Wisconsin Cent. Ltd. v. Shannon

• Citation: 516 F.Supp.2d 917
• Decision Date: 21 September 2007
• Docket Number: No. 07 C 994.,07 C 994.
• Parties: WISCONSIN CENTRAL LTD., an Illinois corporation, Plaintiff, v. Catherine SHANNON and Nancy McDonald, Defendants.
• Court: U.S. District Court — Northern District of Illinois

516 F.Supp.2d 917

WISCONSIN CENTRAL LTD., an Illinois corporation, Plaintiff, v. Catherine SHANNON and Nancy McDonald, Defendants.

No. 07 C 994.

United States District Court, N.D. Illinois, Eastern Division.

September 21, 2007.

James Stanton Whitehead, Sarah Marie Konsky, Scott Edward Gross, Sidley Austin LLP, Chicago, IL, for Plaintiff.

Leeann Richey, Raymond G. Garza, Office of the Attorney General, Chicago, IL, for Defendants.

MEMORANDUM OPINION AND ORDER

RUBEN CASTILLO, District Judge.

Wisconsin Central Ltd. ("Plaintiff'), filed this action for declaratory and injunctive relief against Defendants Catherine Shannon ("Shannon"), the Director of the Illinois Department of Labor ("DOL"), and Nancy McDonald ("McDonald"), a DOL Compliance Officer, in their official capacities (collectively "the Defendants"). (R. 11, Am.Compl.) Plaintiff seeks a determination regarding whether overtime claims raised by Plaintiff's employees through the DOL under the Illinois Minimum Wage Law ("Wage Law"), 820 ILCS § 105/1-15, are preempted by the federal Railway Labor Act ("the Railway Act" or "the Act"), 45 U.S.C. §§ 151-188. (R. 11, Am. Compl. at 1.) Presently before the Court are the parties' cross-motions for summary judgment. (R. 21, Pl.'s Mot. for Summ. J.; R. 17, Defs.' Mot. for Summ. J.)¹ For the following reasons, Defendants' motion for summary judgment is denied, and Plaintiff's motion for summary judgment is granted.

RELEVANT FACTS²

Plaintiff is an interstate freight railroad with operations in Illinois, Michigan, Minnesota, and Wisconsin. (R. 35, Defs.' Resp. to Pl.'s Facts ¶¶ 1, 6). Plaintiff is a rail "carrier" engaged in interstate commerce within the meaning of the Railway Act, 45 U.S.C. § 151, and is subject to the provisions of the Act. (Id. ¶ 1) Plaintiff employs five categories of employees who perform work in Illinois: communications and signal employees ("CSEs"), conductors, locomotive engineers ("engineers"), maintenance-of-way employees ("MWEs"), and certain management employees. (Id. ¶ 7.) These employees also perform work for Plaintiff outside of Illinois on an ongoing or intermittent basis. (Id.) The CSEs, conductors, engineers, and MWEs are members of bargaining units represented by labor organizations that the National Mediation Board ("Mediation Board") has certified pursuant to the Railway Act. (Id.) Each of the four labor organizations has negotiated a collective bargaining agreement ("CBA") with Plaintiff to govern the terms and conditions of employment for their respective members. (Id. ¶¶ 10, 12, 14, and 16.)

A. The Overtime Applications

The DOL is an Illinois administrative agency possessed with authority to investigate and enforce overtime and other provisions of the Wage Law, which provides in pertinent part:

[N]o employer shall employ any of his employees for a workweek of more than 40 hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than 1½ times the regular rate at which he is employed.

820 ILCS § 105/4a(1). Between April 2005 and November 2005,³ the DOL received Minimum Wage and Overtime Claim Applications ("applications") from five of Plaintiff's employees ("claimants"), who alleged that Plaintiff had violated the Wage Law's overtime pay provision. (R. 38, Pl.'s Resp. to Defs.' Facts ¶ 2; R. 33-2, Defs.' Mem. in Supp., Ex. B, McDonald Decl., Group Ex. 1.) In their applications, all five claimants stated that they held the position of "Tech A, Signal Maintainer" with Plaintiff and that their primary duties were to maintain railroad crossings and signal systems, among other job responsibilities. (R. 38, Pl.'s Resp. to Defs.' Facts ¶ 4; R. 33-2, Defs.' Mem. In Supp., Ex. B, McDonald Decl., Group Ex. 1.) Four of the claimants listed a home address in Illinois, and one claimant listed a home address in Wisconsin. (R. 33-2, Defs.' Mem. In Supp., Ex. B., McDonald Decl., Group Ex. 1.) All five claimants stated in their applications that Plaintiff had an office in Illinois. (R. 38, Pl.'s Resp. to Defs.' Facts ¶ 3.)

McDonald was assigned to investigate the allegations contained in the applications. (Id. ¶¶ 5-6.) On August 22, 2006, McDonald sent a letter to Plaintiffs office in Homewood, Illinois, stating that the DOL was investigating whether Plaintiff violated the overtime pay provisions of the Wage Law with respect to the wages paid to its signal employees. (R. 11-7, Am. Compl., Ex. 5 at 1.) McDonald requested that Plaintiff provide payroll records relating to hours worked and wages paid to its signal maintainers from September 2003 to the present. (Id.; R. 38, Pl.'s Resp. to Def.'s Facts ¶ 8.)

On September 5, 2006, Constance Valkan ("Valkan"), Plaintiff's in-house counsel, replied to McDonald's letter, stating that Plaintiff's signal maintainers were represented by the Brotherhood of Railway Signalmen ("BRS"), and that the wages and hours of its signal maintainers, including overtime pay, were established by a CBA negotiated with BRS. (R. 35, Defs.' Resp. to Pl.'s Facts ¶ 19; R. 11-8, Am. Compl., Ex. 6 at 1.) Valkan also asserted that as applied to Plaintiff's unionized employees, the overtime pay provisions of the Wage Law were preempted by the Railway Act. (R. 35, Defs.' Resp. to Pl.'s Facts ¶ 19; R. 11-8, Am. Compl., Ex. 6 at 1-2.)

On January 29, 2007, McDonald responded to Valkan's letter, stating that because the DOL currently had no Chief Counsel, she was unable to obtain legal review of Plaintiffs position regarding preemption, and that she would be proceeding with her investigation. (R. 35, Defs.' Resp. to Pl.'s Facts ¶ 20.) McDonald informed Valkan that if Plaintiff did not voluntarily produce the payroll records she had requested in her August 22, 2006 letter, she would issue a subpoena calling for production of those records pursuant to 820 ILCS § 105/7(c). (Id.) Shortly thereafter, DOL decided to expand the scope of its investigation to include all of Plaintiff's employees. (R. 38, Pl.'s Resp. to Defs.' Facts ¶¶ 11-12.) On March 2, 2007, DOL issued a subpoena to Plaintiff seeking time and payroll documents for every person employed by Plaintiff from September 1, 2003 through February 8, 2007. (R. 35, Defs.' Resp. to Pl.'s Facts ¶ 21; R. 11-9, Am. Compl., Ex. 7 at 2.) Those documents have not been produced, and because Plaintiff initiated this action, the DOL agreed to suspend the deadline for compliance with the subpoena pending a resolution of this lawsuit. (R. 35, Defs.' Resp. to Pl.'s Facts ¶ 21.)

B. The Collective Bargaining Agreements

Plaintiff negotiated CBAs with the four labor organizations that represent Plaintiffs non-management employees. (R. 11, Am.Compl., Ex. 1-4, CBAs.)

BRS, the labor organization that represents CSEs employed by railroads in the United States, is a "representative" within the meaning of the Railway Act and was certified by the Mediation Board on April 4, 2003 to be the designated representative of Plaintiff's CSEs, including the five signal maintainers who filed complaints with the DOL. (R. 35, Defs.' Resp. to Pl.'s Facts ¶¶ 9, 19.) Among other provisions, the CBA negotiated with BRS contains provisions governing wage rates, work hours, and overtime pay. (R, 11-2, Am.Compl., Ex. 1.)

The United Transportation Union ("UTU") is the labor organization that represents conductors employed by railroads in the United States. (R. 35, Defs.' Resp. to Pl.'s Facts ¶ 11.) UTU is a "representative" within the meaning of the Railway Act and was certified by the Mediation Board on July 22, 1997, to be the designated representative of Plaintiffs conductors. (Id.) Among other provisions, the CBA negotiated with UTU contains provisions governing wage rates, work hours, and overtime pay. (R. 11-3, Am.Compl., Ex. 2.)

The Brotherhood of Locomotive Engineers ("BLE") is the labor organization that represents engineers employed by railroads in the United States. (R. 35, Defs.' Resp. to Pl.'s Facts ¶ 13.) BLE is a "representative" within the meaning of the Railway Act and was certified by the Mediation Board on July 22, 1997, to be the designated representative of Plaintiff's engineers. (Id.) Among other provisions, the CBA negotiated with BLE contains provisions governing wage rates, work hours, and overtime pay. (R. 11-4, Am.Compl., Ex. 3.)

The Brotherhood of Maintenance of Way Employees ("BMWE") is the labor organization that represents MWEs employed by railroads in the United States. (R. 35, Defs.' Resp. to Pl.'s Facts ¶ 15.) The BMWE is a "representative" within the meaning of the Railway Act and was certified by the Mediation Board on June 26, 2002, to be the designated representative of Plaintiffs MWEs. (Id.) Among other provisions, the CBA negotiated with BMWE contains provisions governing wage rates, work hours, and overtime pay. (R. 11-5, Am. Compl., Ex 4.)

PROCEDURAL HISTORY

On February 21, 2007, Plaintiff filed a complaint in this Court seeking declaratory and injunctive relief regarding whether the DOL has jurisdiction to enforce the Wage Law with respect to Plaintiff's unionized employees. (R. 31, Am. Compl. ¶¶ 1-35.) Each party now moves for entry of summary judgment in their favor.

Plaintiff argues that it is entitled to summary judgment because the DOL's enforcement of the Wage Law is preempted in two respects: (1) enforcement will require interpretation of the CBAs that govern the terms of employment of Plaintiff's unionized employees and thus is preempted by the Railway Act; and (2) enforcement of the Wage Law is preempted under the doctrine of field preemption by the broad panoply of federal laws that regulate the interstate rail industry. (R. 22, Pl.'s Mem. in Supp. of Mot. for Summ. J. at 1-2.) Conversely, Defendant argues that it is entitled to summary judgment because the Wage Law merely creates a minimum labor standard applicable to all Illinois workers and is not in conflict with, or preempted by, federal labor laws. (R. 18, Def.'s Mem. in Supp....