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Driver v. AppleIllinois, LLC

United States Court of Appeals, Seventh Circuit

January 15, 2014

Glenn DRIVER et al., on behalf of themselves and all others similarly situated, Plaintiffs-Respondents,
v.
APPLEILLINOIS, LLC, et al., Defendants. Petition of W. Curtis Smith.

Submitted Dec. 16, 2013.

Page 1074

Paul DeCamp, Attorney, Jacqueline C. Tully, Attorney, Jackson Lewis P.C., Reston, VA, Hallie Diethelm Caldarone, Attorney, Jackson Lewis P.C., Chicago, IL, for Petitioner.

Jamie Golden Sypulski, Attorney, Law Office of Jamie G. Sypulski, Douglas M. Werman, Attorney, Chicago, IL, for Respondent.

Before WOOD, Chief Judge, and BAUER and POSNER, Circuit Judges.

POSNER, Circuit Judge.

This is the second petition by the remaining defendant in a class action suit for permission to appeal from the denial by the magistrate judge presiding over the case of his challenge to the certification of the class. Fed.R.Civ.P. 23(f). We denied the first petition, and we are denying this second one as well, but we think it may be helpful to future litigants contemplating Rule 23(f) appeals to spell out our reasons for this second denial.

The rule authorizes a court of appeals to entertain interlocutory appeals from orders granting or denying class certification. It does not forbid a party to file repeated motions seeking our permission to appeal if, as is not uncommon, the district judge alters the class definition from time to time and therefore issues a new certification order each time. To avoid being inundated we need a standard for coping with repeat motions.

The class that the district court has certified is composed of waiters, bartenders, and other tipped employees at restaurants owned by entities controlled by defendant Smith (the other individual defendants have dropped by the wayside: two have died, the others have settled), who is subject to both the federal Fair Labor Standards Act and the Illinois Minimum Wage Law, 29 U.S.C. § 203(d); 820 ILCS 105/3(c), if determined to be an employer under those Acts (an issue not yet determined). Because they receive tips their employer is not required to pay them the full federal or state minimum

Page 1075

wage; in effect their tips are credited against the minimum wage to which they would otherwise be entitled. 29 U.S.C. § 203(m); 820 ILCS 105/4(c). But of course if the tipped employees also perform non-tipped duties (provided those duties are unrelated to their tipped duties— an important qualification, as we'll see), such as, in the case of restaurant servers, washing dishes, preparing food, mopping the floor, or cleaning bathrooms, they are entitled to the full minimum wage for the time they spend at that work. Although only the state-law claims have been certified for class treatment, neither the Illinois statute nor the implementing regulation, 56 Ill. Admin. Code § 210.720, addresses the issue presented by this appeal. But that is of no consequence, because in such situations Illinois courts (and likewise, therefore, federal courts administering Illinois law) seek guidance in the federal case law interpreting the Fair Labor Standards Act. See 56 Ill. Admin. Code § 210.120; Kerbes v. Raceway Associates, LLC, 356 Ill.Dec. 476, 961 N.E.2d 865, 870-71 (Ill.App.2011); Urnikis-Negro v. American Family Property Services, 616 F.3d 665, 672 n. 3 (7th Cir.2010).

In her first ruling on class certification, the judge certified a class consisting of employees " 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 are not paid at the minimum wage rate." A second ruling modified the definition, and the last— the one that precipitated the current petition (filed more than three years after Smith's first petition) for permission to appeal— substituted a much simpler definition: employees " who worked as tipped employees earning a sub-minimum, tip credit wage rate."

The definition is overinclusive because it says nothing about the tipped employees' work for which they weren't tipped. True, the judge found that the defendant had a policy of requiring tipped employees to do non-tipped work yet without paying them the full minimum wage for the time they spent doing that work. But the Department of Labor, interpreting section 203(m), has distinguished between non-tipped work that is, and is not, " related" to tipped work, and has decided that as long as the tipped employee spends no more than 20 percent of his workday doing non-tipped work related to his tipped work (such as a waiter's setting or clearing a table that he waits on), the employer doesn't have to pay the full minimum wage (that is, the minimum wage without the tip credit) for the time the employee spends doing that work. 29 C.F.R. § 531.56(e); U.S. Department of Labor, Field Operations Handbook § 30d00(e) (June 30, 2000), www. dol. gov/ whd/ FOH/ FOH_ Ch 30. pdf (visited Jan. 7, 2014); see Fast v. Applebee's International, Inc., 638 F.3d 872 (8th Cir.2011). Although in an earlier order the judge found that " many" of the defendant's employees spent more than 20 percent of their workday doing work related to tipped work, she didn't find that all did, or that all who didn't did at least some non-tipped work unrelated to tipped work and would therefore be entitled to full minimum wage for that work.

In nevertheless including all the tipped employees in the class, the judge relied on Bolden v. Walsh Construction Co., 688 F.3d 893, 895 (7th Cir.2012), which disapproved a class that " defines its members as persons who did not earn more ‘ because of their race.’ Using a future decision on the merits to specify the scope of the class makes it impossible to determine who is in the class until the case ends, and it creates the prospect that, if the employer should ...


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