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Brianne Haschak, Jason Steinlauf and Nicole Adams, On Behalf of v. Fox & Hound Restaurant Group

November 14, 2012

BRIANNE HASCHAK, JASON STEINLAUF AND NICOLE ADAMS, ON BEHALF OF THEMSELVES AND ALL OTHER PERSONS SIMILARLY SITUATED, KNOWN AND UNKNOWN,
PLAINTIFFS,
v.
FOX & HOUND RESTAURANT GROUP, AND CHAMPPS OPERATING CORPORATION, D/B/A CHAMPPS AMERICANA, DEFENDANTS.



The opinion of the court was delivered by: Judge James B. Zagel

MEMORANDUM OPINION AND ORDER

Named plaintiffs Brianne Haschak, Jason Steinlauf and Nicole Adams have brought a class action complaint against defendants Fox & Hound Restaurant Group and Champps Operating Corporation, alleging violations of the Illinois Minimum Wage Law ("IMWL") and the Fair Labor Standards Act ("FLSA"). Both counts are premised on the allegation that Defendants have maintained a policy under which employees are paid a sub-minimum, "tipped" wage for time spent performing "untipped" duties that are unrelated to their "tipped occupation."

With respect to the IMWL claim, Plaintiffs have moved under Fed.R.Civ.P 23(b)(3) to certify a class defined as:

All persons employed in Illinois by Champps Operating Corporation, doing business as Champps Americana, from December 17, 2007, 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 minimum wage.

With respect to the FLSA claim, Plaintiffs have moved under 29 U.S.C. § 216(b) to authorize notice of a collective action to potential class members. Defendants oppose both motions. For the reasons that follow, Plaintiffs' motions are granted.

BACKGROUND

Defendants own and operate over 40 restaurants in fifteen states. Five of these restaurants are located in Illinois. The named plaintiffs all worked at one of the five, located in Lincolnshire, as bartenders and/or wait staff. As "tipped employees," the named plaintiffs and other putative class members were, on the face of it, legally paid a wage below the legal minimum. A tipped employee is one who is engaged in an occupation in which he or she regularly and customarily receives more than $30 per month in tips. 29 U.S.C. § 203(t). Because of this additional source of income, Illinois law permits employers to pay employees engaged in such occupations at a rate as low as sixty percent of the required minimum wage. See 820 ILCS 105/4(c); see also 29 U.S.C. § 203(m).

Crucially, however, this exemption from the minimum wage requirement is only properly applied to time spent doing work for which the employee customarily receives tips. Time spent performing other required duties that are not "related" to the tipped occupation must be compensated at no less than the minimum wage. See 29 C.F.R. § 531.56(e).

Plaintiffs assert that Defendants maintain a policy at the corporate level wherein employees are regularly and formally required to perform tasks unrelated to their tipped occupation. Referred to as "sidework" by Defendants, Plaintiffs contend that Defendants' practice of compensating their employees at a sub-minimum, tipped wage rate for this sidework is in violation of the Illinois Minimum Wage Law ("IMWL"), 820 ILCS 105/1, et seq. and the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 216(b). Plaintiffs seek, inter alia, payment of unpaid minimum wages and punitive damages.

DISCUSSION

I. Class Certification

Class action suits are governed by Fed.R.Civ.P. 23, and the Rule's familiar two-step analysis is required to determine if class certification is appropriate. First, the proposed class must satisfy all four requirements of Rule 23(a): (1) numerosity; (2) commonality; (3) typicality; and (4) adequacy of representation. Second, the proposed class must also satisfy at least one of the requirements listed under Rule 23(b). Here, Plaintiffs seek class certification under Rule 23(b)(3), which the Seventh Circuit has described as requiring "a case in which the common questions predominate and class treatment is superior." Spano v. Boeing Co., 633 F.3d 574, 583 (7th Cir. 2011).

While subsequent factual testing under Rule 56 or at trial permits a court simply to accept a complaint's allegations for purposes of ruling, for example, on a 12(b)(6) motion, "an order certifying a class usually is [a court's] last word on the subject." Szabo v. Bridgeport Machines, Inc., 249 F.3d 672, 676 (7th Cir. 2001). Consequently, a court must make all legal and factual inquiries that are necessary under Rule 23 at the class certification stage. This may require "touching aspects of the merits" and "prob[ing] behind the pleadings." See Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2551-52 (2011) (citing General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 160 (1982); Szabo, 249 F.3d at 676-77).

A. Rule 23(a)

Defendants do not contest that the putative class satisfies the requirements of Rule 23(a), apparently reserving their argument to dispute whether Rule 23(b)(3) is satisfied. I will nevertheless ...


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