The opinion of the court was delivered by: Magistrate Judge Geraldine Soat Brown
MEMORANDUM OPINION AND ORDER
The named plaintiffs in this case are former employees of
AppleIllinois, LLC ("AppleIllinois"), who worked in tipped positions
such as servers or bartenders. Plaintiffs brought several claims
against AppleIllinois, and several classes were certified.*fn1
One of the claims for which a class was certified was the
so-called "dual jobs" claim under the Illinois Minimum Wage Law,
Ill. Comp. Stat. §§ 105/1 et seq. ("IMWL"), described further below.
The named plaintiffs brought claims under the Fair Labor Standards
Act, 29 U.S.C. §§ 201 et seq. ("FLSA") on behalf
themselves only. (Third Am. Compl. Cnts. IV and V.) [Dkt 141.] The
named plaintiffs' Count IV parallels the plaintiff class's dual jobs
claim but is brought under the FLSA.
Now the plaintiff class and the named plaintiffs on one hand and AppleIllinois on the other hand have filed cross-motions for summary judgment on the dual jobs claims. (Pls.' Mot. [dkt 297]; Defs.' Mot. [dkt 353].) For the reasons set out below, plaintiffs' motion is granted, and AppleIllinois' motion is denied.*fn2
The class claim at issue is brought under the IMWL. That law requires employers to pay workers (with some exceptions) a minimum hourly rate. 820 Ill. Comp. Stat. §105/4(a)(1). However, it also provides:
Every employer of an employee engaged in an occupation in which gratuities have customarily and usually constituted and have been recognized as part of the remuneration for hire purposes is entitled to an allowance for gratuities as part of the hourly wage rate . . . . The Director shall require each employer desiring an allowance for gratuities to provide substantial evidence that the amount claimed, which may not exceed 40% of the applicable minimum wage rate, was received by the employee in the period for which the claim of exemptionis made, and no part thereof was returned to the employer. 820 Ill. Comp. Stat. § 105/4(c). That allowance is the "tip credit."
The FLSA likewise allows an employer to take a tip credit. Under the definition of "wage," the amount paid to a "tipped employee" can include an "amount on account of tips" received by such employee, subject to certain conditions. 29 U.S.C. § 203(m). "'Tipped employee' means any employee engaged in an occupation in which he customarily and regularly receives more than $30 a month in tips." 29 U.S. C. § 203(t).
The FLSA is relevant to the class's IMWL claim because the IMWL parallels the FLSA and the same analysis has generally been applied to both statutes. See, e.g., Condo v. Sysco Corp., 1 F.3d 599, 601 n. 3 (7th Cir. 1993) (adopting parties' agreement that FLSA and IMWL are coextensive, as supported by the Illinois Administrative Code and Illinois case law); Williams-Green v. J. Alexander's Rests., LLC, 277 F.R.D. 374, 378 (N.D. Ill. 2011); Ladegaard v. Hard Rock Concrete Cutters, Inc., No. 00 C 5755, 2004 WL 1882449 at *4 (N.D. Ill. Aug. 18, 2004) (citing Haynes v. Tru-Green Corp., 507 N.E.2d 945, 951 (Ill. App. 4th Dist. 1987)); O'Brien v. Encotech Constr., No. 00 C 1133, 2004 WL 609798 at *7 (N.D. Ill. Mar. 23, 2004).
The Illinois Administrative Code provides that the Director of the Illinois Department of Labor, in interpreting the IMWL and regulations thereunder, may look to the United States Department of Labor's regulations and interpretations of the FLSA. Ill. Admin. Code tit. 56, pt. 210.120 (2012). But the Code also provides that where there are concurrent state and federal powers, the stricter of the two shall prevail. Ill. Admin. Code tit. 56, pt. 210.100 (2012). Thus, if there is a difference in the interpretation of the IMWL and FLSA, the IMWL is more favorable to the employee.*fn3
An employer may take a tip credit "only for hours worked by [an] employee in an occupation in which [he] qualifies as a 'tipped employee.'" 29 C.F.R. § 531.59(b). Under either the FLSA or the IMWL, that means an occupation in which tips are customarily and regularly paid. 820 Ill. Comp. Stat. § 105/4(c); 29 U.S.C. § 203(t). In contrast, [a]n employee employed full time or part time in an occupation in which he does not receive more than $30 a month in tips customarily and regularly is not a "tipped employee" within the meaning of the Act and must receive the full compensation required by its provisions in cash or allowable facilities without any deduction for tips received under the provisions of section 3(m).
The regulations recognize that in some situations, an employee may be employed in a "dual job," such as a hotel maintenance employee who also serves as a waiter. 29 C.F.R. § 531.56(e). In such a situation, the employee is considered employed in two occupations and is a tipped employee only for the time he works as a waiter; the employer may not take a tip credit for the time the employee spends in his occupation of maintenance worker and must pay the employee at least the full minimum wage for that time. Id. The regulation further recognizes:
Such a situation is distinguishable from that of a waitress who spends part of her time cleaning and setting tables, toasting bread, making coffee and occasionally washing dishes or glasses. It is likewise distinguishable from the counterman who also prepares his own short orders or who, as part of a group of countermen, takes a turn as a short order cook for the group. Such related duties in an occupation that is a tipped occupation need not by themselves be directed toward producing tips. 29 C.F.R. § 531.56(e) (hereinafter the "dual jobs regulation"). The employer must maintain and preserve records that show, among other things, which employees are paid in part by tips, and, for those employees, how many hours in each workday are worked in occupations in which the employee receives tips and how many are worked in any occupation in which the employee does not receive tips. 29 C.F.R. § 516.28(a)
The Department of Labor's 1988 Field Operations Handbook interprets the dual jobs regulation:
Reg 531.56(e) permits the taking of the tip credit for time spent in duties related to the tipped occupation, even though such duties are not by themselves directed toward producing tips (i.e. maintenance and preparatory or closing activities). For example a waiter/waitress, who spends some time cleaning and setting tables, making coffee, and occasionally washing dishes or glasses may continue to be engaged in a tipped occupation even though these duties are not tip producing, provided such duties are incidental to the regular duties of the server (waiter/waitress) and are generally assigned to the servers. However, where the facts indicate that specific employees are routinely assigned to maintenance, or that tipped employees spend a substantial amount of time (in excess of 20 percent) performing general preparation work or maintenance, no tip credit make be taken for the time spent in such duties.
U.S. Dept. of Labor Field Operations Handbook Ch. 30d00(e) (Rev. 563) (Dec. 9, 1988) (emphasis added) (available at http://www.dol.gov) (last visited Aug. 24, 2012).
II. Procedural background
Over AppleIllinois' opposition, the court certified several classes under Federal Rule of Civil Procedure 23 for a number of plaintiffs' IMWL claims, including the "dual jobs" claim:
On Plaintiffs' claim under the IMWL with respect to the issue of non-tipped duties performed for tip credit rate wages, a class is certified consisting of persons employed by Defendant AppleIllinois, LLC, from October 6, 2003, to the conclusion of this action, who worked as tipped employees earning a sub-minimum, tip credit wage rate, and who performed duties unrelated to their tipped occupation for which they were not paid at the minimum wage rate. (Mem. Op. & Order, Mar. 2, 2010 at 47.) [Dkt 231.]
AppleIllinois sought interlocutory appeal of that decision, which was denied. [Dkt 234.] AppleIllinois' motion to decertify the class following the Supreme Court's decision in Wal-Mart Stores, Inc. v. Dukes, __ U.S. __; 131 S.Ct. 2541; 180 L.Ed.2d 374 (2011) was also denied. [Dkt 333.]
B. The Fast v. Applebee's case
A significant development since the class was certified here is the decision by the Eighth Circuit in Fast v. Applebee's Int'l, Inc., 638 F.3d 872 (8th Cir. 2011), a collective action case brought under the FLSA with a dual jobs claim virtually identical to the plaintiffs' dual jobs claims here. In its opinion upholding the district court's decision denying the employer's motion for summary judgment, the Eighth Circuit considered the FLSA, the dual jobs regulation, and the DOL's handbook and opinion letters regarding that regulation.
The court observed that the statutory text of 29 U.S.C. § 203(t) does not recognize the possibility of an employee performing more than one occupation for the same employer, and thus, the dual jobs test set out in the regulation is a creature of the DOL. Fast, 638 F.3d at 879. "The regulation, to which we owe Chevron deference, makes a distinction between an employee performing two distinct jobs, one tipped and one not, and an employee performing related duties within an occupation 'part of the time' and 'occasionally.'" Id. (referring to Chevron, U.S.A., Inc. v. Natl. Resources Def. Council, Inc., 467 U.S. 837 (1984)). But, the court observed, the regulation is itself ambiguous because it does not address an employee performing related duties more than part of the time or more than occasionally. Id. The DOL's interpretation contained in its Handbook, which concludes that employees who spend "substantial time" (more than 20%) performing related but non-tipped duties should be paid at the full minimum wage for that time without the tip credit, is not entitled to Chevron deference, but is entitled to deference under the standard of Auer v. Robbins, 519 U.S. 452, 461 (1997), that is, the interpretation is controlling unless plainly erroneous or inconsistent with the regulation. Fast, 638 F.3d at 878-79.
The question of which specific duties are subject to the 20% limitation was not finally determined by the court of appeals, which concluded only that the district court properly determined that the Handbook's interpretation governed the case. Id. at 881.
There is no such authority on point from the Seventh Circuit. In the absence of Seventh Circuit precedent, decisions by other courts of appeals, while not binding on a district court in the Seventh Circuit, are entitled to respectful consideration. U.S. v. Glaser, 14 F.3d 1213, 1216 (7th Cir. 1994); Colby v. J.C. Penney Co., Inc. 811 F.2d 1119, 1123 (7th Cir. 1987).
Both sides have moved for summary judgment on the dual jobs claims. Plaintiffs contend that AppleIllinois improperly paid employees at the tip credit rate for doing work that should have been paid at the minimum wage. AppleIllinois contests that conclusion, and argues that it is entitled to summary judgment because plaintiffs' claims are barred as a matter of law.
The parties have re-submitted many of the exhibits that were submitted in connection with the motion for class certification, including many of the previously-submitted declarations by current or former AppleIllinois employees.*fn4 The court has carefully re-reviewed those declarations, as well as the new materials submitted with the present motions. The facts are essentially uncontested. The dispute is about the legal consequences of the facts.
The class members are current and former tipped employees of 38 Applebee's restaurant locations in Chicago and the Chicago suburbs. (Dkt 319 ¶ 1.) AppleIllinois employs various hourly employees, who are divided into tipped positions (servers, bartenders, hosts and carside employees) and non-tipped positions (general utility workers ("GU"), expediters ("Expo"), line cooks, prep cooks, and kitchen professionals). (Id. ¶¶ 1-2.)*fn5 All of the plaintiff class are present or former servers, bartenders, hosts or carside workers whom AppleIllinois paid at the tip credit rate. (Dkt 307 ¶ 7.)
AppleIllinois is an Illinois limited liability company that opened and operated approximately 38 Applebee's restaurants within Illinois, and currently owns and operates approximately 34 Applebee's restaurants. (Dkt 307 ¶ 6.) Defendant W. Curtis Smith is the President, a member and a manager of AppleIllinois. (Dkt 307 ¶ 9.) Defendants James Borke, Archie Iodice and Jerry Kreger all are or were members of AppleIllinois. (Dkt 150 ¶¶ 9, 11-12.)
II. AppleIllinois' classifications of employees and their duties.
A. Tipped and non-tipped positions and hourly wage rates AppleIllinois' Corporate Policy as of January 2009 was submitted as an exhibit. (Dkt 356, Ex. A.) That document identifies "tipped positions" and "non-tipped positions," and lists the wage rates for the respective positions as of January 2009, noting that the Illinois minimum wage was then $7.75 per hour. (Id.at A-04715.) In that document, tipped positions are divided into "directly tipped": server (hire rate $4.65 per hour), bartender (hire rate $4.65 per hour), carside (hire rate $5.00 per hour); and "indirectly tipped": host/hostess (hire rate $4.35 per hour). (Id.) Non-tipped positions wage rates ranged from $7.75 for general utility ("GU") to $10.00 for service/kitchen professional. (Id.)
It is undisputed that, from at least October 2003 to the present, AppleIllinois paid servers, bartenders, hosts and carsides at an hourly "credit wage rate" that is less than minimum wage. (Dkt 307 ¶ 37.) Non-tipped employees are paid at least the minimum wage; in fact, expediters and kitchen staff make more than the minimum wage. (Dkt 299, Ex. A, Dep. of Ronald Long at 101-02.)*fn6
AppleIllinois has written "Position Descriptions" for each of those positions, both tipped and non-tipped. (Dkt 299, Ex. P.) These descriptions are AppleIllinois policy because they were adopted from the franchisor. (Dkt 299, Ex. J, Dep. of Scott Cortner at 166.) For example, as primary responsibilities, a GU employee (a non-tipped employee who receives minimum wage) "maintains kitchen work areas, equipment, plateware and utensils in a clean, sanitary and orderly condition. Assists in food preparation." (Dkt 299, Ex. P at A-12240.) The GU employee's "specific functions and duties" are:
1. Scrapes and pre-rinses food from dirty dishes and places them in dishwashing machine (50%).*fn7
2. Washes pots, pans and trays by hand and/or machine (15%).
3. Completes all assigned prep work (10%).
4. Removes trash and garbage to dumpster area (10%).
5. Washes work area tables, walls, refrigerator equipment, cooking equipment and floors (5%).
6. Cleans garbage cans and trash receptacles (5%).
7. Assembles, maintains and breaks down dish machine (5%). (Id.)
The expediter or "expo" is also a non-tipped, Back-of-the-House or
"BOH" position, paid at least at the minimum wage rate.*fn8
The expo line or station is an area in the back of the house
where final food preparation is done. The expediter reads tickets or
orders on the kitchen display system, pulls the items out, assembles
them on a counter-top and arranges them for the servers to take
(Long dep. at 99-101.) As described by AppleIllinois' Position Description, the expediter has the primary responsibility of "[c]oordination and consolidation for all outgoing food items from the kitchen assuring high standards of plate presentation and food quality." (Dkt 299, Ex. P at A-12239.) The "specific functions and duties" of an expeditor are:
1. Receive all incoming food orders (15%).
2. Clock in tickets and assure ticket cook times meet or exceed our standards (20%).
3. Communicate between the service staff and kitchen staff (5%).
4. Complete all plate presentations per the recipe/plate presentation specifications (30%).
5. Pass a final quality check on the food for plate presentation, temperature, garnish and time (5%).
6. Coordinate food delivery with food runners (20%).
7. Set up expediter station, keeping it clean, organized and stocked throughout the shift (5%).
(Id.) It can take as long as 5 minutes to "expo" the order for a single table. (See, e.g., Decl. April Bodine ¶55; Decl. Kristen Burch ¶ 44 (server ...