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").
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