s responsibility to
determine what constituted Plaintiffs’ primary duty.” (Def. Strike Mem., at 3.) RadioShack
contends that the October Report is untimely, and insists that “[nJeither the Court nor the jury will
require Mr. Speer's assistance [in calculating overtime] in light of the clear, straight-forward rules

that are prescribed in the applicable DOL regulations and that will be explained to the jury by the

Court in the instructions.” (Def. Strike Reply, at 7.) The court addresses each report in turn.