Mello v. Appleillinois, LLC

Filing 55

WRITTEN Opinion entered by the Honorable James F. Holderman on 9/26/2011: For the reasons explained in the Statement section of this order, plaintiff Lisa Mello's ("Mello") "Motion for Class Certification" 48 is denied without prejudice. The case is set at 9:00 A.M. on October 19, 2011. Counsel and the parties are encouraged to discuss settlement. Signed by the Honorable James F. Holderman on 9/26/2011: Mailed notice (am)

Order Form (01/2005)

United States District Court, Northern District of Illinois
Name of Assigned Judge
or Magistrate Judge

James F. Holderman

CASE NUMBER

Sitting Judge if Other
than Assigned Judge

10 C 3433

DATE

9/26/2011

Lisa Mello vs. AppleIllinois, LLC

CASE
TITLE
DOCKET ENTRY TEXT

For the reasons explained in the Statement section of this order, plaintiff Lisa Mello’s (“Mello”) “Motion for
Class Certification” [48] is denied without prejudice. The case is set at 9:00 a.m. on October 19, 2011.
Counsel and the parties are encouraged to discuss settlement.
O[ For further details see text below.]

Notices mailed.

STATEMENT
On June 4, 2010, plaintiff Lisa Mello (“Mello”) filed a class-action complaint against AppleIllinois,
LLC (“AppleIllinois”), d/b/a/ Applebee’s Neighborhood Grill and Bar (“Applebee’s”), based on alleged
violations of the Illinois Wage Payment and Collection Act (“IWPCA”), 820 ILCS 115/5 (Count I).
Currently before the court is Mello’s “Motion for Class Certification” (Dkt. No. 48). For the reasons
explained below, Mello’s motion is denied without prejudice.
Mello worked as a server and bartender at an Applebee’s restaurant in Tinley Park, Illinois for over
12 years. (Dkt. No. 12, Def.’s Answer ¶ 4.) AppleIllinois owns and operates the Tinley Park Applebee’s.
(Id. ¶ 5.) According to the complaint, between at least 1997 and 2010, AppleIllinois maintained a vacation
policy for hourly employees, including Mello. (Id. ¶¶ 4, 9.)
AppleIllinois’s vacation policy, which is set out in a writing attached to Mello’s complaint, provides
in pertinent part:
VACATION
Hourly Employees
Qualified employees will be eligible for vacation benefits. Qualified employees are defined as
anyone who maintains an average of at least 30 hours worked per week during the year prior
to the date of eligibility for vacation. The vacation benefit is as follows:
a)
b)

One week after one year of service.
Two weeks after five years of service.

The amount of vacation pay will be based on your average hours worked per week during the
year times your current hourly rate. Vacation pay will be calculated by the payroll department
and will automatically be paid the month following your employment anniversary. . . .
Hourly employees who terminate their employment are only eligible for vacation pay if
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STATEMENT
employed when the vacation pay checks are issued. No vacation pay is earned for partial
years of employment. I.E. If you are employed on Feb. 1, 1998 and terminated on Dec. 1,
1998 no vacation pay is due, since you have not completed a full year of employment. On
Feb. 1, 1999, if you qualify, you will be issued one week’s vacation pay automatically in the
month following your anniversary.
(Vacation Policy (attached as Ex. A to Compl.).) Mello alleges that AppleIllinois violated the IWPCA by not
paying her the ratable share of earned vacation when her employment terminated in 2010. (Compl. ¶ 11.)
Mello seeks to certify the following class under Federal Rule of Civil Procedure 23:
All persons separated from employment with AppleIllinois, LLC, in Illinois between August
17, 2002, and the present who were subject to AppleIllinois’s Vacation Pay policy and did not
receive all earned vacation pay benefits.
The plaintiff bears the burden of demonstrating that class certification is appropriate. Oshana v.
Coca-Cola Co., 472 F.3d 506, 513 (7th Cir. 2006). Class certification under Rule 23 involves two steps.
First, the plaintiff’s claim must satisfy the numerosity, commonality, typicality, and adequacy of
representation requirements of Rule 23(a). Id. Second, the claim must meet one of the conditions of Rule
23(b). Id. Here, Mello is proceeding under Rule 23(b)(3), which provides that a class action may be
maintained if “the court finds that the questions of law or fact common to class members predominate over
any questions affecting only individual members, and that a class action is superior to other available
methods for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3).
In response to Mello’s motion, AppleIllinois contends that Mello’s complaint asserts three legally
distinct claims under the IWPCA and Mello only has standing to pursue a claim under one of those theories.
As a result, AppleIllinois argues, Mello cannot satisfy Rule 23(a)’s typicality and adequacy of representation
requirements with respect to the other two theories.
According to AppleIllinois, Mello’s IWPCA claim is based on three separate legal theories: (1)
failure to pay a pro rata share of a year’s vacation upon termination to employees who were employed for
less than a year (“Initial Year” claims); (2) failure to pay a pro rata share of vacation to an employee who
completed one of more full years of employment and received vacation pay for those years but did not work a
full subsequent year before terminating employment (“Subsequent Years” claims); and (3) failure to pay
vacation if an employee completed a full year of initial service or completed a full subsequent year of
service, but was not employed on the date that AppleIllinois disbursed the vacation payment (“Separation
Before Disbursement” claims). Because Mello’s claim falls within the Subsequent Years claim category,
AppleIllinois contends that Mello’s proposed class should be limited to those former AppleIllinois employees
with Subsequent Years claims.
Following the U.S. Supreme Court’s and the Seventh Circuit’s instructions, the court must first
“consider issues of class certification prior to issues of standing.” See Payton v. Cnty. of Kane, 308 F.3d 673,
680 (7th Cir. 2002).

I.

Rule 23(a)’s Class Certification Requirements

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STATEMENT
A.

Typicality

“[A] plaintiff’s claim is typical if it arises from the same event or practice or course of conduct that
gives rise to the claims of the other class members and his or her claims are based on the same legal theory.”
Rosario v. Livaditis, 963 F.2d 1013, 1018 (7th Cir. 1992) (quoting DeLa Fuente v. Stokley-Van Camp, Inc.,
713 F.2d 225, 232 (7th Cir. 1983)). The “typicality requirement may be satisfied even if there are factual
distinctions between the claims of the named plaintiffs and those of other class members.” Muro v. Target
Corp., 580 F.3d 485, 492 (7th Cir. 2009) (quoting De La Fuente, 713 F.2d at 232). Rule 23(a) does not
“require all class members suffer the same injury as the named class representative.” Rosario, 963 F.2d at
1018 Rather, the court focuses its inquiry on “the defendant’s conduct and the plaintiff’s legal theory.” Id.
In this case, the court finds that Mello’s claim is not typical of the class as currently defined by Mello.
Under the IWPCA,
Every employer shall pay the final compensation of separated employees in full, at the time of
separation, if possible, but in no case later than the next regularly scheduled payday for such
employee. . . .
[W]henever a contract of employment or employment policy provides for paid vacations, and
an employee resigns or is terminated without having taken all vacation time earned in
accordance with such contract of employment or employment policy, the monetary equivalent
of all earned vacation pay shall be paid to him or her as part of his or her final compensation at
his or her final rate of pay and no employment contract or employment policy shall provide
for forfeiture of earned vacation time upon separation.
820 ILCS 115/5. The Illinois Department of Labor recognizes that an employer’s vacation policy can
provide that no vacation is earned by employees for a limited period at the commencement of employment.
56 Ill. Admin. Code § 300.520(f)(1). Such a vacation policy is permissible if the employer “demonstrate[s]
that the policy is not a subterfuge to avoid payment of vacation actually earned by length of service and, in
fact, no vacation is implicitly earned or accrued during that period.” Id.
Here, Mello’s proposed class includes former AppleIllinois employees who worked for AppleIllinois
for less than one year and, under AppleIllinois’s vacation policy, did not qualify for vacation pay. Whether
AppleIllinois’s vacation policy, as that policy pertains to employees who worked for AppleIllinois for less
than a year, is in compliance with Illinois law raises a legal issue that would not impact the entire class as
defined by Mello. Because Mello worked at AppleIllinois for twelve years, she does not fall within this
category of AppleIllinois employees. Thus, unlike the former AppleIllinois employees with Initial Year
claims, Mello “would have little incentive to litigate vigorously whether” AppleIllinois’s vacation policy’s
provision with respect to employees employed for less than a year violates Illinois law. Muro, 580 F.3d at
493. The court therefore finds that Mello’s claim is not typical of the class of former employees with “Initial
Year” claims.
With respect to the remaining class members (i.e., those with Separation Before Disbursement or
Subsequent Years claims), the court finds that Mello’s claims are typical. AppleIllinois does not dispute that
Mello’s claim is a Subsequent Years claim and that her claim is typical of other potential class members with
Subsequent Years claims. Moreover, whether a claim is a Separation Before Disbursement or Subsequent
Years claim, these claims all arise out of essentially the same conduct and are based on the same legal theory:
namely, AppleIllinois’s failure to pay earned vacation time in violation of the IWPCA. The minor factual
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STATEMENT
differences between these two categories of claims does not defeat the class action. See Rosario, 963 F.2d at
1018.
B.

Adequacy of the Representation

In the Seventh Circuit, “[w]hether the named plaintiffs properly represent the class’ interest depends
upon a number of factors including: the adequacy of the named plaintiff’s counsel, and the adequacy of
representation provided in protecting the different, separate and distinct interest of the absentee members.”
Sec’y of Labor v. Fitzsimmons, 805 F.2d 682, 697 (7th Cir. 1986) (en banc). “A class is not adequately
represented if class members have antagonistic or conflicting claims.” Rosario, 963 F.2d at 1018. Here,
AppleIllinois argues that Mello cannot be an adequate representative of the entire class because her claims
are not typical of the entire class. As discussed above, the court has found that Mello’s claim is typical of the
potential class members with Subsequent Years and Separation Before Disbursement claims. Moreover, the
court has no reason to believe that Mello has an antagonistic or conflicting claims with these potential class
members. Mello’s attorneys similarly appear capable of providing the absentee members of the class with
adequate representation. They are members of good standing in the Illinois State Bar with extensive
experience litigating federal and state wage and hour law cases, including class actions. (See Stevens’s,
Werman’s & Sypulski’s Decls. (attached as Exs. B, E & F to Mello’s Mot.).) The court accordingly finds
that Mello is an adequate representative of the class of former AppleIllinois employees with Subsequent
Years and Separation Before Disbursement claims.
C.

Commonality

Regarding the commonality requirement of Rule 23, AppleIllinois has not challenged whether Mello
has satisfied this requirement and the court has no reason to find that it is not satisfied with respect to the
potential class members with Subsequent Years and Separation Before Disbursement claims. The U.S.
Supreme Court has explained that “[t]he commonality and typicality requirements of Rule 23(a) tend to
merge.” Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 n.5 (2011). Both requirements assist the
court in “determining whether under the particular circumstances maintenance of a class action is economical
and whether the named plaintiff’s claim and the class claims are so interrelated that the interests of the class
members will be fairly and adequately protected in their absence.” Id. More specifically, “commonality”
requires the plaintiff to show that “the class members have suffered the same injury.” Id. at 2551 (citation
omitted). Here, the court finds that the potential class members having the Subsequent Years and Separation
Before Disbursement claims suffered the same injury: they allegedly did not receive earned vacation pay in
violation of the IWPCA.
D.

Numerosity

Lastly, regarding the numerosity requirement, the plaintiff bears the burden of demonstrating that
“such a class [is] ‘so numerous that joinder of all members [is] impracticable.” Muro, 580 F.3d at 488
(quoting Williams v. Chartwell Fin. Servs, Ltd., 204 F.3d 748, 760 (7th Cir. 2000)). Here, because Mello’s
numerosity arguments were based on the size of entire class, including those former employees with Initial
Year claims, the court cannot determine at this time whether the current class, which the court has limited to
former AppleIllinois employees from the relevant time period with Separation Before Disbursement and
Subsequent Years claims, satisfies the numerosity requirement. Consequently, Mello’s motion for class
certification is denied without prejudice. Mello may renew its motion, consistent with this order, and provide
the court with evidence of the number of potential class members from the relevant time period with
Separation Before Disbursement and Subsequent Years claims.
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STATEMENT
II.

Mello’s Article III Standing

Finally, should Mello renew its motion for class certification, the court addresses AppleIllinois’s
contention that Mello only has standing to assert Subsequent Years claims on behalf of the class.
AppleIllinois’s standing arguments mirror its Rule 23 arguments that Mello’s claim is not typical of the entire
class. Article III standing to bring a class action, however, is distinct from the Rule 23 inquiry. Arreola v.
Godinez, 546 F.3d 788, 795 (7th Cir. 2008) (“In our view, it is best to confine the term ‘standing’ to the
Article III inquiry and thus to keep it separate from the plaintiff’s . . . ability to satisfy the Rule 23 criteria.”).
To have standing to bring a class action, the plaintiff must have “suffered an ‘injury in fact’ which is fairly
traceable to the challenged action of the defendant and ‘likely,’ as opposed to merely ‘speculative,’ to be
‘redressed by a favorable decision.’” Payton v. Cnty. of Kane, 308 F.3d 673, 677 (7th Cir. 2002) (quoting
Doe v. Cnty. of Montgomery, 41 F.3d 1156, 1159 (7th Cir. 1994)). Here, based on the allegations in Mello’s
complaint, she suffered a violation of the IWPCA based on AppleIllinois’s failure to pay her earned vacation
pay. Such allegations demonstrate an “injury in fact” and accordingly satisfy the Article III standing
requirements.

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