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Kim Emanuel v. Rolling In the Dough

November 21, 2012

KIM EMANUEL, PLAINTIFF,
v.
ROLLING IN THE DOUGH, INC., AND KENNETH R. LINDEMAN, THE HONORABLE SHARON JOHNSON COLEMAN DEFENDANTS. ROLLING IN THE DOUGH, INC., AND KENNETH R. LINDEMAN, THIRD-PARTY PLAINTIFFS,
v.
DAVID P. SHAFER, THIRD-PARTY DEFENDANT.



MEMORANDUM OPINION AND ORDER

This matter comes before the Court on cross-motions for summary judgment. Defendants, Rolling in the Dough, Inc. and Kenneth R. Lindeman, filed a motion for summary judgment seeking judgment as a matter of law in their favor finding that plaintiff Kim Emanuel is not an employee under the Fair Labor Standards Act ("FLSA") and that such a finding defeats Emanuel's FLSA claim for wages and her claims under the Illinois Minimum Wage Law and quantum meruit. Emanuel also filed for summary judgment requesting that this Court find that she is an employee within the meaning of FLSA and Illinois Minimum Wage Law, and that defendant Lindeman had constructive knowledge of her work. For the reasons stated below, this Court finds in favor of defendants and against plaintiff.

Background

Unless otherwise noted, the following relevant facts are undisputed. Defendant Rolling in the Dough, Inc. is a corporation that operates several Domino's Pizza franchises in the Chicago area. Defendant Kenneth R. Lindeman is the owner of Rolling in the Dough. Plaintiff Kim Emanuel's boyfriend and domestic partner David Shafer managed the Domino's Pizza restaurant located in Elmhurst, Illinois ("the Elmhurst store") operated by defendants.

At some point in 2007, Emanuel told Shafer that she wanted to work at the Elmhurst store. Emanuel wanted to help Shafer with his effort to become a Domino's Pizza franchise owner.*fn1 Shafer informed Emanuel that he would have to speak to Lindeman about Emanuel working at the Elmhurst store. Thereafter, Shafer told Emanuel that Lindeman "believed your talents can be better utilized somewhere else." (Defendants' Local Rule 56.1 Statement of Material Facts, Dkt. 94, at

¶10). Sometime later, Shafer communicated to Emanuel that she could begin working at the Elmhurst store. Emanuel's deposition testimony as cited by plaintiff in her Response to Defendants' LR 56.1 Statement of Facts, indicates that she assumed Shafer spoke to Lindeman. (Dkt. 105, at ¶ 12). Her testimony is as follows: "Q. So Mr. Shafer communicated to you that Mr. Lindeman had said to him that you can come in and perform services at the Elmhurst store? A. I would say yes. Q. Why would you say yes? A. Because he didn't tell me not to come in; and he saw me at the store, the president saw me in the store, area leaders saw me in the store." (Dkt. 94-1 at 65:18-66:1). Emanuel further testified, Q. "I'm asking about whether Mr. Shafer had a conversation with you before you started working at the Elmhurst store where he said that he had spoken to Mr. Lindeman and that Mr. Lindeman said that it was okay for you to come work there.

A. I'm sure we did have a conversation. Otherwise Ken Lindeman probably would have told me get the hell out of my [sic] store." (Dkt. 94-1 at 67:2-9). Emanuel alleges that she worked at the Elmhurst store from late 2007 until approximately December 2009. In an email exchange from April 2008 between Lindeman and Shafer, Lindeman stated that it would violate the company's nepotism policy for Emanuel to be a paid store employee. (Dkt. 94 at ¶15). It was Shafer's understanding from this communication that defendants had made a determination that they would not permit Emanuel to be a paid store employee. (Dkt. 94 at ¶16; Dkt. 94-3 at 82:2-12).

Defendants never promised to pay Emanuel for working in the store. Defendants never told Emanuel directly or indirectly that they would pay her for working at the Elmhurst store during the entire time she claims to have worked. Emanuel never had an agreement with Lindeman that defendants would pay her for any work performed at the Elmhurst store. Shafer never promised to pay Emanuel for any services she performed at the Elmhurst store. An IRS Form I-9 was never completed for Emanuel. No IRS Form W-4 was ever completed for Emanuel. No "new hire" paperwork was ever completed for Emanuel. All employees of Rolling in the Dough were required to provide banking information to receive direct deposit for any wage payments. Defendants assert that no financial information for Emanuel was ever provided to defendants. Plaintiff denies this assertion because Shafer and Emanuel had a joint checking account and therefore defendants had Emanuel's financial information. (Dkt. 105 at ¶28).

Emanuel believed her role at the Elmhurst store was sharing the general store management duties with Shafer and doing the same job as Shafer. Emanuel and Shafer's plan for Emanuel was that she would operate the Elmhurst store while Shafer went out and delivered pizzas. Shafer was the general manager of the Elmhurst store and no other stores operated by defendants had more than one general manager.

Shafer stopped working for defendants around November or December 2009. Shafer would not have left defendants employ if he was paid the profits that he believed were owed to him under his agreement with Lindeman. Emanuel working at the Elmhurst store was not part of the agreement between Shafer and Lindeman. Shafer testified as follows: "Q. But just so we're clear, Kim's working at the store without being paid, that wasn't part of the deal for you purchasing the store and becoming a franchisee. You're not saying that, are you? A. Of course not. She worked at the store because it made more sense for our family because she was going to school in Elmhurst. And she was working on the other side of the city. So in terms of making our lives better in terms of timing and effort and timewise, it made more sense for her to be an employee at the store." (Dkt. 94-3 at 159:20-160:5). Shafer believed that Emanuel would have continued working at the Elmhurst store without pay, if Shafer had not quit.

Legal Standard

A party is entitled to summary judgment if all of the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). When considering a summary judgment motion, the Court construes the facts and all reasonable inferences in the light most favorable to the non-moving party. Abdullahi v. City of Madison, 423 F. 3d 763, 773 (7th Cir. 2005). The party who bears the burden of proof on an issue may not rest on the pleadings or mere speculation, but must affirmatively demonstrate that there is a genuine issue of material fact that requires a trial to resolve. Celotex v. Catrett, 477 U.S. 317, 324 (1986). On cross-motions, summary judgment is appropriate only when evidence as a whole shows there is no genuine dispute as to any material fact, Davis v. Time Warner Cable of Southeastern Wis., L.P., 651 F.3d 664, 671 (7th Cir. 2011), regardless to which motion the evidence is attached. Las Vegas Sands, LLC v. Nehme, 632 F.3d 526, 532 (9th Cir. 2011).

Discussion

Resolution of the issues before the Court requires determination of whether plaintiff Emanuel was an employee under the FLSA. Defendants argue that Emanuel was not an employee under the FLSA because it is undisputed that defendant Lindeman expressly stated on more than one occasion that he would not pay her and that her talents would be better used elsewhere. In effect, defendants' position is that they never hired Emanuel as an employee and therefore were never under any obligation to compensate her. Emanuel argues that she was an employee because Lindeman did not prevent her from working in the Elmhurst store even though he was aware that she was sometimes present at the store and her name appeared on the timesheets sent to Lindeman.

The determination of an individual's employment status is a legal rather than a factual determination. Karr v. Strong, 787 F.2d 1205, 1206 (7th Cir. 1986). "Those seeking compensation under the [Fair Labor Standards] Act bear the initial burden of proving that an employer-employee relationship exists and that the activities in question constitute employment for purposes of the Act." Benshoff v. City of Va. Beach, 180 F.3d 136, 140 (4th Cir. 1999); see also Kellar v. Summit Seating Inc., 664 F.3d 169, 173 (7th Cir. 2011) (The plaintiff bears the burden of proving she performed work under the Act for which she was not compensated. Then the burden shifts to the defendant to prove an exemption applies.). Under the FLSA, "employ [means] to suffer or permit to work." 29 U.S.C. §203(g). "The term 'employee' means any individual employed by an employer." Id. at §203(e)(1). The United ...


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