Driver v. AppleIllinois, LLC

• Decision Date: 08 January 2013
• Docket Number: Case No. 06 C 6149.
• Citation: 917 F.Supp.2d 793
• Court: U.S. District Court — Northern District of Illinois
• Parties: Glenn DRIVER, Demiko D. McCaster, Rosamar Mallari, Joyce A. Britton and Michael H. Hicks, on behalf of themselves and all other persons similarly situated, known and unknown, Plaintiffs, v. APPLEILLINOIS, LLC d/b/a Applebee's Neighborhood Grill & Bar, W. Curtis Smith, James Borke, J. Timothy Brugh, Archie Iodice, et al., Defendants.

917 F.Supp.2d 793

Glenn DRIVER, Demiko D. McCaster, Rosamar Mallari, Joyce A. Britton and Michael H. Hicks, on behalf of themselves and all other persons similarly situated, known and unknown, Plaintiffs,

v.APPLEILLINOIS, LLC d/b/a Applebee's Neighborhood Grill & Bar, W. Curtis Smith, James Borke, J. Timothy Brugh, Archie Iodice, et al., Defendants.

Case No. 06 C 6149.

United States District Court,

N.D. Illinois,

Eastern Division.

Jan. 8, 2013.

David Erik Stevens, Douglas M. Werman, Maureen Ann Salas, Werman Law Office PC, Jamie G. Sypulski, Law Office Jamie Golden Sypulski, Chicago, IL, for Plaintiffs.

Nadine C. Abrahams, Andrea D. Somerville, Hallie D. Caldarone, Jane M. McFetridge, Paul J. Stroka, Chicago, IL, Paul Decamp, Jacqueline C. Tully, Reston, VA, for Defendants.

MEMORANDUM OPINION AND ORDER

GERALDINE SOAT BROWN, United States Magistrate Judge.

Before the court is defendants AppleIllinois, LLC, et al.' s Motion for Summary Judgment on Plaintiffs' Notice Claim.¹ (Defs.' Mot.) [Dkt 335.] Plaintiffs filed their opposition to the motion (Pls.' Opp'n) [dkt 346], and AppleIllinois filed its reply (Defs.' Reply) [dkt 350]. For the reasons set forth below, AppleIllinois' motion is granted in part and denied in part.

BACKGROUND

The history of this case is set out in a number of previous opinions. ² In summary, the plaintiffs, who are present or former tipped employees at Illinois Applebee's restaurants, bring claims against AppleIllinois on behalf of a plaintiff class under the Illinois Minimum Wage Law (“IMWL”), 820 Ill. Comp. Stat. §§ 105/1, et seq., the Illinois Wage Payment and Collection Act (“IWPCA”), 820 Ill. Comp. Stat. §§ 115/1, et seq., and on behalf of the individual plaintiffs under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201, et seq. (Third Am. Compl.) [Dkt 141.] The plaintiff class alleges that AppleIllinois violated the IMWL in a number of ways. ( SeeMem. Op. & Order, 265 F.R.D. at 301.) A class was certified as to the claim that AppleIllinois violated the IMWL by failing to provide sufficient notice that AppleIllinois would take a “tip credit” as part of the employees' wages. ( Id. at 304–05.)

Statutory framework

Both the FLSA and the IMWL allow employers to take a tip credit against the minimum wage for employees in occupations that customarily receive gratuities. The IMWL provides:

Every employer of an employee engaged in an occupation in which gratuities have customarily and usually constituted and have been recognized as part of the remuneration for hire purposes is entitled to an allowance for gratuities as part of the hourly wage rate .... The Director shall require each employer desiring an allowance for gratuities to provide substantial evidence that the amount claimed, which may not exceed 40% of the applicable minimum wage rate, was received by the employee in the period for which the claim of exemption is made, and no part thereof was returned to the employer.

820 Ill. Comp. Stat. § 105/4(c). That allowance is the “tip credit.”

The FLSA also allows a tip credit, subject to certain conditions, one of which is informing the employee about the tip credit:

The [tip credit] shall not apply with respect to any tipped employee unless such employee has been informed by the employer of the provisions of this subsection, and all tips received by such employee have been retained by the employee, except that this subsection shall not be construed to prohibit the pooling of tips among employees who customarily and regularly receive tips.

29 U.S.C. § 203(m) (emphasis added). The italicized language was added to the FLSA in 1974. Pub. L. No. 93–959, § 13, 88 Stat. 55, 65 (1974). It was not until 2011, however, that the United States Department of Labor (“USDOL”) promulgated a regulation specifying the information required. 29 C.F.R. § 531.59.

The IMWL does not include such a specific provision relating to information about the tip credit, although it does contain a general notice provision.

Posting of summary of Act and regulations. Every employer subject to any provision of this Act or of any regulations issued under this Act shall keep a summary of this Act approved by the Director [of the Illinois Department of Labor], and copies of any applicable regulations issued under this Act or a summary of such regulations, posted in a conspicuous and accessible place in or about the premises, wherever any person subject to this Act is employed. Employers shall be furnished copies of such summaries and regulations by the State on request without charge.

820 Ill. Comp. Stat. § 105/9. The IWPCA also contains a notice requirement:

Notification of rate, time and place of payment of wages; records; notices. Employers shall notify employees, at the time of hiring, of the rate of pay and of the time and place of payment. Whenever possible, such notification shall be in writing and shall be acknowledged by both parties. Employers shall also notify employees of any change in the arrangements, specified above, prior to the time of change ... Every employer shall post and keep posted at each regular place of business in a position easily accessible to all employees one or more notices indicating the regular pay days and the place and time for payment of his employees, and on forms supplied from time to time by the Department of Labor containing a copy or summary of the provisions of this Act.

820 Ill. Comp. Stat. § 115/10 (emphasis added).

Other than the provision quoted above regarding the tip credit, the text of the FLSA does not contain a notice and posting requirement comparable to those in the IMWL and IWPCA, but the USDOL regulations require such posting.

Every employer employing any employees subject to the Act's minimum wage provisions shall post and keep posted a notice explaining the Act, as prescribed by the Wage and Hour Division, in conspicuous places in every establishment where such employees are employed so as to permit them to observe readily a copy.

29 C.F.R. § 516.4.

Present motion

AppleIllinois now moves for summary judgment as to both the class's claim under the IMWL and the individual plaintiffs' claim under the FLSA on the question of whether AppleIllinois provided sufficient notice regarding its practice of taking the tip credit. It is undisputed that AppleIllinois posted a summary of the IMWL in a poster approved by the Illinois Department of Labor (“IDOL”). (Pls.' LR 56.1 Resp. ¶ 25.) [Dkt 347.] The issue with respect to the class's IMWL claim is whether, in order to take the tip credit, AppleIllinois was required to provide more information than that. With respect to the individual plaintiffs' FLSA claim, the issue is whether the information provided to the five named plaintiffs satisfied AppleIllinois' obligation under FLSA § 203(m).

LEGAL STANDARD

Summary judgment on all or part of a claim or defense is proper “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). To oppose a motion for summary judgment successfully, the responding party may not simply rest on its pleadings, but rather must submit evidentiary materials showing that a material fact is genuinely disputed. Fed.R.Civ.P. 56(c)(1). A genuine dispute of material fact exists when there is “sufficient evidence favoring the non-moving party for a jury to return a verdict for that party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The nonmoving party bears the responsibility of identifying applicable evidence. Bombard v. Ft. Wayne Newspapers, Inc., 92 F.3d 560, 562 (7th Cir.1996). In determining whether a genuine dispute of material fact exists, the court construes all facts and draw all reasonable and justifiable inferences in favor of the non-moving party. Anderson, 477 U.S. at 255, 106 S.Ct. 2505.³

DISCUSSION

I. The class claim under the IMWL.

Plaintiffs contend that the information AppleIllinois provided to employees about the tip credit is insufficient because it fails to “inform” the employees about the tip credit, as required by FLSA § 203(m) and the regulations and case law interpreting that section. (Pls.' Opp'n at 8–10.) Plaintiffs further contend that the IMWL incorporates the requirements of FLSA § 203(m), and, they assert, if AppleIllinois failed to comply with the FLSA § 203(m), it also violated the IMWL. (Pls.' Opp'n at 4–7.)

AppleIllinois' central argument is that the IMWL does not impose any obligation upon employers to provide notice to employees that the employer is taking a tip credit against the minimum wage. (Defs.' Mem. at 4.) [Dkt 336.] That cannot be literally correct. As described above, both the IWML and the IWCPA require the employer to post a summary of the IMWL approved by the Director of the IDOL. The version of the poster approved by the IDOL for 2007 included a reference to the tip credit (“A tip credit is recognized by the Act, but must not exceed 40% of the applicable minimum wage”) and a box with a chart showing the minimum wage (for 2005, $6.50) and the minimum wage with tip credit (for 2005, $3.90). (Defs.' Exs., Ex. A–1.) [Dkt 338.] Advising the employee about the “rate of pay,” as the employer is required to do under the IWPCA, would necessarily require the employer to tell a tipped employee that the employer will be taking the tip credit, and that the employee will be paid at the minimum wage with tip credit.⁴

The IDOL-approved poster does not, however, describe all of the provisions of FLSA § 203(m). For example, the poster text does not inform the tipped employee that all tips received by the employee are to be retained by the employee except for permitted tip pooling. The issue for the class is whether the IMWL or the IWPCA obligates the employer to go beyond posting the IDOL-approved poster and telling the employee his rate of pay, and requires the employer to provide more detail about the tip credit.

Comparing the...