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XPO Logistics, Inc. v. Leeway Global Logistics, LLC

United States District Court, D. Utah, Central Division

January 12, 2018

XPO LOGISTICS, INC., a Delaware corporation, Plaintiff,
LEEWAY GLOBAL LOGISTICS, LLC, a Nevada limited liability company; LEEWAY GLOBAL LOGISTICS, INC., a Nevada corporation; AARON PETERSON, an individual; ADAM SUDWEEKS, an individual; and ASAP ENERGY, LCC, a Utah limited liability company, Defendants. ADAM SUDWEEKS, Individually and on Behalf of All Others Similarly Situated, Counterclaim Plaintiff,
XPO LOGISTICS, INC., Counterclaim Defendant.

          Paul M. Warner Magistrate Judge.



         On November 16, 2017, an in camera hearing was conducted in this matter to: (1) address the Plaintiff / Counterclaim Defendant XPO Logistics, Inc. (“XPO”) and Defendant / Counterclaim Plaintiff Adam Sudweeks' (“Sudweeks”) (collectively the “Settling Parties”) Joint Motion for In Camera Hearing Regarding Approval of FLSA Settlement Agreement (“Motion for Approval”); and (2) to determine whether the Settling Parties had met the Fair Labor Standards Act (“FLSA”) requirements for Court approval of the settlement. XPO was represented by Robert H. Smeltzer of Howard & Howard. Sudweeks was present and represented by Susan B. Motschiedler of Parsons Behle and Latimer.

         Having reviewed and considered the Settling Parties' briefing and heard the arguments presented at the November 16, 2017 hearing, the Court hereby enters its Findings of Fact and Conclusions of Law and ORDERS as follows.



         1. XPO provides logistics services, including truck brokerage and transportation, last mile logistics, intermodal, contract logistics, ground and air expediting, drayage, global forwarding, and managed transportation.

         2. Sudweeks worked for XPO as an account manager on freight logistics accounts from approximately December 2013 to June 2015.

         3. As an account manager, Sudweeks was paid a salary plus commission.

         4. Sudweeks' initial salary at XPO was $35, 000 per year, and later $42, 000 per year.

         5. In his position as an account manager, Sudweeks sought out new potential logistics customers, provided quotes for current or future freight shipments, entered shipments into XPO's computer systems, and serviced existing customers by giving them updates on shipments in transit.

         6. Sudweeks was also responsible for creating and keeping accurate administrative records relating to the shipments, including things like bills of lading and other shipping documents.

         7. XPO terminated Sudweeks' employment on June 29, 2015.

         8. On or around July 21, 2015, Sudweeks became employed at Leeway Global.

         9. XPO initiated this action by filing a four-count Complaint for Preliminary Injunction and Other Relief against Sudweeks and another former XPO employee, Aaron Peterson (“Peterson”), and their subsequent employer Leeway.

         10. Count I alleged that Sudweeks and Peterson violated their respective Employment Agreements with XPO by going to work for Leeway, its competitor in the business of providing third-party logistics services; soliciting its customers; and using or disclosing its confidential information.

         11. Count II alleged that, while still employed, Sudweeks and Peterson breached their fiduciary duties to XPO by operating a separate company called ASAP on XPO's time and with its money.

         12. Count III alleged that Leeway intentionally interfered with XPO's economic relations by employing Sudweeks and Peterson in violation of the Employment Agreements and putting them in a position to solicit XPO's customers and trade on its Confidential Information.

         13. Count IV alleged that Defendants misappropriated XPO's trade secrets.

         14. In response to the Complaint, Sudweeks filed a partial answer, as well as a three-count Counterclaim, alleging: (a) a collective action against XPO for unpaid overtime per §207(a)(1) of the FLSA; (b) breach of contract (in the alternative); and (3) breach of the implied covenant of good faith and fair dealing (in the alternative).

         15. Sudweeks amended his FLSA counterclaim on two occasions thereafter, eventually dropping the collective action and pursuing only his individual overtime claims and the two alternative claims.

         The Nature of the Settling Parties' Dispute

         16. The Settling Parties dispute whether Sudweeks was exempt from the overtime provision of Section 207(a)(1) of the FLSA.

         17. Sudweeks alleges that, as an account manager on freight logistics accounts, XPO misclassified his job position ...

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