Krause v. USA Docufinish

• Decision Date: 11 March 2015
• Docket Number: No. 3–13–0585.,3–13–0585.
• Citation: 28 N.E.3d 996
• Parties: Michael KRAUSE, Plaintiff–Appellant, v. USA DOCUFINISH and John W. McKillip, Defendants–Appellees.
• Court: United States Appellate Court of Illinois

28 N.E.3d 996

Michael KRAUSE, Plaintiff–Appellant

v.USA DOCUFINISH and John W. McKillip, Defendants–Appellees.

No. 3–13–0585.

Appellate Court of Illinois, Third District.

March 11, 2015.

John C. Ireland (argued), of South Elgin, for appellant.

Robert A. Kezelis (argued), of Law Offices of Robert A. Kezelis, of Palos Heights, for appellees.

OPINION

Justice HOLDRIDGE delivered the judgment of the court, with opinion.

¶ 1 The plaintiff, Michael Krause, brought this small claims action under the Illinois Wage Payment and Collection Act (the Act) (820 ILCS 115/1 et seq. (West 2012)) to recover wages from his former employer which Krause claimed were earned and unpaid. The plaintiff also brought claims for breach of contract and “interference with contract of employment.” The defendants brought counterclaims for “overpayment” and “property damage,” but later abandoned their counterclaim for overpayment.

¶ 2 Prior to filing his complaint in small claims court, the plaintiff filed a wage claim against defendant USA DocuFinish with the Illinois Department of Labor (DOL). The DOL ordered Defendant USA DocuFinish to pay the plaintiff $3,346.56. Defendant USA DocuFinish initially disputed the DOL's ruling. However, sometime after the plaintiff filed his complaint in small claims court, USA DocuFinish paid the plaintiff the amount ordered by the DOL.

¶ 3 On June 5, 2013, the trial court granted the defendants' motion to dismiss the plaintiff's claim under the Act. The trial court found that section 14 of the Act “precludes further legal action by [plaintiff] Krause because * * * sec [tion] 14 causes a loss of jurisdiction for an Employee who has filed a claim with the Dep[artment] of Labor.” After denying the plaintiff's motion to reconsider, the trial court entered an order under Illinois Supreme Court Rule 304(a) (Ill.S.Ct. R. 304(a) (eff. Feb. 26, 2010)) finding that there was no just cause to delay the appeal of its order dismissing the plaintiff's claim under the Act. This appeal followed.

¶ 4 FACTS

¶ 5 The plaintiff worked for defendant USA DocuFinish as its plant production manager. USA DocuFinish's vacation pay policy provides that its employees receive 20 vacation days upon completing 8 years of employment and that, “[u]pon termination of employment, employees will be paid for unused vacation time that has been earned through the last day of work.” After working at USA DocuFinish for eight years, the plaintiff quit his job.

Thereafter, the plaintiff asked USA DocuFinish to pay him his earned vacation time. Defendant John W. McKillip, the president and chief executive officer of USA DocuFinish, wrote the plaintiff a letter refusing the plaintiff's request. McKillip's letter stated that, despite the fact that the plaintiff had quit, the company had generously agreed not to contest the plaintiff's unemployment and to pay him unemployment benefits which he “really [was] not entitled to.”

¶ 6 On March 24, 2011, the plaintiff filed a wage claim against USA DocuFinish with the DOL. He sought payment for 27 earned, unused vacation days which he claimed amounted to $7,786.00. On April 4, 2012, the DOL issued a “Wage Payment Demand” stating that “[t]he [DOL's] investigation of this matter has disclosed apparent violations of the Wage Payment and Collection Act.” The DOL stated that USA DocuFinish “shall pay to [plaintiff]” 22 days in earned vacation less a $3,000 “gratuitous payment” that USA DocuFinish had made to the plaintiff at separation, which amounted to $3,346.56. Both parties initially disputed the amount ordered by the DOL.¹

¶ 7 The plaintiff filed an “Exception to the Wage Payment Demand” in the DOL in which he asked the DOL to reconsider certain aspects of its decision. On April 30, 2012, the DOL issued a “Notice of Closing of File” (Notice). The Notice stated that the DOL had “conducted a thorough review” of the plaintiff's wage claim which included “extensive work by [its] staff in an effort to investigate and resolve [the] claim” and “an attempt to conciliate the matter with respondent employer.” The Notice went on the state that “[w]e have concluded that there are no further actions that we can take on your behalf with respect to your wage claim.” For that reason, the DOL noted that it had “closed [the plaintiff's] file.” However, the Notice stated that its “decision to close your file with our agency DOES NOT preclude you from pursuing other legal remedies that may be available to you.” On July 10, 2012, the DOL denied the plaintiff's request for reconsideration and noted that the plaintiff's “[a]pplication was properly decided.” However, the DOL also noted that “[t]his determination is based solely on the provisions of the [Act] and does not bar any other civil or criminal remedy that may be available to you.”

¶ 8 On August 13, 2012, the plaintiff filed a claim for “[o]wed wages” under the Act in the circuit court of Will County, small claims division. The plaintiff also asserted claims for breach of contract and “interference with contract of employment.” The complaint alleged that “the defendant is indebted to the plaintiff in the sum of $10,000 for [o]wed wages, enforcement of a Wage Payment Demand issued by the [DOL], breach of [c]ontract, payment of interest, costs, attorney fees, and penalties, and interference with contract of employment.” The defendants filed a counterclaim for “overpayment,” alleging that, prior to the DOL's wage payment demand, they had already paid the defendant $4,000, which was more than the DOL had ordered them to pay. The defendants also asserted a counterclaim for $23,679.06 in damages that they claimed the plaintiff had deliberately done to the defendants' equipment. During subsequent discussions with the plaintiff, the defendants agreed to abandon their counterclaim for overpayment and filed an “ admission of liability” agreeing to pay the plaintiff the amount ordered by the DOL. However, they denied any further liability to the plaintiff and refused to pay any costs or attorney fees in the small claims action. Moreover, the defendants did not withdraw their counterclaim for property damage.

¶ 9 On March 1, 2013, the defendants' counsel handed the court excerpts from section 14 of the Act and brought an oral motion to dismiss based on those excerpts. Specifically, the defendants cited the following language from section 14 of the Act:

“Any employee not timely paid wages, final compensation, or wage supplements by his or her employer as required by this Act shall be entitled to recover through a claim filed with the Department of Labor or in a civil action, but not both, the amount of any such underpayments and damages of 2% of the amount of any such underpayments for each month following the date of payment during which such underpayments remain unpaid. In a civil action, such employee shall also recover costs and all reasonable attorney's fees.” (Emphasis added.) 820 ILCS 115/14(a) (West 2012).

The defendants argued that the “but not both” language in the above excerpt, which was added in the January 1, 2011, amendments to the Act (Pub. Act 96–1407, § 10 (eff. Jan. 1, 2011)) (amending 820 ILCS 115/14(a) (West 2010)), precluded jurisdiction in the circuit court because the plaintiff had already received a wage payment demand from the DOL.

¶ 10 The trial court granted the defendants' motion to dismiss. The plaintiff brought a motion to reconsider, which the trial court granted on the ground that the plaintiff had inadequate notice of the defendants' motion to dismiss.

¶ 11 On May 9, 2013, the defendants filed a written motion to dismiss for “lack of jurisdiction” under section 2–619 of the Code of Civil Procedure (the Code) (735 ILCS 5/2–619 (West 2012) ). The plaintiff filed a response citing Miller v. J.M. Jones, 198 Ill.App.3d 151, 144 Ill.Dec. 461, 555 N.E.2d 820 (1990), and Rekhi v. Wildwood Industries, Inc., 61 F.3d 1313 (7th Cir.1995), both of which recognized a party's right to file a claim to collect unpaid wages or benefits in the circuit court after obtaining a wage payment demand from the DOL. On the eve of the motion to dismiss hearing, the defendants filed a “Motion for Sanctions” in which the defendants argued, for the first time, that the Illinois legislature added the “but not both” language to section 14 of the Act in the January 1, 2011, amendments to the Act in order to remove jurisdiction in the courts after a plaintiff had received an award from the DOL.

¶ 12 On June 5, 2013, the trial court granted the defendant's motion to dismiss. In granting the motion, the trial court ruled that the legislative purpose of the 2011 amendments was to remove court jurisdiction over a plaintiff's claim after the plaintiff had received a wage payment demand from the DOL, thereby overturning Miller, Rekhi, and other, similar cases.

¶ 13 The plaintiff filed a motion to reconsider which cited relevant legislative history from the Act. The court denied the plaintiff's motion. This appeal followed.

¶ 14 ANALYSIS

¶ 15 As an initial matter, we must determine whether the trial court's dismissal of the plaintiff's claim in this case was a final and appealable order. The trial court granted the defendants' “Motion to Dismiss for Lack of Jurisdiction.” The defendants did not specify whether their motion was brought under section 2–615 (735 ILCS 5/2–615 (West 2012) ) or section 2–619 (735 ILCS 5/2–619 (West 2012) ) of the Code. In granting the defendants' motion, the trial court did not reference either section. Rather, it simply ruled that the defendants' motion was granted because “sec[tion] 14 of the [Act] precludes further legal action by [the plaintiff] because * * * sec[tion] 14 causes a loss of jurisdiction for an Employee who has filed a claim with the [DOL].” The trial court's order did not explicitly state whether its dismissal of the defendants' claim was with prejudice.

¶ 16 Nevertheless, we conclude that the trial court's dismissal of the plaintiffs' claim was final and...