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Melody Dominguez, Stephanie Holdren, and All Other Plaintiffs v. Quigley's Irish Pub

May 24, 2011

MELODY DOMINGUEZ, STEPHANIE HOLDREN, AND ALL OTHER PLAINTIFFS SIMILARLY SITUATED KNOWN AND UNKNOWN, PLAINTIFFS,
v.
QUIGLEY'S IRISH PUB, INC., NANCY
QUIGLEY, AND MICHELE MICHAEL, INDIVIDUALLY, DEFENDANTS.



The opinion of the court was delivered by: Magistrate Judge Jeffrey Cole

MEMORANDUM OPINION AND ORDER

INTRODUCTION

Melody Dominguez and Stephanie Holdren filed this lawsuit against their former employer, Quigley's Irish Pub, Inc., and against Nancy Quigley and Michelle Michael, individually, alleging violations under the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. ("FLSA"), the Portal-to-Portal Act, 29 U.S.C. § 251, et seq., and the Illinois Minimum Wage Law, 820 Ill. Comp. Stat. 105/1 et seq. ("IMWL"). In their two-count Amended Complaint [76], the plaintiffs claim that the defendants failed to pay them minimum wages and overtime as required by law. Both parties have moved for summary judgment.*fn1

BACKGROUND

A. Summary Judgment Standard Under Local Rule 56.1

For summary judgment purposes, the relevant background facts are derived from the parties' Local Rule 56.1 submissions, which assist the court in "organizing the evidence, identifying undisputed facts, and demonstrating precisely how each side propose[s] to prove a disputed fact with admissible evidence." Bordelon v. Chicago Sch. Reform Bd. of Trs., 233 F.3d 524, 527 (7th Cir. 2000). Indeed the Rule is "'key'" to that task. F.T.C. v. Bay Area Business Council, Inc., 423 F.3d 627, 634 (7th Cir. 2005).

The rule requires a party seeking summary judgment to include with its motion "a statement of material facts as to which the.party contends there is no genuine issue and that entitle the.party to a judgment as a matter of law." Local Rule 56.1(a)(3); Ciomber v. Cooperative Plus, Inc., 527 F.3d 635, 643 (7th Cir. 2008). Each paragraph must refer to the "affidavits, parts of the record, and other supporting materials" that substantiate the asserted facts. Local Rule 56.1(a)(3); Bay Area Business Council, Inc., 423 F.3d at 633. The party opposing summary judgment must then respond to the movant's statement of proposed material facts; that response must contain both "a response to each numbered paragraph in the moving party's statement," Local Rule 56.1(b)(3)(B), Cracco v. Vitran Exp., Inc., 559 F.3d 625, 632 (7th Cir. 2009); Bay Area Business Council, Inc., 423 F.3d at 633, and a separate statement "consisting of short numbered paragraphs, of any additional facts that require the denial of summary judgment." Local Rule 56.1(b) (3)(C); Ciomber, 527 F.3d at 643.

If the moving party fails to comply with the Rule, the motion can be denied without further consideration. Local Rule 56.1(a)(3); Smith v. Lamz, 321 F.3d 680, 682 n. 1 (7th Cir. 2003). If the responding parting fails to comply, its additional facts may be ignored, and the properly supported facts asserted in the moving party's submission are deemed admitted. Local Rule 56.1(b)(3)(C); Montano v. City of Chicago, 535 F.3d 558, 569 (7th Cir. 2008); Cracco, 559 F.3d at 632; Cady v. Sheahan, 467 F.3d 1057, 1061 (7th Cir. 2006). District courts are "'entitled to expect strict compliance'" with Rule 56.1 and do not abuse their discretion when they opt to disregard facts presented in a manner that does follow the Rule's instructions. Cracco, 559 F.3d at 632; Ciomber, 527 F.3d at 643; Ammons v. Aramark Unif. Servs., Inc., 368 F.3d 809, 817 (7th Cir. 2004). The court is not required to scour the record for evidence that supports a party's case if the party fails to point it out; that is the counsel's job. See Bay Area Business Council., 423 F.3d at 633.

In the instant case, the parties filed their respective motions for summary judgment on the same day. [Dkt Nos. 59 and 61]. Thereafter, the plaintiffs responded to Defendants' Statement of Material Facts ("Defs. SOF") [69] as required by Local Rule 56.1. The defendants, however, failed to respond to Plaintiffs' Statement of Material Facts ("Pls. SOF"). And, although the defendants properly submitted a statement of facts in support of their own Motion for Summary Judgment, that is not an adequate substitute for the specific, paragraph-by-paragraph response required by Local Rule 56.1. It is not the responsibility of the court to compare the defendants' Rule 56.1 Statement in support of their Motion for Summary Judgment to the plaintiffs' Rule 56.1 filing in support of their Motion for Summary Judgment. Indeed, that is the very sort of endeavor that Rule 56.1 is designed to eliminate.

As the court emphasized in Bay Area Business Council, even where a party files an affidavit in purported response to a Rule 56.1 filing, the affidavit will not suffice. A court is not obligated to conduct a paragraph-by-paragraph comparison to determine what is and what is not in dispute: .the defendants suggest the district court should have harked back to affidavits submitted with their answer to the FTC's amended complaint and their motion in opposition to the preliminary injunction. But local rules such as 56.1 exist precisely because the district court is not "obliged . to scour the record looking for factual disputes."

423 F.3d at 634 (citation omitted).*fn2 Here, the defendants have not even made a pretense of filing a document that purportedly is responsive to a Rule 56.1 filing of the opposing party. The defendants have done nothing to respond to the plaintiffs' filing and thus, the plaintiffs' Statement of Facts is admitted.

B. The Material Facts In The Parties' Rule 56.1 Statements

In Support Of Their Motions For Summary Judgment

Quigley's Irish Pub is a restaurant and bar located in Naperville, Illinois. (Pls. SOF ¶ 4); (Defs. SOF ¶ 5). The Pub is owned and operated by Nancy Quigley and Michelle Michael. (Pls. SOF ¶ 5). Among other things, Ms. Quigley and Ms. Michael have the authority to hire and fire employees, direct and supervise the work of employees, sign on the Pub's checking and payroll accounts, and make or participate in decisions regarding employee compensation and capital expenditures. (Pls. SOF ¶ 5).

Melody Dominguez is a former Pub employee. (Pls. SOF ¶ 1); (Defs. SOF ¶ 1). She worked at the Pub from August 2006 until February 15, 2009. (Pls. SOF ¶ 1). However, Ms. Dominguez did not work at the Pub for a period of approximately twenty weeks between November 10, 2006 and March 30, 2007. (Pls. SOF ¶ 1). Throughout her employment, Ms. Dominguez worked primarily as a server. (Pls. SOF ¶ 3). As a server, Ms. Dominguez was paid less than the applicable full minimum wage, and instead was paid the lower "tipped employee" rate. (Pls. SOF ¶ 3). Stephanie Holdren, also a former Pub employee, worked from March 2, 2009 until September 19, 2009, primarily as a server and was likewise paid the lower tipped employee rate. (Pls. SOF ¶¶ 2-3).

The defendants inform prospective employees of the minimum wage and server minimum wage to the extent that Ms. Dominguez and Ms. Holdren were told that they would be paid the server minimum wage during their interviews. (Plaintiffs' Objections and Responses to Defendants' Statement of Material Facts (("Pls. Resp.") at ¶11). The Pub also gives its servers written notification of increases in the minimum wage. (See Defs. SOF ¶ 12, 13; Defs. Ex. A -- June 11, 2009 Memorandum to Employees; Defs. Ex. 83 -- June 20, 2008 Memorandum to Employees). Although Ms. Dominguez denies that the defendants notified her of the Pub's intent to take a tip credit, it is unclear whether this blanket denial extends to whether she even received the Pub's written memo regarding the minimum wage. (See Pls. Resp. at 5). The memorandum at issue in Ms. Dominguez's case is dated June 20, 2008 and reads: "Effective July 1, 2008, the State of Illinois will increase the minimum wage to $7.75 per hour. Tipped employees' minimum wage will increase to $4.65 per hour." (Defs. Ex. 83). The memo further states that information was available posted on the office door and on the Federal and State Law posters located by the schedule board. (Defs. Ex. 83).

Ms. Holdren similarly denies that the Pub notified her of its intent to take a tip credit, but admits receiving a memo regarding a minimum wage increase dated June 11, 2009. (Pls. Resp. at 5; Defs. Ex. A). That memo states: "Effective July 1, 2009, the State of Illinois will increase the minimum wage to $8.00 per hour. Tipped employees minimum wage increases to $4.80 per hour." (Defs. Ex. A)(Emphasis supplied). Although the defendants do not point it out specifically, this memo differs slightly from the June 20, 2008 memo in that it also states that "[t]he difference between the minimum wage on regular earnings v. tipped employees is the tip credit (tips collected by employees)." (Defs. Ex. A) (parenthetical in original).

The Pub prominently displays state and federal wage and labor notices/posters. (Defs. SOF ¶ 15). Both Ms. Dominguez and Ms. Holdren acknowledge seeing the posters on display near the back of the Pub. (See Defs. SOF ¶ 15; Defs. Ex. G -- Dominguez Dep. at 43-45, "It was in plain view"; Defs. Ex. H -- Holdren Dep. at 17-18).

The defendants pay their servers by the minute. (Pls. SOF ¶ 14; Pls. Ex. B -- Michael Dep. at 35; Pls. Ex. C -- Quigley Dep. at 33). The Pub uses a Point of Sales computer system to keep time records of hours worked by its servers. (Pls. SOF ¶ 8). Servers are required to clock-in and clock-out on the computer system using their individual employee number. (Pls. SOF ¶¶ 9, 10). Throughout their employment, Ms. Dominguez and Ms. Holdren would begin working immediately after clocking-in to the system. (Pls. SOF ¶¶ 9, 10). Then, when they finished working, they would clock-out. (Pls. SOF ¶ 9).

The Pub's time records indicate -- and the defendants do not deny -- that Ms. Dominguez is due wages and overtime during the pay period starting on September 22, 2008 and ending on October 5, 2008. (Pls. SOF ¶ 27). During this period, Ms. Dominguez worked a total of 74.37 hours, with 3.45 hours being overtime. (Pls. SOF ¶ 27). However, she was only paid 70.92 hours at her regular rate, and was not paid for the 3.45 hours of overtime. (Pls. SOF ¶ 27).

Similarly, Ms. Dominguez was not paid .71 hours of overtime work due during the pay period of June 16, 2008 through June 29, 2008. (Pls. SOF ¶ 28). Ms. Dominguez was paid overtime for the weeks beginning November 19, 2007, May 19, 2008, May 26, 2008, August 18, 2008, September 8, 2008, and September 15, 2008. (Pls. SOF ¶ 29).

The great source of contention in this case, however, stems from alleged unpaid wages and overtime resulting from the defendants' frequent and undisputed adjusting of the Pub's computer time records. The Point of Sales computer system allows the defendants to alter employees' clock-in and clock-out times. (Pls. SOF ¶ 8). The defendants frequently changed servers' time records -- including Ms. Dominguez's and Ms. Holdren's -- and trained their managers to do so as well. (Pls. SOF ¶¶ 11, 12, 13). For example, when either Ms. Dominguez or Ms. Holdren clocked-in and began working before their shift was scheduled to start, the defendants frequently changed their clock-in time on the system manually to reflect the start time of their scheduled shift. (Pls. SOF ¶¶ 10, 12). The defendants would similarly adjust Ms. Dominguez's and Ms. Holdren's in and out times even though they claimed to have been working the entire time they were clocked-in. (Pls. SOF ¶¶ 10, 12).

Instead of their actual clock-in and clock-out times, the Pub used the altered time records to determine Ms. Dominguez's and Ms. Holdren's weekly wages. (Pls. SOF ¶¶ 14, 15). Prior to approximately May 2008, the Pub used a Point of Sales computer system by Hospitality Solutions International ("HSI") (Pls. SOF ¶ 8). Since approximately May 2008, the Pub has used a system by 24 X 7 Hospitality ("24 X 7"). (Pls. SOF ¶ 8). Although both systems work the same way, (Pls. SOF ¶ 8), HSI maintains electronic logs (i.e. metadata) showing the servers' original clock-in and clock-out times, while 24 X 7 does not save the original information. (Pls. SOF ¶ 11).

The available logs indicate that between August 30, 2006 and April 27, 2008, Ms. Dominguez's time records were altered 163 times. (Pls. SOF ¶17). Specifically, her clock-in time was changed 127 times, and her clock-out time was adjusted 36 times. (Pls. SOF ¶ 17). The exact number of times that Ms. Dominguez's time records were changed after April 27, 2008 cannot be determined because, after April 2008, the Pub began using the 24 X 7 computer software that no longer maintained a log of the changes. (See Pls. SOF ¶ 11). Likewise, the changes made to Ms. Holdren's time records were not tracked in the Pub's computer system since she only began working on or about March 2, 2008, and by April the Pub had switched over to the 24 X 7 system. (Pls. SOF ¶¶ 2, 11). Nonetheless, the defendants admit they continued to change Ms. Dominguez's time records at the same frequency after April 27, 2008, and also altered Ms. Holdren's time records throughout her employment. (Pls. SOF ¶¶ 11, 17, 18).

The Pub used a three-strike progressive discipline policy. (Pls. SOF ¶ 16). Typically, an employee would be terminated after his or her third violation of the Pub's policies -- although managers would occasionally make exceptions for minor violations, such as clocking-in early and not working. (Pls. SOF ¶ 16). However, an employee would eventually be written up and/or terminated for repeated minor violations. (Pls. SOF ¶ 16). Although the defendants frequently changed Ms. Dominguez's and Ms. Holdren's time records (Pls. SOF ¶¶ 17, 18), and defendants had a policy against clocking-in early and not working (Pls. SOF ¶ 16), neither Dominguez nor Holdren were ever written-up or fired for such conduct. (Pls. SOF ¶¶ 19, 20).

The defendants also have a policy requiring servers to reimburse the Pub if a customer walks out without paying after 9:00 p.m (Pls. SOF ¶ 21; Pls. Ex. B -- Michael Dep. at 63; Pls. Ex. C -- Quigley Dep. at 48). The defendants' walk-out policy was implemented approximately one year after the Pub opened and was in effect throughout Ms. Dominguez's and Ms. Holdren's employment. (Pls. SOF ¶¶ 1, 2, 22).

The defendants do not maintain any written records of when an employee reimburses the Pub for a walk-out. (Pls. SOF ¶ 23). Neither do the defendants have any specific recollection of either Ms. Dominguez or Ms. Holdren reimbursing the Pub for walk-outs during the course of their employment. (See Pls. SOF ¶ 26; Pls. Ex. B -- Michael Dep. at 66-67; Pls. Ex. C -- Quigley Dep. at 48). However, both Ms. Dominguez and Ms. Holdren recall having reimbursed the Pub under the walk-out policy. (Pls. SOF ¶¶ 24, 25; Pls. Ex. G -- Dominguez Dep. at 7-9, 66-67; Pls. Ex. L -- Holdren Dep. at 10-12, 25).

At her deposition, Ms. Holdren stated that she reimbursed the Pub seventy dollars for a walk-out that occurred in the middle of the afternoon in March 2009. (Pls. SOF ¶ 24; Pls. Ex. L -- Holdren Dep. at 10-12, 25). Ms. Holdren said that she paid the Pub using money from her tips. (Pls. SOF ¶ 24; Pls. Ex. L -- Holdren Dep. at 11-12). Likewise, Ms. Dominguez stated at her deposition that she reimbursed the Pub for customer walk-outs during her employment. (Pls. SOF ¶ 25; Pls. Ex. G -- Dominguez Dep. at 7-9, 66-67).

Despite not having any records of walk-out reimbursements, the defendants claim that Ms. Dominguez and Ms. Holdren kept all of their tips. Although the Pub admits having a self-styled "anti-theft" policy which mandated that employees reimburse the Pub for a customer walk-out, the defendants claim that servers were not required to reimburse the Pub out of their tips. (See Defs. SOF ¶ 16; Defs. Ex. B -- Quigley Dep. at 6). Servers also had the option of either taking a written write-up or reimbursing the Pub for the walk-out. (Pls. SOF ¶ 21; Pls. Ex. B -- Michael Dep. at 63; Pls. Ex. C -- Quigley Dep. at 48).*fn3

Ms. Dominguez and Ms. Holdren seek partial summary judgment as to the defendants' liability for unpaid minimum wages and overtime. They contend that, at a minimum, Ms. Dominguez is owed 4.16 overtime hours for uncontested overtime work performed during the June 16-29, 2008 and the September 22-October 5, 2008 pay periods. The bulk of their claims, however, relate to unpaid amounts resulting from the defendants' use of the altered time records to calculate payroll. In a related claim, they contend that the Pub was not entitled to take a "tip credit" (i.e. to pay its servers at the lower "tipped employees rate") because the Pub did not meet the statutory prerequisites. Finally, they contend that the Pub's owners, Ms. Quigley and Ms. Michael, may be held individually liable as employers under the FLSA in addition to the Pub, itself.

The defendants have countered with their own motion for summary judgment, claiming that the Pub's records clearly indicate that Ms. Dominguez and Ms. Holdren were paid for any and all overtime they worked. The defendants do acknowledge that the time records show that 4.16 hours of overtime is due to Ms. Dominguez, but they insist that those amounts resulted from a mere bookkeeping error. They further contend that they are entitled to summary judgment on the question of the Pub's entitlement to take a tip credit because it ...


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