Park et al v. Dundee market III, Inc. et al
Filing
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MEMORANDUM Opinion and Order. Signed by the Honorable John W. Darrah on 11/20/2014. Mailed notice. (as, )
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
MIN SIK PARK and MI OG PARK
Plaintiff,
v.
DUNDEE MARKET III, INC.;
WILLOW MARKET, INC.;
CHUL MIN KIM; SANG H. KIM;
HO YOUNG HONG; and
YOUNG JA HONG,
Defendants.
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Case No. 14-cv-1541
Judge John W. Darrah
MEMORANDUM OPINION AND ORDER
Plaintiffs, Min Sik Park and Mi Og Park, filed a five-count Complaint against
Dundee Market III, Inc. (“Dundee”); Willow Market, Inc. (“Willow”); Chul Min Kim,
Sang H. Kim; Ho Young Hong; and Young Ja Hong (collectively, the “Individual Defendants”).
Count I alleges violations of the Fair Labor Standard Act (“FLSA”), 29 U.S.C. §201 et. seq.
Count II alleges violations of the minimum wage provision of the Illinois Minimum Wage Law
(“IMWL”), 820 ILL. COMP. STAT. 105/1 et seq. Count III alleges violations of the overtime
provision of the IMWL. Count IV is a claim for piercing the corporate veil of Dundee and
Willow and finding the Individual Defendants personally liable for the obligations of the
corporate Defendants. Count V is a claim for unjust enrichment. The Defendants move to
dismiss Counts II and III of Plaintiffs’ Second Amended Complaint pursuant to Federal Rule of
Civil Procedure 12(b)(6).
BACKGROUND
The following is taken from the Complaint, which is assumed to be true for the purposes
of a motion to dismiss. See Reger Dev., LLC v. Nat'l City Bank, 592 F.3d 759, 763 (7th Cir.
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2010). Plaintiff claims that the Defendants did not pay any wages to Plaintiffs during the course
of their employment. (Id. at ¶ 1.) Plaintiffs further allege that they were working in excess of 40
hours per week and the Defendants did not pay any overtime wages. (Id. at ¶ 1.) Plaintiffs also
allege that Defendants’ failure to pay regular and overtime wages was willful and intentional.
(Id. at ¶ 1.) Defendants Ho Young Hong, Young Ja Hong, Chul M. Kim, and Sang H. Kim were
the sole governing and dominating personalities of the corporate Defendants:
Willow Market, Inc. and Dundee Market III, Inc. (Id. at ¶ 66.) Defendant Mrs. Hong was the
president of Willow Market, Inc. (Id. at ¶ 69.)
LEGAL STANDARD
Rule 12(b)(6) permits a defendant to move to dismiss a complaint for “failure to state a
claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). A complaint must allege
enough facts to support a claim that is “plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 547 (2007). Facial plausibility exists when the court can “draw the
reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). All well-pleaded allegations are presumed to be true, and all
inferences are read in the light most favorable to the plaintiff. Lavalais v.
Village of Melrose Park, 734 F.3d 629, 632 (7th Cir. 2013). This presumption is not extended to
‘legal conclusions, or threadbare recitals of the elements of a cause of action, supported by mere
conclusory statements.’ Alam v. Miller Brewing Co., 709 F.3d 662, 666 (7th Cir. 2013) (quoting
Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009)). The complaint must provide a defendant
“with ‘fair notice’ of the claim and its basis.” Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th
Cir. 2008) (quoting Fed.R.Civ.P. 8(a)(2) and Twombly, 550 U.S. at 555).
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ANALYSIS
Plaintiffs claim that Defendants did not pay them minimum wage for any hours they
worked and that Defendants did not compensate them for overtime wages for hours they worked
in excess of 40 hours per work week. Plaintiffs also claim that Individual Defendants are
“employers” as defined by the IMWL and should be held personally liable for any violations of
the statute. The Individual Defendants argue that Counts II & III of the Complaint should be
dismissed as to them since they do not fall under the definition of “employer” in the IMWL.
No Illinois court of review has addressed this particular point of statutory interpretation.
When interpreting an Illinois statute without interpretation from the Supreme Court of Illinois, a
federal court predicts how that court would address the issue. Adams v. Catrambone, 359 F.3d
858, 862 (7th Cir. 2004). The primary goal of statutory construction is to ascertain and give
effect to the intent of the legislature. People v. Marshall, 950 N.E.2d 668 (Ill. 2011). A statute
is construed as a whole and the language is given its plain and ordinary meaning. Id. Words and
phrases are considered in light of other relevant provisions in the statute, and a court must avoid
rendering any part meaningless or superfluous. Id. It is presumed the legislature did not intend a
statute to have absurd, inconvenient, or unjust consequences. Id. at 293. Where the language of
the statute is clear and unambiguous, the statute applies without the aids of statutory
construction. See People v. Davison, 906 N.E.2d 545 (Ill. 2009).
The parties dispute the definition of “employer” in the IMWL. The IMWL defines an
“Employer” as:
any individual, partnership, association, corporation, limited liability company,
business trust, governmental or quasi-governmental body, or any person or group
of persons acting directly or indirectly in the interest of an employer in relation to
an employee, for which one or more persons are gainfully employed on some day
within a calendar year. An employer is subject to this Act in a calendar year on
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and after the first day in such calendar year in which he employs one or more
persons, and for the following calendar year.
820 ILL. COMP. STAT. 105/3(c).
Individual Defendants argue canons of statutory construction illustrate that personal
liability is not available under the IMWL. They argue the definition of “employer” under the
IMWL should be interpreted in the same way as the definition of “employer” under the Illinois
Wage Payment and Collection Act (“IWPCA”), 820 ILL. COMP. STAT. 115/1 et. seq. The
IWPCA defines an “Employer” as:
any individual, partnership, association, corporation, limited liability company,
business trust, employment and labor placement agencies where wage payments
are made directly or indirectly by the agency or business for work undertaken by
employees under hire to a third party pursuant to a contract between the business
or agency with the third party, or any person or group of persons acting directly or
indirectly in the interest of an employer in relation to an employee, for which one
or more persons is gainfully employed.
820 ILL. COMP. STAT. 115/2. Individual Defendants argue that the IMWL and IWPCA address
similar issues and that interpretation of IMWL should be guided by the interpretation of IWPCA.
Under the doctrine of in pari materia, “different acts which address the same subject matter . . .
should be read together such that the ambiguities in one may be resolved by reference to the
other.” Firstar Bank, N.A. v. Faul, 253 F.3d 982, 990 (7th Cir. 2001). The Individual
Defendants cite to a Cook County Chancery Court decision that found no personal liability under
the IMWL by comparing it with the IWPCA. 1 Similarly, Individual Defendants argue the
Supreme Court of Illinois’s decision that officers were not employers under similar language in
the IWPCA, should foreclose an interpretation that officers are employers under the IMWL. See
Andrews v. Kona Printing Corp., 217 Ill.2d 101, 106-11 (Ill. 2005). However, the reasoning in
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Ross Perlumutter v. Houlihan Smith & Company, et. al., Case No. 10 CH 50204
(Dec. 14, 2012).
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that case rested on the fact that the IWPCA provided for officer liability in a different section of
the statute. Andrews, 217 Ill.2d at 11. Because of this, the “economic realities” test that federal
courts use to determine if an individual is personally liable is unnecessary under the IWPCA. Id.
A similar provision is not included in the IMWL.
Federal courts have found that individuals can be held liable for IMWL violations. See
Morgan v. SpeakEasy, LLC, 625 F. Supp. 2d 632, 651 (N.D. Ill. 2007) (holding that individual
defendant could be jointly and severally liable for any violations under the IMWL); Knapp v.
City of Markham, No. 10 C 03450, 2011 WL 3489788, at *10 (N.D. Ill. Aug. 9, 2011) (holding
Fair Labor Standards Act analysis applied to plaintiff’s IMWL claims against the individual
Defendants). Further, Illinois courts look to Fair Labor Standards Act (“FLSA”) regulations and
precedents when applying the IMWL. See Lewis v. Giordano's Enters., Inc., 921 N.E.2d 740,
746 (2009) (“federal cases interpreting the FLSA, while not binding on this court, are persuasive
authority and can provide guidance in interpreting issues under the [IMWL]”). The FLSA allows
for personal liability against officers, agents, and shareholders under the “economic reality” test,
which “focuse[s] on the role played by the corporate officers in causing the corporation to
undercompensate employees and to prefer the payment of other obligations and/or the retention
of profits.” Baystate Alternative Staffing, Inc. v. Herman, 163 F.3d 668, 678 (1st Cir. 1998).
Illinois regulations also point to the FLSA regulations for guidance. 56 Ill. Admin. Code
210.120 (“For guidance in the interpretation of the [IMWL], the Director [of the Illinois
Department of Labor] may refer to the Regulations and Interpretations of the Administrator,
Wage and Hour Division, U.S. Department of Labor, administering the [FLSA].”).
The economic realities test focuses on whether “the officer in question (1) holds a
significant ownership interest in the corporation; (2) exercises operation control over significant
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aspects of the corporation's day-to-day functions, including the compensation of employees; and
(3) personally made the decision to continue operations despite financial adversity during the
period of nonpayment.” Andrews, 217 Ill. 2d at 110. Taking all well-pleaded allegations as true
and all inferences in the light most favorable to the Plaintiffs, they have alleged enough facts to
plausibly suggest personal liability for the Individual Defendants. Plaintiffs allege that the
Individual Defendants were the owners. Plaintiffs allege that Chul Min Kim managed and
supervised their employment and determined how much Plaintiffs were paid. (Dkt. 24 at ¶¶ 33,
37). They also allege that Chul Min Kim participated in and approved of the unlawful pay
practices of the corporate Defendants. (Dkt. 24 at ¶ 38). Finally, Plaintiffs allege that each
Individual Defendant approved of, condoned, and/or otherwise ratified every act of the other
Defendants.
Plaintiffs have stated a claim that the Individual Defendants may be personally liable for
violations of the IMWL.
CONCLUSION
For the reasons discussed above, Defendants’ Motion to Dismiss [28] Counts II and III is
denied.
Date:
November 20, 2014
/s/______________________________
JOHN W. DARRAH
United States District Court Judge
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