Case 3:18-cv-00133-NJR Document 136-62 Filed 07/01/20 Page 1 of 13 Page ID #4523
`Case 3:18-cv-00133-NJR Document 136-62 Filed 07/01/20 Page 1of13 Page ID #4523
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`EXHIBIT 61
`EXHIBIT 61
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`Case 3:18-cv-00133-NJR Document 136-62 Filed 07/01/20 Page 2 of 13 Page ID #4524
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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
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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 CHARLES D'AMICO
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`Case 3:18-cv-00133-NJR Document 136-62 Filed 07/01/20 Page 3 of 13 Page ID #4525
`Case 3:18-cv-00133-NJR Document 136-62 Filed 07/01/20 Page 3o0f13 Page ID #4525
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`I, Charles D’ Amico, hereby declare, depose and state, based upon my personal knowledge,
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`recollection and belief, as follows:
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`I have personal knowledgeof the facts set forth in this declaration, and if called as
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`a witness [ could and wouldtestify to them.
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`a.
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`I live in Amarillo, Texas. Iam the sole owner of Blue Rock Holdings, LLC (“Blue
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`Rock’). Blue Rock has been a Jimmy John’s franchisee since August 2016. Before starting Blue
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`Rock, I worked for eight years as the General Manager and Director of Operations for another
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`Jimmy John’s franchisee in Michigan and Ohio.
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`Blue Rock was originally incorporated in the State of Michigan and is now
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`incorporated in the State of Texas.
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`It currently owns and operates seven Jimmy John’s-branded
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`restaurants. Three are in Amarillo, Texas, two are in Lubbock, Texas, and two are in Santa Fe,
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`New Mexico.
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`4,
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`The seven restaurants owned by Blue Rock have between 125 and 175 total
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`employees. Between 21 and 24 Blue Rock employees are managers, including 15 or 16 Certified
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`Managers. Blue Rock also employs one Area Manager and one Area Marketing Director.
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`Brand Standards
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`Underits franchise agreements, Blue Rock maintains certain standards of quality
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`and service in its Jimmy John’s-branded restaurants.
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`These “brand standards” include
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`specifications for menu items, ingredients, food preparation, cleanliness, store appearance, speed
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`of service, and other factors affecting the Jimmy John’s brand.
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`6.
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`Blue Rock’s stores compete for sales with other sandwich shops, such as Jersey
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`Mike’s and Schlotzsky’s, and with other national and regional fast food brands. I consider another
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`restaurant a competitor if it operates within about a three-mile radius of one of Blue Rock’s stores.
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`Case 3:18-cv-00133-NJR Document 136-62 Filed 07/01/20 Page 4 of 13 Page ID #4526
`Case 3:18-cv-00133-NJR Document 136-62 Filed 07/01/20 Page 4of13 Page ID #4526
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`7.
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`Blue Rock’s stores do not compete with any other Jimmy John’s-brandedstores.
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`Blue Rock is the sole operator of Jimmy John’s-branded restaurants in the areas where it has
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`restaurants. When I was in Detroit, there was friendly competition among Jimmy John’s operators
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`in terms of which stores had the highest performance, but weall thought of ourselves as being on
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`the same team.
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`8.
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`In my experience, Jimmy John’s brand standards help Blue Rock’s stores be more
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`competitive. Jimmy John’s high standards protect the brand. When customers comeinto a Jimmy
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`John’s restaurant, they know they are going to get the same high-quality product and same high
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`level of service no matter where they are.
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`2.
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`I am in frequent contact with other franchisees, usually about how to best run their
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`stores on a day-to-day basis. Jimmy John’s corporate can teach franchisees about brand standards,
`but there is a lot more that goes into running a store, especially when it comes to managing people.
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`I am constantly developing talent, and it’s one of the things I love about the job. So I help coach
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`other franchisees about how to motivate and manage their employees. On one occasion, another
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`franchisee sent a manager to work in my stores for a few days for training purposes. Some
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`franchisees have asked me about manager compensation, but their questions were about how to
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`structure manager pay generally (.e., salary vs. hourly) rather than about actual payrates.
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`10.
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`| do not belongto any franchisee association. Sometimes, | visit the Facebook page
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`for Jimmy John’s franchise owners.
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`I have seen never seen other franchisees sharing employee
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`wage information on the Facebook page. The wage-related postings I have seen were posts from
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`franchisees seeking advice about whether to change menu prices after the minimum wage
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`increased, On oneoccasion,I saw a post from a new franchisee asking aboutstarting pay for store
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`managers, but I did not see franchisees providing the requested information.
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`Instead, I saw that
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`Case 3:18-cv-00133-NJR Document 136-62 Filed 07/01/20 Page 5 of 13 Page ID #4527
`Case 3:18-cv-00133-NJR Document 136-62 Filed 07/01/20 Page5of13 Page ID #4527
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`other franchisees advised the new franchisee to look at local job postings, such as for Jersey Mike’s
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`managerpositions, to decide what to pay his managers.
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`Recruitment of Employees
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`Blue Rock is responsible for all decisions regarding recruitment and hiring of
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`employees at the restaurants it operates.
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`It makes these decisions independently of the Jimmy
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`John’s corporate entities and independently of any other franchisee.
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`12.|When it comesto hiring employees, Blue Rock competes with any other employer
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`in the local geographic area hiring minimum wage employees. For drivers, Blue Rock also
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`competes with any other employers in the local area offering delivery jobs, including third-party
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`platforms such as Uber and Grubhub.
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`13.|Blue Rock hires in-shoppers and drivers, but not managers, from any other
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`employerin the local area. With managers, I prefer to promote from within, because I find that
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`managers who were trained from the ground up are the best performers.
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`I also like to create a
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`culture where people are always training and developing new skills. Every single one of the
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`managers at Blue Rock’s stores was internally promoted.
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`14.
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`To recruit employees, I usually place an ad on Indeed or on Craigslist, and I also
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`rely on word of mouth.
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`In online job postings, I keep the ads short and to the point, andjustlist
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`the hours, the store location(s), and the wages.
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`If we are looking for someoneto fill a part-time
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`position, the ad might be very targeted and specific, such as: “Are you a stay at home parent?
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`Wantto work 8 hours per week and earn some extra money?” I don’t usually require any kind of
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`availability in my ads. I am very flexible when it comes to employee schedules, because that helps
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`with employeeretention.
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`Case 3:18-cv-00133-NJR Document 136-62 Filed 07/01/20 Page 6 of 13 Page ID #4528
`Case 3:18-cv-00133-NJR Document 136-62 Filed 07/01/20 Page 6of13 Page ID #4528
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`15.|The employees Blue Rock hires have a variety of different backgrounds and past
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`job experiences. For some employees, it may be their first paid job, while other employees have
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`already been working as delivery drivers for 15 years.
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`Blue Rock has hired employees with prior Jimmy John’s experience as in-shoppers
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`or drivers and eventually coached them up to managers. Blue Rock has not hired someone with
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`prior Jimmy John’s experience directly into a managementposition. I prefer to promote managers
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`from within.
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`17.|The types of people we hire also vary a lot by region. In Lubbock, the pool of
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`potential employees tends to be younger.
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`In Amarillo, it’s a mix, but at the downtown store we
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`have hired some people who were formerly homeless.
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`In Santa Fe, we hire all kinds of people
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`whoare commutinginto the city because the minimum wages are so much higherin Santa Fe than
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`in surrounding areas. In Santa Fe, we have hired people who workedas nurses in the suburbs, and
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`people who were managers at a McDonald’s outside Santa Fe who wanted to work as crew
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`members in Santa Fe to earn a higher minimum wage.
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`The geographic area from whichI recruit employees varies by region. In Amarillo
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`and Lubbock, I generally recruit only from within city limits.
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`In Santa Fe, I recruit from within
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`about a 30-mile radius. Santa Fe has a higher minimum wagethan someofthe surrounding areas,
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`so people are willing to commute farther to work in Santa Fe.
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`Employee Compensation and Retention
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`19.|Compensation for Blue Rock employees depends on several factors, including job
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`category, employee performance, and geographic area.
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`In-shoppers start out earning the local
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`minimum wage.
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`In Amarillo and Lubbock, the minimum wage is $7.25 per hour, the federal
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`minimum wage.
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`In Santa Fe, the minimum wage is higher, around $11.80 per hour. Shift
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`managersin all of our stores earn at leastJj more per hour than in-shoppers.
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`Case 3:18-cv-00133-NJR Document 136-62 Filed 07/01/20 Page 7 of 13 Page ID #4529
`Case 3:18-cv-00133-NJR Document 136-62 Filed 07/01/20 Page 7of13 Page ID #4529
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`20.
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`Drivers in all of our stores earn an hourly wage, plus mileage pay, plus tips. Just
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`recently, in September or October 2019, the average hourly wage for drivers was increased to a
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`per hourin Santa Fe,{J per hourin Lubbock,and {J per hour in Amarillo. Blue Rocksets the
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`hourly wagefor drivers to be competitive with other delivery driver jobs in the local area.
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`21.
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`Based on what I hear from Blue Rock drivers, and from what I have observed in
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`Blue Rock stores compared to other franchise stores, the combination of hourly wages, mileage
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`pay, andtips allows drivers to earn more than they would makingdeliveries for other employers.
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`All Blue Rock employees, including managers, are paid by the hour. The only
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`salaried employee is the Area Manager. Each Blue Rock store has a General Manager, a First
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`Assistant Manager, a Second Assistant Manager, and Shift Manager(s) (also called a “Person in
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`Charge”).
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`23.
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`In addition to hourly wages, full-time managers also earn bonuses every a
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`GB. The bonusstructure is essentially the same as the structure Jimmy John’s used for
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`corporate stores several years ago. I’m not sure ifthe Jimmy John’s corporate bonus structure has
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`changed since then. In Blue Rockstores, the total bonus poolis calculated as;| ofthe store’s
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`profits. Managers can earn up to 7 of the bonus if they hit performancetargets for cost of
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`goods sold (COGS), labor costs, paperwork, and sales comps. Bonusesare just part of managers’
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`overall compensation, and | prefer to structure manager compensation so that the majority of
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`managers’ pay is not performance-based.
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`‘I have found that giving frequent, incremental raises is key to motivating and
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`retaining employees and building a positive culture. In the Santa Fe stores, Blue Rock was paying
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`employees above minimum wage, and I saw that paying above minimum wagewas very effective
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`for employee retention. I started giving small, frequent raises in my Texas stores. Now, most of
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`Case 3:18-cv-00133-NJR Document 136-62 Filed 07/01/20 Page 8 of 13 Page ID #4530
`Case 3:18-cv-00133-NJR Document 136-62 Filed 07/01/20 Page 8of13 Page ID #4530
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`my employees earn multiple raises per year. For example, last year most Blue Rock managers
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`earned {J raises. Turnoverin Blue Rockstores is low because wetake care of our people.
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`25.
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`In addition to giving raises based on tenure, Blue Rockalso gives employees raises
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`as they gain more skills. The philosophy is, “You learn something new, we’ll pay for it.” For
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`example, employees can earn a raise when they memorize the menu, master all three in-shop
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`stations (register, sandwich-making, and wrapping), or learn how to do a shift change. Raises for
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`learning new skills range from [J per hour.
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`26.
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`The biggest bump in hourly pay happens when a manager completes Certified
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`Manager Training. Certified Managers also able to earn more than other managers through Blue
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`Rock’s bonus program.
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`Because Blue Rock provides frequent raises, some of the more tenured managers
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`carn betweenJ per hour, plus overtime.
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`28.
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`Blue Rock also pays employees more if they work in especially busy stores.
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`Lubbock, example, four of the crew members received a raise because their store is so busy, and
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`the employees have to do more than the average in-shop employeein less busystores.
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`29.
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`Because of the variousraises that Blue Rockoffers its employees, even though in-
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`shoppers start out earning federal minimum wageof[J per hour, most in-shoppers in reality
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`ear more than that.
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`In Lubbock, for example, {jj of the crew is earning approximately [J per
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`hour.
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`30.|When Blue Rock has opened stores in new areas, we set employee wages by
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`looking at what other quick-service restaurants and restaurants were paying employeesin similar
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`positions. Jimmy John’s corporate has never given me guidance on what to pay employees and
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`plays no role in my decisions regarding pay.
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`Case 3:18-cv-00133-NJR Document 136-62 Filed 07/01/20 Page 9 of 13 Page ID #4531
`Case 3:18-cv-00133-NJR Document 136-62 Filed 07/01/20 Page 9of13 Page ID #4531
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`31.
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`I have not offered higher compensation to attract employees away from a
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`competitor or from another Jimmy John’s store.
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`In my experience, Blue Rock needsto invest in
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`coaching and training an employee no matter where they are coming from,so thereis little value
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`in paying more to lure someone away from a competitor or from another Jimmy John’s store.
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`32.|Because Blue Rock gives our employees frequent raises, and because we have
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`invested in training and built a strong culture, our turnover is generally lower than at most Jimmy
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`John’s or other quick-service restaurants. The average tenure for managersisJ,if not
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`more. Around {J of in-shoppers anddrivers have worked for Blue Rock for more than a year.
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`33.|When employees leave Blue Rock, they leave for a variety of other opportunities.
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`One Blue Rock managerleft for a job at Harbor Freight Tools.
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`I have had an in-shopper leave to
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`become a manager at Domino’s.
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`34.|The reasons why Blue Rock employees leave can also depend on wherethe store
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`is located. In Lubbock, Blue Rock employs a large numberof college students. These employees
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`frequently come to Lubbock for school and then leave once they graduate.
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`Non-Compete Agreements
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`35.
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`It has never been mypractice to require Blue Rock employees to sign non-compete
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`agreements,
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`If one of my employees wants to leave to go work for a competitor, such as
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`Schlotzsky’s, that is their prerogative.
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`Training and Investment in Employees
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`36.
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`Blue Rock currently employs 15 or 16 Certified Managers. Sending someone to
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`Certified ManagerTraining costs approximatelyI, including the costs oftraining andtravel
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`expenses.
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`Case 3:18-cv-00133-NJR Document 136-62 Filed 07/01/20 Page 10 of 13 Page ID #4532
`Case 3:18-cv-00133-NJR Document 136-62 Filed 07/01/20 Page 10 0f13 Page ID #4532
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`a Blue Rock’s Area Manager, General Managers, and I generally determine who will
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`attend Certified Manager Training.
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`If a manager shows promise andis interested in getting
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`certified, Blue Rock will generally pay for that person to go to Certified ManagerTraining.
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`38.
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`Usually, Blue Rock sends a group of4 or 5 managers to Certified Manager Training
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`In my first year as a franchisee, I had 15 managers certified, which was a significant
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`[believe that sending managers to Certified Manager Training helped improve Blue
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`Rock’s profit margins when I was a new franchisee. Now, I see the main benefit of Certified
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`Manager Training as giving employees a sense ofpride in their work.
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`It also gives employees
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`confidence whenthey realize that the standards we are coaching them on in ourstores are the same
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`standards being taught at Jimmy John’s corporate in Champaign.
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`40.
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`Generally, after one ofmy employees attends Certified ManagerTraining, they will
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`stay with Blue Rock for about 18 months or more. I do not require managers to make any kind of
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`commitment that they will stay with Blue Rock for a certain amount of time as a condition of
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`sending them to Certified Manager Training. I had one manager whomIpaid to go to Certified
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`ManagerTraining, and then he quit shortly after.
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`41.—_In addition to Certified Manager Training, I am also always training managers in
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`my stores. For example, | will train managers on how to managetheir shifts to maximize the
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`productivity of the crew working on their shift.
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`I also set aside time for training non-manager
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`employees. I encourage managers to train non-manager employeeson skills like bread-making.
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`42.
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`1 am aware that at one time, there was a provision in the Jimmy John’s franchise
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`agreements that restricted franchisees’ ability to recruit and/or hire current or former Jimmy John’s
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`managers or employees, but I do not recall the specifics of that provision. This provision did not
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`Case 3:18-cv-00133-NJR Document 136-62 Filed 07/01/20 Page 11 of 13 Page ID #4533
`Case 3:18-cv-00133-NJR Document 136-62 Filed 07/01/20 Page 11o0f13 Page ID #4533
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`impact Blue Rock’s decisions about how much to pay employeesas a starting wage, nor did it
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`affect the raises we give employees over time.
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`43.
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`Blue Rock has never refused to hire someone because they worked for another
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`franchisee or a Jimmy John’s corporate store. On a few occasions, current or former Jimmy John’s
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`employees have applied forjobs at Blue Rock stores in Texas. Blue Rock’s Lubbock and Amarillo
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`stores are not close to other Jimmy John’s restaurants, so these employees were coming from other
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`44. When a current or former Jimmy John’s employee has sought a position at Blue
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`Rock, we have checked references, and we might advise the employee to give their employer
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`notice. But we have never sought the prior employer’s permission to hire the employee. To my
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`knowledge,no other franchisee has ever complained about Blue Rockhiringtheir current or former
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`45.
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`On one occasion, a manager at another Jimmy John’s restaurant applied for a
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`manager position with Blue Rock, but Blue Rock did not hire him because it is our policy to
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`promote managers from within rather than hire managers from outside the company. The no-
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`poach provision in the franchise agreements had nothing to do with Blue Rock’s decision not to
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`hire this person.
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`46.
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`| have also recommended current or former Blue Rock employees who were
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`seeking jobs at other franchise stores or with Jimmy John’s corporate. For example, I supported a
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`Shift Manager at one of Blue Rock’s Santa Fe stores in transferring to another franchisee’s store
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`in the Farmington-Durango, Colorado area to become a manager.
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`I did not restrict him from
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`transferring stores or provide a written release for his transfer. A few months after he left for
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`Case 3:18-cv-00133-NJR Document 136-62 Filed 07/01/20 Page 12 of 13 Page ID #4534
`Case 3:18-cv-00133-NJR Document 136-62 Filed 07/01/20 Page 12o0f13 Page ID #4534
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`Colorado, he asked to come back to the Blue Rock store in Santa Fe, and Blue Rock hired him
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`back. We did not seek a written release from the Colorado franchisee.
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`47.
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`Additionally, when one of Blue Rock’s Certified Managers was considering
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`48.
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`Before I started Blue Rock, when I was working for the franchisee in Michigan and
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`I also recommended employees for other Jimmy John’s positions.
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`For example,
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`recommended one of our drivers for a position with Jimmy John’s corporate. Another former
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`49.
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`| have also granted Blue Rock employees’ requests to transfer between different
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`Blue Rock stores. For example, a shift manager in Santa Fe recently transferred to a store in
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`Lubbock. Where Blue Rock has multiple stores in one city, employees frequently transfer between
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`Recordkeeping
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`50.
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`Blue Rock employees enter their hours by clocking in and out using the point of
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`sale or “POS”system in their store, which runs software called Macromatix. The POS system also
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`contains information about employee pay rates. However, the pay rates entered in the POS do not
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`reflect what employees actually earn. For example, I cap managers’ pay rates in the POSat a
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`GE. 10 reality, many managers carnI. With in-shoppers, the POS may
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`reflect that an employeeis earningI, when they actually carnI.
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`51.
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`It is not important to Blue Rock’s operations for the POS system to reflect actual
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`pay rates. In some ways,it is actually beneficial for the POS system to not reflect actual payrates.
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`One reason for not keeping accurate pay rates in the POSis that Blue Rock employees receive
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`frequent raises, and I do not want managersto feel pressure to cut driver or in-shopper hours after
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`Case 3:18-cv-00133-NJR Document 136-62 Filed 07/01/20 Page 13 of 13 Page ID #4535
`Case 3:18-cv-00133-NJR Document 136-62 Filed 07/01/20 Page 130f13 Page ID #4535
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`employees get a raise. Blue Rock gives raises to encourage employee productivity and booststore
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`performance, and if managers respondto raises by cutting hours, then that defeats the purpose of
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`the raises.
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`In addition, having artificial pay rates in the POS system can help avoid employee
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`conflicts, for example, if a General Manager wereto learn that he or she is making the same hourly
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`wageas an experienced, high-skilled Assistant Manager.
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`52.
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`Therefore, the pay rates in Blue Rock’s POS system do not accurately represent
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`Instead of relying on the pay rates in the POS system, Blue
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`Rockusesa third-party vendorto run payroll.
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`53.
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`I understand that the hours and pay rates entered into Blue Rock’s POS are
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`automatically uploaded onto the “Labor” tab of the Weekly Sales Reports (WSRs) that Blue Rock
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`submits to Jimmy John’s corporate every week. I do not audit or alter the data in the “Labor” tab
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`before submitting Blue Rock’s WSRsto Jimmy John’s Franchise.
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`54.
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`Because the pay rate information in Blue Rock’s POSis not an accurate reflection
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`of what employees are actually paid, the data reported on the “Labor” tab of the WSRsfor Blue
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`Rockstores is not accurate.
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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.
`OY sare VI, Ty
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`| executed this Declaration on this
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`_@ 4 day of March, 2020 in
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`Charles D’ Amico
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