Plestsov v. GTS Transp. Corp.
| Decision Date | 12 February 2021 |
| Docket Number | No. 20 CV 1847,20 CV 1847 |
| Parties | ALEXEI PLESTSOV, DENIS NAZAROV, and ROMAN KALABAYDA, Plaintiffs, v. GTS TRANSPORTATION CORP. and TOMAS STIRBYS, Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
MEMORANDUM OPINION AND ORDER
After their complaint was dismissed, plaintiffs Roman Kalabayda, Alexei Plestsov, and Denis Nazarov filed an amended complaint against GTS Transportation Corporation and its owner, Tomas Stirbys, alleging violations of the Illinois Wage Payment and Collection Act and unjust enrichment and quantum meruit in the alternative. For the reasons stated below, the defendants' second motion to dismiss is granted in part, denied in part.
Roman Kalabayda, Alexei Plestsov, and Denis Nazarov worked as truck drivers for GTS Transportation Corporation, a company owned and operated by Tomas Stirbys. [22] ¶¶ 1, 13, 32, 49, 67.1 All three plaintiffs had similar hiringexperiences. [22] ¶¶ 33, 51, 68. Stirbys and another GTS employee interviewed Kalabayda. [22] ¶ 69. Stirbys orally offered Kalabayda a job, where he would be paid based on a percentage of the dollar amount of the freight/load confirmations from brokers and customers, minus fuel and other expenses. [22] ¶¶ 10, 69. Stirbys orally stated other terms about control, like Kalabayda could only operate GTS trucks, could not work for another company, and had to comply with all of GTS's instructions for deliveries. [22] ¶¶ 70-72. Kalabayda was required to sign a document on the spot, which he did not understand due to his lack of English proficiency and legal knowledge. [22] ¶¶ 74, 86. Kalabayda accepted the job offer. [22] ¶ 73. Later, on at least three occasions, Kalabayda learned from GTS brokers and staff that the dollar amount on the original freight/load confirmations differed from the confirmations he received, resulting in an underpayment of approximately 10 percent. [22] ¶ 80. In one instance, Kalabayda was able to verify the underpayment because he received an original confirmation from a broker and compared it to the confirmation GTS provided him for the same load. [22] ¶ 80. Consequently, the plaintiffs allege that GTS forged the confirmations presented to Kalabayda, which lowered his pay, and that the total amount of underpayment is unknown because the original freight/load confirmations are in GTS's possession and control. [22] ¶ 79.
A GTS employee who interviewed Kalabayda interviewed Plestsov, along with another GTS employee. [22] ¶¶ 34, 69. At Stirbys's direction, the GTS employees orally offered Plestsov a job, where he would be paid a percentage of the dollar amount of the freight/load confirmations from brokers and customers, minus fuel and otherexpenses. [22] ¶¶ 8, 34, 101. One of the GTS employees orally stated the same terms about control, and Plestsov signed a document that he did not understand. [22] ¶¶ 34-37, 39, 86. Plestsov accepted the offer but eventually learned from other drivers, including Kalabayda, that GTS allegedly forged the freight/load confirmations, which lowered his pay by approximately 10 percent. [22] ¶¶ 38, 43, 48. Similarly, another GTS manager, at Stirbys's direction, orally offered Nazarov a truck driver position. [22] ¶¶ 9, 52. Nazarov would be paid per mile, including layovers and extra stops, and subject to the same terms about control. [22] ¶¶ 51-55, 60, 101. Like the others, Nazarov signed a document that he did not understand and accepted the job offer. [22] ¶¶ 56-57, 86. Nazarov alleges that he too was underpaid by approximately 10 percent because GTS paid him using a "zip code to zip code" formula instead of calculating the actual miles he drove. [22] ¶ 62.2
GTS also took deductions from the plaintiffs' paychecks, which they never agreed to. [22] ¶¶ 1, 7. GTS withheld a total of $17,096.90 from Kalabayda's pay for "escrow," "repairs," "claims," and a "ticket"; $3,797.20 from Plestsov's pay for "escrow," "repairs," and an "Uber"; and $520 for a "cash advance" and "insurance escrow" from Nazarov's pay. [22] ¶¶ 41, 59, 76.3 GTS never reimbursed Kalabayda and Plestsov for $52,000 and $17,181.52, respectively, for operational expenses, or Nazarov for a new GPS, tire gauge, and repair tools. [22] ¶¶ 42, 61, 77. Finally, GTSfailed to pay Plestsov approximately $3,000.61 for his last two weeks at work and never paid Nazarov for any layovers and extra stops, as promised. [22] ¶¶ 36, 44, 60. GTS also returned the $1,000 it took for "escrow" at the time of Nazarov's hiring 24 weeks later. [22] ¶ 60. In total, the plaintiffs allege that the defendants owe at least $65,532.88 to Kalabayda, $29,734.74 to Plestsov, and $6,467.37 to Nazarov. [22] ¶¶ 47, 66, 82.
The plaintiffs broadly allege that the defendants took advantage of immigrant workers, and that at Stirbys's direction, GTS doctored freight/load confirmations to lower their drivers' pay, took improper deductions, and misclassified drivers as independent contractors. [22] ¶¶ 1, 3-5, 7, 13, 95, 100, 103-106. The plaintiffs also allege that GTS failed to withhold payroll and social security taxes; provide health insurance for its drivers; or make contributions to unemployment insurance or workmen's compensation. [22] ¶ 96. The defendants filed a motion to dismiss the plaintiffs' first class action complaint based on lack of jurisdiction and failure to state a claim for equitable remedies, [16], which I granted. [21]. The plaintiffs filed an amended complaint, realleging violations of the Illinois Wage Payment and Collection Act and in the alternative, unjust enrichment and quantum meruit. [22]. The defendants now seek to dismiss both claims on the merits. [27].
To state a claim under the Illinois Wage Payment and Collection Act, employees must allege that they are owed compensation pursuant to an employment contract or agreement between the two parties and that the defendants were"employers" under the IWPCA. Osorio v. The Tile Shop, LLC, 939 F.3d 847, 850 (7th Cir. 2019) (citing 820 ILCS § 115/2).4 The statute provides a remedy for various types of wage violations. 820 ILCS § 115/14. It requires employers to notify employees of the rate of pay at the time of hiring (in writing whenever possible), which both parties must acknowledge. 820 ILCS § 115/10. Employers must also notify employees of any changes in the arrangements before a change. Id. The IWPCA requires employers to pay employee wages in full and in a timely manner, including an employee's final paycheck. 820 ILCS §§ 115/3-5. The IWPCA prohibits employers from taking improper deductions from an employee's wages, like deductions made outside of a valid wage assignment or deductions made without the employee's consent. 820 ILCS § 115/9. Employers must also reimburse employees for all necessary expenditures incurred within the scope of employment and directly related to services performed for the employer's benefit. 820 ILCS § 115/9.5.
Normally, to state a claim, a complaint need only contain a short and plain statement that plausibly suggests the violation of a legal right. Fed. R. Civ. P. 8(a); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556-58 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 677-80 (2009). However, when a complaint alleges fraud, a heightened pleading standard applies. Fed. R. Civ. P. 9(b); Borsellino v. Goldman Sachs Group, Inc., 477 F.3d 502, 507 (7th Cir. 2007) (). This heightened standard ensures that fraud claims are well supported and brought responsibly, since allegations of fraud risk great reputational harm to businesses. Id. The precise level of detail required depends on the facts of the case. United States ex rel. Presser v. Acacia Mental Health Clinic, LLC, 836 F.3d 770, 776 (7th Cir. 2016) (). Rule 9(b) applies to all "averments of fraud or mistake," which means a heightened pleading standard may apply whenever a claim is premised on allegations of a fraudulent course of conduct, regardless of whether the plaintiffs bring a fraud claim. Borsellino, 477 F.3d at 507 (quoting Fed. R. Civ. P. 9(b)).5 If a claim is based on both fraudulent and nonfraudulent conduct, Rule 9(b) only applies to the allegations of fraud. See Kennedy v. Venrock Associates, 348 F.3d 584, 593 (7th Cir. 2003).6
The defendants argue that the plaintiffs' entire IWPCA claim "sounds in fraud," and therefore should be dismissed because the allegations fail to meet the heightened pleading requirements of Rule 9(b). But the plaintiffs allege wage violations that are independent of their allegations about doctored wages and fraudulent misclassification of employees. GTS failed to pay Nazarov for any layovers and extra stops or pay Plestsov his final paycheck. [22] ¶¶ 36, 44, 60. It took GTS 24 weeks to return "escrow" money it took from Nazarov. [22] ¶ 60. GTS also tookrandom and authorized deductions from their paychecks, for expenses like "escrow" and "repairs," and never reimbursed Kalabayda and Plestsov for operational expenses, or Nazarov for truck equipment. [22] ¶¶ 1, 7, 41-42, 59, 61 76-77. None of these allegations involve fraudulent conduct. See Majewski v. Gallina, 17 Ill.2d 92, 99 (1959) ().7 The plaintiffs successfully state IWPCA claims that are not subject to the heightened pleading standard for averments of fraud.
The plaintiffs do aver that GTS forged freight/load confirmations, "doctored" logbooks, and systematically misclassified drivers as independent contractors, [22] ¶¶ 1, 3-5, 7, 13, 43, 48, 62 79-80, 95, 100, 103-106, in violation of the IWPCA's requirement that employers must...
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