Volz v. Tricorp Management Company et al
Filing
65
ORDER STRIKING and REPLACING 64 Order. The Stricken order contained an incorrect caption. The present order is docketed for the purpose of correcting the caption. All other aspects of the order remain the same. Signed by Judge David R. Herndon on 1/13/2016. (dsw)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
Jania Volz,
Plaintiff
vs.
Case No. 15-cv-0627-DRH-PMF
Tricorp Management Company et al,
Defendants.
ORDER
HERNDON, District Judge:
I.
INTRODUCTION
This matter is before the Court on the defendants’ motion to dismiss (Doc.
36). For the reasons discussed herein the motion is DENIED in part and
GRANTED in part. FURTHER, the Court GRANTS the plaintiff’s motion for oral
argument on the pending motion for conditional class certification (Doc. 44). The
matter is set for oral argument on February 11, 2016 at 1:30 PM before
Judge David R. Herndon in East St. Louis.
However, as noted below, if a timely amended complaint is filed, the
pending motion for conditional class certification will be moot and the Court will
cancel the above hearing, to be set at a later date as necessary.
II.
BACKGROUND
In the instant case, the operative complaint was filed on August 25, 2015
(Doc. 33). In the amended complaint, the plaintiff brings a putative collective and
class action under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq.,
and the Illinois Minimum Wage Law (“IMWL”), 820 Ill. Comp. Stat. 105/1, et seq.,
to recover unpaid minimum wages and other damages owed to herself and to all
others similarly situated. The amended complaint alleges four counts: (1)
violation of the Fair Labor Standards Act (29 U.S.C. § 201 et seq.) (filed on behalf
of the proposed FLSA Collective Class); (2) violation of the Illinois Minimum Wage
Law (filed on behalf of the proposed Illinois Subclass); (3) breach of contract (filed
on behalf of the proposed Illinois Subclass); and (4) unjust enrichment (filed on
behalf of the Illinois Subclass).
On September 8, 2015, the defendants filed a motion to dismiss(Doc. 36
and Doc. 37), The Non-Illinois defendants sought dismissal for lack of personal
jurisdiction pursuant to Federal Rules of Civil Procedure 12(b)(2). Additionally,
all defendants sought dismissal pursuant to Federal Rules of Civil Procedure
12(b)(6) for failure to state a claim.
On November 2, 2015, the Court granted the plaintiff’s motion for leave to
conduct jurisdictional discovery and denied the defendants’ motion to stay
discovery (Doc. 56). The Court set forth a scheduling order with regard to
jurisdictional discovery and deferred ruling on the present motion until
completion of the same. Id. (setting evidentiary hearing regarding personal
jurisdiction for February 17, 2016). On November 11, 2015, the non-Illinois
defendants filed a motion to withdraw their objection to personal jurisdiction
(Doc. 59). The motion to withdraw objections to personal jurisdiction was granted
(Doc. 61). Accordingly, with respect to the motion to dismiss, all that remains is
that portion pertaining to failure to state a claim pursuant to Federal Rule of Civil
Procedure 12(b)(6).
Also pending is the plaintiff’s motion for class certification (Doc. 34 and
Doc. 35) and the plaintiff’s motion for oral argument on the same (Doc. 44). The
Court deferred ruling on these motions, pending its decision on the defendants’
motion to dismiss.
III.
MOTION TO DISMISS
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6)
challenges the sufficiency of the complaint for failure to state a claim upon which
relief may be granted. Gen. Elec. Capital Corp. v. Lease Resolution Corp., 128
F.3d 1074, 1080 (7th Cir. 1997). To survive a motion to dismiss, a complaint
must establish a plausible right to relief. Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555 (2007). The allegations of the complaint must be sufficient “to raise a
right to relief above the speculative level.” Id.
In making this assessment, the district court accepts as true all wellpleaded factual allegations and draws all reasonable inferences in the plaintiff's
favor. See Rujawitz v. Martin, 561 F.3d 685, 688 (7th Cir. 2009); St. John's
United Church of Christ v. City of Chi., 502 F.3d 616, 625 (7th Cir. 2007), cert.
denied, 553 U.S. 1032 (2008). Even though Twombly (and Ashcroft v. Iqbal,
556 U.S. 662 (2009)) retooled
federal pleading standards, notice pleading
remains all that is required in a complaint: “A plaintiff still must provide only
‘enough detail to give the defendant fair notice of what the claim is and the
grounds upon which it rests and, through his allegations, show that it is plausible,
rather
than merely speculative, that he is entitled
to relief.’“ Tamayo v.
Blagojevich, 526 F.3d 1074,1083 (7th Cir. 2008).
IV.
ANALYSIS
A. Counts I and II
Defendants contend that Counts I and II of the amended complaint should
be dismissed because plaintiff fails to plead any facts to suggest that her real
hourly wage was less than the applicable minimum wages in any workweek. More
specifically, defendants contend, inasmuch as the minimum wage provisions of
the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (“FLSA”), and Illinois
Minimum Wage Law, 820 ILCS 105/1 et seq. (“IMWL”), have been construed to
apply to a workweek, plaintiff was required to plead facts to plausibly suggest her
real hourly wage was less than the applicable minimum wage - $7.25 an hour
under the FLSA and $8.25 an hour under the IMWL. 29 U.S.C. § 206(a)(1); 820
ILCS § 105/4(a)(1). Defendants argue Counts I and II of the Amended Complaint
should be dismissed because Plaintiff fails to plead the number of hours she
worked and her total wages as necessary to determine whether Plaintiff was paid
less than the applicable minimum wage in any workweek during her period of
employment in 2015.
In support of this argument, defendants cite to a number of district court
opinions, including an opinion from the undersigned judge (Doc. 37 pp. 12-13).
Notably, all of the decisions referenced by the defendants predate the Seventh
Circuit’s decision in Driver v. AppleIllinois, LLC, 739 F.3d 1073, 1074-75 (7th Cir.
2014). (addressing the so-called twenty-percent rule). See Id. at 1076 (“A tipped
employee is entitled just to the sub-minimum, tip credit wage rate unless he is
doing either unrelated non-tipped work or related non-tipped work in excess of 20
percent of his work-day.”).
In the instant case, plaintiff has alleged that she worked as a tipped
employee, she performed untipped duties for more than 20% of her workweek,
and that defendants claimed the tip credit for all hours worked. A number of
district courts, referencing inter alia, the Driver opinion, have concluded that
similar allegations sufficiently plead FLSA and state-law minimum-wage tip-credit
claims under the twenty-percent rule. 1 See e.g., Hart v. Crab Addison, Inc., 2014
1
The FLSA allows employers to pay tipped employees a wage below the federally mandated
minimum wage rate, so long as the inclusion of the employees' tips meets or exceeds the current
federal minimum wage. See 29 U.S.C. § 203(m); 29 U.S.C. § 206(a)(1). The IMWL mirrors the
federal statute, and the same analysis is generally applied to both statutes. 820 Ill. Comp. Stat. §
105/4(c); see also Driver, 890 F.Supp.2d at 1011 (citing Condo v. SyscoCorp., 1 F.3d 599, 601 n.
3 (7th Cir.1993)). This is commonly referred to as a “tip credit.” Employers can only take
advantage of the tip-credit for hours worked by a tipped employee performing “related duties.” See
29 C.F.R. § 531.59(b); 29 C.F.R. § 531.56(e). For example, a “waitress who spends part of her
time cleaning and setting tables, toasting bread, making coffee and occasionally washing dishes or
glasses” may be paid less than minimum wage for these related duties which might “not by
WL 5465480 (W.D. New York Oct. 28, 2014)(Siragusa, J.) (“[W]here a pleading
plausibly alleges that an employee in a tipped occupation also ... performed
related untipped duties more than 20% of a workweek, and the employer claimed
the tip credit for all hours worked, the pleading states a minimum wage tip-credit
claim without more, since the employer cannot take the tip credit at all for hours
spent ... performing related untipped work that comprised more than 20% of a
workweek.”); Flood v. Carlson Restaurants Inc., 94 F.Supp.3d 572 (S.D. New
York, March 27, 2015) (Torres, J.); Irvine v. Destination Wild Dunes
Management, Inc., 106 F. Supp. 3d 729 (S. Car. May 26, 2015) (Gergel, J.). See
also Fast v. Applebee's Int'l, Inc., 638 F.3d 872, 881 (8th Cir. 2011), cert. denied,
––– U.S. ––––, 132 S.Ct. 1094, 181 L.Ed.2d 977 (2012) (concluding that “[f]he 20
percent threshold used by the DOL in [the FOH] is not inconsistent with §
531.56(e) and is a reasonable interpretation of the terms ‘part of [the] time’ and
‘occasionally’ used in that regulation”).
themselves be directed toward producing tips.” 29 C.F.R. § 531.56(e). The Department of Labor
further interpreted this regulation in its Field Operations Handbook, explaining as follows:
Reg 531.56(e) permits the taking of the tip credit for time spent in duties related to
the tipped occupation... provided such duties are incidental to the regular duties of
the server (waiter/waitress) and are generally assigned to the servers. However,
where the facts indicate that specific employees are routinely assigned to
maintenance, or that tipped employees spend a substantial amount of time (in
excess of 20 percent) performing general preparation work maintenance, no tip
credit may be taken for the time spent in such duties.
U.S. Dept. of Labor Field Operations Handbook Ch. 30d00(e) (June 30, 2000), available at
http://www.dol.gov/whd/FOH/FOH_Ch30.pdf. The above interpretation is the genesis for
tip-credit claims under the twenty-percent rule.
The Court finds that the plaintiff has sufficiently stated a tip-credit claim
under the FLSA and IMWL against defendants. Accordingly, the motion to dismiss
as to Counts I and II is DENIED.
B. Breach of Contract
Count III of the amended complaint purports to assert a claim for breach of
contract. With respect to the breach of contract claim, it is difficult to determine
from the allegations whether the plaintiff is asserting a claim for breach of an
express contract. If Count III is a claim for breach of an express contract, as
outlined in defendants’ briefing, it is deficient in a number of respects. For
example, plaintiff has failed to specify whether the contract is written or oral and
who specifically entered into the alleged contract(s), Additionally, Count III’s
repeated references to an “implied” contract with “implied” terms leads the Court
to consider whether the plaintiff is actually attempting to assert a claim premised
on an implied-in-fact contract. See e.g. Midcoast Aviation, Inc. v. Gen. Elec. Credit
Corp., 907 F.2d 732, 743 (7th Cir. 1990) (comparing contracts implied-in-fact
and contracts implied in law).
Considering the above, the Court finds that Count III fails to provide
sufficient detail to give the defendants fair notice of what the claim is and the
grounds upon which it rests.
Accordingly, the motion to dismiss, as to Count III, is GRANTED, with
leave to refile.
C. Unjust Enrichment
With respect to unjust enrichment, plaintiff contends that defendants used
tipped workers, at sub-minimum wage pay, to fill positions that should be staffed
by full minimum wage employees (Doc. 33 ¶ 130). Plaintiffs allege that defendants
received free labor and/or labor at a reduced rate in the form of extra services
(“side work” and “back of the house work”) through illegal and inequitable
conduct (Doc. 33 ¶ 128-135). Plaintiffs further allege that, as a result, the
defendants have retained a benefit at the expense of the plaintiff and the Illinois
subclass which they should be required to disgorge.
The Court finds that plaintiff has pled facts which are sufficient to put
defendants on notice with regard to the unjust enrichment claim. The complaint
contains factual allegations which are enough “to raise a right to relief above the
speculative level.” Twombly, 550 U.S. at 555. Moreover, at present there are
“enough facts to raise a reasonable expectation that discovery will reveal evidence”
supporting the plaintiff’s claims. Id. at 556.
The Court notes the fact that a breach of contract and unjust enrichment
claim are mutually exclusive does not warrant dismissal. “A party may state as
many separate claims or defenses as the party has regardless of consistency.”
Fed.R.Civ.P. 8(d)(3). “There
is generally nothing
wrong
with alternative
pleading....” Mizuho Corporate Bank (U.S.A.) v. Cory & Assocs., 341 F.3d 644,
651 (7th Cir. 2003).
With respect to preemption, the undersigned judge has previously held as
follows:
As stated previously, the Seventh Circuit has not addressed the issue
of whether the remedies under the FLSA are exclusive. The Court is
aware that there is a split in the circuit courts on this issue and that
other district courts in the Seventh Circuit have ruled that state
claims are preempted by the FLSA where those claims merely
duplicate the FLSA claims.1The Court is also aware that other
district courts have held that the FLSA does not generally preempt
state law claims in a given case. Moreover, the FLSA's savings clause,
which allows states to enact stricter wage, hour, and child labor
provisions, indicates that the FLSA does not provide an exclusive
remedy for its violations. See 29 U.S.C. § 218(a). As other courts
have held, this Court likewise believes the savings clause indicates
that Congress did not foreclose states from providing alternative
remedies.
Schultheis v. Cmty. Health Sys., Inc., No. 11-0435-DRH, 2012 WL
1899440, at *3 (S.D. Ill. May 24, 2012) (Herndon, J.). However, the Court notes,
as it did in Schultheis that although “additional discovery may reveal that the
[plaintiff’s state common law claims are] duplicative of the statutory claims, the
Court cannot conclude at this stage of the proceedings that [plaintiff’s state
common law claims are] preempted by the FLSA.”
Accordingly, the motion to dismiss Count IV is DENIED.
V.
CONCLUSION
For the reasons discussed herein, the Court DENIES in part and GRANTS
in part defendants’ motion to dismiss (Doc. 36). The Court DENIES the motion
to dismiss as to Counts I, II, and IV. The Court GRANTS the motion to dismiss as
to Count III (Breach of Contract), with leave to amend. The plaintiff has until
January 27, 2016 to file an amended complaint.
FURTHER, the Court GRANTS the plaintiff’s motion for oral argument on
the pending motion for conditional class certification (Doc. 44). The matter is set
for oral argument on February 11, 2016 at 1:30 PM before Judge David R.
Herndon in East St. Louis.
However, if an amended complaint is filed, the motion for conditional class
certification will be mooted and the Court will cancel and reschedule oral
argument on class certification as necessary in the future.
IT IS SO ORDERED.
Signed this 13th day of January, 2016
Digitally signed
by Judge David
R. Herndon
Date: 2016.01.13
13:41:05 -06'00'
United States District Judge
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