Driver et al v. Appleillinois, LLC

Filing 295

MEMORANDUM Opinion and Order. Signed by the Honorable Geraldine Soat Brown on 9/9/2011: Notice mailed by judge's staff (ntf, )

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
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, et al,
Defendants.

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Case No. 06 C 6149

Magistrate Judge Geraldine Soat Brown

MEMORANDUM OPINION AND ORDER
Before the court is plaintiffs’ Motion to Exclude the Report of Michael Vucurevich.
[Dkt 271.] Defendants AppleIllinois, LLC, W. Curtis Smith, Jerry Kreger, and Doreen Borke as
representative of the estate of James Borke and Archie Iodice (collectively, “defendants”) have filed
their opposition to the motion (Defs.’ Resp.) [dkt 275], and plaintiffs have filed their reply (Pls.’
Reply) [dkt 276]. For the reasons set forth below, the motion is granted in part and denied in part.

1

BACKGROUND
A.

Procedural background

This class action case involves plaintiffs’ claims against defendants 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 the Fair Labor Standards Act
(“FLSA”), 29 U.S.C. § 201, et seq. (Third Am. Compl. ¶ 1.) [Dkt 141.] The named plaintiffs are
five individuals who were formerly employed by AppleIllinois as servers and bartenders at an
Applebee’s restaurant in Ford City, Illinois. (Id. ¶ 2-6.) Generally, plaintiffs complain that when
they worked for AppleIllinois, they failed to receive statutorily required minimum wages as the result
of certain of defendants’ practices. The following classes have been certified under Federal Rule of
Civil Procedure 23 on plaintiffs’ claims under the IMWL: (1) all AppleIllinois tipped employees who
were not properly notified of defendants’ practice with regard to tip credits; (2) all AppleIllinois
tipped employees who were impermissibly paid a sub-minimum tip credit wage rate because
AppleIllinois’ tip sharing pool was unreasonable; and (3) all AppleIllinois tipped employees who
were impermissibly paid a sub-minimum tip credit wage rate because they were required to perform
duties unrelated to their tipped occupation for which they were not paid at the regular minimum
wage rate. (Mem. Op. & Order, Mar. 2, 2010 at 46-47.) [Dkt 231.]
Pursuant to Federal Rule of Civil Procedure Rule 26(a)(2)(B), defendants disclosed the report
of their proffered expert Michael Vucurevich. (Pls.’ Mot., Ex. 1., Rpt. Michael Vucurevich.)
Plaintiffs’ present motion asks the court to strike the report and to bar Mr. Vucurevich from
providing opinion testimony in this case.
After reviewing the parties’ submissions and the transcript of Mr. Vucurevich’s deposition,
2

the court ordered a hearing pursuant to Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579
(1993) , which was held on July 7, 2011, and at which Mr. Vucurevich testified.1

B.

Mr. Vucurevich’s report and opinions

Mr. Vucurevich proposes to testify to two opinions set out in his report. First, he opines that
AppleIllinois’ practice of requiring servers to contribute 2.5% of gross sales each day to a tip pool
(a “2.5% tip pool contribution”) is customary and reasonable within the casual dining segment of
the restaurant industry. (Vucurevich Rpt. at 5.)2 Second, he lists the duties that, in his opinion, are
related to various tipped occupations. (Id. at 5-6, 11-18, 26-29.) This is offered in support of
AppleIllinois’ practice of having tipped employees perform some or all of those duties while being
paid at the tip credit rate.
Mr. Vucurevich’s opinions are based entirely on his experience working in the restaurant
business, and not on any formal education or classroom training. (Hrg. 10:58:20.) In addition to his
memory and general understanding of restaurant practices, Mr. Vucurevich was assisted by an
employee, Megan McCrea, and by his business partner, Dan Simons, in compiling and drafting the
report. (Defs.’ Resp. Ex. 2, Dep. Michael Vucurevich at 77, 88; Hrg. 3:25:40.) Ms. McCrea also
obtained information from contacts at nine restaurant chains in an attempt to determine if Mr.
Vucurevich’s experience was in line with wider industry practice. (Vucurevich Rpt. at 10;
Vucurevich Dep. at 137.)

1

No transcript of that hearing has yet been prepared; references to the hearing are to the time
reflected on the court’s recording system.
2

The “casual dining” segment of the restaurant industry is discussed further below.
3

LEGAL STANDARDS
Federal Rule of Evidence 702, which governs the admission of expert witness testimony,
provides:
If scientific, technical, or other specialized knowledge will assist the trier of fact to
understand the evidence or to determine a fact in issue, a witness qualified as an
expert by knowledge, skill, experience, training, or education, may testify thereto in
the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts
or data, (2) the testimony is the product of reliable principles and methods, and
(3) the witness has applied the principles and methods reliably to the facts of the
case.
In Daubert, the Supreme Court emphasized the “gatekeeping” role of the federal trial judge
in ensuring that expert testimony is both relevant and reliable. Daubert, 509 U.S. at 589, 597. To
make this determination, courts consider: (1) whether the witness is qualified as an expert by
knowledge, skill, experience, training, or education; (2) whether the testimony has a reliable basis
in the knowledge and experience of the relevant discipline; and (3) whether the testimony will “assist
the trier of fact to understand the evidence or to determine a fact in issue.” See Myers v. Ill. C. R.R.
Co., 629 F.3d 639, 644 (7th Cir. 2010) (quoting Ervin v. Johnson & Johnson, Inc., 492 F.3d 901, 904
(7th Cir. 2007)). “The proponent of the expert bears the burden of demonstrating that the expert’s
testimony would satisfy the Daubert standard.” Lewis v. CITGO Petroleum Corp., 561 F.3d 698,
705 (7th Cir. 2009) (citing Fed. R. Evid. 702 advisory comm. nn. (2000 Amends.)).
Mr. Vucurevich based his opinions in this case on his experience in the restaurant industry.
He is not an academic; he is a consultant and businessman. Except for Ms. McCrea’s calls to others
in the restaurant industry, Mr. Vucurevich conducted no research before preparing his report. Rule
702 permits testimony by an expert whose qualification is based on experience. Fed. R. Evid. 702
and advisory comm. nn. (2000 Amends.); Kumho Tire Co. v. Carmichael, 526 U.S. 137, 152 (1999).
4

An expert’s opinion based solely on experience, however, still must “be an expert opinion (that is,
an opinion informed by the witness’ expertise) rather than simply an opinion broached by a
purported expert.” Jones v. Lincoln Elec. Co., 188 F.3d 709, 723 (7th Cir. 1999); accord Metavante
Corp. v. Emigrant Savings Bank, 619 F.3d 748, 761 (7th Cir. 2010). The expert must “explain the
‘methodologies and principles’ that support his opinion; he cannot simply assert ‘a bottom line.’”
Metavante, 619 F.3d at 761 (quotation omitted). “If the witness is relying solely or primarily on
experience, then the witness must explain how that experience leads to the conclusion reached, why
that experience is a sufficient basis for the opinion, and how that experience is reliably applied to
the facts. The trial court’s gatekeeping function requires more than simply ‘taking the expert’s word
for it.’” Fed. R. Evid. 702 advisory comm. nn. (2000 Amends.) (quoting Daubert v. Merrell Dow
Pharmaceuticals, Inc., 43 F.3d 1311, 1319 (9th Cir. 1995); accord Gen. Elec. Co. v. Joiner, 522 U.S.
136, 146 (1997); Metavante, 619 F.3d at 761. The court must “make certain that an expert, whether
basing testimony upon professional studies or personal experience, employs in the courtroom the
same level of intellectual rigor that characterizes the practice of an expert in the relevant field.”
Kumho Tire, 526 U.S. at 152.

DISCUSSION
Plaintiffs object that Mr. Vucurevich’s opinions are neither relevant nor reliable. (Pls.’ Mot.
Exclude at 2.) They argue that Mr. Vucurevich’s opinions impermissibly draw legal conclusions and
that evidence as to industry standards and customs is inadmissible in FLSA cases. (Id.; Pls.’ Reply
at 2.) Plaintiffs also argue that the report lacks well-grounded reasoning or methodology, and that
Mr. Vucurevich lacks specialized knowledge or sufficient qualifications to opine on practices across
5

the casual dining segment of the restaurant industry. (Pls.’ Mot. Exclude at 9, 11-13, 14-15.) They
further point to certain aspects of the report to cast doubt on its reliability. (Id. at 10-14.)
Defendants respond that Mr. Vucurevich is not offered as an expert on legal issues but rather
to testify on restaurant industry practices as they relate to tip pool contributions and the duties related
to various occupations. Defendants argue that Mr. Vucurevich’s opinions are well supported by his
more than 35 years’ experience in the restaurant industry. (Defs.’ Resp. at 8-10, 12-13.) Defendants
further assert that plaintiffs’ challenges to the extent of Mr. Vucurevich’s experience or certain of
his conclusions go to the weight of his testimony and not its admissibility under Rule 702. (Id. at
9-10.)

A.

Mr. Vucurevich’s qualifications as an expert

Mr. Vucurevich has worked in the restaurant business since 1974, when he began as a nontipped employee in the kitchen of the Sacramento location of a restaurant chain called Victoria
Station. (Vucurevich Dep. at 18-19.) Within a year of starting he was promoted to manager and
attended the chain’s management training program. (Id.) After the training program, he worked as
a kitchen manager at Victoria Station locations throughout the United States and in Quebec, and was
then promoted to “Front of the House” manager at the Victoria Station in Sacramento where he
began. (Id. at 21-22.)3 After six months in that position, he was promoted to general manager of the
Victoria Station restaurant in Lake Tahoe, Nevada. (Id. at 22; Vucurevich Rpt. at 21.)
Following his work with the Victoria Station restaurant chain, Mr. Vucurevich was hired as

3

“Front of the House” or “FOH” refers to the area of the restaurant to which diners have
access. (Mem. Op. & Order, Mar. 2, 2010 at 33 n. 14.)
6

a manager for Restaurants Unlimited, a company that owned a string of casual dining restaurants.
(Vucurevich Dep. at 23-24.) Following five years of managing restaurants on the west coast, he was
hired in 1986 as Director of Operations for the Cheesecake Factory. (Id. at 25-26, 29, Vucurevich
Rpt. at 21.)
Over the next ten years, the Cheesecake Factory expanded from two to 14 restaurants.
(Vucurevich Dep. at 27.) Mr. Vucurevich hired restaurant managers and worked with restaurant
management on day-to-day operations. (Id. at 27, 29.) Mr. Vucurevich testified that, during his time
hiring managers for the Cheesecake Factory, he learned about other restaurants by asking
management interviewees about the current practices in restaurants where they worked. (Id. at 63.)
Mr. Vucurevich worked in each new Cheesecake Factory location as it opened, including one that
opened in Chicago in 1994, and stayed in each new restaurant for amounts of time ranging from
three months to one year. (Id. at 30-31, 39; Hrg. 11:08:00-11:13:00.)
In 1996, Mr. Vucurevich took a position as Chief Operating Officer for “eatZi’s,” a take-out
food market. (Vucurevich Dep. at 43-45, 47; Vucurevich Rpt. at 20.) That operation did not use
tipped employees. (Hrg. 11:12:30.) Following his time there, he was hired to be Chief Operating
Officer for Al Copeland’s restaurant holding company, responsible for the operations of 40 to 45
casual dining restaurants (including franchisees) located throughout the southern and central United
States. (Vucurevich Dep. at 47-49.)
Since 2004, Mr. Vucurevich has run a restaurant consulting business, Vucurevich Simons
Advisory Group (VSAG), with Dan Simons, a former Cheesecake Factory and eatZi’s colleague.
(Id. at 67; Vucurevich Rpt. At 20.) Mr. Vucurevich operates out of Texas, while Mr. Simons is
located in Washington, D.C. (Vucurevich Dep. at 69-70.) VSAG has consulted for businesses
7

including PepsiCo, Silver Dollar, Jimmy Nichols, Café Deluxe and numerous small restaurant
operations. (Hrg. 11:22:00, 11:27:30.) His consulting focus over the last several years has been on
restaurant concept development, which includes developing a restaurant’s style and menu. (Hrg.
10:59:50.) VSAG regularly employs contractors to assist in other consulting projects. (Hrg.
11:25:10.) It is VSAG’s policy to undertake an analysis of the operations of all new clients,
including a survey of the client’s current staffing levels and tip pooling practice. (Hrg. 3:36:30.)
VSAG also gives advice to businesses about tip-out procedures and contribution percentages.
(Vucurevich Dep. at 87; Vucurevich Rpt. at 9.) Mr. Vucurevich testified that one of VSAG’s main
goals in carrying out its consulting business is to ensure that there is sufficient cost savings or profit
generation from VSAG’s recommendations to justify their consulting fees. (Hrg. 11:31:00.) VSAG
also currently runs one restaurant in Washington, D.C., with another scheduled to open in October
2011. (Hrg. 11:20:30.)
Mr. Vucurevich has authored no publications in the past ten years nor previously testified as
an expert. (Vucurevich Rpt. at 4.) He has not received any formal education or training on the
restaurant industry as a whole. (Hrg. 10:58:20.)
Mr. Vucurevich has substantial experience in the restaurant business, but that experience is
limited to the management perspective. For example, he has never worked as a tipped employee
except for a brief time (90 days) as part of his management training. (Hrg. 1:51:05.) His experience
is also limited in scope. Mr. Vucurevich’s experience has been in the “casual dining” segment of
the restaurant industry, which he defined as full service restaurants with a price point for entrees
between ten and twenty dollars. (Hrg. 11:37:25.) He testified that there is a spectrum of restaurants
within the casual dining industry, from family dining restaurants (which usually lack a bar) and mid8

range restaurants, to the more upscale end of the range, which generally charge more for entrees and
have more elaborate decor. (Hrg. 11:38:00-11:46:00.)
Even within the casual dining segment, most of Mr. Vucurevich’s experience has been with
restaurants higher on the spectrum than Applebee’s. (Hrg. 11:38:00, 11:54:10.) The Cheesecake
Factory, where he spent a considerable number of years, ranks on the “upscale” end of the spectrum,
he testified, whereas he would place Applebee’s in the lower, “family” end of the spectrum. (Id.)
He has never worked for Applebee’s in any capacity and did not attempt to base any of his opinions
on Applebee’s actual operations. (Hrg. 11:54:30, 2:45:00.) He has had no personal professional
experience with a number of large national chains including Red Lobster, Olive Garden,
International House of Pancakes, Steak & Shake, Baker’s Square, and Ruby Tuesday. (Hrg.
11:44:00, 11:59:00.) Although he did some consulting for Denny’s restaurants, his work was limited
to training staff in principles of guest hospitality, and not on any wage and hour issues that would
be relevant to this case. (Hrg. 11:23:20.)
Mr. Vucurevich’s 35 years of experience in the restaurant industry, particularly his work in
and observation of casual dining restaurants, provides a basis of specialized knowledge as
contemplated under Federal Rule of Evidence 702. A further issue, however, is whether Mr.
Vucurevich is qualified to offer the specific opinions he proposes. That must be determined “by
comparing the area in which [he] has superior knowledge, skill, experience, or education with the
subject matter of [his] testimony.” Am. Honda Motor Co. v. Allen, 600 F.3d 813, 816 (7th Cir. 2010)
(quoting Carroll v. Otis Elevator Co., 896 F.2d 210, 212 (7th Cir. 1990)). Defendants have the
burden of demonstrating that Mr. Vucurevich’s experience is a sufficient basis for each of his two
opinions.
9

B.

AppleIllinois’ 2.5% mandatory tip pool contribution

A tip pool is a system whereby workers who receive tips directly from customers contribute
a portion of the tips they receive to a pool which is then distributed to other workers. (Mem. Op. &
Order, Mar. 2, 2010 at 8-9.) Mr. Vucurevich opines that a mandatory tip pool contribution of 2.5%
of gross sales is both customary and reasonable. (Vucurevich Rpt. at 5.) He bases this opinion on
professional experience as well as an informal series of interviews conducted by Ms. McCrea. (Id.
at 10; Hrg. 1:37:10.) He states that he personally observed mandatory tip pool contribution
percentages between 2% and 4%, and that in his consulting business he recommends that his clients
use a tip pool contribution of 3% of gross sales. (Vucurevich Rpt. at 7, 9.) He also outlines his
understanding of the rationale behind tip pooling as a general practice and the reasons behind using
gross sales rather than collected tips as the basis for a tip pool contribution. (Id. at 8.)
Mr. Vucurevich testified that he has had experience with tip pools throughout virtually all
of his 35 years of experience in the restaurant industry. (Hrg. 1:32:25.) He testified that he uses tip
pool contribution data as a basic metric in making managerial decisions, both in restaurants over
which he had responsibility as well as in his consulting business today. (Hrg. 11:31:00, 1:33:00.)
Mr. Vucurevich learns from his clients what their tip pool contribution percentage is, which
employees receive the pooled tips and in what amounts, and whether or not the tip pool can support
the client’s overall staffing structure. (Hrg. 11:29:30.)
The court concludes that some, but not all, of Mr. Vucurevich’s proposed testimony about
tip pools meets the standards of Rule 702. From his years of observing the way tip pools work, he
is qualified to testify about the mechanics of tip pools, that is, how he has observed them operate in
restaurants. He may also testify about the tip pool percentages he has seen. These are not opinions
10

per se, but a witness who is qualified as an expert may testify “in the form of an opinion or
otherwise.” Fed. R. Evid. 702; see Trustees of Chi. Painters & Decorators Pens. Funds v. Royal
Intl. Drywall & Decorating, Inc., 493 F.3d 782, 787-88 (7th Cir. 2007) (expert testimony based on
specialized knowledge and not subjective belief or speculation is reliable).
Mr. Vucurevich’s experience, however, is an insufficient basis from which to opine or testify
about the entire casual dining segment of the restaurant industry, and he lacks a reliable basis to
opine that AppleIllinois’ tip pool practice is customary and reasonable. “[E]xperts’ work is
admissible only to the extent that it is reasoned, uses the methods of the discipline, and is founded
on data.” Naeem v. McKesson Drug Co., 444 F.3d 593, 608 (7th Cir. 2006) (quoting Lang v. Kohl’s
Food Stores, Inc., 217 F.3d 919, 924 (7th Cir. 2000)).
Mr. Vucurevich’s proffered opinions are significantly broader than his experience supports.
By opining that certain practices or tip percentages are “customary,” he extrapolates that his
experience is representative of the casual dining segment of the restaurant industry, and in particular,
Applebee’s. Defendants have provided no evidentiary support for that extrapolation. Not only is
Mr. Vucurevich’s experience of the casual dining segment limited, he does not know what
proportion of that segment his experience represents. Mr. Vucurevich admitted that he does not
know how many casual dining restaurants there are in the United States, perhaps “thousands.”
(Vucurevich Dep. at 115, 135.) His experience relates to chain restaurants, but there are “a lot of
mom-and-pop restaurants that are out there that are independents.” (Id. at 115.) He has done no
research about them. As described above, he has considerable experience in some restaurants in a
certain part of the spectrum of casual dining, but no experience with other large restaurant chains.
Notably, most of his experience is with chains like the Cheesecake Factory that are further up the
11

spectrum than Applebee’s. He did not make an effort to make up for this gap in knowledge. (Hrg.
11:43:00.) He conducted no industry-wide research nor did he consult with any industry publications
to inform his opinions. (Hrg. 11:04:00.) Furthermore, his opinions were formed based chiefly on
his memory, rather than a verifiable body of quantitative data. (Hrg. 3:14:50.) Since Mr.
Vucurevich lacks data beyond his limited personal experience, one cannot reliably conclude that his
personal experience is representative of what is “customary” in the restaurant industry or even in the
casual dining segment.
The informational interviews conducted by Ms. McCrea do not sufficiently make up for the
gaps in Mr. Vucurevich’s knowledge. The fact that Ms. McCrea rather than Mr. Vucurevich
conducted the interviews, would not, of itself, make the opinions inadmissible. “An expert witness
is permitted to use assistants in formulating his expert opinion, and normally they need not
themselves testify.” Dura Automotive Sys. of Ind., Inc. v. CTS Corp., 285 F.3d 609, 612-13 (7th Cir.
2002). Mr. Vucurevich testified that all of the opinions in the report were his own and that he had
supervised the report’s drafting. (Vucurevich Dep. at 77, 88-89; Hrg. 3:25:30.) The problem, rather,
is the nature of the assignment Ms. McCrea was given, which was not designed to be a statistically
valid survey.
Mr. Vucurevich formed his opinion on what is a reasonable and customary tip pool based on
his experience and then directed his staff to reach out to contacts to see whether their experience in
their respective restaurants was consistent with his experience. (Vucurevich Rpt. at 10; Hrg.
1:38:00.) Ms. McCrea contacted individuals that Mr. Vucurevich or other employees of VSAG
knew from previous dealings. (Hrg. 3:25:40.) Ms. McCrea obtained information from contacts at
nine restaurant chains, eight of whom reported some sort of mandatory tip pooling practice. (Pls.’
12

Mot. Exclude, Ex. 6.) Although Mr. Vucurevich believed these nine contacts represented a
significant share of the industry, no effort was made to determine if that belief was correct. (See Hrg.
1:42:00-1:44:00.) No steps were taken to confirm the accuracy of the contacts’ information or to
confirm whether their reports represented uniform practices throughout the chains in which they
worked. (Id.) Although Mr. Vucurevich characterizes these chains as “bellwether” companies, no
research or testing was performed to determine whether the group with whom Ms. McCrea
communicated was actually representative of the casual dining segment of the restaurant industry.
(Hrg. 1:42:45.) In fact, Mr. Vucurevich testified that he is not claiming that the sources were
representative. (Vucurevich Dep. at 133.) Rather, the results of Ms. McCrea’s select interviews
reinforced his personal belief. (Id.)
In presenting the results of Ms. McCrea’s contacts with other restaurants with charts and
graphs and reporting the average and modal tip pool contribution percentages, Mr. Vucurevich’s
report affects a veneer of statistical rigor that has no basis in fact. It appears to be a scientific survey,
but even Mr. Vucurevich admitted that it was not. At best, this “reality check” served as a selective
confirmation of Mr. Vucurevich’s personal impressions. (Hrg. 1:44:10.) A statistically valid survey
of the practices of the restaurant industry, or its casual dining segment, if it had been undertaken,
might have been admissible to demonstrate what is “customary.” See Zenith Elec. Corp. v. WH-TV
Broad. Corp. 395 F.3d 416, 419 (7th Cir. 2005) (suggesting that a calculation of lost profits might
have been reliable under Rule 702 using multiple regression analysis); Cummins v. Lyle Indus., 93
F.3d 363, 369 (7th Cir. 1996) (noting that some opinions lend themselves to testing and
substantiation by the scientific method). Important components of such research include an analysis
of the reliability of the sample tested and an understanding of the relevant population of restaurants
13

and the sample size in comparison to that population. That analysis is lacking here. The court
concludes that Mr. Vucurevich’s opinion that 2.5% is a customary mandatory tip pool contribution
is not sufficiently supported to be admissible under Rule 702.
Similarly, Mr. Vucurevich’s conclusion that 2.5% is “reasonable” does not meet the
standards of Rule 702. He opines that “[w]orking full time, a server can undoubtedly earn enough
tips to deduct a reasonable tip out of between two and four percent of gross sales and still earn a fair
annual salary.” (Vucurevich Rpt at 7.) Although the discussion is presented in a way which suggests
a high level of precision, it is based on numbers with no apparent statistical support. For example,
he states, “In my experience, the average annual income of a full time server within the causal dining
segment ranges between $24,000 and $40,000 per year.” (Id.) As discussed above, Mr. Vucurevich
has experience in only part of the casual dining segment, none with Applebee’s itself, and most of
it with restaurants more “upscale” than Applebee’s. Apparently, he did not get information from
Applebee’s or any other source such as the Bureau of Labor Statistics about the actual annual income
of restaurant servers. Rather, Mr. Vucurevich testified, the numbers represent what servers have the
potential to earn. (Vucurevich Dep. at 125.) He drew those numbers from his recollection and
general understanding of what servers in his restaurant earn, which he tracks through credit card
statements. The single other source cited in his report is a Wall Street Journal article from October
2008 about the average server gratuity. (Vucurevich Rpt. at 7 n. 2.) That article, he explained, made
intuitive sense to him based on his experience. (Hrg. 1:10:45, 3:45:00.) The opinion of a Rule 702
expert “has a significance proportioned to the sources that sustain it.” Huey v. United Parcel Serv.,
Inc., 165 F.3d 1084, 1087 (7th Cir. 1999) (internal quotations and citation omitted). Mr.
Vucurevich’s opinion is simply not based on sufficient data.
14

This is not to suggest that Mr. Vucurevich is not good at his profession, which is consulting
for restaurant management. His experience and the type of confirmatory checking Ms. McCrea
undertook may be all his clients need for the purpose for which they engage him; that is, advising
restaurant managers how to generate additional profit. (See, e.g., Vucurevich Rpt at 9-10 (describing
the recommendations he gives to his clients about tip pools).) However, it does not supply a
sufficiently reliable basis under the standards of Rule 702 to allow his opinion that Applebee’s
practice of a 2.5% tip pool is customary and reasonable to be admitted at trial in this case.
Mr. Vucurevich’s proposed opinion is different from the opinion rendered by the expert in
Metavante Corp. v Emigrant Sav. Bank, 619 F.3d 748 (7th Cir. 2010). In that case, the seller of
electronic banking service products sued to get payment from a bank that had bought its products.
The plaintiff’s expert testified, based on his experience, that the plaintiff’s performance in providing
technology was reasonable and consistent with the expectations in the industry because it enabled
the bank to meet its financial objectives, which is the perspective from which he had seen banks such
as the defendant measure that performance. Id. at 761-62. Here, Mr. Vucurevich proposes to testify
about the reasonableness of AppleIllinois’ tip pool policy, but the issue is not only whether the policy
meets the needs of the restaurant owner, which is Mr. Vucurevich’s usual perspective, but rather
whether it meets a broader definition of reasonableness, encompassing more than just the economic
goals of management. Mr. Vucurevich’s professional experience has not prepared him to render an
opinion from that point of view. His attempt to fill that gap with some unidentified recollections of
what his tipped employees earn and a single article from the Wall Street Journal lacks any reliable
basis in facts or data.
Therefore, although Mr. Vucurevich is qualified to testify as to some of his proposed subject
15

matter, he lacks a sufficient basis to testify to all of it. Even if Mr. Vucurevich is an experienced
professional, testimony that is not sufficiently supported cannot be allowed. See Happel v. Walmart
Stores, Inc., 602 F.3d 820, 825-26 (7th Cir. 2010) (calling testimony beyond a witness’s expertise
and unsupported by reliable methodologies “at best . . .an ‘inspired hunch.’”).
In sum, Mr. Vucurevich is qualified to testify on the mechanics and structure of tip pools that
he has observed, including the tip pool percentages he has observed. That testimony may “assist the
trier of fact to understand the evidence or to determine a fact in issue.” See Fed. R. Evid. 702.
Information regarding the mechanics of tip pools in general, including the tip pool contribution
percentages in certain restaurants, may provide useful background information to the trier of fact.
“[An] expert’s testimony need not relate to the ultimate issue in order to be relevant under Rule
702.” Smith v. Ford Motor Co., 215 F.3d 713, 721 (7th Cir. 2000). The limitations of his experience
are proper subjects for cross-examination, but go to the weight rather than admissibility of that
permitted testimony. He may not testify that AppleIllinois’ tip pool practice is customary and
reasonable or mention the contacts he or his team made in the course of preparing his expert report.
Part III-C and Exhibit C of Mr. Vucurevich’s report are stricken.4
This is not a final ruling about relevance of such testimony, and thus, is not a ruling about
the ultimate admissibility of such testimony. That ruling will be made when the evidence is
proffered.

4

Because Mr. Vucurevich will not be testifying about whether AppleIllinois’ tip pooling
policy is customary or reasonable, it is unnecessary to decide plaintiff’s objections that such
testimony would present legal conclusions.
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C.

Related duties of tipped employees

Mr. Vucurevich’s second opinion defines the duties that he considers “related” to the tipped
occupations of server, bartender, host, and “to-go/carside” employee. (Vucurevich Rpt. at 11.) This
is offered in connection with plaintiffs’ claim that they were required to perform duties for which
they should have been paid the minimum wage, not the tipped credit rate. The Department of Labor
regulations provide that an employer may take a tip credit “only for hours worked by [an] employee
in an occupation in which [he] qualifies as a ‘tipped employee.’” 29 C.F.R. § 531.59(b). The
regulations recognize that in some situations, however, an employee may be employed in a dual job,
such as a hotel maintenance employee who is simultaneously employed as a waiter. 29 C.F.R.
§ 531.56(e). The regulations further recognize:
Such a situation is distinguishable from that of a waitress who spends part of her time
cleaning and setting tables, toasting bread, making coffee and occasionally washing
dishes or glasses. It is likewise distinguishable from the counterman who also
prepares his own short orders or who, as part of a group of countermen, takes a turn
as a short order cook for the group. Such related duties in an occupation that is a
tipped occupation need not by themselves be directed toward producing tips.
Id. (emphasis added). Part of the dispute between the parties, therefore, is what is a “related duty”
to a plaintiff’s tipped occupation. (See Mem. Op. & Order, March 2, 2010 at 36.)
Mr. Vucurevich’s report includes his descriptions and rationales for specific duties, including
cleaning and dishwashing, as related to tipped occupations, the functions of various tipped
occupations, and an exhibit that presents a non-exhaustive list of related duties. (Vucurevich Rpt.
at 11-18, 26-29.) With a few exceptions, such as cooking at a cooking station for an entire shift or
washing dishes all day long, Mr. Vucurevich regards virtually all restaurant tasks as “related” duties
for a server. (Id. at 11-12, 18; Vucurevich Dep. at 151; Hrg. 1:55:47, 2:44:00.) Those include

17

cleaning the server’s area with wood polish and brass polish, and bathroom cleaning in the middle
of a shift. (Vucurevich Rpt. at 27; Hrg. 2:51:47-52.) In his view, even bathroom cleaning after the
restaurant closes could be “sidework” of a tipped employee. (Hrg. 2:53:30.) Mr. Vucurevich
explained his reasoning in allocating duties in a restaurant, specifically, that all efforts should be
directed towards rapid customer service, and that anything that keeps servers away from their tables
for any substantial period of time should be avoided. (Hrg. 1:56:15, 2:07:10.) But when he
recommends assigning duties, he focuses on lean staffing to maximize efficiency and profitability.
(Hrg. 2:05:00.)
Mr. Vucurevich bases his opinion on his personal experience managing restaurants, setting
restaurant staffing policies, and observing the practices of his consulting clients. (Vucurevich Rpt
at 4, 6; Hrg. 2:50:30.) Again, Mr. Vucurevich’s experience qualifies him to testify about his
observation of the allocation of duties in the restaurants in which he has worked and provided
consultation services. Mr. Vucurevich is able to describe the duties he has seen tipped employees
perform and those he has seen non-tipped employees perform based on his many years of personal
observation. (Vucurevich Rpt. at 5-6; Vucurevich Dep. at 149-50.) As to that proposed area,
therefore, Mr. Vucurevich’s experience provides a reliable basis for testimony.
Here too, however, his experience is limited. He has formed opinions as to related duties
based on his observations in certain restaurants, but he does not know what proportion of the
industry this encompasses, nor does he know whether there is any variance in the distribution of
duties along the spectrum of casual dining restaurants. (Hrg. 11:44:00-11:54:00.)
More importantly, his description of what constitutes a “related” duty is not based on any
distinction that is meaningful in this case. He knows that there is a distinction between the work that
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tipped employees can do and work that must be performed by individuals that are paid at least the
minimum wage, but he cannot define it. (See Hrg. 1:53:40, 2:12:50.) He has done no research on
distinguishing employees who may receive tip-credit wages from those who must receive at least the
full minimum wage. (Hrg. 2:03:30-2:08:00.) He has observed workers in dual occupations, such
as servers who also work shifts as cooks, but he has never addressed the wage requirements for such
workers. (Hrg. 1:51:45.) Instead, he views a restaurant’s decision about whether to pay at a
minimum wage rate or a tipped rate as “self-governing.” (Hrg. 2:13:50.) 5 The distinction he draws
is not the nature of the task but the efficiency of assigning the task to a tipped or wage employee (that
is, an employee paid at the minimum wage). For example, he testified, that an “expo” position can
be either a tipped position or a wage position, depending on how busy the restaurant is. (Hrg.
2:16:00.)
It became clear at the hearing that Mr. Vucurevich’s view of what a server can be required
to do as “sidework” or a “related duty” focuses on the efficient running of the restaurant for purposes
of maximizing profits, without any consideration of the Department of Labor regulations. He has
never advised as to how many hours in a day a tipped employee may perform non-tipped duties.
(Hrg. 2:03:45.) Likewise, he has never identified what portion of an eight hour day a tipped
employee could perform non-tip-producing activities at a tip-credit rate, nor has he looked beyond
overall restaurant efficiency in choosing what duties he believes should be assigned to tipped

5

Mr. Vucurevich explained that restaurants have to govern themselves with regard to the
allocation of duties because they are in a competitive, high turnover business. (Hrg. 2:03:30.) They
must schedule and allocate work to ensure that tipped employees are actively deployed but not doing
so many ancillary tasks that they are not earning enough in tips. (Hrg. 11:32:00, 2:03:50.) In his
opinion, “if the . . . worker doesn’t make enough money or they don’t get enough hours, then they’re
[going to] go work down the street.” (Hrg. 11:33:30.)
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employees. (Hrg. 1:55:30, 2:05:00.) That is illustrated by the example he gave of assigning tipped
employees to do cleaning work after the restaurant closes if the restaurant is slow and cannot afford
to hire a separate cleaning service. (Hrg. 2:21:00, 2:53:00.)
Mr. Vucurevich’s opinion about what duties are related to the tipped occupations of server,
bartender, host, and “to-go/carside” employee suffer from the same deficiencies as his tip pool
opinions in that he has extrapolated from his limited experience to the entire restaurant industry or
even to the entire casual dining segment. But additionally, his opinion is not helpful to the trier of
fact because he is responding to a different question. He is not opining as to what duties require a
tipped employee to be paid a wage rate. He is answering the question that his clients ask, which is:
what is the most efficient and cost-effective way to assign the tasks in a restaurant.
Mr. Vucurevich may not testify as to whether a particular duty is “related” to a tipped
occupation for the purposes of 29 C.F.R. § 531.56, or that his experiences are representative of
practices in restaurants he has not observed.6 See Wintz v. Northrop Corp., 110 F.3d 508, 513-14
(7th Cir. 1997) (finding district court properly barred expert testimony where expert was not
sufficiently qualified in area of proffered testimony). He may however, describe the methods of
allocating duties that he has used or observed, and the reasoning behind those methods.
That testimony may be helpful to the trier of fact. See Smith, 215 F.3d at 721 (testimony need
only be relevant to any fact in issue; it need not relate directly to ultimate issue to be resolved by trier
of fact). His observations as to duties he has seen tipped workers perform may provide a useful
background and framework for the trier of fact in considering the practices at issue here.

6

Here too, it is therefore unnecessary to determine whether such testimony would present
legal conclusions.
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Again, this is not a final ruling about relevance of such testimony, and thus, is not a ruling
about the ultimate admissibility of such testimony. That ruling will be made when the evidence is
proffered.

CONCLUSION
For all of the reasons set forth above, plaintiff’s Motion to Exclude the Report of Michael
Vucurevich [Dkt 271] is granted in part and denied in part, as set forth in this opinion.

IT IS SO ORDERED.

________________________________
Geraldine Soat Brown
United States Magistrate Judge
Date: September 9, 2011

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