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January 2015

Gordon & Rees Chicago Team Obtains Summary Judgment in Fair Labor Standards Act and Illinois Minimum Wage Law Class Action

On December 29, 2014, Gordon & Rees partner James B. Hiller and associate Robert D. Connealy successfully obtained summary judgment in a Fair Labor Standards Act (FLSA) and Illinois Minimum Wage Law (IMWL) putative class action case. U.S. District Judge James B. Zagel of the Northern District of Illinois granted judgment as a matter of law in favor of Gordon & Rees’s client, a family owned restaurant business.

Plaintiffs, two servers at the restaurant owned and operated by Defendants, alleged that Defendants failed to pay them proper minimum wage based on a 10 cent meal credit deduction. Plaintiffs asserted they were never informed that the deduction was taken in exchange for meals in violation of both statutes. This is despite the fact that both Plaintiffs testified to taking the meals offered by Defendants and that the 10 cent hourly deduction appeared on their pay stubs. Plaintiffs also argued that the meal credit should not be taken from their wages on shifts they decided not to consume meals offered by Defendants.

Defendants maintained that its meal credit was lawfully implemented under both federal and Illinois law. They presented facts demonstrating that Plaintiffs received notice of the meal credit when they were hired, and the meal credit deduction appeared on Plaintiffs’ pay stubs. Defendants contended that the additional requirements argued for by Plaintiffs, such as providing its servers an opportunity to “opt-out” of the meal credit, simply were not supported by the language of either statute. Finally, and perhaps most importantly, Defendants developed a factual record showing that they did not profit from the meal credit – a key requirement under both the FLSA and the IMWL. Instead, Defendants showed that they lost money providing employee meals.

While ruling for Defendants, the court noted that the case presented questions of first impression under both Illinois law and the Seventh Circuit’s FLSA jurisprudence. The judge agreed that Defendants did not profit from the meal credit and rejected the notion that Plaintiffs can pick and choose which shifts the meal credit would apply. He also ruled that neither the FLSA nor the IMWL compelled employers to give their employees an opportunity to “opt out” of the meal credit.

James B. Hiller


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