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Oropeza v. Appleillinois

January 5, 2010


The opinion of the court was delivered by: Geraldine Soat Brown United States Magistrate Judge

Magistrate Judge Geraldine Soat Brown


Before the court is the Motion for Leave to File Amended Answers and Defenses to the Third Amended Complaint filed by defendants AppleIllinois, LLC, W. Curtis Smith, James Borke, Archie Iodice and Jerry Kreger (collectively, "defendants"). [Dkt 197].*fn1 For the reasons set out below, the motion is granted in part and denied in part. Defendant AppleIllinois, LLC, may file amended affirmative defenses in accordance with this opinion by January 19, 2010.


In December 2006, the two named plaintiffs, Juan Oropeza and Jorge Lopez, filed their first complaint in this action against their former employer, AppleIllinois, LLC, alleging claims under the federal Fair Labor Standards Act ("FLSA"), the Illinois Minimum Wage Law ("IMWL") and the Illinois Wage Payment and Collection Act ("IWPCA"). (Compl.) [Dkt 1]. In May 2007, plaintiffs amended their complaint to add additional individual counts of discrimination and retaliation. (First Am. Compl.) [Dkt 22]. Plaintiffs amended their complaint twice more in 2009, adding certain AppleIllinois, LLC members and general managers as individual defendants. (Second Am. Compl.; Third Am. Compl.) [Dkt 113, 134.] Each of plaintiffs' four complaints have contained an allegation that the named plaintiffs were employed as "Kitchen Managers" at AppleIllinois' restaurants and were not exempt from the overtime wage provisions of the FLSA. (Compl. ¶¶ 4, 5, 14; First Am. Compl. ¶¶ 4, 5, 19; Second Am. Compl. ¶¶ 4, 5, 25; Third Am. Compl. ¶¶ 4, 5, 28.) AppleIllinois answered each complaint, consistently admitting that plaintiffs were non-exempt employees and admitting in its later two answers that plaintiffs were kitchen managers at the restaurants.*fn2 (Ans. to Compl. ¶ 14; Ans. to First Am. Compl. ¶ 19; Ans. to Second Am. Comp. ¶¶ 4, 5, 25; Ans. to Third Am. Compl. ¶¶ 4, 5, 28.) [Dkt 15, 24, 115, 141.]

Defendants now move for leave to amend their separate answers to Paragraph 28 of the most recent complaint, plaintiffs' Third Amended Complaint, in order to change their admission that the named plaintiffs are non-exempt employees under the FLSA and the IMWL to a denial based on the executive and/or administrative exemptions of those statutes. (Defs.' Mot. ¶ 8.) Defendant AppleIllinois also seeks leave to amend its answer to include the following affirmative defenses already asserted by the individual defendants: (1) recoupment, offset or overpayment; (2) waiver, estoppel and/or laches; and (3) failure, refusal or neglect to avoid or mitigate damages. (Id. ¶ 9.)

Defendants argue that their request for leave to amend is based upon information recently discovered during the depositions of the named plaintiffs. (Id. ¶ 5.) They claim (without quoting from or including any deposition excerpts) that the named plaintiffs testified that they were not "Kitchen Professionals, but rather, were Kitchen Managers paid on a salary basis of more than $455 per week." (Id. ¶ 6.) They argue (again, without any factual support) that the named plaintiffs' duties as kitchen managers were such that they would be exempt from the overtime provisions of the FLSA and the IMWL. (Id.) Defendants assert further that their contemplated amendment will not cause prejudice or delay, affect the course or timing of discovery with respect to either the named plaintiffs' individual claims or the opt-in plaintiffs' claims, or affect the timing of AppleIllinois' motion to decertify the collective action of this matter. (Id. ¶ 11.)

Plaintiffs oppose the motion on several grounds. First, they disagree with defendants' characterization of the named plaintiffs' deposition testimony. (Pls.' Resp. at 2-4.) [Dkt 200.] Plaintiffs submit excerpts of the named plaintiffs' deposition testimony in which they testified that they were to be paid hourly as kitchen managers. (Id. Ex. A, Dep. J. Lopez at 91- 92; id. Ex. B, Dep. J. Oropeza at 35-36.) Second, plaintiffs argue that defendants have known plaintiffs' job titles and payment structure since the start of this lawsuit, and thus defendants' motion for leave to amend rests on a change in strategy rather than the development of new facts. (Pls.' Resp. at 2-4.) Plaintiffs stress that their allegation that Mr. Oropeza and Mr. Lopez were kitchen managers has been present since the filing of their first complaint in 2006. (Id. at 4, citing Compl.) Finally, plaintiffs argue that defendants' change in strategy will cause delay and undue prejudice because plaintiffs have structured their discovery thus far on the understanding that defendants did not contest that element of their claims. (Id. at 4-5.)

Defendants refine their argument in their reply, explaining that they knew that Mr. Oropeza and Mr. Lopez contended they were kitchen managers although defendants' records showed that they were "Kitchen Professionals," typically a non-exempt position paid hourly. (Defs.' Reply at 1-2.) [Dkt 202.] According to defendants:

What did not become evident to AppleIllinois until the recent depositions of the Named Plaintiffs is that theirs was a completely unique situation wherein they were designated "Kitchen Professionals" internally for record keeping at AppleIllinois, but in actuality, they were paid on a salary basis and performed the functions of a Kitchen Manager, making them exempt employees. (Id. at 2.)*fn3 Even with their reply, however, defendants fail to include any factual evidence to support their position.


Fed. R. Civ. P. 15(a)(2) provides in pertinent part that the court should freely grant leave to amend a pleading when justice so requires. It is, however, wholly within the district court's sound discretion whether to grant or deny a motion to amend the pleadings. Thompson v. Boggs, 33 F.3d 847, 853 (7th Cir. 1994) (finding no error in district court's refusal to allow amendment to add new claim weeks before trial where defendant knew facts and could have asserted defense from the beginning); Fort Howard Paper Co. v. Standard Havens, Inc., 901 F.2d 1373, 1379 (7th Cir. 1990) (following grant of new trial, district court properly refused to allow amendment adding new defense where plaintiff had no notice and opportunity to prepare for it).

Leave to amend may be denied for "apparent or declared reason - such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc." Foman v. Davis, 371 U.S. 178, 182 (1962); Thompson, 33 F.3d at 853; J.D. Marshall Int'l., Inc. v. Redstart, Inc., 935 F.2d 815, 819 (7th Cir. 1991). Moreover, "the burden to the judicial system from allowing parties to change theories in midstream is a pertinent factor and may in appropriate cases justify a refusal to allow an amendment even if the amendment would cause no hardship at all to the opposing party." Tamari v. Bache & Co., 838 F.2d 904, 909 (7th Cir. 1988). While delay in moving to amend does not necessarily mean denial, "the longer the delay, the greater the presumption against granting leave to amend. The longer the delay in seeking leave to amend, the likelier is it both that the delay is inexcusable . . . and that granting leave to amend will, by further delaying the lawsuit, impair the ...

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