520 South Michigan Ave. Associates v. Shannon

• Decision Date: 15 December 2008
• Docket Number: No. 07-3377.,07-3377.
• Citation: 549 F.3d 1119
• Parties: 520 SOUTH MICHIGAN AVENUE ASSOCIATES, LTD., d/b/a The Congress Plaza Hotel & Convention Center, Plaintiff-Appellant, v. Catherine SHANNON, Director of the Illinois Department of Labor, Defendant-Appellee, and Unite Here Local 1, Intervenor-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

549 F.3d 1119

520 SOUTH MICHIGAN AVENUE ASSOCIATES, LTD., d/b/a The Congress Plaza Hotel & Convention Center, Plaintiff-Appellant, v. Catherine SHANNON, Director of the Illinois Department of Labor, Defendant-Appellee, and Unite Here Local 1, Intervenor-Appellee.

No. 07-3377.

United States Court of Appeals, Seventh Circuit.

Argued February 19, 2008.

Decided December 15, 2008.

Peter Andjelkovich, Bradley J. Wartman, Andjelkovich & Associates, Chicago, IL, for Plaintiff-Appellant.

Carl Elitz, Office of the Attorney General, Chicago, IL, for Defendant-Appellee.

Paul L. More, Davis, Cowell & Bowe, San Francisco, CA, for Intervenor-Appellee.

Before MANION, KANNE, and TINDER, Circuit Judges.

MANION, Circuit Judge.

520 S. Michigan Avenue Associates, Ltd., doing business as The Congress Plaza Hotel & Convention Center ("Congress Plaza"), sued the Director of the Illinois Department of Labor ("Illinois"), seeking a declaratory judgment that Illinois statute 820 ILCS 140/3.1, the Hotel Room Attendant Amendment ("Attendant Amendment") to the One Day Rest in Seven Act, 820 ILCS 140/1 et. seq., is unconstitutional. Unite Here Local 1, a labor union, intervened and together with Illinois moved to dismiss pursuant to Fed.R.Civ.P. 12(b)(6). The district court granted the defendant's and intervenor's motions to dismiss, rejecting Congress Plaza's arguments that the Attendant Amendment was preempted by the National Labor Relations Act ("NLRA"), 29 U.S.C. § 151 et seq., and violated its due process and equal protection rights. Congress Plaza appeals. Because the Attendant Amendment is preempted by the NLRA, we reverse.

I.

Congress Plaza is located on Michigan Avenue in Chicago, Illinois, in Cook County. Congress Plaza, employs, among others, room attendants who clean guest rooms. The Unite Here Local 1 union ("Unite Here") represents the approximately 130 room attendants working at Congress Plaza, as well as several hundred room attendants working at other Cook County hotels. As of the date of oral argument, Congress Plaza and Unite Here's latest collective bargaining agreement ("CBA") had expired on December 31, 2002. Since June 2003, Unite Here members have engaged in a work stoppage while negotiating a new CBA. Congress Plaza has continued to abide by the terms of the expired CBA, requiring a work day of eight productive hours and providing meals free of charge to its room attendants, along with clean and sanitary facilities. Congress Plaza also customarily provides one half-hour unpaid lunch break.

In the midst of Congress Plaza's negotiations with Unite Here, the Illinois legislature passed the Hotel Room Attendant Amendment ("Attendant Amendment") to the One Day Rest in Seven Act. The One Day Rest in Seven Act was originally enacted in July 1935 and currently provides that "[e]very employer shall allow every employee except those specified in this Section at least twenty-four consecutive hours of rest in every calendar week in addition to the regular period of rest allowed at the close of each working day."¹ 820 ILCS 140/2. The One Day Rest in Seven Act further provides: "Every employer shall permit its employees who are to work for 7½ continuous hours or longer, except those specified in this Section, at least 20 minutes for a meal period beginning no later than 5 hours after the start of the work period."² 820 ILCS 140/3. The section mandating a 20-minute meal period "does not apply to employees for whom meal periods are established through the collective bargaining process." Id.

The Attendant Amendment to the One Day Rest in Seven Act provides, in full:

§ 3.1. Hotel room attendants.

(a) As used in this Section, "hotel room attendant" means a person who cleans or puts in order guest rooms in a hotel or other establishment licensed for transient occupancy.

(b) This Section applies only to hotels and other establishments licensed for transient occupancy that are located in a county with a population greater than 3,000,000.³

(c) Notwithstanding any other provision of law, every hotel room attendant shall receive a minimum of two 15-minute paid rest breaks and one 30-minute meal period in each workday on which the hotel room attendant works at least 7 hours. An employer may not require any hotel room attendant to work during a break period.

(d) Every employer of hotel room attendants shall make available at all times a room on the employer's premises with adequate seating and tables for the purpose of allowing hotel room attendants to enjoy break periods in a clean and comfortable environment. The room shall have clean drinking water provided without charge.

(e) Each employer of hotel room attendants shall keep a complete and accurate record of the break periods of its hotel room attendants.

(f) An employer who violates this Section shall pay to the hotel room attendant 3 times the hotel room attendant's regular hourly rate of pay for each workday during which the required breaks were not provided.

(g) It is unlawful for any employer or an employer's agent or representative to take any action against any person in retaliation for the exercise of rights under this Section. In any civil proceeding brought under this subsection (f), if the plaintiff establishes that he or she was employed by the defendant, exercised rights under this Section, or alleged in good faith that the defendant was not complying with this Section, and was thereafter terminated, demoted, or otherwise penalized by the defendant, then a rebuttable presumption shall arise that the defendant's action was taken in retaliation for the exercise of rights established by this Section. To rebut the presumption, the defendant must prove that the sole reason for the termination, demotion, or penalty was a legitimate business reason.

(h) In addition to the remedies provided in Sections 6 and 7, a person claiming violation of this Section shall be entitled to all remedies available under law or in equity, including but not limited to damages, back pay, reinstatement, or injunctive relief. Any person terminated in violation of this Section shall recover treble his or her lost normal daily compensation and fringe benefits, together with interest thereon, and any consequential damages suffered by the employee. The court shall award reasonable attorney's fees and costs to a prevailing plaintiff in an enforcement action under this Section.

820 ILCS 140/3.1

After the Illinois legislature passed the Attendant Amendment and the governor signed it into law, the Illinois Hotel and Lodging Association filed a declaratory judgment action in state court against the Director of the Illinois Department of Labor, seeking to have the Attendant Amendment declared unconstitutional. The state trial court granted the Illinois Department of Labor summary judgment, concluding that the Attendant Amendment was not preempted, and that the Attendant Amendment did not violate the Illinois Constitution's prohibition on special legislation or the plaintiff's right to equal protection. Ill. Hotel & Lodging Ass'n v. Ludwig, No. 05CH13796, *10 (Circuit Court of Cook County, Illinois). The Illinois appellate court affirmed. See Ill. Hotel & Lodging Ass'n v. Ludwig, 374 Ill. App.3d 193, 311 Ill.Dec. 833, 869 N.E.2d 846 (1st Dist.2007). The Supreme Court of Illinois declined to hear the Illinois Hotel and Lodging Association's appeal. Ill. Hotel & Lodging Ass'n v. Ludwig, 225 Ill.2d 633, 314 Ill.Dec. 824, 875 N.E.2d 1111 (2007).

While the Illinois Hotel and Lodging Association's case was making its way through the Illinois state court system, Congress Plaza, which is not a member of that trade organization, filed its own challenge to the Attendant Amendment in federal court. Congress Plaza argued that the Attendant Amendment is preempted by the National Labor Relations Act ("NLRA"), 29 U.S.C. § 151 et seq., and section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185(a). Congress Plaza also alleged that the Attendant Amendment violated its due process and equal protection rights, as well as provisions of the Illinois Constitution. Congress Plaza sought a permanent injunction prohibiting enforcement of the Attendant Amendment.

Illinois and Unite Here filed separate motions to dismiss under Fed.R.Civ.P. 12(b)(6). Illinois also filed a motion to dismiss under Fed.R.Civ.P. 12(b)(1), claiming Eleventh Amendment immunity from the state claims. The district court granted the defendants' motions to dismiss Congress Plaza's preemption and equal protection and due process claims. 520 S. Michigan Ave. Assoc., Ltd. v. Shannon, 2007 WL 2728757 at *8-11 (N.D.Ill.2007). The district court then declined jurisdiction over Congress Plaza's state law claims. Id. at *11. Congress Plaza appeals.

II.

On appeal, Congress Plaza argues that the NLRA preempts the Attendant Amendment.⁴ Whether the NLRA preempts the Attendant Amendment is a pure legal question and therefore we review the district court's decision de novo. See Cannon v. Edgar, 33 F.3d 880, 883 (7th Cir.1994). Moreover, our de novo review is not limited by the state court's decision in Ill. Hotel & Lodging Ass'n v. Ludwig, 374 Ill.App.3d 193, 311 Ill.Dec. 833, 869 N.E.2d 846, holding that the Attendant Amendment is not preempted by the NLRA. We "owe[ ] no deference to state-court interpretation of the United States Constitution." TMJ Implants, Inc. v. Aetna, Inc., 498 F.3d 1175, 1181 (10th Cir.2007) (citing Ace Cycle World, Inc. v. Am. Honda Motor Co., 788 F.2d 1225, 1228 (7th Cir.1986)).⁵

Our review of preemption begins with the Constitution's Supremacy Clause. See Cannon, 33 F.3d at 883. The Supremacy Clause provides:

This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the...