Crisostomo v. Chartwell Staffing Services et al
MEMORANDUM Opinion and Order Signed by the Honorable John Z. Lee on 7/6/17.Mailed notice(ca, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
TRACY L. SCHNEIDER-KIDAN and
16 C 6406
Judge John Z. Lee
MEMORANDUM OPINION AND ORDER
Plaintiff Josey Crisostomo (“Plaintiff”) brings suit against Defendants Tracy SchneiderKidan (“Schneider-Kidan”) and Adam Kidan (“Kidan”), both officers of Chartwell Staffing
Services, Inc. (“Chartwell”).
Plaintiff’s claims arise under the Illinois Wage Payment and
Collection Act, 820 Ill. Comp. Stat. 115, et seq. (“IWPCA”).
He alleges that Defendants
knowingly failed to properly compensate him in accordance with the parties’ employment
agreement. He further alleges that Defendants unlawfully retaliated against him by discharging
him for complaining about Defendants’ failure to properly compensate him.
Defendants have moved to dismiss the First Amended Complaint for lack of personal
jurisdiction pursuant to Federal Rule of Civil Procedure (“Rule”) 12(b)(2).
Defendants argue the First Amended Complaint should be dismissed for failing to state a claim
under Rule 12(b)(6). For the reasons stated below, Defendants’ motion  is denied.
Plaintiff is a resident of Naperville, Illinois, and was employed by Chartwell as an
Executive Vice President. 1st Am. Compl. ¶ 3, ECF No. 1. Plaintiff worked at Chartwell’s
Lombard, Illinois location.
Chartwell provides staffing services nationwide with its
corporate headquarters located in Pennsylvania. Id. ¶ 6. During the period relevant to Plaintiff’s
claims, Schneider-Kidan was an owner and the CEO of Chartwell and was involved in the dayto-day operations of the company. Id. ¶ 4. Kidan was an owner and the Chairman of Chartwell
and was also involved in the day-to-day operations of the company. Id. ¶ 5.
In March 2015, at Chartwell’s Lombard, Illinois office, Kidan told Plaintiff that he
intended to promote Plaintiff to Executive Vice President, increase his salary to $180,000, and
increase his commissions as well.
Id. ¶ 7.
On April 20, 2015, the parties finalized an
employment agreement which included a base salary of $180,000 per annum, 1.25% commission
of gross revenue for sales personally generated, 0.5% commission of gross revenue for accounts
that Plaintiff supervised, as well as 20% of the net profits of the offices and accounts Plaintiff
supervised on a quarterly basis. Id. ¶ 8; see id., Ex. A.
In August 2015, Plaintiff complained to Kidan that he was not being paid the proper
share of net profits or commissions as set forth in the employment agreement. Id. ¶ 12. Kidan
responded by assuring Plaintiff that the issue would be fixed.
When Plaintiff again
complained to Kiden in November 2015, Kidan told Plaintiff he would look into it, but did not
do so. Id. ¶ 14. This pattern continued until March 31, 2016, when Plaintiff complained one last
time to Kidan about the outstanding compensation. Id. ¶ 17. Kidan responded by asking if
Plaintiff wanted “today to be his last day.” Id. Plaintiff was terminated on April 4, 2016. Id.
A court that lacks personal jurisdiction over a defendant must dismiss the case as to that
party. See Fed. R. Civ. P. 12(b)(2). If a defendant moves to dismiss pursuant to Rule 12(b)(2), it
places the burden on the plaintiff to demonstrate the court has personal jurisdiction over the
defendant. Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir.
2003). In making this determination, the court will “‘read the complaint liberally, in its entirety,
and with every inference drawn in favor of’” the plaintiff. Cent. States, Se. & Sw. Areas Pension
Fund v. Phencorp Reinsurance Co., 440 F.3d 870, 878 (7th Cir. 2006) (quoting Textor v. Bd. of
Regents of N. Ill. Univ., 711 F.2d 1387, 1393 (7th Cir. 1983)). “The precise nature of the
plaintiff’s burden depends upon whether an evidentiary hearing has been held.” Purdue, 338
F.3d at 782. When there is no dispute of material fact and a court rules solely based on the
submission of written materials, the plaintiff “‘need only make out a prima facie case of personal
jurisdiction.’” Id. (quoting Hyatt Int’l Corp. v. Coco, 302 F.3d 707, 713 (7th Cir. 2002)). In
making this determination, the court can consider affidavits and other supporting materials. See
The court must resolve any conflicts in the affidavits and supporting materials in the
plaintiff’s favor. Id. at 782–83.
A motion under Rule 12(b)(6) challenges the sufficiency of the complaint. Bell v. City of
Country Club Hills, 841 F.3d 713, 716 (7th Cir. 2016). Under the federal pleading standards,
“[a] plaintiff’s complaint need only provide a short and plain statement of the claim showing that
the pleader is entitled to relief, sufficient to provide the defendant with fair notice of the claim
and its basis.” Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008) (internal quotation
marks omitted); Fed R. Civ. P. 8(a)(2). When considering a motion to dismiss under Rule
12(b)(6), the Court must “accept[ ] as true all well-pleaded facts alleged, and draw[ ] all possible
inferences in [the plaintiff’s] favor.” Tamayo, 526 F.3d at 1081.
Additionally, a complaint must allege “sufficient factual matter, accepted as true, to ‘state
a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). To have facial plausibility, a
claim must plead “factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Id. “The plausibility standard is not akin to a
‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted
unlawfully.” Id. Plausibility, however, “does not imply that the district court should decide
whose version to believe, or which version is more likely than not.” Swanson v. Citibank, N.A.,
614 F.3d 400, 404 (7th Cir. 2010).
Defendants argue that personal jurisdiction is lacking for two reasons.
Defendants argue that the fiduciary-shield doctrine precludes the Court from exercising personal
jurisdiction over them. In addition, Schneider-Kidan argues that she lacks sufficient minimum
contacts with Illinois to confer personal jurisdiction. In particular, she asserts that Plaintiff has
not alleged that she purposefully directed activity at Illinois or purposefully availed herself of the
privilege of doing business in Illinois such that she could have reasonably anticipated being
subject to the Court’s jurisdiction. The Court analyzes each argument in turn.
The Fiduciary-Shield Doctrine
According to Defendants, the fiduciary-shield doctrine precludes the exercise of personal
jurisdiction because any contact Defendants had with Illinois were by way of actions taken in a
representative capacity on behalf of Chartwell. In response, Plaintiff contends that the fiduciaryshield doctrine does not apply to high-ranking corporate officers and shareholders such as
As a general matter, the fiduciary-shield doctrine prevents courts from asserting
jurisdiction over an individual based on acts taken by that person merely as an employee at the
behest of his or her employer. Rollins v. Ellwood, 565 N.E.2d 1302, 1318 (Ill. 1990). Two
exceptions apply: (1) actions motivated by an individual’s personal interests, and (2) actions
within an individual’s discretion. See Rice v. Nova Biomedical Corp., 38 F.3d 909, 912 (7th Cir.
1994); Leong v. SAP Am., Inc., 901 F. Supp. 2d 1058, 1064 (N.D. Ill. 2012). That said, the
doctrine does not mandate dismissal, and whether to apply the fiduciary-shield doctrine is within
a court’s discretion. Rice, 38 F.3d at 914; Levin v. Posen Found., 62 F. Supp. 3d 733, 741 (N.D.
Courts have generally refused to apply the fiduciary-shield doctrine to individuals who
are high-ranking officers and owners of a company, reasoning that such individuals enjoy
discretion and are motivated by personal interests. See McGreal v. Semke, 836 F. Supp. 2d 735,
740–41 (N.D. Ill. 2011) (holding fiduciary-shield doctrine inapplicable because defendant, as
president and shareholder, had a direct and personal interest in the financial expenditures and
well-being of the company); Farmer v. DirectSat USA, LLC, No. 08 C 3962, 2010 WL 380697,
at *3–4 (N.D. Ill. Jan. 28, 2010) (finding that allegations that defendants had the ability to hire
and fire employees, direct and supervise the work of employees, and make decisions regarding
wage and hour classifications and employee compensation were sufficient to deprive them of the
fiduciary shield); Consumer Benefit Servs., Inc. v. Encore Mktg. Int’l, Inc., No. 01 C 6985, 2002
WL 31427021, at *3–4 (N.D. Ill. Oct. 30, 2002) (declining to apply fiduciary-shield doctrine
where defendant was the CEO and a shareholder of the company); see also Leong, 901 F. Supp.
2d at 1065 (holding that the fiduciary-shield doctrine did not apply because plaintiff made a
prima facie showing that defendant had discretion over the allegedly unlawful actions).
Here, Plaintiff alleges that Defendant Schneider-Kidan was an owner and the CEO of
Chartwell and that Defendant Kidan was an owner and the Chairman of Chartwell. Am. Compl.
¶¶ 4–5. To that end, Plaintiff alleges that Defendants were involved in day-to-day business
operations with the discretion to hire and fire, direct the work of employees, and make decisions
regarding employee compensation and capital expenditures.
Accordingly, each had
discretion to take the actions that impacted Plaintiff. Id. Finally, as owners, Defendants had a
direct financial stake in the company’s health, resulting in both a personal and corporate benefit.
Id. Based upon these factors, the Court finds that the fiduciary-shield doctrine does not apply.
The cases upon which Defendants rely are unavailing. Defendants attempt to analogize
to Kouakou v. Sutton Funding, LLC, No. 09 C 7132, 2012 WL 581179 (N.D. Ill. Feb. 22, 2012),
contending that Plaintiff has not alleged any facts that support the notion that Defendants were
acting in furtherance of their own self-interest. Reply at 4, ECF No. 28 (citing Kouakou, 2012
WL 581179, at *3–4). But the plaintiffs in Kouakou did not allege any acts personally taken by
the defendants, nor did they allege that the defendants would personally gain from their actions
or had the requisite ownership interest in the entities at issue. Id. at *4. By contrast, here,
Plaintiff alleges that Defendants themselves engaged in the challenged acts against the Plaintiff
and that Defendants had discretion regarding those acts.
Defendants also read too much into Petrich v. MCY Music World, Inc., 862 N.E.2d 1171
(Ill. App. Ct. 2007). They assert that Petrich establishes a rule that the fiduciary-shield doctrine
precludes the court from exercising jurisdiction over defendants that take actions as shareholders
on behalf of corporations. Reply at 4 (citing Petrich, 862 N.E.2d at 1183). But Petrich does not
stand for the broad proposition that shareholders are always protected by the fiduciary-shield
doctrine. Rather, like the other cases cited here, the Petrich court focused on the nature and
extent of the defendants’ particular conduct. Petrich, 862 N.E.2d at 1183.
Because Defendants are high-ranking officers and owners of Chartwell and had
discretion in their actions involving the Plaintiff, the Court finds the fiduciary-shield doctrine
inapplicable. Accordingly, the Court denies Defendants’ motion to dismiss based upon the
Schneider-Kidan’s Contacts with Illinois
Schneider-Kidan argues that Plaintiff has not alleged minimum contacts sufficient to
subject her to personal jurisdiction in Illinois. To determine whether personal jurisdiction exists
over Schneider-Kidan in Illinois, the Court considers the Illinois long-arm statute, the Illinois
constitution, and the federal constitution. Citadel Grp. Ltd. v. Wash. Reg’l Med. Ctr., 536 F.3d
757, 760 (7th Cir. 2008). The Illinois long-arm statute permits the exercise of jurisdiction to the
full extent permitted by the United States Constitution, which causes the state statutory and
federal constitutional inquiries to merge. See 735 Ill. Comp. Stat. 5/2-209(c); Tamburo v.
Dworkin, 601 F.3d 693, 700 (7th Cir. 2010). In such circumstances, a court will exercise
personal jurisdiction over a defendant “if the defendant had ‘certain minimum contacts with it
such that the maintenance of the suit does not offend traditional notions of fair play and
substantial justice.’” Mobile Anesthesiologists Chi., LLC v. Anesthesia Assocs. of Houston
Metroplex, P.A., 623 F.3d 440, 443 (7th Cir. 2010) (quoting Int’l Shoe Co. v. Washington, 326
U.S. 310, 316 (1945)) (internal quotation marks omitted).
There are two types of personal jurisdiction: general and specific. Plaintiff here relies on
specific jurisdiction, which asks whether “(1) the defendant has purposefully directed his
activities at the forum state or purposefully availed himself of the privilege of conducting
business in that state, and (2) the alleged injury arises out of the defendant’s forum-related
activities.” Tamburo, 601 F.3d at 702. To determine whether a defendant purposefully directed
his activities at the forum state, courts consider whether the defendant engaged in (1) intentional
conduct, (2) expressly aimed at the forum state, (3) with the knowledge that such conduct would
injure the plaintiff in the forum state. Tamburo, 601 F.3d at 703. Furthermore, the exercise of
specific jurisdiction must comport with traditional notions of fair play and substantial justice,
which takes into account considerations such as the burden on the defendant, the interests of the
forum state, and the plaintiff’s interest in obtaining relief. Burger King Corp. v. Rudzewicz, 471
U.S. 462, 477 (1985).
In this case, Plaintiff alleges that Schneider-Kidan is the CEO and owner of Chartwell,
which had at least one office in Illinois. Am. Compl. ¶ 4. He further states that she is registered
with the State of Illinois Secretary of State as the president and owner of Chartwell. Resp. at 9,
ECF No. 27. 1 He claims that Schneider-Kidan was involved in the day-to-day operations of
Chartwell, “including payroll accounts and the decisions regarding employee compensation of
Id. ¶ 4.
Furthermore, Schneider-Kidan was involved in “devising, directing,
implementing and supervising” Chartwell’s compensation practices, which “includ[ed] the
decision not to pay Plaintiff his earned wages and commission.” Id.
Additionally, the employment agreement in question—which Schneider-Kidan, in her
capacity as CEO, was responsible for devising—specifically acknowledges that Plaintiff resides
in Naperville, Illinois. Id., Ex. A. Thus, Schneider-Kidan was aware that her actions would
directly affect a citizen of Illinois. What is more, the employment agreement obligates Chartwell
The Court may take judicial notice of matters of public record, including records
maintained by the Illinois Secretary of State. See Ennenga v. Starns, 677 F.3d 766, 773–74 (7th
Cir. 2012) (stating that, on a motion to dismiss, “[a] court may take judicial notice of facts that
are (1) not subject to reasonable dispute and (2) either generally known within the territorial
jurisdiction or capable of accurate and ready determination through sources whose accuracy
cannot be questioned”); Trent v. Ohio Nat’l Life Ins. Co., No. CIV. 10-715-GPM, 2010 WL
4385496, at *3 (S.D. Ill. Oct. 28, 2010) (taking judicial notice of online records of corporations
maintained by the Illinois Secretary of State).
to pay Plaintiff “20% of the net profits” of the accounts that he oversees out of the Lombard,
Illinois, office. Id. Finally, the agreement states it “shall be interpreted and construed according
to the law of [Illinois],” and subjects Plaintiff to a noncompetition clause which covers “the
geographic area where the employee conducted business,” which would include Illinois. Id.
These allegations are sufficient to establish that Schneider-Kidan has purposefully
availed herself of the privilege of conducting business in Illinois, and that her conduct caused
Plaintiff’s purported injury in Illinois.
Tamburo, 601 F.3d at 706 (holding that “although
[defendants] acted from points outside the forum state, [they] specifically aimed their tortious
conduct at [plaintiff] and his business in Illinois with the knowledge that he lived, worked, and
would suffer the ‘brunt of the injury’ there,” and were therefore subject to personal jurisdiction
in Illinois); Barker v. Atl. Pac. Lines, No. 13 C 1272, 2013 WL 4401382, at *4 (N.D. Ill. Aug.
14, 2013) (concluding that a New Jersey citizen was amenable to jurisdiction in Illinois because
the plaintiff performed work in Illinois and the defendant was complicit in causing the plaintiff
not to receive compensation in Illinois); Farmer, 2010 WL 380697, at *9 (determining that
instituting wage and hour policies and establishing an Illinois office were sufficient to confer
specific personal jurisdiction). 2
Additionally, Illinois has a strong interest in resolving this dispute because the injury
occurred in Illinois, to a resident employed in Illinois, by a business registered with the Illinois
The Court notes that the facts surrounding the employment agreement likely bring
defendants under two other provisions of the Illinois long-arm statute: transacting business in
Illinois under § 5/2-209(a)(1) and execution of a contract substantially connected with the state
under § 5/2-209(a)(7). 735 Ill. Comp. Stat. 5/2-209(a)(1), 5/2-209(a)(7); see E.A. Cox Co. v. Rd.
Savers Int’l Corp., 648 N.E.2d 271, 276 (Ill. App. Ct. 1995) (holding that because the defendant
entered into an agreement with an Illinois resident, the agreement provided for partial
performance by the defendant in Illinois, and the defendant’s breach was based on activity on the
part of the defendant in Illinois, the plaintiff pleaded sufficient facts for the court to exercise
personal jurisdiction under § 2-209(a)(1) or § 2-209(a)(7)).
Secretary of State. Furthermore, Plaintiff, as a resident of Illinois, has an interest in litigating
this case in his home state. Accordingly, requiring Schneider-Kidan to litigate in this forum will
not offend traditional notions of fair play and substantial justice.
For these reasons, Schneider-Kidan’s motion to dismiss for lack of personal jurisdiction
is denied. 3
Rule 12(b)(6): Defendants as “Employers” Under the IWPCA
Chartwell as an Employer “in this State”
Defendants also argue the case should be dismissed under Rule 12(b)(6). Specifically,
Defendants contend that they are not “employers” under the IWPCA, because they “are not
located in, citizens or residents of Illinois”. Defs.’ Mem. Supp. Mot. Dismiss 7, ECF No. 23.
But this misses the point. Plaintiff’s complaint, properly construed, does not allege that he was
an employee of Kidan and Schneider-Kidan, but that he was an employee of Chartwell. After
all, the employment agreement at the center of this dispute is one between Plaintiff and
Chartwell, not Plaintiff and the individual Defendants. See Am. Compl., Ex. A. 4 Accordingly,
While Defendants have not explicitly argued that the Court lacks personal jurisdiction
over Schneider-Kidan with regard to Plaintiff’s retaliation claim, the Court is satisfied that it can
exercise personal jurisdiction in relation to this claim as well. Plaintiff alleges that on March 31,
2016, he verbally complained regarding unpaid compensation to Defendants. Am. Compl. ¶¶ 17,
31. He further alleges that Defendants terminated him from his position as Executive Vice
President four days later in retaliation for his complaints. Id. ¶¶ 18–19, 31. Based on these
allegations, Plaintiff has sufficiently pleaded that Schneider-Kidan took purposeful action
directed at Plaintiff in Illinois that injured him here, and for the reasons stated above, it would be
fair and just to exercise personal jurisdiction over her in relation to Plaintiff’s retaliation claim.
Admittedly, the allegations in the Amended Complaint obscure this point. But, where the
allegations in a complaint are at odds with an exhibit attached thereto, it is the exhibit that
controls. Massey v. Merrill Lynch & Co., 464 F.3d 642, 645 (7th Cir. 2006) (“[W]e will consider
the exhibits attached to a complaint, but, where an exhibit conflicts with the allegations of the
complaint, the exhibit typically controls.”).
the question is whether Chartwell, a foreign corporation, is an “employer” for the purposes of the
The IWPCA applies to “employers and employees in this State.” 820 Ill Comp. Stat.
115/1. Unfortunately, the statute does not define what it means to be an employer “in this State,”
and the Supreme Court of Illinois has not spoken on the issue. 6 Some guidance, however, can be
gleaned from the Illinois appellate courts.
We start with Liaquat Khan v. Van Remmen, Inc. 756 N.E.2d 902 (Ill. App. Ct. 2001).
There, an Illinois resident brought an action against an out-of-state employer and its nonresident
president under the IWPCA. Id. at 912–13. The plaintiff did not allege that the defendants had
any physical presence in Illinois, but argued nonetheless that defendants were “Illinois
employers.” Id. at 913. An Illinois appellate court held that the defendants were not Illinois
employers, but expressly declined to “create an all-encompassing definition of ‘employers in this
State,’” limiting its holding to the facts of that case. Id.
The Illinois appellate court next addressed the issue more than ten years later in Elsener
v. Brown, 996 N.E.2d 84, 99 (Ill. App. Ct. 2013). In that case, the plaintiff had sued the CEO of
a parent company for causing his employer to withhold wages in violation of an employment
If Chartwell qualifies as an “employer” under the IWPCA, then whatever claims Plaintiff
may have against Kidan and Schneider-Kidan arise out of § 115/13 of the IWPCA, which
provides that any “officers of a corporation or agents of an employer who knowingly permit such
employer to violate the provisions of this Act shall be deemed to be employers of the employees
of the corporation.” 820 Ill. Comp. Stat. 115/13.
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.
agreement. Id. at 86. The defendant, however, was an Ohio resident with no presence in Illinois.
Id. at 98. Acknowledging its prior holding in Khan, the court limited it to Khan’s facts, stating,
“we left open the possibility that a corporation with no headquarters or physical presence in
Illinois can still qualify as an ‘employer’ under the Wage Act.” Id. at 99. Then, noting that
“today’s communications technology permits managers to achieve a virtual presence between
states,” the court held that physical presence was not necessary to make one an “employer” under
the IWPCA and found the defendant was an Illinois employer due to the control he exercised
over the plaintiff’s employer, who was located in Illinois. Id. at 99–100. 7
Considering this backdrop, Defendants’ assertion that they cannot be subject to the
IWPCA because they are “not located in, citizens, or residents of Illinois” is incorrect. Rather,
the Court must consider the extent of Defendants’ business and activities conducted on behalf of
Chartwell in Illinois to determine whether Chartwell is an employer “in this State.” Elsener, 996
N.E. 2d at 100. In doing so, the Court considers whether Plaintiff worked in Illinois, whether
Chartwell maintains an office in Illinois, and whether it markets and provides its services in
Illinois. See McGreal, 836 F. Supp. 2d at 740–41 (denying an out-of-state corporation’s motion
to dismiss an IWPCA claim because plaintiff sufficiently alleged defendant was an Illinois
employer, maintained an Illinois office, marketed its services in, and conducted substantial
business in Illinois); Musso v. Excellence in Motivation, Inc., No. 10 C 3236, 2010 WL 3385452,
at *2 (N.D. Ill. Aug. 24, 2010). (same); cf. Duberville v. WMG, Inc., No. 13 C 02061, 2015 WL
Interestingly, the Elsener court also cited Adams v. Catrambone, 359 F.3d 858 (7th Cir.
2004), for support. In Adams, the Seventh Circuit used the reasoning in Khan to hold that a nonresident employee who worked in Illinois could maintain a claim under the IWPCA against an
in-state employer—the converse of Khan. Id. at 863. The Elsener court interpreted Adams to “at
least stand for the proposition that nonresident employees are not outside the Wage Act’s
coverage.” 996 N.E.2d at 100. “As the Adams court found no residency requirement for
employees, so we find no residency requirement for employers.” Id.
186834, at *7 (N.D. Ill. Jan. 13, 2015) (holding that a transient rental of a single Illinois office
for a single employee was not enough to be considered substantial activity to subject the
defendant to the IWPCA); Nathan v. Morgan Stanley Renewable Dev. Fund, LLC, No. 11 C
2231, 2012 WL 1886440, at *18 (N.D. Ill. May 22, 2012). (concluding that an out-of-state
company that maintained an Illinois office only to accommodate one employee but did not
conduct business here could not be considered an “employer” under the IWPCA).
Here, Plaintiff has alleged that he worked out of Chartwell’s office in Lombard, Illinois.
Am. Compl. ¶ 3. The complaint further indicates that Plaintiff, as Executive Vice President, was
tasked with supervising accounts and employees out of the Lombard office. Id.; see id., Ex. A.
When the Court construes every reasonable inference in Plaintiff’s favor, as it must do at this
stage, Plaintiff has satisfied his burden to establish that Chartwell conducted substantial business
in Illinois and was an employer “in this State” for purposes of the IWPCA. 8
Schneider-Kidan’s Individual Liability under § 115/13
Schneider-Kidan further argues that Plaintiff has failed to adequately allege that she can
be individually liable under the IWPCA. Section 115/13 of the IWPCA states that “any officers
of a corporation or agents of an employer who knowingly permit such employer to violate the
provisions of this Act shall be deemed to be the employers of the employees of the corporation.”
Defendants cite DeGeer v. Gillis, 707 F. Supp. 2d 784 (N.D. Ill. 2010), pointing to
language in DeGeer that cites Khan for the proposition that the IWPCA does not apply to out-ofstate employers. Reply at 7 (citing DeGeer, 707 F. Supp. 2d at 800). As discussed previously,
however, the court in Khan specifically stated that it did “not purport to create an allencompassing definition of ‘employers in this State’ for purposes of the Wage Act.” Khan, 756
N.E.2d at 913. What is more, the judge deciding DeGeer later explicitly recognized this point,
noting that, “[i]n DeGeer . . . I had no need to consider, in the context of that case, under what
circumstances an entity organized in another state could be deemed an Illinois employer for the
purposes of the [IWPCA].” Musso, 2010 WL 3385452, at *1. Finally, the DeGeer court had no
opportunity to consider the Illinois appellate court’s later decision in Elsener. Accordingly,
Defendants’ reliance on DeGeer is misplaced.
820 Ill. Comp. Stat. 115/13.
Plaintiff has alleged that, as a CEO and owner of Chartwell,
Schneider-Kidan was involved in day-to-day business operations, including managing payroll
accounts, making decisions regarding employee compensation, as well as hiring and firing—
including the specific actions on which Plaintiff’s claims are based. Am. Compl. ¶ 4. For
example, Plaintiff alleges that Kidan and Schneider-Kidan “regularly and repeatedly fail[ed] to
properly compensate Plaintiff for all wages owed, including unpaid commissions and profit
sharing.” Id. ¶¶ 16, 23. Additionally, Plaintiff alleges that after he complained about the
Defendants’ failure to properly compensate him, they both made the decision to terminate
Plaintiff in retaliation for the complaint. Id. ¶¶ 17–19, 31. These allegations, taken in a light
most favorable to the Plaintiff, adequately state a claim that Schneider-Kidan violated § 115/13
of the IWPCA. See Zwick v. Inteliquent, Inc., 83 F. Supp. 3d 804, 812 (N.D. Ill. 2015) (holding
that allegations that defendants were officers that advised and affected decisions regarding
Plaintiff’s severance satisfied § 115/13 at the motion to dismiss stage); Ziccarelli v. Phillips, No.
12 CV 9602, 2013 WL 5387864, at *12 (N.D. Ill. Sept. 25, 2013) (finding that plaintiff’s
allegation that actions taken in violations of the IWPCA required advice or consent of the
defendant was sufficient to bring the defendant under § 115/13 and survive a motion to dismiss).
For the reasons stated herein, Defendants’ motion to dismiss  is denied.
IT IS SO ORDERED.
John Z. Lee
United States District Judge
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