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Torres v. Nation One Landscaping, Inc.

United States District Court, N.D. Illinois, Eastern Division

December 5, 2016

Aureliano Torres, on behalf of himself and other similarly situated persons, known and unknown, Plaintiffs,
Nation One Landscaping, Inc., and Brian Emmick, individually, Defendants.


          Manish S. Shah United States District Judge.

         Plaintiff Aureliano Torres brought this action against his employer, defendant Nation One Landscaping and its CEO, defendant Brian Emmick, for owed wages under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq., the Illinois Minimum Wage Law, 820 ILCS § 105/1 et seq., and the Illinois Wage Payment and Collection Act, 820 ILCS § 115/1 et seq. Torres alleges that Nation One did not pay him overtime wages, took unauthorized deductions out of his paycheck, and failed to pay him the state-mandated minimum wage. Four other Nation One employees opted in to join Torres's FLSA claim, and Torres represents a class of Nation One employees in his state-law overtime and unauthorized deductions claims. Torres moves for summary judgment on all counts. For the following reasons, that motion is granted in part and denied in part.

         I. Legal Standards

         Summary judgment is appropriate where “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). A genuine dispute of material fact exists if the evidence would allow a reasonable jury to return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The moving party bears the burden of establishing that there is no genuine dispute as to any material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). In deciding whether a genuine issue of material fact exists, courts must construe all facts and reasonable inferences in the light most favorable to the nonmoving party. CTL ex rel. Trebatoski v. Ashland Sch. Dist., 743 F.3d 524, 528 (7th Cir. 2014).

         Both the moving party and the nonmoving party must cite “particular parts of materials in the record” to support their respective assertions-the absence or presence of a genuine dispute of material fact. Fed.R.Civ.P. 56(c). To facilitate this process, Local Rule 56.1 requires the moving party to file a statement of material facts “to which the moving party contends there is no genuine issue and that entitle[s] the moving party to a judgment as a matter of law.” L.R. 56.1(a). It also requires the nonmoving party to file a concise response and permits that party to submit additional material facts as necessary. L.R. 56.1(b). All statements under Local Rule 56.1 must contain short numbered paragraphs with specific references to supporting admissible evidence in the record. L.R. 56.1 (a), (b). In some instances, the parties' filings failed to cite specific pages or paragraphs. District courts are not “obliged” to “scour the record looking for factual disputes, ” and do not consider conclusory allegations, conjecture, or argument in Local Rule 56.1 statements. Waldridge v. Am. Hoechst Corp., 24 F.3d 918, 922 (7th Cir. 1994); see also Ammons v. Aramark Unif. Servs., Inc., 368 F.3d 809, 817-18 (7th Cir. 2004). An asserted fact that is not controverted by reference to specific, admissible evidence is deemed admitted.

         II. Background

         Brian Emmick was the owner and chief executive officer of Nation One, a landscaping company. [129] ¶ 9; [132] ¶ 13.[1] Emmick handled the daily operations of Nation One and had final authority over Nation One's policies. [129] ¶ 19. He was in charge of hiring, supervising, paying, and firing employees. [129] ¶¶ 10-14. As owner and CEO, Emmick engaged a payroll service to handle Nation One's payroll. [129] ¶ 16. Emmick was an authorized signer on the Nation One payroll banking account. [129] ¶ 15. Nation One later transitioned to using internal bookkeepers for payroll; those bookkeepers continued to report to Emmick as the highest authority on payroll for Nation One. [129] ¶ 17. Emmick relied on others and was uninvolved and unaware of how Nation One's payroll operated. [120-3] at 70:22-71:12; see also [120-3] at 72:16-21.

         Nation One had a practice of compensating its employees for all hours worked at the regular rate and of not compensating its employees' overtime hours at the required time-and-a-half rate. [129] ¶ 42. For employees who had worked overtime during a given pay period, defendants would cut those employees two checks on payday: the first was a payroll check for forty hours at the regular rate, and the second was a business check for the additional hours, also at the regular rate. [129] ¶ 43. Additionally, Nation One had a practice of deducting $4.84 from its employees' weekly wages for company uniforms and half an hour of pay from its employees' daily wages for a lunch break. [129] ¶¶ 58, 65.

         Between 2011 to the present, defendants employed Torres, the opt-ins, and members of the certified class. [129] ¶¶ 1, 4-7, 20. During this time, these employees routinely worked more than eight and one half hours per day and more than forty hours per week. [129] ¶¶ 27-41. In 2013, the Illinois Department of Labor notified defendants of its intent to investigate Nation One's time and payroll records for “all current and past employees who worked during the period of May 1, 2011 to July 31, 2013, which records by law you are required to maintain.” [129-3] at 2. The letter requested that defendants “assemble and have available the records set forth in ‘Attachment A' of this letter for the period to be audited and have available for an interview a company representative who is knowledgeable about the structure and management of the company.” Id. Less than one month later, IDOL completed the audit and found that Nation One was not in compliance with the IMWL, 820 ILCS § 105/1-15, because it failed to pay its employees the required rate for overtime worked. [120-4] at 2; [129] ¶ 44.

         Torres worked for Nation One from approximately March 2011 to November 2011. [129] ¶ 1. He typically worked Monday through Friday from 6:40 a.m. to either 5:15 p.m. or to 6:30 p.m. [129] ¶¶ 27-28. He also usually worked two Saturdays per month from 6:40 a.m. to either 4:00 p.m. or to 4:20 p.m. [129] ¶¶ 29-30. He earned $9.50 per hour. [129] ¶ 46. He regularly performed work before he clocked in and after he clocked out for his shift, for which he was not paid. [120-1] at 4, ¶¶ 26, 28-32. Half an hour was automatically deducted from his daily pay, even though his lunch break was interrupted and he was called back to work at least three times per week. [120-1] at 4, ¶¶ 33-36. In total, he was shorted eight hours of pay per week. [120-1] at 4, ¶ 25. Since Torres was not paid for all of the time he worked, his wages often fell below the state-mandated minimum wage. [129] ¶ 68.

         The opt-in plaintiffs provide similar facts for their tenures with Nation One. Eliseo Marcelo, Marco Marcelo, and Andrez Gutierrez regularly performed work before they clocked in and after they clocked out, and they were not paid for this pre- and post-shift work. [120-1] at 17, ¶¶ 29, 31-36; [120-2] at 4, ¶¶ 26, 28-33; [120-2] at 16, ¶¶ 29, 31-36. For each of these plaintiffs, as with Torres, Nation One deducted half an hour of wages from their daily pay, even though their lunch breaks were regularly interrupted-as a result, they were not paid for one and one-half hours of work per week. [120-1] at 17-18, ¶¶ 37-41; [120-2] at 4-5, ¶¶ 34-38; [120-2] at 16-17, ¶¶ 37-41. All of the opt-in plaintiffs, including Alfonso Garcia, typically worked over 40 hours per week, and each received various payments in compensation after the IDOL audit. [120-1] at 16, ¶ 17, at 18, ¶ 45; [120-2] at 5, ¶ 42; [120-2] at 15, ¶ 16, at 17, ¶ 45; [120-2] at 28, ¶¶ 15, 21.

         Defendants maintained pay and time records for their employees, but not all of the relevant records were produced during discovery.[2] [129] ¶¶ 69-70. In 2011, defendants say they gave their time and payroll records to the payroll service it had engaged; that business is now defunct and it never returned the documents to defendants.[3] [120-4] at 27, ¶ 37. Sometime thereafter, defendants managed their payroll internally. [120-3] at 42:11-18. Defendants' staff produced to plaintiffs all of the time and payroll documents the company had in its possession; Emmick was uninvolved in production for discovery. [120-3] at 44:21-45:5. In December 2014, ADP took over Nation One's payroll system. [131-1] at 2. ADP produced its payroll records for Nation One from the end of 2014 through 2016. Id.

         CEO Emmick was also absent from the IDOL audit process. [120-3] at 42:11- 18. Since defendants have not identified which records it turned over to IDOL, it remains a mystery which records IDOL reviewed and which documents formed the basis for the audit's conclusions.

         III. Analysis

         A. Applicability of the FMLA, the IMWL, and the IWPCA

         Defendants admit they were the “employer” of Torres, the opt-ins, and the class during the relevant time period under the FLSA, the IMWL, and the IWPCA. [129] ¶¶ 21-22; 29 U.S.C. § 203(d); 820 § ILCS 105/3(c); 820 ILCS § 115/2. The only dispute as to the applicability of these three statutes to this lawsuit pertains to opt-in plaintiff Gutierrez. Defendants argue that Gutierrez was exempt from the overtime pay requirements of the FLSA and the IMWL. [129] ¶ 23.

         The FLSA exempts employees who are employed in a “bona fide executive, administrative, or professional capacity.” 29 U.S.C. § 213(a)(1). The implementing regulations further define this phrase to mean any employee: “(1) compensated on a salary or fee basis at a rate of not less than $455 per week […]; (2) [w]hose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers; and (3) [w]hose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.” 29 C.F.R. § 541.200(a). The IMWL exemption is the same. 820 ILCS § 105/4a(2)(E); see also Kennedy v. Commonwealth Edison Co., 410 F.3d 365, 376 (7th Cir. 2005).

         Gutierrez's salary in 2013 and 2015 exceeded the statutory requirement, thereby satisfying the first element. [129] ¶¶ 55-56. With respect to the second element, defendants say Gutierrez was a crew supervisor who managed job sites, directed workers on his crew, made decisions in the field, and was free from direct supervision in the field. Id. Support for this statement comes from Emmick's affidavit. Emmick, however, has virtually no personal knowledge of what went on in the field and therefore cannot provide an evidentiary foundation for this statement. By contrast, Gutierrez's affidavit states that as a crew leader, he completed job assignments “alongside the crew” in the field and did not work in the Nation One office. [131-1] at 29, ¶¶ 4-5. He was “responsible for showing the crew how to perform their job assignments, ” but in no way did he describe having the ability to exercise discretion or independent judgment in this role. Defendants have not offered evidence to support their assertion that Gutierrez performed office or non-manual work in furtherance of the management of Nation One. As such, the second and third elements are not met and Gutierrez is not exempt from the overtime requirements under the FLSA, or under the IMWL by extension.

         In this action, the FLSA applies to Torres and the opt-ins, and the IMWL and the IWPCA apply to Torres and the ...

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