SETH D. HARRIS,  ACTING SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR, Plaintiff,
SKOKIE MAID AND CLEANING SERVICE, LTD. and JADWIGA MALEWICKA, Defendants.
MEMORANDUM OPINION AND ORDER
JAMES F. HOLDERMAN, District Judge.
The U.S. Department of Labor ("the Department") brings this Fair Labor Standards Act ("FLSA") suit against Skokie Maid and Cleaning Service, Ltd. ("Skokie Maid"), as well as its president and owner, Jadwiga Malewicka ("Malewicka"). The Department alleges that, between 2008 and 2011, Malewicka failed to pay seventy-five of her employees minimum wage and adequate overtime for the work they performed for Skokie Maid. According to the Department's estimate, Malewicka owes a total of $250, 946.72 in unpaid compensation. The Department also seeks an equal amount in liquidated damages, for total damages in the amount of $501, 893.44, as well as an injunction preventing Malewicka from further violating the FLSA.
On January 31, 2013, the Department moved for summary judgment on all counts. (Dkt. No. 63.) For the reasons set forth below, the Department's motion is granted in its entirety.
Skokie Maid, an Illinois-based domestic employment agency, provides cleaning services to households and businesses throughout north suburban Chicago. (Dkt. No. 64 ("Pl.'s 56.1(a)(3) SMF") ¶ 5.) Skokie Maid is owned and operated by Malewicka. ( Id. ¶ 4.)
Malewicka oversees substantially all day-to-day management and operations at Skokie Maid, which includes supervising all pay and employment practices. ( Id. ¶¶ 10-12.) The responsibilities of the maids include "sweeping, vacuuming, dusting, polishing, and washing laundry, kitchens, bathrooms, furniture, and floors...." ( Id. ¶ 21.) No special skills are required, ( id. ), and many of the maids speak only Spanish or Polish. ( Id. ¶ 16.)
When an individual applies for a maid position, he or she-though Skokie Maid's employees appear to be almost exclusively female ( see Dkt. No. 72, Ex. O)-fills out two documents: the "Independent Contractor Application" and the "Independent Contractor Contract." (Pl.'s 56.1(a)(3) SMF ¶ 14.) The application contains non-compete and non-solicitation clauses that state:
I agree not to solicit work from any customer while employed at SKOKIE MAID SERVICE. Also, I agree not to solicit any of their customers for at least one (1) year after leaving their employment. In addition, I agree not to compete or work in/for any competing service for one (1) year after my final workday with SKOKIE MAID SERVICE ______! If I violate this Agreement, I promise to pay $2, 000 to SKOKIE MAID SERVICE within thirty (30) days of the violation.
(Dkt. No. 68-2, Ex. F-1 ("Application and Contract"), at 1.) The application form goes on to state: "YOUR REQUIRED DEPOSIT WILL NOT BE RETURNED IF YOU QUIT BEFORE 6 MONTHS OF WORK! A 2-WEEK NOTICE IS REQUIRED PRIOR TO TERMINATING EMPLOYMENT." ( Id. (emphasis in original).) Malewicka hired a lawyer to enforce the non-solicitation clause against at least one maid, Maria Shauman ("Shauman"), after Shauman stopped working for Skokie Maid in June 2010. (Dkt. No. 70-1, Ex. I ("Shauman Decl.") ¶¶ 4, 36.) In a September 24, 2010 letter to Shauman, Skokie Maid's lawyer listed four customers that had allegedly been solicited by Shauman after her final workday with Skokie Maid, and sought $2, 000 from Shauman for each of the four alleged violations. (Dkt. No. 70-6, Shauman Decl., Attach. 5 at 1.)
After maids were hired, Malewicka would occasionally-depending on the maid's experience-provide training. (Pl.'s 56.1(a)(3) SMF ¶ 23.) New maids would work alongside another maid for two or three days, during which time the new maid was not paid. ( Id. ¶ 24.) Many maids had no other employment besides Skokie Maid, and were financially dependent on Malewicka, who had control over their schedules. ( Id. ¶¶ 32, 41, 43.) Malewicka would assign clients, work hours, and job sites to the maids. ( Id. ¶ 32.)
The maids primarily arrived at work through one of two methods: either they were driven by one of three or four van drivers from Skokie Maid's office to the work site, or they drove themselves. (Dkt. No. 68-1 ("Malewicka Dep.") at 37:13-39:16; Pl.'s 56.1(a)(3) SMF ¶¶ 26-27.) Malewicka sometimes reimbursed maids who drove themselves for gas money. (Pl.'s 56.1(a)(3) SMF ¶ 27.)
After the maids completed their work, they would fill out a form each week which determined their pay. ( Id. ¶ 29.) The form stated only the maximum number of hours the customer fixed for the job or the amount of money the customer paid for the job. ( Id. ) The maids did not need to provide the total number of hours worked. ( Id. ) Malewicka did not maintain records of the actual hours worked by the maids; her payroll records reflect only the maximum number of hours allotted for the job. ( Id. ¶ 33.)
Clients paid the maids directly, ( id. ¶ 35), and the maids would then turn over client payments the next time they were in the office. ( Id. ¶ 36.) The maids were subsequently paid by Malewicka in cash every week, and were at times given raises of an extra dollar per hour. ( Id. ¶¶ 30-31.) The maids' compensation was determined exclusively by their hourly rate and the number of hours assigned to the job. ( Id. ¶ 38.) They were not paid for time spent at Skokie Maid's office, or for time spent traveling between jobsites. ( Id. ¶¶ 45-46.) Deductions were taken from maids' pay for broken items at client homes or jobsites. ( Id. ¶¶ 47, 49.)
Between 2007 and 2008, the U.S. Department of Labor's Wage and Hour Division conducted an investigation to determine Skokie Maid's compliance with the FLSA. ( Id. ¶ 51.) The investigator, Piotr Kisielinski, determined that Skokie Maid had violated minimum wage and overtime pay rules, and consequently owed 74 employees back pay. (Dkt. No. 69-5, Ex. H ("Kisielinski Decl.") ¶ 9.) During the investigation, Skokie Maid provided only time records and work schedules, rather than pay records and hours worked. ( Id. ¶ 4; Pl.'s 56.1(a)(3) SMF ¶ 53.) The investigator notified Malewicka of his findings, including his determination that the maids were employees, not independent contractors. (Pl.'s 56.1(a)(3) SMF ¶ 56.) Malewicka made no changes to the way she paid her maids after learning of the investigator's findings. ( Id. ¶ 58.)
Between 2010 and 2011, the Wage and Hour Division conducted another investigation into Skokie Maid's employment practices. ( Id. ¶ 59.) The second investigation proceeded along an arc similar to the first: Malewicka did not turn over records including the actual number of hours the maids worked; she argued that the maids were independent contractors; and the investigator found that 36 employees were due $20, 065.97 in unpaid minimum wage and 75 employees were due $230, 880.75 in unpaid overtime compensation. ( Id. ¶¶ 60-66.)
At a status hearing on January 31, 2013, in Malewicka's presence, the court ordered the Department to file its anticipated motion for summary judgment that same day, after the Department's lawyers deposed Malewicka at the Department's Chicago office. (Dkt. No. 59.) Malewicka was also given a copy of N.D.Ill. Local Rule 56.2 "Notice to Pro Se Litigants Opposing Summary Judgment" at the January 31, 2013 status hearing. ( Id. ) The court scheduled a subsequent status hearing for February 14, 2013, for purposes of scheduling a date for Malewicka's response to the Department's motion, and ordered Malewicka "to be personally present" at the February 14, 2013 status hearing. ( Id. )
The Department complied with the scheduled deadline and filed its motion, statement of material facts, and supporting memorandum on January 31, 2013. (Dkt. Nos. 63-65.) The next day, on February 1, 2013, the court granted the Department a four-day extension of time to file its supporting exhibits. (Dkt. No. 66; see also Dkt. Nos. 67-86.)
At the February 14, 2013, status hearing, with Malewicka present, the court ordered Malewicka to file her response to the Department's motion by April 15, 2013. (Dkt. No. 88.) Approximately two months later, on April 11, 2013, Malewicka filed a "Motion for Attorney Assistance" and supporting financial affidavit. (Dkt. Nos. 90, 91.) The court denied Malewicka's motion on April 16, 2013, and sua sponte granted Malewicka a one-week extension of time, until April 22, 2013, to file her response to the Department's motion. (Dkt. No. 92.) Malewicka never filed a response with the court.
Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). In evaluating the existence of a genuine issue of material fact, the court must view evidence and draw all reasonable inferences in favor of the opposing party. See Bennington v. Caterpillar Inc., 275 F.3d 654, 658 (7th Cir. 2001); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). Although the Department's motion for summary judgment is unopposed, the standard of review remains the same. See Vt. Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241, 244 (2d Cir. 2004) (applying the same standard of review to the grant of an unopposed motion for summary judgment); Federal Rules of Civil Procedure, Advisory Committee Comments to 2010 Amendments ("[S]ummary judgment cannot be granted by default even if there is a complete failure to respond to the motion.") (discussing Fed.R.Civ.P. 56(e)). Accordingly, the court considers whether the Department's motion and supporting materials show that it is entitled to judgment as a matter of law based on the undisputed material facts in the record. Fed.R.Civ.P. 56(e)(3). Pursuant to Local Rule 56.1, each material fact set forth in the Department's statement is deemed admitted in light of Malewicka's failure to respond. N.D.Ill. Local R. 56.1(b)(3)(C).
The primary dispute in this case is whether Skokie Maid is subject to the requirements of the FLSA, and therefore is required to meet the minimum wage and overtime requirements set forth, respectively, in 29 U.S.C. §§ 206 and 207. To make this determination, the court must address three threshold issues: (1) whether Skokie Maid is an "enterprise engaged in commerce"; (2) whether Malewicka is an "employer"; and (3) whether the maids are "employees" rather than independent contractors. See Solis v. Int'l Detective & Prot. Serv., Ltd., 819 F.Supp.2d 740, 747 (N.D. Ill. 2011) (Kendall, J.). "The interpretation of these employment definitions under the FLSA must be broad and ...