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GLASS v. KEMPER CORP.

April 1, 1996

GREGORY GLASS, Plaintiff,
v.
KEMPER CORPORATION, THE PRIME GROUP, INC., PRIME INTERNATIONAL, INC., STEVEN TIMBERS, JOHN NEAL, and MICHAEL OBERST, Defendants.



The opinion of the court was delivered by: ALESIA

 Before the court are the defendants Kemper Corporation's ("Kemper"), The Prime Group, Inc.'s ("Prime"), Prime International, Inc.'s ("PII"), Stephen Timbers' ("Timbers"), and John Neal's ("Neal") (collectively, "defendants") motions to dismiss Count VI of plaintiff Gregory Glass's ("Glass") first amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons that follow, the court grants defendants' motions to dismiss Count VI of Glass's first amended complaint.

 I. BACKGROUND1

 Some time in the early 1990s, Kemper, Prime, and PII, all Illinois corporations with their principal places of business in Illinois, began a project to develop the Diagonal Mar shopping mall in Barcelona, Spain. In November 1992, Prime and PII hired Glass to manage the Diagonal Mar project. Glass, now a Wisconsin resident and a Georgia resident prior to beginning work for Prime and PII, moved to Barcelona and performed all of his work on Diagonal Mar in Barcelona.

 In May 1994, Kemper gained control of Prime, PII, and the other subsidiaries, divisions, and affiliates related to Diagonal Mar. Oberst, a vice president of Kemper and managing director of Kepro, which held title to the Diagonal Mar property, told Glass that Glass now worked for Kemper. From May 1994 through October 1994, Oberst and Glass negotiated Glass's employment contract with Kemper. Oberst made repeated representations to Glass that Glass now worked for Kemper; that he would be paid the equivalent of $ 400,000 per year; that he would be employed until the project was completed, or through March 31, 1995, if Kemper chose to terminate the project; that if Kemper ended the project, Glass would receive a minimum of a $ 200,000 severance package; that if Kemper proceeded with Diagonal Mar, Glass would receive annual bonuses of up to $ 200,000 and equity participation in the project; that if Glass sold his Atlanta home and resided full-time in Spain, Kemper would pay all brokers' fees and closing costs; and that Glass must devote all of his time and attention to Diagonal Mar.

 Glass withdrew from all other projects and sold his Atlanta home. In September 1994, Glass received a memorandum outlining the employment agreement between Kemper and Glass, and accepted the employment terms.

 On October 20, 1994, Kemper, through Oberst, terminated Glass's employment, effective November 20, 1994. Oberst stated that the terms of Glass's termination were pursuant to a 1992 services agreement between Prime and Kepro and that the September 1994 offer was withdrawn.

 Glass filed a six-count cause of action, which he subsequently amended, against defendants, making allegations of fraud, breach of contract, promissory estoppel, equitable estoppel, unjust enrichment, and violation of the Illinois Wage Payment and Collection Act. Defendants now move to dismiss Count VI of Glass's first amended complaint, alleging violation of the Illinois Wage Payment and Collection Act. *fn2"

 II. DISCUSSION

 A. Standard for motion to dismiss

 When deciding a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the court must accept all factual allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Cromley v. Board of Educ. of Lockport, 699 F. Supp. 1283, 1285 (N.D. Ill. 1988). If, when viewed in the light most favorable to the plaintiff, the complaint fails to state a claim upon which relief can be granted, the court must dismiss the case. See FED. R. CIV. P. 12(b)(6); Gomez v. Illinois State Board of Educ., 811 F.2d 1030, 1039 (7th Cir. 1987). However, the court may dismiss the complaint only if it appears beyond doubt that the plaintiff can prove no set of facts in support of his claims that would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 102, 2 L. Ed. 2d 80 (1957).

 B. Analysis of Wage Payment and Collection Act

 In Count VI of his first amended complaint, Glass seeks recovery of unpaid wages pursuant to the Illinois Wage Payment and Collection Act ("Wage Act"), 820 ILCS 115/1 - 115/16. Specifically, Glass seeks in excess of $ 700,000 for lost salary, lost bonus opportunities, severance pay, and damages associated with the closing costs of his Atlanta home.

 The Wage Act provides a means for employees to collect wages due them. See generally 815 ILCS 115/4 - 115/6. It applies "to all employers and employees in this State, including employees of units of local governments and school districts, but excepting employees of the State or Federal governments." 815 ILCS 115/1. Defendants base their motion to dismiss on this provision. They argue that the Wage Act applies only to employers and employees in Illinois, and does not apply to employees working outside the state of Illinois. Therefore, it does not apply to Glass, who never was an Illinois resident and did all of his work outside of Illinois. Glass counters that the Wage Act applies to Illinois employers and is meant to prevent them from depriving their employees of wages. Therefore, because defendants are residents of Illinois, the Wage Act covers their conduct towards Glass and provides Glass a remedy to recover his wages.

 Unfortunately, neither the Illinois legislature nor the Illinois judiciary has answered the question whether the Wage Act applies to non-resident employees performing their work outside of Illinois. The legislature did not define "employee" in the act, and failed to provide any explanation of where the employee must reside or work to be able to invoke the Wage Act. Furthermore, no Illinois court has interpreted section 115/1 of the act. The court finds it surprising that the issue now before it is an issue of first impression, but apparently it is. ...


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