Elder et al v. Comcast Corporation et al

Filing 84

MEMORANDUM Opinion and Order. Signed by the Honorable James F. Holderman on 12/6/12. Notice mailed by judge's staff (ntf, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
TIMOTHY WHARTON, ISIAH ELDER, and
DONALD HART,

)
)
)
Plaintiffs,
)
)
v.
)
)
COMCAST CORPORATION and COMCAST
)
CABLE COMMUNICATIONS MANAGEMENT, )
LLC,
)
)
Defendants.
)

No. 12 C 1157

MEMORANDUM OPINION AND ORDER
JAMES F. HOLDERMAN, Chief Judge:
Plaintiffs Isiah Elder, Donald Hart, and Timothy Wharton have brought a class action against
Comcast Corporation and Comcast Cable Communications Management, LLC (collectively
“Comcast”). The plaintiffs allege that Comcast violated the federal Fair Labor Standards Act
(“FLSA”) (Count I), the Illinois Minimum Wage Law (“IMWL”), 820 ILCS 105 (Count II), and the
Illinois Wage Payment and Collection Act (“IWPCA”), 820 ILCS 115 (Count III). According to the
plaintiffs, Comcast failed to compensate them for pre-shift work, post-shift work, and work during
meal breaks. The plaintiffs also allege that Comcast failed to pay them overtime wages when
appropriate. On September 4, 2012, the court granted Comcast’s motion to dismiss the IWPCA
claim without prejudice, but granted the plaintiffs leave to amend their complaint to assert additional
allegations relevant to the IWPCA claim. The plaintiffs filed their Second Amended Complaint on
September 18, 2012 (Dkt. No. 56), and Comcast again moved to dismiss the IWPCA claim (Dkt.
No. 58). For the reasons stated below, Comcast’s motion is denied.
LEGAL STANDARD

Under the Federal Rules of Civil Procedure, a complaint need contain only “a short and plain
statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). The
complaint must “give the defendant fair notice of what the . . . claim is and the grounds upon which
it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S.
41, 47 (1957)). While “detailed factual allegations” are not required, “labels and conclusions, and
a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555.
The complaint must “include sufficient facts ‘to state a claim for relief that is plausible on its face.’”
Cole v. Milwaukee Area Tech. Coll. Dist., 634 F.3d 901, 903 (7th Cir. 2011) (quoting Justice v.
Town of Cicero, 577 F.3d 768, 771 (7th Cir. 2009)). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In
ruling on a Rule 12(b)(6) motion, the court “construe[s] the . . . [c]omplaint in the light most
favorable to Plaintiff, accepting as true all well-pleaded facts and drawing all possible inferences
in his favor.” Cole, 634 F.3d at 903.
ANALYSIS
With certain exceptions not relevant here, the IWPCA requires every employer “at least
semi-monthly, to pay every employee all wages earned during the semi-monthly pay period.” 820
ILCS 115/3. Wages are defined as “any compensation owed an employee by an employer pursuant
to an employment contract or agreement between the 2 parties, whether the amount is determined
on a time, task, piece, or any other basis of calculation.” 820 ILCS 115/2. The IWPCA therefore
does not provide an independent right to payment of wages and benefits; instead, it only enforces
the terms of an existing contract or agreement. See Sanchez v. Haltz Const., Inc., No. 09 C 7531,

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2012 WL 13514, at *5 (N.D. Ill. Jan. 4, 2012) (Grady, J.) (citing Nat’l Metalcrafters, Div. of
Keystone Consol. Indus. v. McNeil, 784 F.2d 817, 824 (7th Cir. 1986)). Accordingly, “for a person
to state a claim under the Wage Collection Act, he or she must plead that wages or final
compensation is due to him or her as an employee from an employer under an employment contract
or agreement.” Landers-Scelfo v. Corporate Office Sys., Inc., 827 N.E.2d 1051, 1058 (Ill. App. Ct.
2d Dist. 2005).
The plaintiffs allege here that Comcast violated its employment agreement with them to pay
them an hourly wage and to pay them overtime pay at a rate of 1.5 times the hourly rate when they
worked more than forty hours a week. (Dkt. No. 56 (“Second Am. Compl.”) ¶ 14.) They allege that
the agreement is documented by (1) statements in Comcast’s employee handbooks describing the
overtime policy; (2) Comcast’s statements in parallel litigation relying on the handbook for the
proposition that Comcast “requires” employees to be paid for all time worked, Dkt. No. 41, at 5,
Brand v. Comcast Corp., No. 12-cv-1122 (N.D. Ill. July 16, 2012); (3) Comcast’s “Timekeeping Pay
Process,” a document describing the overtime policy; (4) Comcast’s November 2008 timekeeping
system announcement stating that “[o]vertime will now be calculated based on a normal 40-hour
work week”; (5) Comcast’s 2011 and 2012 employee training programs which told employees that
Comcast would pay for all time worked, and that “[i]f you work overtime, you will usually be paid
one and a half times your normal rate”; and (6) other unspecified “statements” by Comcast’s
“managers and supervisors during meetings” with employees. (Id. ¶ 14.)
Comcast challenges the sufficiency of those allegations first by noting that its handbooks
from 2005-2012 all contain a disclaimer stating: “The contents of the Comcast Employee Handbook
are not intended to create an express or implied contract of employment and you may not rely on

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it as such.” (Dkt. No. 59, at 7.)1 The 2003 and 2004 handbooks contain similar language, but also
state that the handbooks do not create any “other legally enforceable promise between you and the
Company.” (Id. at 8.) All the handbooks further provide that:
The individual provisions of the Employee Handbook are simply guidelines, and
Comcast reserves sole discretion to interpret them and resolve any conflict between
or among policies. Comcast also reserves the right to change, delete, suspend,
discontinue, or otherwise revise the Employee Handbook, or any individual policy
contained in it, at any time for any reason, with or without notice.
(Id.)
At least five judges in this district have held that similar disclaimers preclude the creation
of an IWPCA agreement. Brand v. Comcast Corp., No. 12 CV 1122, 2012 WL 5845639, at *3-4
(N.D. Ill. Nov. 19, 2012) (Kim, J.); Camilotes v. Resurrection Health Care Corp., No. 10-cv-366,
2012 WL 2905528, at *6 (N.D. Ill. July 16, 2012) (St. Eve, J.); Harris v. Seyfarth Shaw LLP, No.
09 C 3795, 2010 WL 3701322, at *2 (N.D. Ill. Sept. 9, 2010) (Bucklo, J.); Martino v. MCI
Comm’cns Servs., Inc., No. 08 C 4811, 2008 WL 4976213, at *8 (N.D. Ill. Nov. 20, 2008) (St. Eve,
J.); Skelton v. Am. Intercont’l Univ. Online, 382 F. Supp. 2d 1068, 1075 (N.D. Ill. 2005) (Kennelly,
J.); Pautlitz v. City of Naperville, No. 89 C 8855, 1991 WL 33658, at *2-3 (N.D. Ill. Mar. 8, 1991)
(Plunkett, J.). Two other judges have held that such disclaimers, although preventing the creation
of a contract, do not preclude an IWPCA agreement. See Hall v. Sterling Park Dist., No. 08 C
50116, 2011 WL 1748710, at *6 (N.D. Ill. May 4, 2011) (Mahoney, J.) (reporting that court declined
to dismiss the complaint after it “took notice of language in the Personnel Policy Manual granting

1

The court may consider the handbooks on a motion to dismiss because they were attached
to the motion to dismiss, were referred to in the complaint, and are central to the plaintiffs’ claims.
See Menominee Indian Tribe v. Thompson, 161 F.3d 449, 456 (7th Cir. 1998) (“Documents attached
to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff’s
complaint and are central to his claim.”).
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overtime wages only to non-exempt employees and acknowledged that the manual was not an
employment contract, but found that Plaintiff’s allegations allow for inquiry into ‘the way the
employer-employee relationship has played out over the course of the relationship’” (citation
omitted)); Dkt. No. 37, Bollie v. Bd. of Trs., No. 07 C 1382 (N.D. Ill. July 31, 2007) (Shadur, J.)
(oral ruling).
None of those judges’ decisions addressed in detail the distinction that the IWPCA and
Illinois law establish between an “agreement” and a “contract.” Those terms had settled definitions
at common law, a background against which the Illinois legislature is presumed to have legislated.
See Advincula v. United Blood Servs., 678 N.E.2d 1009, 1017 (Ill. 1996). Moreover, “[a] term of
well-known legal significance can be presumed to have that meaning in a statute,” and “common
law meanings of words and terms may be assumed to apply in statutes dealing with new or different
subject matter, to the extent that they appear fitting and absent evidence indicating a contrary
meaning.” Id. (citation omitted). Illinois courts have followed that principle when interpreting the
IWPCA by drawing on the Restatement (Second) of Contracts to define the term “agreement”
according to its common law definition. See Landers-Scelfo, 827 N.E.2d at 1059 (quoting
Restatement (Second) of Contracts § 3 (1981)); Zabinsky v. Gelber Grp., Inc., 807 N.E.2d 666, 671
(Ill. App. Ct. 1st Dist. 2004) (same). This court will do the same in its effort to apply Illinois law
faithfully.
First, the Restatement distinguishes an agreement from a contract. Restatement (Second) of
Contracts § 3, cmt. a. The disclaimers’ statements that the handbooks do not create a “contract”
therefore say nothing, by themselves, about whether the handbooks create an agreement.
Accordingly, Illinois courts have held that “[a]n employment agreement need not be a formally

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negotiated contract,” and that “‘parties may enter into an “agreement” without the formalities and
accompanying legal protections of a contract.’” Landers-Scelfo, 827 N.E.2d at 1059 (quoting
Zabinsky, 807 N.E.2d at 671); accord Catania v. Local 4250/5050 of Commc’ns Workers of Am.,
834 N.E.2d 966, 972 (Ill. App. Ct. 1st Dist. 2005). Under that standard, the employment handbooks
can still create an agreement, even if they do not create a contract.
Second, the Restatement defines an agreement as “a manifestation of mutual assent on the
part of two or more persons.” Restatement (Second) of Contracts § 3. The Restatement then
distinguishes an agreement from a “bargain” (a necessary prerequisite of a contract except in limited
circumstances, see id. § 3 cmt. e), which the Restatement defines as “an agreement to exchange
promises or to exchange a promise for a performance or to exchange performances.” In other words,
unlike a bargain (and most contracts), an agreement under Illinois law does not require the exchange
of promises, or indeed any exchange. Instead, as Illinois courts recognize, an agreement requires
only “mutual assent to terms.” Landers-Scelfo, 827 N.E.2d at 1059.
Moreover, there is plainly mutual assent to the terms in the handbooks here. It is irrelevant
that the disclaimers in the 2003 and 2004 handbooks prevent the creation of a “promise,” and it is
similarly irrelevant that all the handbooks purport to be “guidelines” and retain Comcast’s right to
change the terms in the handbooks at any time. Reserving the right to change the terms prevents the
creation of a promise, but it does not vitiate Comcast’s assent to the terms in the handbooks, at least
so long as the handbooks were in effect.2 The absence of a promise thus does not preclude the

2

Needless to say, no party disputes that the plaintiffs’ decision to work for Comcast while
the terms of the handbooks were in effect sufficiently manifests their assent to the terms contained
therein.
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existence of an agreement.3
The Restatement’s definition of an agreement, as adopted by Illinois courts, similarly
dismantles Comcast’s next argument: that the terms of the handbooks do not show an agreement
because they establish nothing more than that Comcast will comply with existing employment law.
As Comcast points out, the terms of the alleged agreement—that it will pay an hourly wage and will
pay overtime at 1.5 times that wage—are nothing more than what Comcast is required to do under
the federal Fair Labor Standards Act and the IMWL. Comcast’s argument is based on an intuition
grounded in contract law, that a contract generally cannot be formed without a bargained-for
exchange, or consideration. Restatement (Second) of Contracts § 71. A promise to perform a legal
duty that a party is already bound to perform cannot constitute consideration, because in that case
the party has not actually promised anything; he has merely given the other party “an empty bag.”
See id. § 73. Comcast’s argument is, in essence, that Comcast did not offer any consideration by
merely stating that it will comply with the law.
The problem with that argument, again, is that an agreement is distinct from a bargain,

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That conclusion is bolstered by Illinois law on at-will employment relationships. Even
though at-will employment relationships include no terms obligating either party to continue the
employment or any term of the employment in the future, Illinois courts generally treat at-will
employment relationships as contractual in nature. See Walker v. Abbott Labs., 340 F.3d 471, 477
(7th Cir. 2003) (“From our review of the case law, it does appear that Illinois courts generally treat
at-will employment relationships as contractual in nature.”); Fellhauer v. City of Geneva, 568
N.E.2d 870, 878 (Ill. 1991) (“‘[W]here the contract is one of employment, it is immaterial whether
it is for a fixed period or is one which is terminable by either party at will, both parties being willing
and desiring to continue the employment under that contract for an indefinite period.’” (quoting
London Guarantee & Accident Co. v. Horn, 69 N.E. 526 (Ill. 1903))); Blount v. Stroud, 915 N.E.2d
925, 937 (Ill. App. Ct. 1st Dist. 2009) (“Although at-will employees lack a fixed duration of
employment, there are nevertheless contractual aspects to an at-will employment relationship, such
as wages, benefits, duties, and working conditions.”). Similarly, Comcast’s reservation of the right
to change the terms in its employment handbooks does not preclude the formation of an agreement.
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because an agreement does not require a bargained-for exchange of consideration. It is thus
irrelevant that Comcast offered nothing more than what it was already bound to do. Comcast’s
statements in the handbooks nonetheless manifest assent to compliance with the terms of the law,
and are sufficient to create an agreement.
Comcast next raises a policy argument, contending that if an employer’s statements about
its compensation policy (in an employee handbook or elsewhere) are sufficient by themselves to
create an employment agreement under the IWPCA, then employers will have an incentive to avoid
issuing any statements about compensation that could be used against them in IWPCA lawsuits. As
Comcast puts it, “[e]mployers would have to choose between refraining from disseminating wage
and hour policies to avoid potential IWPCA liability, but risking a finding that they did not promote
an atmosphere of compliance with wage and hour laws, or promulgating such materials to comply
with FLSA obligations.” (Dkt. No. 59, at 12.) The court does not share Comcast’s worries. Indeed,
as Comcast points out, employers are required by multiple provisions of law, including in the
IWPCA itself, to disseminate their compensation policies to employees. See 820 ILCS 115/10
(“Employers shall notify employees, at the time of hiring, of the rate of pay and of the time and
place of payment. Whenever possible, such notification shall be in writing and shall be
acknowledged by both parties. Employers shall also notify employees of any changes in the
arrangements, specified above, prior to the time of change.”). Plainly, employers need not choose
between violating those provisions and incurring IWPCA liability. They can avoid both hazards by
merely disclosing their compensation policies, and then complying with the policies they have
disclosed (until they change them after giving notice to their employees of new policies). That is
precisely the outcome that the IWPCA seeks to ensure.

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Similarly, the court is unconcerned with Comcast’s contention that a broad definition of
“agreement” renders the IWPCA largely redundant with the IMWL. The IWPCA requires employers
to pay employees in accordance with their employment agreement. The IMWL, by contrast, sets a
floor for employee compensation. The two acts perform different functions. To be sure, the two
requirements will amount to the same thing for employees with employment agreements establishing
their compensation at the IMWL’s floor. That fact is inconsequential, however, for the IWPCA and
the IMWL still aim at two different overlapping, yet distinct, goals.
Comcast also cites the reasoning of the court in Jaramillo v. Garda, Inc., No. 12 C 662, 2012
WL 1378667 (N.D. Ill. Apr. 20, 2012) (Leinenweber, J.). There, the court dismissed an IWPCA
claim in part because it concluded that the Illinois Department of Labor took the position that the
IWPCA did not cover overtime violations. Id. at *3. The court’s conclusion rested on the
Department of Labor’s form for filing a wage claim under the IWPCA, which included no spot to
allege an overtime claim and instructed claimants with overtime claims to use the IMWL form
instead. See id. On May 15, 2012, after Jaramillo came down, however, the Department of Labor
began using a new form including a spot for IWPCA claimants to claim overtime violations. Ill.
D e p ’ t

o f

L a b o r ,

W a g e

C l a i m

A p p l i c a t i o n

1 ,

http://www.state.il.us/agency/idol/forms/pdfs/IL452WC02.PDF (last visited Dec. 6, 2012)
(providing a box to check to indicate that a claim for unpaid wages is for “overtime”). The reasoning
of Jaramillo is thus no longer valid. Indeed, to the extent the opinion of the Department of Labor
is authoritative, it supports the court’s determination that the plaintiffs’ IWPCA claim for overtime
violations may proceed here.
Finally, to this point this court has not discussed the plaintiffs’ additional allegations beyond

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the employee handbooks showing the existence of an agreement. Those allegations include other
written and oral affirmations by Comcast of the employment terms referenced in the employee
handbooks. Accordingly, they support the court’s determination that the plaintiffs have adequately
alleged Comcast’s mutual assent to the terms of an employment agreement. Comcast’s motion to
dismiss is denied.
CONCLUSION
For the reasons explained above, Comcast’s motion to dismiss Count III of the plaintiffs’
Second Amended Complaint (Dkt. No. 58) is denied. The defendants’ answer to Count III is due
12/20/12. The parties are to follow the schedule set on 10/10/12. (Dkt. No. 68.) The case is set for
status on 1/24/13 at 9:00 AM. The parties are encouraged to discuss settlement.
ENTER:

_______________________________
JAMES F. HOLDERMAN
Chief Judge, United States District Court
Date: December 6, 2012

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