Case 3:18-cv-00133-NJR Document 136-59 Filed 07/01/20 Page 1 of 14 Page ID #4492
`Case 3:18-cv-00133-NJR Document 136-59 Filed 07/01/20 Page1of14 Page ID #4492
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`EXHIBIT 58
`EXHIBIT 58
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`Case 3:18-cv-00133-NJR Document 136-59 Filed 07/01/20 Page 2 of 14 Page ID #4493
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE SOUTHERN DISTRICT OF ILLINOIS
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`DONALD CONRAD, on Behalf of
`Himself and All Others Similarly
`Situated,
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`Plaintiff,
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`v.
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`JIMMY JOHN’S FRANCHISE, LLC;
`JIMMY JOHN’S ENTERPRISES, LLC;
`JIMMY JOHN’S LLC; et al.,
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`Defendants.
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`Civil Action No. 18-cv-133 NJR
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`DECLARATION OF SAM BRADBURY
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`Case 3:18-cv-00133-NJR Document 136-59 Filed 07/01/20 Page 3 of 14 Page ID #4494
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`I, Sam Bradbury, hereby declare, depose and state, based upon my personal knowledge,
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`recollection and belief, as follows:
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`1.
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`I have personal knowledge of the facts set forth in this declaration, and if called as
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`a witness I could and would testify to them.
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`2.
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`I live in Lake Mary, Florida. I am the owner and primary officer of Morbury LLC
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`(“Morbury”). Morbury is a Florida corporation that has been operating Jimmy John’s-branded
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`stores since March 2010. It currently owns and operates two Jimmy John’s stores in Florida: one
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`in Longwood, which opened in March 2010, and another in Lake Mary, which opened in August
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`2011.
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`3.
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`I also previously was an officer and part owner of three other entities that franchised
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`with Jimmy John’s: Morbury WP, LLC; Morbury OBT, LLC; and Morbury SF, LLC (together
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`with Morbury, the “Morbury entities”). I owned these entities with my former business partner,
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`Tom Morrow. Before January 2019, the Morbury entities owned and operated a total of six Jimmy
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`John’s-branded stores in Florida, including stores in Orange City, Winter Park, Orlando, and
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`Sanford, in addition to the Lake Mary and Longwood stores. In July 2019, I purchased Tom’s
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`membership interest and have since closed all of the entities other than Morbury itself. In 2019, I
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`also closed or sold four of the stores. Morbury now only owns and operates the Longwood and
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`Lake Mary stores (the “Morbury stores”).
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`4.
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`The Morbury stores currently have between 30 and 35 total employees between
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`them. They employ eight managers, including one General Manager at each store. Each store has
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`General Managers, Assistant Managers, and Persons in Charge. Morbury also has a “Manager in
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`Training” position for employees we are transitioning from Assistant Manager to General
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`Manager.
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`2
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`Case 3:18-cv-00133-NJR Document 136-59 Filed 07/01/20 Page 4 of 14 Page ID #4495
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`5.
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`Before January 2019—when the stores in Orange City, Winter Park, Orlando, and
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`Sanford closed—the Morbury entities employed around 90 people. Each of the six stores
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`employed three or four managers. And before January 2019, the Morbury entities had nine or ten
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`Certified Managers, including Tom and me. Beginning in 2017, the Morbury entities promoted
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`an employee to an Area Manager position to support operations at all of the stores.
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`Brand Standards, Competition, and Interactions with Jimmy John’s Corporate and other
`Franchisees
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`6.
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`Under its franchise agreements with Jimmy John’s, Morbury maintains certain
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`standards of quality and service in its Jimmy John’s-branded restaurants. These “brand standards”
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`include specifications for menu items, ingredients, food preparation, cleanliness, store appearance,
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`speed of in-store service, and other factors affecting the Jimmy John’s brand.
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`7.
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`Jimmy John’s Franchise, LLC provides consultants, known as Business Coaches,
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`who give Morbury tips and guidance on how to meet Jimmy John’s brand standards. The Business
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`Coaches also conduct periodic audits of Morbury stores and provide detailed feedback on how we
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`are meeting brand standards on measures such as food preparation, store cleanliness, and customer
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`service. The Jimmy John’s Operations Manual also provides Morbury stores with guidance on
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`how to meet brand standards.
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`8.
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`In competing for sales, Morbury stores primarily compete with other fast casual
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`restaurants and third-party delivery apps such as Grubhub and UberEats. The growth in popularity
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`of third-party delivery apps has greatly increased competition for delivery sales. We used to
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`compete for deliveries only with other restaurants that offered their own delivery services, such as
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`Chinese and pizza restaurants. Now, we compete with any other restaurant that offers delivery
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`through third-party apps.
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`3
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`Case 3:18-cv-00133-NJR Document 136-59 Filed 07/01/20 Page 5 of 14 Page ID #4496
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`9.
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`It is difficult to precisely measure the geographic area within which Morbury stores
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`compete. However, my best estimate is that Morbury stores compete within an area that is at least
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`a few square miles.
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`10.
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`I sometimes have contact with other Jimmy John’s franchisees in the Orlando area.
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`For example, a franchisee in Apopka has asked for my advice when he faced certain difficulties
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`with recruiting employees, such as when no one showed up for scheduled employee interviews. I
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`am also in contact with the franchisee who purchased the Morbury store in Winter Park about
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`every other week. The new franchisee has at times asked to borrow cheese or bread, and I am
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`happy to help out. I have also lent product to another franchisee in Deland. And on one occasion,
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`we borrowed product from the Deland franchisee after we received an order for 500 sandwiches
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`with only a few hours’ notice.
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`11.
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`I am a member of a Facebook group for Jimmy John’s franchisees, and I visit the
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`group’s webpage almost daily. Franchisees in the group post about a variety of topics, such as
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`how to replace a computer hard drive or about franchise stores or equipment for sale. Before the
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`Facebook group was created, I sometimes visited the “Owner’s Forum” website for franchisees. I
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`used the site as a resource to find vendors for equipment repair and to download paperwork such
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`as daily punch lists.
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`Employee Recruitment
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`12. Morbury is responsible for all decisions regarding recruitment and hiring of
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`employees at the Jimmy John’s stores it operates. It makes these decisions independently of the
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`Jimmy John’s corporate entities and independently of any other franchisee.
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`13.
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`To recruit employees, I post job openings on Indeed. The job postings usually
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`specify whether we are looking for in-shoppers or drivers, and they provide a brief job description
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`4
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`Case 3:18-cv-00133-NJR Document 136-59 Filed 07/01/20 Page 6 of 14 Page ID #4497
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`and hourly wage information. In addition to online job postings, Morbury also recruits employees
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`by offering a referral bonus of
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` to any employee who refers a friend who is hired and
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`then stays with the company for a certain amount of time without incident.
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`14. Morbury competes with a variety of employers in recruiting employees. For in-
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`shop employees, we primarily compete with other quick-service restaurants and call centers. For
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`delivery drivers, we also compete with employers that provide delivery services, such as pizza
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`restaurants. Some Morbury employees have had many other jobs, while others are high school
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`students who have no prior work experience at all.
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`15.
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`Each Morbury store typically recruits employees from the city or zip code where
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`the store is located, although occasionally people apply to work for Morbury from farther away.
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`16.
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`Over the years, some Morbury employees have transferred between Morbury-
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`owned stores. For example, before the Winter Park store closed, an employee transferred from the
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`Winter Park store to the Lake Mary store to become an Assistant Manager, and then to the
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`Longwood store to become a General Manager.
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`17.
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` Morbury stores tend to experience a lot of employee turnover. I would estimate
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`that the average tenure for Morbury employees is only a couple of months. But there is a wide
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`range: I have one employee who has worked for Morbury for nine years, while other employees
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`have quit after just one day. People leave Morbury for a variety of reasons, such as to move away
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`for school. Usually, I do not know where people go after they leave their employment with
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`Morbury.
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`Employee Compensation and Retention
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`18.
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`All Morbury employees are currently paid hourly. Delivery drivers and in-shoppers
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`start out at minimum wage. Delivery drivers also receive mileage pay and tips. Persons in Charge
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`5
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`Case 3:18-cv-00133-NJR Document 136-59 Filed 07/01/20 Page 7 of 14 Page ID #4498
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`generally earn between
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` per hour. Assistant Managers earn on average
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` per hour,
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`and General Managers generally earn between
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` per hour.
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`19.
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`The Morbury entities used to pay full-time managers on a salary basis. Assistant
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`and General Managers started out at
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` per day, but certain experienced, high-performing General
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`Managers could earn between
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` per day. In January 2020, we switched managers
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`over to hourly pay, because we could not afford to pay managers on a salary basis anymore. Now
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`managers earn an hourly wage plus overtime.
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`20.
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`Before January 2020, Morbury paid raises to managers and non-managers based on
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`both performance and time with the company. For performance-based raises for managers, we
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`would look at whether the manager showed up on time and achieved a good audit score, and if
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`their skills were progressing. For in-shoppers and drivers, we would consider whether the
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`employee could perform certain tasks like slicing meat, using the register, and answering phones.
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`21.
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`Now, raises for all employees are based only on performance. If a Morbury
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`employee asks for a raise, we look at their performance and decide whether or not to increase the
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`employee’s pay. For in-shoppers and drivers, we look at whether the employee can prepare bread
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`or slice meat. The biggest factor in deciding whether to give managers a raise is their store’s
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`performance on the Jimmy John’s brand-standards audit.
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`22.
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`Before 2019, the Morbury entities paid General Managers a bonus based on a bonus
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`structure that I understood was used at one point by Jimmy John’s corporate stores. Bonus pay
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`was calculated as a
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`, and would depend on whether the General
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`Managers hit certain performance targets. Morbury does not use the Jimmy John’s corporate
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`bonus program anymore because our stores are not profitable enough, and I am still paying off
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`loans on the stores that closed.
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`Case 3:18-cv-00133-NJR Document 136-59 Filed 07/01/20 Page 8 of 14 Page ID #4499
`Case 3:18-cv-00133-NJR Document 136-59 Filed 07/01/20 Page 8o0f14 Page ID #4499
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`23.
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`In addition to profits-based bonuses, the Morbury entities also sometimes paid
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`managers (General Managers, Assistant Managers, and Managers in Training) a bonus if they
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`received a high score on a Business Coachaudit.
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`24.
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`Compensation for managers at Morbury entity stores has always depended on the
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`particular store and that store’s volume. For example,at its peak, the Winter Park store was earning
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`almostee. while the Orlando store was only earning about
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`Es
`os
`ee
`ae. Whenwewere using the Jimmy John’s corporate bonusstructure, managers at
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`more profitable stores would earn higher bonuses than managersat less profitable stores, because
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`the bonus formula is based onstoreprofits.
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`The Morbury entities have never offered automatic raises for Certified Managers.
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`|The Morbury entities never provided health imsurance or other benefits to
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`25.
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`26.
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`employees.
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`27.
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`In December 2019, I tried offering higher compensation to the longtime General
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`Manager at our Longwoodstore to prevent him from leaving for another, non-Jimmy John’s job.
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`He received a great opportunity from another employer, and I askedif there was anything we could
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`do to convince him to stay. I even offered to let him buy the Longwoodstore from meif he wanted.
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`In the end, however, we could not match the compensation he wasbeing offered at his new job,
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`and heleft.
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`Case 3:18-cv-00133-NJR Document 136-59 Filed 07/01/20 Page 9 of 14 Page ID #4500
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`28.
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`The Morbury entities have always decided employee compensation without regard
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`to what other Jimmy John’s franchisees were paying their employees. We have never received
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`advice on employee pay from other franchisees. The only compensation-related information we
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`have ever received from Jimmy John’s corporate was the manager bonus structure referenced
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`above, which we used at one point but ultimately decided did not work for our business.
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`Non-Compete Agreements
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`29.
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`It has never been my practice to require employees at any of the Morbury entities
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`to sign non-compete agreements.
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`Training and Investment in Employees
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`30.
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`Store-level managers at Morbury are responsible for training in-shoppers and
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`drivers. They have access to a training packet that Mobury received from Jimmy John’s corporate,
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`but they do not use the packet consistently. Much of the training is done on the job.
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`31.
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`The Morbury entities have typically promoted managers from within. There are
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`only two or three people we hired directly as Managers in Training.
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`32.
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`The Morbury entities used to employ seven or eight Certified Managers. Tom and
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`I also completed Certified Manager training. During the time that Donald Conrad was employed
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`by Morbury WP, LLC and Morbury OBT, LLC, there were probably four Certified Managers
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`across all six of the stores operated by the Morbury entities at that time.
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`33.
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`It is costly for Morbury to send an employee to Certified Manager Training. The
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`tuition for Certified Manager Training is around
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`. When you open a new store, tuition is
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`waived for two Certified Manager Training spots, but franchisees still have to pay the trainees’
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`travel expenses. If I am paying for the tuition plus travel costs, it costs between
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`to send someone to Certified Manager Training. Usually I will decide whether to send someone
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`to Certified Manager Training based on whether they are a good employee.
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`Case 3:18-cv-00133-NJR Document 136-59 Filed 07/01/20 Page 10 of 14 Page ID #4501
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`34.
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`I am not convinced that Certified Manager Training is worth the expense.
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`Sometimes, Certified Managers will stay for years after their training, but sometimes they will
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`stick around only six months or so. My two stores are not very profitable right now, and I cannot
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`afford to send anyone to Certified Manager Training.
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`Employee Mobility
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`35.
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`I am aware that at one time, there was a provision in Section 7(d) of the Jimmy
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`John’s franchise agreements that restricted franchisees’ ability to recruit and/or hire current or
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`former Jimmy John’s managers or employees without obtaining a release from their former
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`employer.
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`36.
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`Until sometime in 2015, if an employee at another Jimmy John’s franchise
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`restaurant applied to one of the Morbury entities’ stores, our general practice was to call the
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`employee’s former store. Usually we spoke with the store manager rather than the franchisee. We
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`would ask if the applicant was a good worker and used following up on other stores’ employees
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`who were applying at our locations as a form of obtaining a release to comply with Jimmy John's
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`standards. Often times these were verbal, or in writing. We always followed the release process
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`when it was applicable.
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`37.
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`Other franchisees also sometimes contacted me when they were considering hiring
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`a Morbury entity employee. Again, I viewed this as the equivalent of providing a letter of
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`recommendation or a reference. Generally, I was supportive of our employees going to other
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`restaurants. For example, the Morbury stores had many employees who were high school students
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`and wanted to work at other Jimmy John’s stores after they moved to another state for college. I
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`supported these moves. If I did not think the employee had been a good employee, however, I
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`would let the other franchisee know. But before 2015, I do not recall ever denying permission to
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`Case 3:18-cv-00133-NJR Document 136-59 Filed 07/01/20 Page 11 of 14 Page ID #4502
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`another franchisee to hire Morbury entity employees or attempting to otherwise enforce the
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`restriction on recruiting or hiring against another franchisee.
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`38.
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`In 2015, however, Tom and I decided that, to avoid any potential conflicts with
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`franchisees in our area, we would adopt a “policy” of not granting employee releases to other
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`franchisees or hiring other franchisees’ employees without a release. Morbury kept this policy in
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`place until Section 7(d) was removed from the Jimmy John’s franchise agreement in July 2018.
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`39.
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`I can only recall one instance in which Morbury actually denied a release for a
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`current or former employee. In 2015, we denied a release to a new franchisee that opened a
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`restaurant in Deland, Florida and tried to hire one of the employees at the Morbury store in Orange
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`City. Other than that incident, however, I do not recall any instances in which Morbury entities
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`actually denied permission to another franchisee or Jimmy John’s corporate store to hire one of
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`our employees, nor do I recall any instances in which Morbury entities refused to hire someone
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`because they had prior Jimmy John’s experience. If Morbury wanted to hire an employee from
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`another Jimmy John’s, we contacted the other franchisee to get a release. I cannot recall any
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`instance in which another franchisee denied a release.
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`40.
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`From time to time, we learned that Morbury entity employees had switched to other
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`Jimmy John’s franchise restaurants without our knowledge. Usually, the Jimmy John’s Business
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`Coach in our region would let us know that she saw a former Morbury entity employee working
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`at another franchisee’s store. When this happened, we never threatened the other franchisee with
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`legal action or sought compensation. We took no action at all, and the employee continue to work
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`for the other restaurant.
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`41.
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`I am also aware of employees working for both Morbury stores and other
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`franchisees simultaneously. For example, in 2010, when Morbury opened its first store in
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`Case 3:18-cv-00133-NJR Document 136-59 Filed 07/01/20 Page 12 of 14 Page ID #4503
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`Longwood, we had a delivery driver who worked for us during the day, and we learned he was
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`working for another franchisee in Orlando at night. I did not care that the delivery driver was
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`working for us and the other franchise, and Morbury took no action with regard to his employment.
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`42.
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`In my experience, having Section 7(d) in the Jimmy John’s franchise agreement
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`helped promote positive relationships among franchisees. As a franchisee, I invest significant
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`resources in training my employees, and Section 7(d) helped protect that investment. Having
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`Section 7(d) in place also encouraged franchisees to talk to each other and find out whether
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`someone was a good employee or not. Franchisees often share ideas about how to boost sales and
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`make our stores more profitable, and Section 7(d) was another tool that helped foster cooperation
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`among franchisees to ensure we employ the best quality employees.
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`43.
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`I am certain that neither Section 7(d), nor Morbury’s “policy” that was in place
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`between 2015 and July 2018, had any bearing whatsoever on how much any of the Morbury stores
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`paid any of its employees or managers, or when or whether those employees were promoted.
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`Donald Conrad’s Employment
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`44. Morbury WP, LLC hired Donald Conrad as an in-shop employee at the Winter Park
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`store in February 2018, at a starting wage of
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`. In March 2018, Donald was promoted
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`to Person in Charge at the Winter Park store and given a raise to
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`. In April 2018,
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`Donald was promoted to Assistant Manager at the Winter Park store, earning
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` in salary.
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`45.
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`In August 2018, sales at our Orlando store (which was owned and operated by a
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`different Morbury entity, Morbury OBT, LLC) were
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`, and most
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`of the employees had quit. At that time, Tom was primarily in charge of the Orlando store, and I
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`was primarily in charge of the Winter Park store.
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`46.
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`So, in August 2018, Tom and I offered Donald a promotion to become a Manager
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`in Training and a raise to
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` if he would transfer from the Winter Park store to the Orlando
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`Case 3:18-cv-00133-NJR Document 136-59 Filed 07/01/20 Page 13 of 14 Page ID #4504
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`store. Tom and I believed that the Orlando store had been poorly managed by the previous General
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`Manager, and we hoped we could motivate Donald to turn the Orlando store around by offering
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`him a promotion and a raise. At that same time, we offered the same promotion and raise to
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`another Assistant Manager at the Winter Park store named
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`. Tom and I hoped that
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`eventually we could promote either Donald or
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` to become the General Manager at the
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`Orlando store.
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`47.
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`Donald and
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` accepted our offers and transferred to the Orlando store in August
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`2018. After transferring, both of them earned a salary of
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`. As Managers in Training,
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`Donald and
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` could also earn bonuses for obtaining good scores on audits from the Jimmy
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`John’s Business Coach that visited the store to audit its adherence to brand standards. As I recall,
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` were not eligible for bonus pay based on store profits (unlike General Managers and
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` As Managers in Training, however, Donald and
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`Assistant Managers).
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`48.
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`During the entire period of Donald’s employment with the Morbury entities, Tom
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`and I made the decisions about what to pay employees. The Morbury entities’ Area Manager,
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`Mike LaTourette, could also make recommendations about what to pay employees and about
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`whether to give employees raises.
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`49.
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`50.
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`Donald’s employment was terminated in November 2018
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`Case 3:18-cv-00133-NJR Document 136-59 Filed 07/01/20 Page 14 of 14 Page ID #4505
`Case 3:18-cv-00133-NJR Document 136-59 Filed 07/01/20 Page14o0f14 Page ID #4505
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`Recordkeeping
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`51.
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`Morbury employeesenter their hours by clocking in and out using the pointof sale
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`or “POS”system in their store, which runs software called Macromatix. The POS system also
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`contains information about employee payrates.
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`52.
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`Morbury managers and PICs are supposed to audit Macromatix reports after each
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`SOOPER
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`.CRSARDTIP»7eaRENRTTOETEReeeepara’eeallSh
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`shift to ensure that employee time records are accurate, butIstill often find mistakes in these
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`reports. For example,it is not uncommonfor meto find a report showing that an employee worked
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`an extraordinarily long (e.g., 29-hour) shift, because the employee forgot to clock out andthe store
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`manageror PIC did not catch the mistake.
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`53.
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`Employees at Morbury WP, LLC and Morbury OBT, LLC used Macromatix to
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`clock in and out during the time that Donald was an employee. Managers would input into
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`Macromatix whether they worked a full-day or half-day shift. At that time, manager pay was based
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`on whether the manager was scheduled for a full or half-day shift, not actual hours worked. If the
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`manager workedless than their scheduled shift, it would depend on the manager andtheir efforts
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`to input the equivalent of the hours they worked.
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`Soif a shift is considered 10 hours and they
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`worked 9, they would input .9 shift worked.
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`I declare under penalty of perjury under the laws of the United States of America that the
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`foregoing is true and correct.
`pale racy
`, Florida.
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`I executed this Declaration on this |4**day of March, 2020,in
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`aA
`
`Sam Bradbury
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`LMAO
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`