Title: Andrews v. Kowa Printing Corp.

State: illinois

Issuer: Illinois Supreme Court

Document:

Docket No. 99111-Agenda 16-May 2005.
NANCY P. ANDREWS et al., Appellants, v. KOWA PRINTING 							

CORPORATION et al., Appellees.
Opinion filed October 20, 2005.
	CHIEF JUSTICE THOMAS delivered the opinion of the court:
	Plaintiffs, 35 former union employees of Kowa Printing
Corporation, brought an action under the Illinois Wage Payment and
Collection Act (the Wage Act) (820 ILCS 115/1 et seq. (West 2004))
against defendants, Kowa Printing Corporation, Thomas W. Kowa,
and Huston-Patterson Corporation. Plaintiffs alleged that they were
owed unpaid vacation time and severance pay and that all three
defendants were jointly liable for the amounts owed, as all three fell
within the Wage Act's definition of "employer." See 820 ILCS 115/2
(West 2002). The circuit court of Vermilion County agreed with
plaintiffs and entered judgment against defendants. Defendants
appealed, and the appellate court reversed the trial court's judgment
as to Thomas Kowa and Huston-Patterson, holding that neither one
was plaintiffs' employer for purposes of the Wage Act. 351 Ill. App.
3d 668. We granted plaintiffs' petition for leave to appeal. 177 Ill. 2d
R. 315(a).

BACKGROUND
	Thomas Kowa owned 100% of Kowa Printing Corporation, a
commercial printing firm located in Danville, and 97% of Huston-Patterson Corporation, a commercial printing firm located in Decatur.
Both of these firms operated under a common service mark, "The
Kowa Group," and Thomas Kowa was the sole officer and sole
director of both firms. The two firms were distinct corporate entities
that were formed at different times and performed separate printing
services. In addition, the two firms had separate employees, separate
management, separate bank accounts, separate collective-bargaining
agreements, and separate retirement plans. That said, the two firms
regularly marketed each other's services, and Huston-Patterson
provided substantial administrative support to Kowa Printing,
including payroll, purchasing, and accounting services.
	In 1996, it was discovered that Kowa Printing's accountant, an
employee of Huston-Patterson, had embezzled over $500,000 from
Kowa Printing, leaving Kowa Printing in dire financial straits. At that
time, Kowa Printing's only secured creditor was BankIllinois. On
April 9, 1997, BankIllinois notified Kowa Printing that it was in
default of its loans. The parties entered into negotiations and
eventually executed a forbearance agreement. Under the agreement,
BankIllinois gave Kowa Printing until November 1, 1997, to satisfy its
liabilities. In exchange, Thomas Kowa agreed to personally guarantee
all of Kowa Printing's loans. The parties later extended the deadline
for repayment to March 15, 1998. According to Thomas Kowa, the
purpose of the forbearance agreement was "to allow the corporation
time to find a buyer, to try to save all the jobs and the money that was
involved, and get appraisals of the equipment, get the company in as
good a position for a seller as possible." On March 13, 1998, Thomas
Kowa executed a surrender agreement, which allowed for the peaceful
surrender of Kowa Printing's assets in the event of foreclosure.
	In early1998, Thomas Kowa located a buyer who entered into a
written agreement to purchase Kowa Printing. As a condition of the
purchase, the buyer required certain concessions concerning the
accrued vacation time of Kowa Printing's employees. As of April 15,
1998, the buyer was still negotiating with plaintiff's union, and
BankIllinois had not yet foreclosed. That same day, plaintiffs' union
voted to reject the buyer's first proposal. The buyer quickly offered a
new proposal, under which the new company would honor all of
Kowa Printing's existing obligations to plaintiffs, with one exception:
the new company would unconditionally honor only two-thirds of
plaintiffs' accrued vacation time, with the remaining third contingent
upon the new company showing a pretax profit of at least $300,000
in its first year. On April 16, 1998, the union rejected that proposal,
as well. A few hours later, BankIllinois foreclosed on the loans, seized
the Kowa Printing facility, and sent plaintiffs home. From that point
forward, neither Thomas Kowa nor Huston-Patterson had access to
Kowa Printing's assets or accounts. The parties stipulate that plaintiffs
never received their final vacation and severance pay.
	Following the foreclosure, plaintiffs filed a complaint alleging that
Kowa Printing, Thomas Kowa, and Huston-Patterson were plaintiffs'
employers, as defined by the Wage Act, and that all three had violated
section 5 of the Wage Act, which requires every employer to "pay the
final compensation of separated employees in full, at the time of
separation, if possible, but in no case later than the next regularly
scheduled payday for such employee." 820 ILCS 115/5 (West 2002).
Following a bench trial, the trial court ruled in plaintiffs' favor and
entered judgment against all three defendants. Defendants appealed,
and the appellate court reversed the portion of the judgment holding
Thomas Kowa and Huston-Patterson liable for the unpaid vacation
and severance pay. 351 Ill. App. 3d 668. This appeal followed.

DISCUSSION
	In this appeal, we must decide whether Thomas Kowa and
Huston-Patterson qualify as plaintiffs' "employer," as that term is
defined in the Wage Act. This is a question of statutory interpretation,
and the principles governing our inquiry are familiar. The fundamental
rule of statutory construction is to ascertain and give effect to the
legislature's intent. Michigan Avenue National Bank v. County of
Cook, 191 Ill. 2d 493, 503-04 (2000). Accordingly, courts should
consider the statute in its entirety, keeping in mind the subject it
addresses and the legislature's apparent objective in enacting it.
People v. Davis, 199 Ill. 2d 130, 135 (2002). The best indication of
legislative intent is the statutory language, given its plain and ordinary
meaning. Illinois Graphics Co. v. Nickum, 159 Ill. 2d 469, 479
(1994). Where the language is clear and unambiguous, we must apply
the statute without resort to further aids of statutory construction.
Davis v. Toshiba Machine Co., America, 186 Ill. 2d 181, 184-85
(1999). The construction of a statute is a question of law that is
reviewed de novo. In re Estate of Dierkes, 191 Ill. 2d 326, 330
(2000).
	Section 5 of the Wage Act provides that "[e]very employer shall
pay the final compensation of separated employees in full, at the time
of separation, if possible, but in no case later than the next regularly
scheduled payday for such employee." 820 ILCS 115/5 (West 2002).
In this case, no one disputes that plaintiffs are still owed unpaid
vacation and severance pay and that Kowa Printing, as plaintiffs'
employer, is liable for the amounts owed. The issue is whether
Thomas Kowa and Huston-Patterson are likewise liable. To resolve
this issue, we must decide whether Thomas Kowa and Huston-Patterson were, along with Kowa Printing, plaintiffs' "employer," as
that term is defined by the Wage Act.
	The Wage Act defines the term "employer" in two different
places. Section 2 of the Wage Act states that, "[a]s used in [the Wage
Act], the term 'employer' shall include any individual, partnership,
association, corporation, business trust ***, or any person or group
of persons acting directly or indirectly in the interest of an employer
in relation to an employee, for which one or more persons is gainfully
employed." 820 ILCS 115/2 (West 2002). Section 13, in turn, states
that "any officers of a corporation or agents of an employer who
knowingly permit such employer to violate the provisions of this Act
shall be deemed to be the employers of the employees of the
corporation." 820 ILCS 115/13 (West 2002).
	We begin our analysis with section 2, which states that "any
person *** acting directly or indirectly in the interest of an employer
in relation to an employee" is deemed an "employer" for purposes of
the Wage Act. 820 ILCS 115/2 (West 2002). The breadth of this
language is confounding, to say the least. Read literally, section 2
would make an "employer" out of every person who possesses even
a modicum of authority over another employee, from the CEO to the
head of the maintenance staff, as such persons undeniably act "directly
or indirectly in the interest of an employer in relation to an employee."
This cannot be, however, as such a reading would render other
provisions of the Wage Act utterly absurd. Section 3, for example,
states that "[e]very employer shall be required, at least semi-monthly,
to pay every employee all wages earned during the semi-monthly pay
period." 820 ILCS 115/3 (West 2004). Similarly, section 5 requires
every "employer" to "pay the final compensation of separated
employees in full, at the time of separation." 820 ILCS 115/5 (West
2004). Notably, both of these duties are strict, with no consideration
given to the purported employer's ability to effectuate compliance.
Given our obligation to presume that the legislature did not intend to
produce absurd or unjust results (Eastman v. Messner, 188 Ill. 2d 404, 414 (1999)), we refuse to believe that, in drafting section 2, the
legislature set out to make every supervisory employee strictly and
personally liable for the payment of his or her subordinates' wages.(1)
This, however, would be precisely the outcome were we to read
section 2's definition of "employer" literally. We therefore reject such
a reading.
	Instead, we endorse the approach taken by the United States
Court of Appeals for the First Circuit in Donovan v. Agnew, 712 F.2d 1509 (1st Cir. 1983), one of the principle authorities cited by
plaintiffs. In Agnew, the court was asked to construe section 203(d)
of the Fair Labor Standards Act (FLSA) (29 U.S.C. §203(d) (1988)),
which defines "employer" in terms very similar to the Wage Act.(2) The
Donovan court began by explaining:
			"[We do not] think too much weight can be put on the
Act's broadly inclusive definition of 'employer.' Taken
literally and applied in this context it would make any
supervisory employee, even those without any control over
the corporation's payroll, personally liable for the unpaid or
deficient wages of other employees. It makes more sense, as
appellants argue, to interpret that language as intended to
prevent employers from shielding themselves from
responsibility for the acts of their agents." Donovan, 712 F.2d  at 1513.
This analysis makes perfect sense. Section 2's definition describes not
only who is the employer ("any individual, partnership, association,
corporation, business trust *** for which one or more persons is
gainfully employed") but also who may inculpate the employer ("any
person or group of persons acting directly or indirectly in the interest
of an employer in relation to an employee"). In other words, section
2 simply confirms that an employer is liable not only for its own
violations of the Wage Act but also for any Wage Act violations
committed by its agents.
	That leaves us with section 13, which states that "[a]ny officers
of a corporation or agents of an employer who knowingly permit such
employer to violate the provisions of this Act shall be deemed to be
the employers of the employees of the corporation." 820 ILCS 115/13
(West 2002). Clearly, it is this section, and not section 2, that defines
who, other than the employer itself, may be treated as an "employer"
for purposes of the Wage Act. Indeed, when considered together,
section 2 and section 13 form a coherent and entirely sensible policy.
Section 2 confirms that an employer is liable both for its own
violations of the Wage Act and for any Wage Act violations
committed by its agents. Section 13, in turn, imposes personal liability
on any officers or agents who knowingly permitted the Wage Act
violation. Unlike a literal reading of section 2, which imposes strict
Wage Act liability upon all supervisory employees, this reading
reserves personal Wage Act liability for those individual decision
makers who knowingly permitted the Wage Act violation. We are
confident that this reading of the Wage Act better vindicates the
General Assembly's policy objectives.
	We note that our reading of section 2 does more than avoid a
patently absurd result. It also avoids rendering section 13 wholly
superfluous, which is an equally laudable goal when construing an act
of the legislature. See Stroger v. Regional Transportation Authority,
201 Ill. 2d 508, 524 (2002) (a "statute should be construed as a whole
and, if possible, in a manner such that no term is rendered meaningless
or superfluous.") If section 2 truly makes an "employer" out of every
person who acts "directly or indirectly in the interest of an employer
in relation to an employee," then section 13 is unnecessary. This is
because any officer or agent with the authority to effectuate
compliance (or noncompliance) with the Wage Act is, by definition,
a person who acts "directly or indirectly in the interest of an employer
in relation to an employee." Thus, these people would already be
classified as "employers" under section 2, and there would be no need
to classify them as such again in section 13. For this reason as well,
we elect to construe section 2 narrowly and in tandem with section 13.
	In reaching this result, we reject plaintiffs' invitation to adopt the
"economic realities" test, which the federal courts use when
determining who qualifies as an "employer" under the FLSA. The
purpose of the economic realities test is to identify the parties actually
responsible for the FLSA violation, "without obfuscation by legal
fictions applicable in other contexts." Dole v. Simpson, 784 F. Supp. 538, 545 (S.D. Ind. 1991). Stated differently, the economic reality test
"focuse[s] on the role played by the corporate officers in causing the
corporation to undercompensate employees and to prefer the payment
of other obligations and/or the retention of profits." Baystate
Alternative Staffing, Inc. v. Herman, 163 F.3d 668, 678 (1st Cir.
1998). Under this test, a corporate officer with operational control of
a corporation's covered enterprise is treated, along with the
corporation itself, as an "employer" for purposes of the FLSA.
Personal liability under the FLSA is typically found where the officer
in question (1) holds a significant ownership interest in the
corporation; (2) exercises operation control over significant aspects
of the corporation's day-to-functions, including the compensation of
employees; and (3) personally made the decision to continue
operations despite financial adversity during the period of
nonpayment. See, e.g., Dole v. Elliot Travel & Tours, Inc., 942 F.2d 962, 966 (6th Cir. 1991); Donovan v. Grim Hotel Co., 747 F.2d 966,
972 (5th Cir. 1984); Agnew, 712 F.2d  at 1514.
	Our rejection of the economic realties test in no way reflects our
dissatisfaction with the test as a matter of policy. We reject the test for
the simple reason that it is a tool of statutory construction that, while
warranted by the FLSA, is unnecessary under the Wage Act. While
there is no denying that the two statutes share nearly identical
definitions of "employer," there is also one critical difference-namely,
section 13. Section 13 of the Wage Act states that "[a]ny officers of
a corporation or agents of an employer who knowingly permit such
employer to violate the provisions of this Act shall be deemed to be
the employers of the employees of the corporation." 820 ILCS 115/13
(West 2002). No analogous provision exists in the FLSA. This
difference is crucial because, to the extent that the federal courts have
devised analytical tools for determining who may be held liable
personally as an "employer" under the FLSA, it is because the FLSA
does not say. As the United States Supreme Court explained:
			"[T]here is in the Fair Labor Standards Act no definition
that solves problems as to the limits of the employer-employee relationship under the Act. *** The definition of
'employ' is broad. *** 'This Act contains its own definitions,
comprehensive enough to require its application to many
persons and working relationships which, prior to this Act,
were not deemed to fall within the employer-employee
category.' " (Emphasis added.) Rutherford Food Corp. v.
McComb, 331 U.S. 722, 728-29, 91 L. Ed. 1772, 1777-78,
67 S. Ct. 1473, 1475-76 (1947), quoting Walling v. Portland
Terminal Co., 330 U.S. 148, 150-51, 91 L. Ed. 809, 812, 67 S. Ct. 639, 640 (1947).
To solve this problem, and taking into account the remedial context
of the FLSA, the federal courts crafted the economic realities test. See
Agnew, 712 F.2d  at 1513.
	No such deficiency exists in the Wage Act. Section 13 of the
Wage Act plainly states that "[a]ny officers of a corporation or agents
of an employer who knowingly permit such employer to violate the
provisions of this Act shall be deemed to be the employers of the
employees of the corporation." 820 ILCS 115/13 (West 2002). Thus,
unlike the FLSA, the Wage Act does contain a definition that "solves
problems as to the limits of the employer-employee relationship under
the Act." Liability under the Wage Act can be imposed upon
employers, as that term is traditionally understood, and upon any
officers of a corporation or agents of an employer who knowingly
permitted the Wage Act violation. And because the Wage Act, unlike
the FLSA, clearly spells out who may be held liable and under what
circumstances, there is no need for application of the "economic
realities" test.
	Turning now to the facts at hand, we are convinced that neither
Thomas Kowa nor Huston-Patterson qualify as plaintiffs'
"employer"under the Wage Act. Looking first at Thomas Kowa, we
find no evidence in the record that Thomas Kowa knowingly
permitted the unlawful withholding of plaintiffs' severance and
accrued vacation pay. On the contrary, the relevant evidence shows
that, as long as Thomas Kowa was in control of Kowa Printing and its
accounts, plaintiffs were paid on time and in full, even at the expense
of other Kowa Printing creditors. As importantly, the specific Wage
Act violation alleged in this case did not occur until after Thomas
Kowa lost control of the business. Plaintiffs allege that Thomas Kowa
violated Section 5 of the Wage Act by permitting the unlawful
withholding of their accrued vacation and severance pay. Section 5,
however, provides that an employee's final compensation is payable
"at the time of separation, if possible, but in no case later than the next
regularly scheduled payday for such employee." 820 ILCS 115/5
(West 2004). At the time of plaintiffs' separation from Kowa Printing,
Thomas Kowa was no longer in control of Kowa Printing. Plaintiffs'
employment was terminated on April 16, 1998, after BankIllinois
seized Kowa Printing and all of its assets. At this point, BankIllinois
was calling the shots, and a violation of section 5 simply was not
within Thomas Kowa's ability to permit, knowingly or otherwise.
	Plaintiffs nevertheless insist that "the record is replete with
evidence showing that [Thomas] Kowa acted knowingly or wilfully."
In support, plaintiffs suggest that Thomas Kowa (1) knew of the
company's "impending demise" at least one year before the asset
seizure; (2) allowed his employees to continue working during the
one-year forbearance period "despite the likelihood that they would
not be paid for some of that work;" and (3) signed the March 13,
1998, surrender agreement "[knowing] Kowa Printing's assets were
about to be seized and the plant closed." With respect to plaintiffs, we
find nothing in the record to suggest that either the demise of Kowa
Printing or the loss of plaintiffs' jobs was inevitable. Rather, the
evidence shows that, upon receiving the April 9, 1997, default notice,
Thomas Kowa immediately negotiated a forbearance agreement "to
allow the corporation time to find a buyer, to try to save all the jobs."
Within the forbearance period, Thomas Kowa located a buyer who
was willing both to continue operations and to retain plaintiffs under
their existing terms of employment, provided a compromise could be
reached concerning plaintiffs' accrued vacation time. On the day of
foreclosure, the buyer and plaintiffs' union were one concession away
from a deal that would secure both the company's future and
plaintiffs' continued employment. If an agreement had been reached,
operations would have continued, plaintiffs would have kept their
jobs, and this case never would have been filed. And once negotiations
broke down, it was too late for Thomas Kowa to do anything, as
BankIllinois immediately moved in and seized all of Kowa Printing's
assets. Nothing in this story supports the inference that Thomas Kowa
knowingly set out to deprive plaintiffs of their accrued vacation and
severance pay. If anything, the evidence suggests that Thomas Kowa
made every effort to ensure that plaintiffs' livelihoods survived Kowa
Printing's unexpected financial downturn.
	As for Huston-Patterson, plaintiffs argue that, "[u]nder section
2 of the Wage Act, Huston-Patterson may be deemed plaintiffs'
employer either because it acted directly or indirectly in the interest of
Kowa Printing in relation to the plaintiffs, or, alternatively, and by
analogy to the FLSA, by virtue of its status as plaintiffs' joint
employer." We can quickly dispose of the first of these arguments, as
we now know that section 2 does not make employers out of persons
who "act directly or indirectly in the interest of an employer in relation
to an employee." Rather, section 2 simply confirms that an employer
is liable for both its own Wage Act violations and those of its agents.
Thus, even if plaintiffs are correct in asserting that Huston-Patterson
acted in Kowa Printing's interest in relation to plaintiffs, the
consequence would not be Wage Act liability for Huston-Patterson;
it would be Wage Act liability for Kowa Printing.
	In the alternative, plaintiffs argue that Huston-Patterson should
be held liable under the Wage Act because it operated as plaintiffs'
"joint employer." In support of this argument, plaintiffs rely
exclusively upon a single regulation issued the United States
Department of Labor. See 29 C.F.R. §791.2 (2005). Indeed, plaintiffs
maintain that "[Huston-Patterson's] liability in this case is premised
upon those factors outlined in 29 C.F.R. §791.2(b)(2), (3)."
(Emphasis added.) Titled "Joint Employment," this regulation begins
by stating that "[a] single individual may stand in the relation of an
employee to two or more employers at the same time under the
[FLSA], since there is nothing in the act which prevents an individual
employed by one employer from also entering into an employment
relationship with a different employer." 29 C.F.R. §791.2(a) (2005).
The regulation then explains:
			"Where the employee performs work which
simultaneously benefits two or more employers, or works for
two or more employers at different times during the
workweek, a joint employment relationship generally will be
considered to exist in situations such as:
			(1) Where there is an arrangement between the employers
to share the employee's services, as, for example, to
interchange employees; or
			(2) Where one employer is acting directly or indirectly in
the interest of the other employer (or employers) in relation
to the employee; or
			(3) Where the employers are not completely disassociated
with respect to the employment of a particular employee and
may be deemed to share control of the employee, directly or
indirectly, by reason of the fact that one employer controls,
is controlled by, or is under common control with the other
employer." 29 C.F.R. §§791.2(b)(1), (b)(2), (b)(3) (2005).
According to plaintiffs, Huston-Patterson qualifies as plaintiffs'
employer under subsections (2) and (3) of the foregoing regulation.
	Plaintiffs' reliance upon the Code of Federal Regulations is
misplaced. The cited regulation was issued by the United States
Department of Labor and construes the Fair Labor Standards Act of
1938, which was enacted by the United States Congress and is not
being applied in this case. As importantly, the Illinois Department of
Labor has issued its own set of regulations construing the Illinois
Wage Payment and Collection Act, which was enacted by the Illinois
General Assembly and is being applied in this case. And unlike the
regulations issued by the United States Department of Labor, the
regulations issued by the Illinois Department of Labor make no
provision whatsoever for joint employer liability. Of course, the fact
that the Illinois Department of Labor did not specifically provide for
joint employer liability does not mean that joint employer liability is
precluded under the Wage Act. As always, our focus in such matters
is the statutory language, given its plain and ordinary meaning. Illinois
Graphics Co., 159 Ill. 2d  at 479. Nevertheless, the interpretation of
a statute by involved administrative bodies constitutes "an informed
source for guidance when seeking to ascertain the legislature's
intention when the statute was enacted." Johnson v. Marshall Field
& Co., 57 Ill. 2d 272, 278 (1974). If the Illinois Department of Labor
was convinced that the Wage Act allowed for joint employer liability
on terms identical to the FLSA, it easily could have adopted the
federal regulation setting forth those terms. Its failure to do so leaves
open the possibility that, in Illinois, the joint employment question is
assessed by a standard other than that crafted by the United States
Department of Labor.
	We turn, then, to the statutory language, which states that
"[e]very employer shall pay the final compensation of separated
employees in full, at the time of separation, if possible, but in no case
later than the next regularly scheduled payday for such employee."
820 ILCS 115/5 (West 2002). "Employer" is defined as "any
individual, partnership, association, corporation, business trust *** for
which one or more persons is gainfully employed" (820 ILCS 115/2
(West 2002)), and "employee" is defined as "any individual permitted
to work by an employer in an occupation" (820 ILCS 115/2 (West
2002)). These definitions are quite broad, and nothing in the language
suggests that an "employee" is limited to only one "employer" for
Wage Act purposes. Combined with the fact that joint employment is
a recognized legal doctrine in Illinois (see Orenic v. Illinois State
Labor Relations Board, 127 Ill. 2d 453, 474 (1989)), the breadth of
the statutory language convinces us that joint employer liability is
allowed by the Wage Act.
	This does not mean, however, that the standard for determining
whether joint employment exists is that articulated by the United
States Department of Labor. On the contrary, this court has
articulated its own standard for determining if joint employment
exists, and it is that standard that we will apply. In Village of Winfield
v. Illinois State Labor Relations Board, 176 Ill. 2d 54 (1997), this
court confirmed that, in Illinois, "[t]he test for the existence of joint
employers is whether ' "two or more employers exert significant
control over the same employees-where from the evidence it can be
shown that they share or co-determine those matters governing
essential terms and conditions of employment." ' " Village of
Winfield, 176 Ill. 2d  at 60, quoting Orenic, 127 Ill. 2d  at 474, quoting
National Labor Relations Board v. Browning-Ferris Industries of
Pennsylvania, Inc., 691 F.2d 1117, 1124 (3d Cir. 1982). Relevant
factors to consider include  "the 'putative joint employer's role in
"hiring and firing; promotions and demotions; setting wages, work
hours, and other terms and conditions of employment; discipline; and
actual day-to-day supervision and direction of employees on the
job." ' " Village of Winfield, 176 Ill. 2d  at 60, quoting Orenic, 127 Ill. 2d  at 475, quoting J. Jansonius, Use and Misuse of Employee
Leasing, 36 Lab. L.J. 35, 36 (1985).
	Applying this standard to the case before us, we must reject
plaintiffs' assertion that, along with Kowa Printing, Huston-Patterson
was plaintiffs' joint employer. Kowa Printing and Huston-Patterson
were distinct corporate entities that operated out of separate facilities
in separate cities; were formed at different times; and had separate
employees, separate management, separate bank accounts, separate
collective bargaining agreements, and separate retirement plans.
Although some Huston-Patterson employees worked out of Kowa
Printing's Danville facility, there is no evidence that Huston-Patterson
employees exercised any degree of control over Kowa Printing
employees. In fact, plaintiffs do not even attempt to argue that
Huston-Patterson played a role in setting or controlling the essential
terms and conditions of plaintiffs' employment, be it hiring, firing,
discipline, hours, or wages. Nor could they, as plaintiffs concede in
their opening brief that the essential terms and conditions of their
employment were controlled by "two separate collective bargaining
agreements *** entered into between Kowa Printing and Graphic
Communications International Union" and that Thomas Kowa signed
those agreements "upon behalf of Kowa Printing." Huston-Patterson
was not a party to these agreements, and nothing in the record
suggests that Huston-Patterson played any role in the collective
bargaining process.
	That said, we have no reason to doubt plaintiffs' assertion that
Thomas Kowa, as the sole officer and director of both firms,
"exercised complete dominion over Huston-Patterson and Kowa
Printing from his office at Huston-Patterson's plant." This is what sole
officers and directors do. But while this observation may have some
degree of relevance in assessing the existence of joint employment
under section 791.2(b)(3) of the Code of Federal Regulations, it has
no immediate relevance in the present case. There is no evidence to
suggest that, simply because Thomas Kowa controlled both Huston-Patterson and Kowa Printing Corporation, Huston-Patterson
controlled the terms and conditions of plaintiffs' employment. Absent
such evidence, plaintiff's Wage Act claim against Huston-Patterson
must fail.

CONCLUSION
	We agree with the appellate court's conclusion that neither
Thomas Kowa nor Huston-Patterson qualifies as plaintiffs'
"employer" under the Wage Act. Accordingly, the judgment of the
appellate court is affirmed.
Affirmed.
	
I agree with the majority's analysis regarding the status of
defendant Huston-Patterson Corporation as an "employer" under
section 2 of the Wage Act and therefore join in that portion of the
opinion. I disagree, however, with the analysis regarding defendant
Thomas Kowa and must therefore respectfully dissent.
	The reasoning supporting the determination of Huston-Patterson's status is not applicable to Thomas Kowa. Kowa clearly is
an "employer" under section 13 of the Act, because the trial court
found that the evidence in the case established that he is the owner and
principal shareholder in Kowa Printing Group, Inc., makes all
corporate decisions, and is primarily responsible for corporate
operations. According to the express terms of section 13, an officer
or agent of the corporation who knowingly permitted the corporation
to violate the provisions of the Act "shall be deemed to be the
employer[ ] of the employees of the corporation." 820 ILCS 115/13
(West 2002). The trial court found that Thomas Kowa had knowingly
violated the Act and was thus liable for payment of the defaulted wage
supplements. The majority has rejected the factual findings of the trial
court without affording it the deference due under the manifest weight
of the evidence standard of review, and therefore I respectfully dissent
from that holding.
	The trial court conducted an extensive review of evidence offered
at trial and made a factual determination that Thomas Kowa was
aware of the corporation's dire financial status and the bank's intent
to take it over. Yet, as the trial court found, he chose not to notify the
plaintiffs and thereby allow them time to seek alternative employment
and take the vacation and severance payments due under their
contracts. Instead, Thomas Kowa kept them on the job right up to the
point of the bank takeover.
	 It is well established that factual determinations of the trial court
are reviewed under the manifest weight of the evidence standard.
Eychaner v. Gross, 202 Ill. 2d 228, 251 (2002). "The court on review
must not substitute its judgment for that of the trier of fact." Kalata
v. Anheuser-Busch Cos., 144 Ill. 2d 425, 434 (1991). Findings of fact
will not be overturned on appeal "unless they are palpably against the
weight of the evidence, even though we might be inclined to find
otherwise." Kolze v. Fordtran, 412 Ill. 461, 468-69 (1952).
Nonetheless, the majority conducts its own review of some of the
evidence at trial and reaches a conclusion contrary to that of the trial
court. Slip op. at 8-10.
	The majority does not identify the standard it applied to
reviewing the trial court's finding that Thomas Kowa knowingly
violated the provisions of the Act requiring payment of "the final
compensation of separated employees in full, at the time of
separation." 820 ILCS 115/5 (West 2002). Undoubtedly, this finding
depended on a review of documentary evidence and witness
testimony, as the court had to determine whether a knowing violation
had in fact occurred. In reaching its conclusion that Thomas Kowa
had committed a knowing violation of section 5 of the Act, the trial
court reasoned that documents admitted in evidence establish he was
able to make the payments at the time of the takeover because he
made similar payments pursuant to a claim filed by the Illinois
Department of Labor. The court further found, based on the evidence,
that plaintiffs had earned the claimed vacation and severance pay at
the time of the takeover and Kowa Printing still maintained its
corporate existence at the time of trial.
	The evidence also showed that negotiations with a prospective
buyer collapsed when the unions involved did not concede proposed
reductions in accrued vacation pay and other benefits. These
negotiations occurred during the extension of the forbearance
agreement to March 15, 1998. The evidence established that Thomas
Kowa executed a surrender agreement with the bank on March 13,
1998, acknowledging the failure of all reorganization efforts. The
surrender agreement referenced an April 6, 1998, takeover date, but
the bank did not actually take over the operation and assets of Kowa
Printing until April 16, 1998.
	Thus, as the trial court found, Thomas Kowa, the sole
decisionmaker for Kowa Printing, knew the bank takeover was a
certainty, but nevertheless allowed the employees to continue working
and accruing benefits for more than one full month after executing the
surrender agreement. In the agreement, Thomas Kowa acknowledged
that the total value of the collateral available from the takeover of
Kowa Printing assets was less than the amount of the defaulted debt.
Rather than notifying plaintiffs of the certain demise of the company
when negotiations broke down, thus affording them an opportunity to
pursue other employment and demand their contractual severance and
vacation pay, Thomas Kowa told them nothing of the impending
imminent takeover. These findings of fact supported the trial court's
conclusion that Thomas Kowa was a statutory employer under section
13 of the Act who knowingly permitted a violation of section 5's
termination requirements.
	After reviewing the same evidence, however, the majority
concluded nothing in the record suggests that either the demise of
Kowa Printing or the loss of plaintiffs' jobs was inevitable. Slip op. at
9. Although the majority acknowledges the execution of the March
13, 1998, surrender agreement, it makes no reference to the
significance of the April 6, 1998, date set for the surrender of Kowa
Printing assets and the application of the assets to corporate debt.
Further, the majority speculates that if an agreement had been reached
on the day of foreclosure, "operations would have continued, plaintiffs
would have kept their jobs, and this case never would have been
filed." Slip op. at 9. It perhaps belabors the obvious to point out that
negotiations did break down and, as a result, Thomas Kowa executed
the surrender agreement. Whether the negotiations broke down
because of union intransigence or the buyer's insistence on the
disputed concessions, Thomas Kowa knew with certainty of the
imminent cessation of company operations. In any event, the right of
employees to accrued wages and benefits pursuant to section 5 is not
dependent on their willingness to bargain over those benefits.
	The majority asserts that once negotiations broke down, it was
too late for Thomas Kowa to do anything "as BankIllinois
immediately moved in and seized all of Kowa Printing's assets." Slip
op. at 9. This assertion ignores the established fact that Kowa
Printing, under Thomas Kowa's direction, continued operations for
more than one full month after the execution of the surrender
agreement that expressly acknowledged the failed efforts to
reorganize.
	Finally, the majority concludes the "evidence suggests that
Thomas Kowa made every effort to ensure that plaintiffs' livelihoods
survived Kowa Printing's unexpected financial downturn." Slip op. at
10. Even if this conclusion were justified, the trial court's contrary
conclusion is at least equally justified.
	The majority has apparently based its conclusion on its own
interpretation of the factual record and has afforded no deference to
the fact findings of the trial court on the issue of Thomas Kowa's
liability. This is clearly contrary to the applicable standard of review.
The trial court's application of its factual findings is well supported by
the record and is not against the manifest weight of the evidence.
Accordingly, I respectfully dissent from the majority's affirmance of
the appellate court's judgment in favor of defendant Thomas Kowa.
 
 
1. ï»¿ There is certainly 
nothing in the legislative history to suggest that the
General Assembly envisioned such a draconian upheaval of traditional
employment law principles. On the contrary, the legislative history reveals
that the Wage Act was passed swiftly, unanimously, and with almost no
debate or discussion.
2.  ï»¿ 
Section 203(d) states that "[a]s used in this chapter *** [e]mployer'
includes any person acting directly or indirectly in the interest of an employer
in relation to an employee." 29 U.S.C. §203(d) (1988).