United States District Court, Central District of Illinois, Peoria Division
October 9, 1992
SATINDER S. REKHI, PLAINTIFF,
WILDWOOD INDUSTRIES, INC., A FOREIGN CORPORATION, DEFENDANT.
The opinion of the court was delivered by: Mihm, Chief Judge.
Pending before the court is Defendant's Motion to Dismiss and
for a More Definite Statement (# 2), and the Magistrate Judge's
Recommendation (# 7). For the reasons stated below, the
Magistrate's Recommendation is accepted and Defendant's Motion
to Dismiss is denied.
This is an action for money damages filed pursuant to state
law. The parties are of diverse citizenship and this court has
jurisdiction pursuant to 28 U.S.C. § 1332.
Plaintiff Satinder S. Rekhi ("Rekhi") alleges that the
Defendant Wildwood Industries, Inc. ("Wildwood") breached an
employee contract by failing to pay severance pay for one
year's salary when Rekhi left Wildwood's employ (Count I). He
also alleges that he was discharged in retaliation for his
religious beliefs (Count II). Finally, he seeks damages and
penalties under the Illinois Wage and Collection Act of 1974,
Ill.Rev.Stat. Ch. 48, ¶ 39m-11 ("the Act").
In a hearing held April 3, 1992, the Magistrate Judge denied
the Motion for a More
Definite Statement as to Counts I and III, finding that the
Complaint put Wildwood on sufficient notice as to the causes of
action in Counts I and III. As to Count II, the Magistrate
recommended that the court grant Wildwood's Motion for a More
Definite Statement because Count II is vague and confusing and
does not follow from the facts pleaded in Count I. He
recommended that Rekhi replead Count II within twenty (20)
Wildwood argued that the court does not have subject matter
jurisdiction over Count III because it is a state claim seeking
approximately $12,000.00 in unpaid salary and penalties
pursuant to Ill.Rev.Stat. Ch. 48, ¶ 39m-14(b) which does not
arise from the same operative facts as Counts I and II.
Therefore, Wildwood argues, the claim does not fall in the
court's supplemental jurisdiction under 28 U.S.C. § 1367.
Magistrate Judge Kauffman disagreed and found that Count III
arises from the same employment action as Counts I and II. He
noted that § 1367 was amended to make clear that federal courts
could and should exercise pendent jurisdiction whenever such
exercise would further judicial economy and the ends of
justice. "Resolving all of Plaintiff's claims against this
Defendant in relation to the termination of Plaintiff's
employment would further both." See Magistrate's
Recommendation, P. 2.
Wildwood filed its objection to the Magistrate's
Recommendation on July 20, 1992, reiterating its argument that
Count III does not arise from the same "case or controversy"
necessary for pendent state claims under 28 U.S.C. § 1367.
The court agrees with Judge Kauffman and finds that Count III
is based upon the same nucleus of operative facts as Count I.
Rekhi's wage demand was prompted by Wildwood's failure to pay
certain compensation which Rekhi felt he deserved under his
contract for employment. His breach of contract claim under
Count I also arises from the same alleged nonpayment of wages
and benefits owed.
Wildwood also argues that Count III involves two unique
issues of Illinois law which distinguish it from Counts I and
II. First, Wildwood contends that under Ill.Rev.Stat. Ch. 48,
¶ 39m-11, only the Department of Labor, not an employee such as
Rekhi, can institute an action for penalties provided under the
Act.*fn1 Although Wildwood concedes that § 11 grants employees
the right to prosecute their own complaint for the recovery of
"wages", it asserts that this authority does not extend to
penalties accrued which result from an employer's failure to
comply with a Department of Labor decision. Secondly, even if
Rekhi can seek recovery of penalties provided for by the Act,
Wildwood argues that by tendering payment of the amount
determined to be due, it may avoid those penalties under the
The court does not believe that Count III involves unique
issues of Illinois state law which would distinguish it from
Count I and require resolution in a state court. It is entirely
within this court's discretion under the Erie Doctrine to
resolve a supplemental claim which requires the court's
analysis of statutory construction and intent under Illinois
In this case, the court must interpret an employee's rights
under Ch. 48, ¶ 39m-11(c) in connection with ¶ 39m-14(b) of the
Illinois Wage and Collection Act. ¶ 39m-14(b) states:
Any employer who has been ordered by the Director
of Labor or the court to pay wages due an employee
and who shall fail to do so within 15 days after
such order is entered shall be liable to pay a
penalty of 1% per calendar day to the employee for
each day of delay in paying such wages to the
employee up to an amount equal to twice the sum of
unpaid wages due the employee.
This provision must be read together with ¶ 39m-11 which
outlines the duties and powers of the Department of Labor in
assisting an employee in collecting wages and benefits due from
his or her employer. Specifically in
question is the meaning of § 11(c) which states in part:
It shall be the duty of the Department of Labor
. . . to make complaint in any court of competent
jurisdiction of violations of this Act.
Nothing herein shall be construed to prevent an
employee from making complaint or prosecuting his
or her own claim for wages. (emphasis added).
Nothing herein shall be construed to limit the
authority of the State's Attorney of any county to
prosecute actions for violation of this Act or to
enforce the provisions thereof independently and
without specific direction of the Department of
In the instant case, Rekhi is pursuing the recovery of both
wages due and penalties allegedly accrued pursuant to ¶
Wildwood advocates a very literal interpretation of ¶
39m-11(c) and argues that the right to prosecute a claim for
"wages"*fn2 does not include the right to prosecute a claim
for penalties accrued under ¶ 39m-14(b). Wildwood cites no
legal authority for this position. Rekhi, also without legal
authority, states that ¶ 39m-14(b) provides that the employer
shall be liable to pay a penalty of 1% per calendar day to the
employee (emphasis added). Therefore, "[c]learly the employee
has a right to collect the penalty on his own behalf". See
Plaintiff's Response, p. 5.
There is clear precedent that ¶ 39m-11(c) establishes a
private cause of action on behalf of the employee. See Stafford
v. Purofied Down Products, Corp., 801 F. Supp. 130, 138
(N.D.Ill. 1992); Arroyo v. MacKay, 1987 WL 19147, *2 (N.D.Ill.
Oct. 26, 1987); Upholsterers International Union Health and
Welfare Fund Trustees v. Pontiac Furniture, Inc., 647 F. Supp. 1053,
1056 (C.D.Ill. 1986); In re Faber, 52 B.R. 563, 565
(N.D.Ill. 1985); Aponte v. National Steel Service Ctr.,
500 F. Supp. 198, 203-204 (N.D.Ill. 1980); But see Chicago Show
Printing Company v. Sherwood, 1992 WL 175577, *2 (N.D.Ill. July
14, 1992) disagrees with Aponte and states that no other
Illinois court has followed Aponte [no longer true]).
Legal precedent which specifically states that an employee
has the right to prosecute specifically for penalties accrued
under ¶ 39m-14 is less abundant. The district court in
Saribekian v. Concrete Drilling and Sawing Co., Inc., 1990 WL
133431 (N.D.Ill. Sept. 13, 1990) held that the Plaintiff could
not seek punitive damages or attorneys fees in his suit against
his former employer under the Illinois Wage and Collection Act
because the Act did not provide for said damages and fees.
However, the court went on to state that the Act did provide
for a 1% per diem penalty if the employer fails to comply with
a court order to pay wages, Id. at *6, citing I.A.S. Ch. 48, ¶
39m-14(b). Although the Saribekian court's comment regarding
penalties under ¶ 39m-14(b) was dicta in the context of denying
Plaintiff's request for punitive damages and attorney fees, it
is a strong indication that if the Plaintiff in that case had
included a request for damages pursuant to penalties accrued
under ¶ 39m-14(b), the court would have found the request
appropriate under the act.
In Miller v. J.M. Jones Company, 198 Ill. App.3d 151, 144
Ill.Dec. 461, 555 N.E.2d 820 (4th Dist. 1990), Plaintiff Miller
requested assistance from the Illinois Department of Labor
contending he had been deprived of certain wages by his
employer, J.M. Jones Company. The Department conducted an
investigation under the provisions of § 11 of the Act
(Ill.Rev.Stat. 1987, Ch. 48, ¶ 39m-11), and determined that
Plaintiff was owed $498.32 by Defendant. J.M. Jones was then
issued a wage-payment demand. Miller brought the action in
small claims court in Champaign County and introduced the
Department proceeding for admission under Rule 216 (107 Ill.2d
R.216). This was the only evidence produced by Miller at trial.
The court held that Miller failed to meet his
burden of proof; the determination of liability would have to
be made by the trial court de novo. Id., 198 Ill. App.3d at
152, 144 Ill.Dec. at 462, 555 N.E.2d at 821. Miller appealed,
contending that the Department of Labor's determination under
the Act was in the nature of a judicial proceeding and must be
treated as such in the small claims action. Id. The Appellate
A reasonable interpretation of the Act requires a
finding that while certain penalties and interest
provisions may run from the Department's initial
determination of liability, actual liability, if
contested, must be determined by the trial court.
Id., 198 Ill. App.3d at 154, 144 Ill.Dec. at 463, 555 N.E.2d at
Like Saribekian, and the instant case, Miller involved an
employee who brought a private cause of action against his
employer for wages due under his employment contract and the
Illinois Wage and Collection Act. Like Rekhi in the instant
case, Miller pursued his claim after the Department of Labor
had issued a wage demand to his employer. The Appellate Court's
finding that "certain penalties and interest provisions [e.g.,
¶ 39m-14(b)] may run from the Department's initial
determination" suggests that penalties accrued from an
employer's non-compliance with the Department of Labor's
determination would be recognized by a trial court if the
employer's initial liability under the Act is established de
novo by the trial court.
This court finds that Miller and Saribekian create a strong
inference that an employee's private right of action under the
Act includes the right to litigate the recovery of penalties
which have accrued under ¶ 39m-14(b) as a result of the
employer's non-compliance with the Department of Labor's
findings and wage demand.
There is also authority which characterizes the Department of
Labor's duty to act on the behalf of a particular employee
under the Act as discretionary. See People ex rel. Hartigan v.
Agri-Chain Products, Inc., 224 Ill. App.3d 298, 302, 166
Ill.Dec. 577, 580, 586 N.E.2d 535, 538 (1st Dist. 1991). The
Hartigan court interpreted the Department of Labor's duties
under ¶ 39m-11(b) as follows:
Not only is there no duty on the part of the State
or the Department to act, but pursuant to § 11(b),
the Department can only act on behalf of a
particular employee if the employee allows it.
Thus, without an assignment of a wage claim from
the employee, the Department has no authority to
file a civil action for the collection of wages.
(See Stafford, [vs. Bowling] 85 Ill. App.3d 
at 980-81, 41 Ill.Dec. 273, [276,] 407 N.E.2d 771,
[774 (1st Dist. 1980)]). The court in Amigleo v.
Bernardi also concluded that pursuant the Illinois
Minimum Wage Act, Ill.Rev.Stat. 1985, ¶ 48, ¶ 1012,
Any failure of the Plaintiff to recover the
underpayment is not the result of the
Department's failure to act, but the result of
the Plaintiff's own failure to institute a
private suit. . . .
Amigleo [v. Bernardi], 175 Ill. App.3d  at
456, 124 Ill.Dec. 903, 529 N.E.2d 1020 [(1st Dist.
Under the rules of statutory construction, a statute must be
viewed in its totality. Logically, if the Department of Labor's
duties under ¶ 39m-11(b) are discretionary, an employee's
private right of action under ¶ 39m-11(c) must avail to the
employee all that is due him or her under the Act, including
the ability to recover penalties accrued by an employer's
non-compliance under ¶ 39m-14(b) which are expressly due the
employee under that provision.*fn3
The court declines to adopt Wildwood's narrow interpretation
of ¶ 39m-11(c) and finds that the private right of action
established in that provision includes the employee's right to
prosecute the entirety of his or her claim for wages, benefits,
and penalties to which the employee has a right pursuant to the
Illinois Wage and Collection Act, Ch. 48, ¶ 39m-1 et. seq.
Regarding Wildwood's second issue of Illinois law, whether or
not Wildwood may avoid imposition of penalties under the Act by
tendering payment of the amount determined to be due, Wildwood
again fails to cite any authority for this position. The court
fails to find language in the statute which lends support
to this statement. Whether Wildwood did, in fact, violate the
Department of Labor's demand under ¶ 39m-14(b) is unclear from
the record and better left for a summary judgment motion after
For the reasons stated above, the Magistrate's Recommendation
is ACCEPTED. Defendant's Motion to Dismiss is DENIED on all
three counts; Defendant's Motion for a More Definite Statement
is DENIED as to Counts I and III and GRANTED as to Count II.
Plaintiff is directed to replead Count II within twenty-one
(21) days of this Order. Defendant is then directed to answer
Plaintiff's Complaint within fourteen (14) days thereafter.