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KEITH A. JACOBY, Bar No. 150233
kiacobv@littler.com
2 BRADLEY E. SCHWAN, Bar No. 246457 FflED/EMOORSIED
X bschwan@littler.com
3 LITTLER MENDELSON, P.C.
D 2049 Century Park East JUL 1 5 2020
4 5th Floor
Los Angeles, CA 90067.3107 By:. S Khorn
5 Telephone: 310.553.0308 Deputy Cierk
Fax No.: 310.553.5583
6
NATHANIEL H. JENKINS, Bar No. 312067
7 njenkins@littler.com
LITTLER MENDELSON, P.C.
8 500 Capitol Mall
Suite 2000
9 Sacramento, CA 95814
Telephone: 916.830.7200
10 Fax No.: 916.561.0828
11
Attomeys for Defendant
12 PRIMERITUS FfNANClAL SERVICES, INC.
13
SUPERIOR COURT OF CALIFORNIA
14
COUNTY OF SACRAMENTO
15
JOHN BOUDREAU, an individual, on Case No. 34-2018-00247272
16 behalf of himself and all others similarly
situated, Assigned to Department 41, Hon. David De Alba
17
Plaintiff, DECLARATION OF CHRISTOPHER
18 McGlNNESS IN SUPPORT OF
DEFENDANT PRIMERITUS FINANCIAL
19 SERVICES, INC.'S MOTION FOR
PRIMERITUS FfNANClAL SERVICES, SUMMARY ADJUDICATION
20 INC., A Delaware corporation; CHRIS
McGlNNESS, an individual; and DOES 1 Date: September 24, 2020
21 through 10, inclusive. Time: 9:00 a.m.
Dept: 54
22 Defendants. Reservation No. 2519118
23
Complaint filed: December 27, 2018
24 First Amended Complaint filed: April 12, 2019
25
26
27
28
LITTLER MENDELSON, P.C.
20ta Ceniury Park E i i t
5lh pjooi
Los Anoelea. CA 90067.3,07 DECLARATION OF CHRISTOPHER McGlNNESS IN SUPPORT OF DEFENDANT PRIMERITUS
310
FINANCIAL SERVICES, INC.'S MOTION FOR SUMMARY ADJUDICATION
' M ! -^1 " ' 0 ' ' r 'Si?
1 I, CHRISTOPHER McGlNNESS, declare:
2 1. I am employed by Defendant PRIMERITUS FINANCIAL SERVICES, INC.
3 ("Defendant" or "Primeritus") as its Chief Executive Officer. I have personal knowledge of the
4 following facts, and if called to testify, I could and would competently testify thereto.
5 2. I understand that I was originally named as an individual defendant in this
6 lawsuit, but that I have since been dismissed from the matter without prejudice.
7 3. Primeritus assists lenders in locating and arranging for the repossession of
8 vehicles (referred to in the industry as "collateral"). Primeritus is headquartered in Nashville,
9 Tennessee and maintains only one office in Califomia, located in El Dorado Hills.
10 4. I began working for Primeritus in December 2013 and I first held the position of
11 Vice President and General Manager of Primeritus' El Dorado Hills office. In May 2016, Primeritus
12 promoted me to Senior Vice President of Operations, a position I held until November 2018. In
13 November 2018, Primeritus promoted me to Chief Operating Officer, and in January 2020,1 became
14 the Chief Executive Officer.
15 5. Primeritus' El Dorado Hills office currently employs approximately 70
16 individuals in the position of "Skip Tracer" or "Investigator," job titles we use interchangeably.
17 Plaintiff Boudreau worked as a Skip Tracer in El Dorado Hills from approximately January 2010
18 until January 2019. Plaintiff s job, as well as that of the other Skip Tracers, was to sit at his desk and
19 independently research and locate collateral using computer-based resources provided by Primeritus.
20 There was nobody looking over his shoulder and measuring his proficiency, ensuring he was always
21 on task, or organizing his schedule. He was, for the most part, on his own. Plaintiff and the Skip
22 Tracers are at their desks actively locating collateral for recovery except for when they are attending
23 a meeting, training, or a Primeritus-sponsored social event. This is because the Skip Tracers are paid
24 on an incentive basis for each vehicle successfully located and repossessed. (Although, Primeritus
25 does not handle the physical repossession of any vehicles; it engages third party vendors for actual
26 repossessions.) Accordingly, Plaintiffs, as well as all Skip Tracers', skills and creativity drive their
27 performance and compensation.
28 6. From December 27, 2014, to August 10, 2019, Primeritus' Incentive Pay Plan
LITTLER MENDELSON, P.C.
2Q49 Ceniury Perh Eail
2.
51h FlooF
Lot Angeles, CA 90DE7.3107
DECLARATION OF CHRISTOPHER McGlNNESS IN SUPPORT OF DEFENDANT PRIMERITUS
310 553,0308
FINANCIAL SERVICES, INC.'S MOTION FOR SUMMARY ADJUDICATION
1 ("Pay Plan") for Skip Tracers in Califomia was comprised of two distinct components of pay: First,
2 the Pay Plan included a points system. Each point was worth $25 and each vehicle that was
3 successfully located and recovered typically eamed four points, or $100. There was only one
4 exception to this easy to understand points system, whereby for just one of Primeritus' lender-
5 clients, each point was still worth $25, but a successful recovery eamed points on an increased scale.
6 For example, the first two successful repossessions eamed two points each, but the third successful
7 repossession eamed three points, the eighth successful repossession, eamed 17 points (or $425), and
8 so on. From my understanding, this is known as a "Piece-Rate" payment system.
9 7. A points grid spelled out this Pay Plan system and the Skip Tracers then kept
10 track of their successful recoveries and denoted the points earned on a document labelled a
11 "commission sheet." The Skip Tracers then provided this commission sheet to Primeritus and signed
12 off on its accuracy before it was provided to Primeritus' payroll department to be calculated into the
13 Skip Tracers' paycheck. Primeritus retained the commission sheets denoting the points for each Skip
14 Tracer.
15 8. Separately from, and in addition to the piece-rate pay, Primeritus paid Skip
16 Tracers $8.00 for each hour worked. Primeritus further paid $12 for each hour worked over eight
17 hours per day or 40 hours in a week.' This separate, additional, compensation - typically $64.00 per
18 eight-hour work day - was intended to be enough to cover the Skip Tracers for their two ten-minute
19 rest breaks, plus any other non-productive time based on Primeritus' reasonable estimates, even i f
20 that nonproductive time was several hours in a single day.
21 9. In fact, Michael Ward, an expert statistician with the Welch Consulting firm,
22 analyzed the Skip Tracers' time and payroll records and confirmed that this $64 per 8-hour work day
23 almost always covered the Skip Tracers for their Califomia rest breaks, as well as any other non-
24 productive time up to 3.5 hours per week. {See Declaration of Michael P. Ward, Appendix C (the
25 "Ward Report") filed concurrently herewith.) The Ward Report determined that there was only one
26
27 ' In addition to the $12 for each hour worked over eight in a day or 40 in a week, Primeritus paid Skip Tracers an
additional overtime sum based on the amount of piece-rate eamed in the pay period, but this component of the Pay Plan
28 is not pertinent to this lawsuit.
LITTLER MENDELSON, P.C.
204S Ceniuty " . r ^ E i . i
3^
Sir. Floor
Los Ar^oelfls. CA S00G7.3107 DECLARATION OF CHRISTOPHER McGlNNESS IN SUPPORT OF DEFENDANT PRIMERITUS
3I0.5S3.030S
FINANCIAL SERVICES, INC.'S MOTION FOR SUMMARY ADJUDICATION
1 instance where the $64 would not be enough to compensate for rest breaks at the average hourly rate
2 or nonproductive time at the minimum wage. He also determined that there were two more
3 instances where that amount would be potentially insufficient to pay for nonproductive time after
4 paying for rest breaks at the average rate of pay, but those instances would only be applicable if the
5 employees worked between 3.0 and 3.5 hours of nonproductive time in a week - which is highly
6 unlikely.
7 10. Mr. Ward further identified a small number of instances where, due to unusually
8 low incentive-pay amounts, after payment of rest breaks at the average hourly rate, and
9 nonproductive time at the minimum wage, the incentive pay fell short of the minimum wage for the
10 time worked by the employee. Out of 14,160 workweeks, this only occurred 164 times (1.16%) and
11 the amount below the minimum wage was a matter of pennies. {See Ward. Decl. t 38 n.5.) Based on
12 this analysis, Primeritus will provide back wages to each of those employees plus interest at 10% per
13 annum.
14
15
16 I declare under penalty of perjury under the laws of the state of Califomia that the
17 foregoing is true and correct.
18 Executed this 2^'*^ day of_j|^f|y . 2020, at Sacramento, Califomia.
19
20
21
CHRISTOPHER McGlNNESS
22
23
24
25
26 4834-5456-7618.2
27
28
LITTLER MENDELSON, P.C.
2049 Ceniury ° t r k E i i l
5ih ^iQor
Lot Anselet, CA 90067.3107
310,553.0308
DECLARATION OF CHRISTOPHER McGlNNESS IN SUPPORT OF DEFENDANT PRIMERITUS
FINANCIAL SERVICES, INC.'S MOTION FOR SUMMARY ADJUDICATION
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KEITH A. JACOBY, Bar No. 150233 kiacobv@littler.com 2 BRADLEY E. SCHWAN, Bar No. 246457 FflED/EMOORSIED X bschwan@littler.com 3 LITTLER MENDELSON, P.C. D 2049 Century Park East JUL 1 5 2020 4 5th Floor Los Angeles, CA 90067.3107 By:. S Khorn 5 Telephone: 310.553.0308 Deputy Cierk Fax No.: 310.553.5583 6 NATHANIEL H. JENKINS, Bar No. 312067 7 njenkins@littler.com LITTLER MENDELSON, P.C. 8 500 Capitol Mall Suite 2000 9 Sacramento, CA 95814 Telephone: 916.830.7200 10 Fax No.: 916.561.0828 11 Attomeys for Defendant 12 PRIMERITUS FfNANClAL SERVICES, INC. 13 SUPERIOR COURT OF CALIFORNIA 14 COUNTY OF SACRAMENTO 15 JOHN BOUDREAU, an individual, on Case No. 34-2018-00247272 16 behalf of himself and all others similarly situated, Assigned to Department 41, Hon. David De Alba 17 Plaintiff, DECLARATION OF CHRISTOPHER 18 McGlNNESS IN SUPPORT OF DEFENDANT PRIMERITUS FINANCIAL 19 SERVICES, INC.'S MOTION FOR PRIMERITUS FfNANClAL SERVICES, SUMMARY ADJUDICATION 20 INC., A Delaware corporation; CHRIS McGlNNESS, an individual; and DOES 1 Date: September 24, 2020 21 through 10, inclusive. Time: 9:00 a.m. Dept: 54 22 Defendants. Reservation No. 2519118 23 Complaint filed: December 27, 2018 24 First Amended Complaint filed: April 12, 2019 25 26 27 28 LITTLER MENDELSON, P.C. 20ta Ceniury Park E i i t 5lh pjooi Los Anoelea. CA 90067.3,07 DECLARATION OF CHRISTOPHER McGlNNESS IN SUPPORT OF DEFENDANT PRIMERITUS 310 FINANCIAL SERVICES, INC.'S MOTION FOR SUMMARY ADJUDICATION ' M ! -^1 " ' 0 ' ' r 'Si? 1 I, CHRISTOPHER McGlNNESS, declare: 2 1. I am employed by Defendant PRIMERITUS FINANCIAL SERVICES, INC. 3 ("Defendant" or "Primeritus") as its Chief Executive Officer. I have personal knowledge of the 4 following facts, and if called to testify, I could and would competently testify thereto. 5 2. I understand that I was originally named as an individual defendant in this 6 lawsuit, but that I have since been dismissed from the matter without prejudice. 7 3. Primeritus assists lenders in locating and arranging for the repossession of 8 vehicles (referred to in the industry as "collateral"). Primeritus is headquartered in Nashville, 9 Tennessee and maintains only one office in Califomia, located in El Dorado Hills. 10 4. I began working for Primeritus in December 2013 and I first held the position of 11 Vice President and General Manager of Primeritus' El Dorado Hills office. In May 2016, Primeritus 12 promoted me to Senior Vice President of Operations, a position I held until November 2018. In 13 November 2018, Primeritus promoted me to Chief Operating Officer, and in January 2020,1 became 14 the Chief Executive Officer. 15 5. Primeritus' El Dorado Hills office currently employs approximately 70 16 individuals in the position of "Skip Tracer" or "Investigator," job titles we use interchangeably. 17 Plaintiff Boudreau worked as a Skip Tracer in El Dorado Hills from approximately January 2010 18 until January 2019. Plaintiff s job, as well as that of the other Skip Tracers, was to sit at his desk and 19 independently research and locate collateral using computer-based resources provided by Primeritus. 20 There was nobody looking over his shoulder and measuring his proficiency, ensuring he was always 21 on task, or organizing his schedule. He was, for the most part, on his own. Plaintiff and the Skip 22 Tracers are at their desks actively locating collateral for recovery except for when they are attending 23 a meeting, training, or a Primeritus-sponsored social event. This is because the Skip Tracers are paid 24 on an incentive basis for each vehicle successfully located and repossessed. (Although, Primeritus 25 does not handle the physical repossession of any vehicles; it engages third party vendors for actual 26 repossessions.) Accordingly, Plaintiffs, as well as all Skip Tracers', skills and creativity drive their 27 performance and compensation. 28 6. From December 27, 2014, to August 10, 2019, Primeritus' Incentive Pay Plan LITTLER MENDELSON, P.C. 2Q49 Ceniury Perh Eail 2. 51h FlooF Lot Angeles, CA 90DE7.3107 DECLARATION OF CHRISTOPHER McGlNNESS IN SUPPORT OF DEFENDANT PRIMERITUS 310 553,0308 FINANCIAL SERVICES, INC.'S MOTION FOR SUMMARY ADJUDICATION 1 ("Pay Plan") for Skip Tracers in Califomia was comprised of two distinct components of pay: First, 2 the Pay Plan included a points system. Each point was worth $25 and each vehicle that was 3 successfully located and recovered typically eamed four points, or $100. There was only one 4 exception to this easy to understand points system, whereby for just one of Primeritus' lender- 5 clients, each point was still worth $25, but a successful recovery eamed points on an increased scale. 6 For example, the first two successful repossessions eamed two points each, but the third successful 7 repossession eamed three points, the eighth successful repossession, eamed 17 points (or $425), and 8 so on. From my understanding, this is known as a "Piece-Rate" payment system. 9 7. A points grid spelled out this Pay Plan system and the Skip Tracers then kept 10 track of their successful recoveries and denoted the points earned on a document labelled a 11 "commission sheet." The Skip Tracers then provided this commission sheet to Primeritus and signed 12 off on its accuracy before it was provided to Primeritus' payroll department to be calculated into the 13 Skip Tracers' paycheck. Primeritus retained the commission sheets denoting the points for each Skip 14 Tracer. 15 8. Separately from, and in addition to the piece-rate pay, Primeritus paid Skip 16 Tracers $8.00 for each hour worked. Primeritus further paid $12 for each hour worked over eight 17 hours per day or 40 hours in a week.' This separate, additional, compensation - typically $64.00 per 18 eight-hour work day - was intended to be enough to cover the Skip Tracers for their two ten-minute 19 rest breaks, plus any other non-productive time based on Primeritus' reasonable estimates, even i f 20 that nonproductive time was several hours in a single day. 21 9. In fact, Michael Ward, an expert statistician with the Welch Consulting firm, 22 analyzed the Skip Tracers' time and payroll records and confirmed that this $64 per 8-hour work day 23 almost always covered the Skip Tracers for their Califomia rest breaks, as well as any other non- 24 productive time up to 3.5 hours per week. {See Declaration of Michael P. Ward, Appendix C (the 25 "Ward Report") filed concurrently herewith.) The Ward Report determined that there was only one 26 27 ' In addition to the $12 for each hour worked over eight in a day or 40 in a week, Primeritus paid Skip Tracers an additional overtime sum based on the amount of piece-rate eamed in the pay period, but this component of the Pay Plan 28 is not pertinent to this lawsuit. LITTLER MENDELSON, P.C. 204S Ceniuty " . r ^ E i . i 3^ Sir. Floor Los Ar^oelfls. CA S00G7.3107 DECLARATION OF CHRISTOPHER McGlNNESS IN SUPPORT OF DEFENDANT PRIMERITUS 3I0.5S3.030S FINANCIAL SERVICES, INC.'S MOTION FOR SUMMARY ADJUDICATION 1 instance where the $64 would not be enough to compensate for rest breaks at the average hourly rate 2 or nonproductive time at the minimum wage. He also determined that there were two more 3 instances where that amount would be potentially insufficient to pay for nonproductive time after 4 paying for rest breaks at the average rate of pay, but those instances would only be applicable if the 5 employees worked between 3.0 and 3.5 hours of nonproductive time in a week - which is highly 6 unlikely. 7 10. Mr. Ward further identified a small number of instances where, due to unusually 8 low incentive-pay amounts, after payment of rest breaks at the average hourly rate, and 9 nonproductive time at the minimum wage, the incentive pay fell short of the minimum wage for the 10 time worked by the employee. Out of 14,160 workweeks, this only occurred 164 times (1.16%) and 11 the amount below the minimum wage was a matter of pennies. {See Ward. Decl. t 38 n.5.) Based on 12 this analysis, Primeritus will provide back wages to each of those employees plus interest at 10% per 13 annum. 14 15 16 I declare under penalty of perjury under the laws of the state of Califomia that the 17 foregoing is true and correct. 18 Executed this 2^'*^ day of_j|^f|y . 2020, at Sacramento, Califomia. 19 20 21 CHRISTOPHER McGlNNESS 22 23 24 25 26 4834-5456-7618.2 27 28 LITTLER MENDELSON, P.C. 2049 Ceniury ° t r k E i i l 5ih ^iQor Lot Anselet, CA 90067.3107 310,553.0308 DECLARATION OF CHRISTOPHER McGlNNESS IN SUPPORT OF DEFENDANT PRIMERITUS FINANCIAL SERVICES, INC.'S MOTION FOR SUMMARY ADJUDICATION