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Aiello v. Southern Wine & Spirits of America, Inc.

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

November 21, 2019

PATRICIA AIELLO, et al., individually and as assignees of claims owned by Kube, LLC, Plaintiffs,
SOUTHERN WINE & SPIRITS OF AMERICA, INC., and successor entity SOURTHERN [sic GLAZER'S WINE AND SPIRITS OF ILLINOIS, LLC, an Illinois Corporation. Defendant.


          Harry D. Leinenweber, Judge.

         For the reasons stated herein, Defendant's Motion to Dismiss the Fourth Amended Complaint (Dkt. No. 113) is granted. Plaintiffs' Fourth Amended Complaint (Dkt. No. 108) is dismissed with prejudice.

         I. BACKGROUND

         On April 26, 2019, the Court granted Defendant's Motion to Dismiss Plaintiffs' Third Amended Complaint alleging an opt-in collective action against Defendant for failure to pay wages in violation of the Fair Labor Standards Act (FLSA) and the Illinois Minimum Wage Payment and Collections Act (IMWPAC). Because the Third Amended Complaint was the first one that named Defendant Sourthern [sic] Glazer's Wine and Spirits of Illinois, LLC (“SG”) as a party, the Court dismissed the case without prejudice. Plaintiffs have now filed their Fourth Amended Complaint and Defendant has again moved to dismiss. The Motion is based on the same reasoning as was the Motion directed at the Third Amended Complaint: that Defendant was not Plaintiffs' employer.

         A little history is in order. Kube LLC (“Kube”), a defendant in the first three Complaints Plaintiffs filed, entered into an agreement with Defendant to provide “consumer educators” (“CEs”), individuals who would go to retail stores and supermarkets to promote Defendant's alcohol related products by offering customers free samples. Under Defendant's contract with Kube, the latter was to “recruit, hire, and train” the CEs. The contract further provided that Kube had complete discretion to “determine the method, details and means of performance of these services.” It further specifically disclaimed that Defendant was a joint employer of the CEs, including all matters related to compensation.

         Based on the clear unambiguous language of the agreement, the Court granted Defendant's Motion to Dismiss, stating that the Third Amended Complaint failed to allege any plausible basis for finding that Defendant was a joint employer with Kube of the Plaintiffs. (See April 26, 2019 Mem. Op. and Order, Dkt. No. 103.)


         To survive a Rule 12(b)(6) motion to dismiss, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)).


         Plaintiffs have settled with Kube. Plaintiffs' Fourth Amended Complaint now brings the two wage claims solely against SG. With respect to the allegations comprising the wage claims, this version is virtually identical to the Third Amended Complaint. It merely deletes Kube from the Complaint's paragraphs and eliminates any mention of the agreement between Kube and Defendant. As Defendant points out, this latest version completes an odyssey commencing with Complaints One, Two and Three brought solely against Kube, through Complaint Four against both Kube and Defendant, SG, to Complaint Five solely against Defendant, SG. This version also conveniently leaves out the allegation in all previous Complaints about the contract between Kube and Defendant.

         Plaintiffs seek to salvage this latest version arguing that, since the Complaint does not refer to the Kube-Defendant contract, the Court cannot consider it on a Motion to Dismiss without converting the Motion to one for summary judgment. However, as Defendant points out, previous versions of a Complaint that are filed with the Court are public court records and may be considered on a Motion to Dismiss. Hensen v. CSC Credit Services, 29 F.3d 280. 284 (7th Cir. 1994); Ibscher v. Sternes, 2004 WL 1368799 at *1 (N.D. Ill.2004). Plaintiffs, apparently believing that their argument may not fly, argues as a backup that the contract is irrelevant because two employers are not allowed to circumvent the wage laws through an agreement to violate the wage laws. Plaintiffs' argument is based on their contention that the wage laws take a conservative view in determining whether an employee is an independent contractor or an employee. Plaintiff cites Estate of Suskovich v. Anthem Health Plans of Virginia, Inc., 553 F.3d 559, 565 (7th Cir. 2009). However, this argument is inapposite. No one contends that Plaintiffs are independent contractors, because they are clearly employees. The issue is whether Plaintiffs are employees of Kube or of Defendant.

         Plaintiffs' argument might have some merit if there were any allegations to support it. As Plaintiffs point out, an employer cannot get around the wage laws by contracting with a third party to pay its employees in violation of the wage laws. However, they still must be its employees. Plaintiffs contend that Defendant, even under its contract with Kube, retained so much control over the CEs that the economic reality was that Plaintiffs were Defendant's employees.

         Plaintiffs provide a laundry list of controls and regulations imposed by Defendant to support the economic reality that they were Defendant's employees. They allege, inter alia, that the CEs, being a part time position, were required to report to specific locations at specific times (4th Am. Compl. ¶ 89); CEs “managed” their wages from a web site operated by Kube (Id. ¶ 91); CEs were required to adhere to a detailed marketing and display plan of Defendant's products (Id. ¶ 106); Defendant established a dress code and makeup requirements (Id. ¶¶ 97-98); and Defendant provided guidelines for the service of the Defendant's alcohol products (Id. ¶ 105).

         However, the Fourth Amended Complaint fails to attain plausibility because all of the so-called controls and regulations relate to the specific product Defendant is purchasing from Kube. In previous iterations of Plaintiffs' Complaint, Plaintiffs described Kube, who “did business under the name ‘Kube Marketing,' [as] a self-styled ‘consumer educator' in the business of promoting consumer products-primarily and other retail outlets across at least five states.” (3d Am. Compl. ¶ 87, Dkt. No. 73) Kube also “employed more ...

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