CONCLUSION

Plaintiffs’ motion for summary judgment [No. 40-1] and defendants’ motion for summary
judgment [No. 36-1] are granted in part and denied in part as stated in the foregoing
memorandum opinion. As discussed in the opinion, the Court has determined certain issues with
rcgard to counts | and 2 of the Second Amended Complaint, while other issucs regarding these
claims remain for trial. Counts 3 and 4 remain for trial. Summary judgment is entered in
defendants’ favor on count 5, Plaintiffs’ motion to dismiss certain counts of the counterclaim
[No. 61-1] is granted in part and denicd in part; claims 7 and 8 of the counterclaim are dismissed
for failure to state a claim. Plaintiffs are ordered to answer the remaining claims within seven

days of this order.

MATTHEW F. KE LY
United States District Iudge

Date: August 21, 2003



direct or circumstantial, of a causal link between his complaints and the employment action.
Hartlein v. Ill. Power Co., 151 Ul. 2d 142, 160, 601 N.E.2d 720, 728 (1992). Regarding
causation, “the ultimate issue to be decided is the employer’s motive in discharging the
employee.” fd. at 163, 601 N.E.2d at 730, The element of causation is not met if “the employer
has a valid basis, which is not pretextual, for discharging the employee.” /d. at 160, N.E.2d at
728.

Adan testified that he often complained to Peter and Felippo Carabctta about spoiled food
during the course of his employment from 1999 to 2001; their response was that Adan should
throw away any spoiled food that he encountered, Adan Dep. at 13, 16. In fact, Peter gave Adan
the responsibility of filling out a U.S. Department of Agriculture logbook. Jd. at 44. His
responsibility was “to inspect all the working equipment, the machines, the containers, . . . the
floor, the tables for everything to be clean.” Jd. Adan does not contend that there were any
negative repercussions when he reported unsanitary conditions in the logbook. Jd. at 45.
Moreover, it was Peter who explained to Adan how to detect when pasta had gone bad and
needed to be disposed of. /d. at 49. However, Adan does claim that when Nicolina Carabetta
was at the plant, she insisted that the spoiled pasta not be disposed of, but rather combined with
the good pasta. He maintains that around September 2001, he found spoiled pasta and threw it
away. When Nicolina arrived later that day, she asked for the pasta, and Adan admitted to
disposing of it. According to Adan, Nicolina became upset, complaining about the money
wasted by throwing away the pasta. Adan then spoke with Peter, who repeated that he should not
mix in spoiled pasta but should throw it away, regardless of Nicolina’s instructions, See id. at

19. After this incident, Adan alleges having voiced additional complaints about spoiled food in

13



consenting adults (rom transacting about minimum wages and overtime pay.”); 820 ILCS 105/12
(“[A]ny agreement between [an employee] and his employer to work for less than [the wages
provided by the IMWL.] is no defense to such action.”). By failing to pay time and one-half for
overtime work, defendants violated both Acts and are liable for the additional “half time” they
failed to pay.

Defendants do not dispute the amount of unpaid overtime wages. They do, however,
dispute the amount plaintiffs arc entitled to receive in this lawsuit. Defendants argue that any
award should consist of wages net of taxcs. Plaintiffs contend that their award of delinquent
“half time” should consist of gross wages. See Pls.’ Mem. of Law in Supp. of their Mot. for
Summ. J. at 3 - 4. Not surprisingly, plaintiffs cite absolutely no authority for this position; they
are not enlitled to receive delinquent overtime compensation “tax free.” Rev. Rul. 72-268, 1972-
1 C.B. 313 (amounts paid pursuant to the FLSA for unpaid overtime compensation are “wages”
for purposes of federal employment taxes and income tax withholding); 86 Ill. Adm, Code
100.7030 (payments to Tllinois cmployees “shall be subject to withholding of Tllinois income tax
if such payments are subject to withholding of federal income tax”). Defendants may deduct, as
required by law, see 26 U.S.C. § 3402(a)(1); 86 Ill. Adm. Code 100.7030, any taxes they would
have been required to withhold from the delinquent amounts had they been paid normally. Cf:
Ford v, Kaufman, No. 84 C 10607, 1985 WL 584, at *1 (N.D. Ill. Apr. 15, 1985) (ordering an
award for delinquent overtime compensation minus deductions for social security and taxes);
Archie y. Grand Cent. P’ship, Inc., 86 F. Supp. 2d 262, 273 (8.D.N.Y. 2000) (stating that in the
FLSA context “courts are generally of one mind that withholding from back wages must be

made” and citing cases).



was unjustly enriched because he falsely claimed that his girlfriend, Margarita Herrera, was his
spouse in order that Italia Foods would provide her with insurance coverage. To state a claim of
unjust entichment under Illinois law, Ttalia nced only allege that “there has been unjust retention
ofa benefit by one party to the detriment of another against the fundamental principles of justice
and equity.” Firemen’s Annuity and Benefit Fund v. Mun. Employees’, Officers’, and Officials’
Annuity and Benefit Fund, 219 Wl. App. 3d 707, 712, 579 N.B.2d 1003, 1007 (1991). “[TJhe
essence of the cause of action is that one party is enriched and it would be unjust for that party to
retain the enrichment.” Jd. Italia has met this threshold, Italia alleges that Renteria received a
benefit — medical insurance for his live-in girlfriend — and that it was to the detriment of
defendant, who paid the premiums for her in the mistaken belief that Herrera was Renteria’s
spouse. Cf Trs. of AFTRA Health Fund v. Biondi, 303 F.3d 765, 782 (7 Cir. 2002) (stating that
becausc ERISA’s civi) enforcement provisions do not provide a remedy “for situations where a
employee benefit trust fund has been defrauded by a non-fiduciary . .. garden-variety state-law
tort claims must, as a general matter, remain undisturbed” by FRISA’s preemption clause).
Renteria’s motion to dismiss count 1 of the counterclaim is therefore denied.

Count 8 of the counterclaim seeks restitution from Renteria pursuant to ERISA. ERISA
permits the fiduciary of a benefit plan, which Ttalia Foods claims to be, to bring a civil action to
obtain cquitable relief to redress violations of a plan’s terms. 29 U.S.C. § 1132(a)(3)(B)(i). Italia
sccks restitution in the amount of the premiums paid on behalf of Herrera. Defendant cannot
maintain a restitution action under ERISA, however, because the Act “docs not provide any
mechanism for plan administrators or fiduciaries to recoup monies defrauded from employee

benefit trust funds by plan participants.” 7s. of AFTRA Health Fund, 303 F.3d at 782 (emphasis

17



Liability of the Carabettas

Plaintiff's argue that the Carabettas, as owners with operational control over Italia Foods,
are jointly liable with Italia for the FLSA and IMWL violations. See, e.g., Donovan v. Agnew,
712 F.2d 1509, 1511 (1* Cir. 1983). Defendants have not responded to this argument and thus
arc deemed to have conceded the point.
FLSA Retaliatory Discharge

The FI.SA prohibits an employer from “discharg[ing] or in any other manner
discriminat[ing]” against an employee for asserting a FLSA claim. 29 U.S.C. § 215(a)(3). In
count 3, plaintiffs J. Socorro Olvera, Gabriela Olvera, Cornejo, Montoya and Reyes claim that
they were fired from Italia Foods when Felippo Carabetta learned they had joined this lawsuit.
Defendants argue that plaintiffs were never fired but rather were merely sent home early on the
afternoon of January 29, 20023

On the afternoon of January 29, Felippo Carabetta learned that the Olveras, Cornejo, and
Montoya had joined the lawsuit originally filed by Renteria and Daniel Adan. Felippo Carabctta
Dep. at 64. He says that he came to the production floor where plaintiffs were working and “told
everybody go home for the day, no more work today.” /d. at 68. Defendants maintain that the
early shutdown was an initial reaction to a possible emergency situation and that it was not

intended as a termination of plaintiffs’ employment. Specifically, Felippo testified that as a

*Count 2 of the Second Amended Complaint names Rosa Adan as a plaintiff claiming
retaliatory discharge. However, she seems to have dropped out of this claim. See Pls.’ Mot. For
Summ. J. 4 10; Pls.” Am. Resp. to Defs.’ Mot. for Summ. J. al 9 (naming only Socorro Olvera,
Montoyo, Cornejo, and Gabriela Olvera as the “January 29, 2002 Plaintiffs”), And that would
make sense, as il appears that she was no longer worked for Italia Foods on this date. Felippo
Carrabetta Dep. at 50, 90.



withheld by the employer but were not. Defendants therefore may not deduct from the overtime
amounts still owed any amounts that previously should have been withheld.

The Court likewise rejects defendants’ argument that they are entitled to offset against the
amounts owed to certain plaintiffs sums that they contend these plaintiffs were improperly
overpaid or that they allegedly received as a result of fraud. Again, such offsets are not among
those permitted under the FLSA.

Limitations Period on FLSA Overtime Claims

Plaintiffs argue that they are entitled to unpaid overtime compensation reaching back
three years from the date this suit was filed. An cmployer is liable for three years of back wages
if the FLSA violation was “willful,” but only two ycars if it was not. 29 U.S.C. § 255(a). This
lawsuit was filed in January 2002. An employer’s violation of the FLSA is “willful” for
purposes of determining the limitations period if the employer either knew or acted with reckless
disregard for whether its conduct was prohibited by the Act. McLaughlin v. Richland Shoe Co.,
486 U.S. 128, 133 (1988). Willful behavior is conduct that is more than simply negligent or
unreasonable, Jd.; & 0.13. In Walton v, United Consumers Club, Inc., supra, a FLSA case, the
Seventh Circuit described “willfulness” as “denoting a range of culpability from gross negligence
to actual knowledge plus malice depending on the context. Usually it denotes some highly
culpable mental state either actual knowledge that one’s acts violate the law or reckless
indifference to the law.” Walton, 786 F.2d at 308-09 (citations omitted). The plaintiff in a FLSA
case bears the burden of establishing willfulness, id. at 308, which “requir[es] proof that ‘the

defendant’s actions were knowing and voluntary and that he knew or reasonably should have

known that those actions violated’ the statute,” id. at 312 (quoting Herman v. National



Defendants also argue that they are also entitled to subtract from the amount owed all the
deductions they failed to withhold from the amounts they previously paid plaintiffs for overtime.
The FLSA permits an employer to crcdit certain payments against any overtime it owes.
Specifically, 29 U.S.C. § 207(h)(2) provides that “[e]xtra compensation paid as described in
paragraphs (5), (6), and (7) of subsection (€) of this section shall be creditable towards overtime
compensation payable pursuant to this section.” Although defendants maintain, presumably
pursuant to this provision, that “[p]ayments or overpayments to employees in a form other than
overtime compensation reduce the amount of unpaid overtime compensation premiums due,”
Defs.’ Mot. for Summ. J. at 5, they do not argue that any of the listed subsections apply.’ The
statute is specific in what types of payments are permissible credits against overtime pay;
delinquent withholding deductions are not among them. Moreover, defendants cite no authority

for the proposition that plaintiffs must reimburse defendants for amounts that should have been

'These subscctions include:
(5) extra compensation provided by a premium rate paid for certain hours worked
by the employee in any day or workweek because such hours are hours worked in
excess of eight in a day or in excess of the maximum workweek applicable to
such employee under subsection (a) of this section or in excess of the employee’s
normal working hours or regular working hours, as the case may be;
(6) extra compensation provided by a premium rate paid for work by the employce
on Saturdays, Sundays, holidays, or regular days of rest, or on the sixth or seventh
day of the workweek, where such premium rate is not less than one and one-half
times the rate established in good faith for like work performed in nonovertime
hours on other days;
(7) extra compensation provided by a premium rate paid to the employee, in
pursuance of an applicable employment contract or collective-bargaining
agrecment, for work outside of the hours established in good faith by the contract
or agreement as the basic, normal, or regular workday (not exceeding eight hours)
or workweek . ...

29 U.S.C. § 207(e).



in original). Count 8 is therefore dismissed.

Count 7 of the counterclaim alleges fraud by Comejo in that he applied for and received
unemployment benefits when in fact he was not eligible for them. Italia contends that Comejo
misrepresented to the Illinois Department of Employment Security that he was involuntarily
unemployed and actively secking employment. Defendant maintains that both representations
are false and were made with the intention of falsely securing unemployment benefits and that
IDES relied on the misrepresentations in awarding him benefits. Italia Foods also maintains that
as a result of'Cornejo’s alleged misrepresentations, it has been injured in an amount cquai to the
increased premiums it must pay for unemployment compensation insurance.

Italia, however, has not alleged the necessary elements of fraud. Under Illinois law, a

plaintiff in a fraud action must show “‘a false statement of material fact made by defendant,
defendant’s knowledge or belief that the statement was false, defendant's intent to induce
plaintiff to act, and action by plaintiff in justifiable reliance on that statement, and damage to
plaintiff resulting from such reliance.” Dresser Indus. Inc. v. Pyrrhus AG, 936 F.2d 921, 934
(7" Cir, 1991) (quoting Commercial Credit Equip. Corp. v. Stamps, 921 F.2d 1361, 1366 (7" Cir.
1990)) (emphasis in original). Italia does not allege, nor could it, that Corejo made the
statements to Italia in the anticipation that Italia would rely on them. ‘The statements, whether

true or falsc, were made to IDES in the anticipation that it would rely on them to confer

unemployment benefits. Count 7 is therefore dismissed for failure to state a claim.

18



Even were events to have occurred according to defendants’ version, however, defendants must
show that their compliance with plaintiffs’ alleged request was in good faith and that they had a
teasonable basis for believing that the shilt did not violate the FLSA. 29 U.S.C. § 260.
Defendants fail to do so. They have adduced absolutely no evidence to this effect. In fact, all the
evidence in the partics’ submissions points the other way. Defendants plead ignorance of the
Act’s requirements, stating that they “are neither college graduates nor experts in accounting.”
Defs.’ Resp. to Pls.’ Mot. for Summ. J. at 7. But the fact that overtime wages were paid in
compliance with the FLSA until November 1999 indicates that defendants were aware of their
obligation to pay time and one-half for hours worked over forly per week. In any case, an
employer's ignorance of the Act or its requirements does not constitute reasonable grounds for
believing it was in compliance. Sinclair v. Auto. Club of Okla., Inc., 733 F.2d 726, 730 (10" Cir.
1984); Marshall v, Brunner, 668 F.2d 748, 753 (3d Cir. 1982). Because defendants have failed
to meet their “substantial burden,” liquidated damages under the FLSA are appropriate.
Bankston vy. State of Illinois, 60 F.3d 1249, 1254 (7* Cir. 1995).

Plaintiffs maintain that they are also entitled to punitive damages under the IMWL. This
statute employs a different standard of proof than the onc that governs awards of liquidated
damages under the FLSA. Under the IMWL, punilive damages are appropniate only if plaintiffs
prove that defendants’ conduct was willful. 820 LLCS 105/12(a).? As discussed in the previous
section, an issue of fact exists regarding whether defendants acted willfully. Whether punitive

damages are available is thus a matter to be determined at trial.

"Defendants argue that punitive damages are available only in actions brought by the
Tllinois Department of Labor, not in private civil actions. They do noi, however, cite any
authority for this proposition, and the Court has not uncovered any in its own research.

8



Minute Order Form (00/97)

United States District Court, Northern District of Mlinois

Name of Assigned Jud; Sitting Judge if Oth
or Magintrate ‘ules Matthew PF. Kennelly than Assigned Judge
CASE NUMBER 02 € 495 DATE 8/21/2003
CASE Renteria vs, Italia Foods, Inc.
TITLE

[In the following box (a) indicate the party filing the motion, ¢.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
of the motion being presented]

MOTION:

DOCKET ENTRY:

(1) a Filed motion of [ use listing in “Motion” box above.]

(2) ao Brief in support of motion due

Bg) oO Answer brief to motion due__. Reply to answer briefdue__—-

(4) oO Ruling/Hearingon__ssetfor_ at.

(5) oO Status hearing[held/continued to] [set for/re-set for]on__—ssetfor_—at__
(6) a Pretrial conference[held/continued to] [set for/re-set for]on____set forall
(7) oO Trial[set for/re-set for] on | at

(8) o {Bench/Jury trial] [Hearing] held/continned toa

(9) oO This case is dismissed [with/without] prejudice and without costs[by/agrecment/pursuant to]

OFRCP4(m) ClLocalRule41.1 O)FRCP4i(a)(1) OO FRCP41(a)(2).

(0) (Other docket entry] Plaintiff’s motion for summary judgment (40-1) and defendants’ motion for summary
judgment (36-1) are granted in part and denied in part. The Court has determined certain issues with regard to counts |
and 2 of the second amended complaint, while other issues regarding these claims remain for trial. Counts 3 and 4 remain
for trial. Summary judgment is entered in defendants’ favor on count 5, Plaintiffs’ motion to dismiss certain counts of
the counterclaim (61-1) is granted in part and denied part; claims 7 and 8 of the counterclaim are dismissed for failure to
state a claim. Plaintiffs are ordered to answer the remaining claims on or before 8/28/03,

(11) Wl [For further detail see order attached to the original minute order.

No notices required, advised in open court. Document

Nuitiber

No nolives required.
number of Houces,

(AUG 25 2003

date docketed,

dockering HY.

Notices mailed by judge's staff.

Notified counsel by telephone.

ao | Docketing to mail notices:

Mail AO 450 form.

g/

Copy to judge/magistrate judge. 48n09 dole tsiq sn
ats die miled notice
ons deputy's 1:2 Hd 92 dny eo
initials ORIN 7
Mad
j cesttral ce fain mailing deputy initials



Immigration Reform and Control Act of 1986, Pub. L. No. 99-603, 100 Stat. 3359 (codified as
amended at 8 U.S.C. § 1324), constitutes a “comprehensive scheme prohibiting the employment
of illegal aliens in the United States” and that it “forcefully” made combating the employment of
illegal aliens central to immigration law policy. fd. at 1282. Under the IRCA’s scheme, the
Court held, an award of back pay to a worker discharged in violation of the National Labor
Relations Act “runs counter to policies underlying the IRCA,” id. at 1283, and would

unduly trench upon explicit statutory prohibitions critical to federal immigration

policy, as expressed in {the Immigration Reform and Control Act of 1986]. It

would encourage the succcssful cvasion of apprehension by immigration

authorities, condone prior violations of the immigration laws, and encourage

future violations.

Id. at 1284.

Defendants argue that an award of back pay, front pay, or compensatory damages for a
violation of the FLSA likewise would trench on the policies expressed in the IRCA. With regard
to back pay and front pay, the Court agrees. The policics that motivated the enactment of the
IRCA are certainly subject to debatc, but the IRCA is the law of the land, and the Supreme Court
has made it clear that awarding back pay to undocumented aliens contravenes the policies
embodied in that law. An award of front pay would be inappropriate for the same reason: front
pay essentially assumes that the worker will continue to work for the cmployer in the future,
which is against the law for an undocumented alien. We reach a different conclusion, however,
regarding compensatory damages. In //offinan Plastic, the Supreme Court did not preclude the
NLRB from taking any remedial action for the employer’s improper firing of an undocumented

worker; it expressly preserved the NLRB’s ability to issue injunctive and declaratory relicf.

Hoffman Plastic, 122 §. Ct. at 1286. The remedy of compensatory damages, unlike those of back

11



result of the lawsuit, he feared plaintiffs might tamper with the food and that not enough family
members were present at the plant to supervise the workers. /d. at 72. He feared tampering
because the complaint alleged food adulteration, and he was concerned that plaintiffs would
sabotage the food in order to prove their case. Jd. at 67. By contrast, plaintiffs have testified that
Felippo said, “no more Italia Food, everybody go home now” and that they understood he was
sending them home for good. Comejo Dep. at 8; see J.Socorro Olvera Dep. at 7; Gabriela Olvera
Dep. at 9; Montoya Dep. at 13. Il plaintiffs’ testimony is believed, a jury reasonably could find
that they had been terminated. For these reasons, a genuine issue of fact exists as to whether a
termination actually occurred. Both sides’ motions for summary judgment are therefore denied
as to the claims of these plaintiffs.

The facts pertaining to Reyes’s alleged discharge are somewhat different. His last day at
Italia Foods was January 28, 2002. Ie claims that on that day Peter Carabelta sent him home
carly. But Reyes conceded at his deposition that hc was told he was being sent home because
there was no work for him and that he did not know whether this meant permanently or just for
the day. Reycs Dep. at 6. As Reyes himself cannot say he belicved he was being sent home
permanently, no reasonable jury could find he was fired. Defendants are entitled to summary
judgment on Reyes’s retaliation claim.
Damages for FLSA Retaliatory Discharge

Defendants maintain that if the Olveras succeed on their retaliatory discharge claim, they
are not entitled to back pay, front pay, or compensatory damages because they werc not legally
authorized to work in the United States at the time of the events in question. In Haffman Plastic

Compounds, Ine. v. NLRB, 122 §. Ct. 1275 (2002), the Supreme Court noted that the

10



Broadcasting Co., 744 V'.2d 604, 607 (7 Cir. 1984)).

Although the record establishes that the shift in overtime compensation was deliberately
undertaken by the defendants, il is genuinely disputed whether plaintiffs can establish a “highly
culpable mental state” on defendants’ part. In other words, plaintiffs have not submitted
evidence conclusively establishing that defendants acted with knowledge that the compensation
scheme violated the law or with reckless indifference on this point. Cf Bankston, 60 F.3d at
1254 (“It is casicr for a plaintiff to receive liquidated damages under the FLSA than it is to
extend the statute of limitations for FLSA claims. ., .”). Plaintiffs will thus have to prove
willfulness at trial in order to be able to recover damages under the FLSA relating to overtime
worked before January 22, 2000.

Liquidated and Punitive Damages

Plaintiffs maintain that they are entitled to liquidated (double) damages under the FLSA
and punitive damages under the IMWL. Until 1947, double damages were mandatory for FLSA
violations, In that year, Congress passed the Portal-to-Portal Act, section 11 of which allows a
district court, “in its sound discretion,” to award a lesser amount of liquidated damages or none at
all. 29 U.S.C. § 260. However, because the FLSA incorporates a “strong presumption” in favor
of liquidated damages, to avoid them an employer must demonstrate that il acted in good faith
and with a reasonable belief that its conduct did not violate the Act. Walton, 786 F.3d at 310; see
Avitia v. Metro, Club of Chicago, Inc., 49 F.3d 1219, 1226 (7" Cir. 1995). Instances where
doubling may not be appropriate, for example, include where “the violation was technical or
inadvertent.” Walton, 786 F. 2d at 308.

As stated above, the parties dispute who instigated the shift in overtime compensation.



The Illinois Minimum Wage Law establishes a similar compensation scheme. The Act
provides that “no employer shall employ any of his employees for a workweek of more than 40
hours unless such cmployee receives compensation for his cmployment in excess of the hours
above specified at a rate not less than 1% times the regular rate at which he is employed.” 820
ILCS 105/4a(1). The IMWL further provides for punitive damages of 2% of any such
underpayments “for cach month following the date of payment during which such underpayments
remain unpaid.” 820 T1.CS 105/12(a). Punitive damages are available only if the “employer’s
conduct is proven by a preponderance of the evidence to be willful.” Jd. Thus under the Illinois
statute, the plaintiff bears the burden of proving willfulness.

The factual predicate for plaintiffs’ FLSA and LMWL claims is undisputed. Prior to
November 1999, plaintiffs were properly compensated at time and one-half for all overtime
hours. Pls.’ Resp. to Defs.’ Rule 56.1 Statement of Facts § 32. As of November 1999, Italia
began compensating plaintiffs for overtime hours at their regular hourly rale. For the first pay
period in which this occurred, Italia withheld proper tax deductions from plaintiffs’ paychecks.
From that time forward, however, Italia compensated plaintiffs for overtime hours by paying,
them straight time without any deductions. The reason for this shift from appropriate overtime
compensation to this arrangement is disputed -- defendants claim that plaintiffs requested to be
compensated in this manner, Felippo Carabetta Dep. at 62, and plaintiffs contend that defendants
instituted the change because they did not want to incur the expense of paying overtime wages,
see, ¢.g., Montoya Dep. at 30-31, or the expense of withholding taxes, see, e.g., Adan Dep. at 53-

54, 63. The reason for the violation, however, is immaterial to plaintiffs’ claim for unpaid

overtime. See Walton, 786 F.2d at 306 (“[T]he Fair Labor Standards Act is designed to prevent



September and early October 2001. Jd. at 20.

The last day Adan worked at Italia Foods was December 21, 2001, with the next possible
work day being December 26. Jd. However, he was not fired or asked not to return to work on
that day. According to Adan, Italia Foods did not always need him to work a full forty hours per
week. Jd. at 26. Because hours were somewhat irregular, Adan would know that he was needed
at work if he received a telephone call from Peter Carabetta the night before Id. at 27.
According to Peter Carabetta, he tried calling Adan several times to report for work between
December 26 and December 31, 2001, but no one answered. Peter Carabetta Aff. {| 2, 3. Peter
Carabetta’s allegation that he attempted to reach Adan but was unsuccessful is consistent with
Adan’s testimony that he was experiencing telephone problems in December 2001 that caused
him to miss many calls, Adan Dep. at 33. He acknowledges that if Peter tried to call him, it is
probable that he would not have received the calls because of his telephone problems. Jd. at 32.
When Adan came to Italia Foods in early January to find out why he had not been called in to
work, Nicolina told him that attempts had been made to reach him. Adan Dep, at 37, 38.
According to Nicolina, she asked him why he did not report for work at the end of December or
call to explain his absence. Nicolina Carabetta Aff. J 8. He lied to Nicolina and told her that he
had been to visi a sick relative in Texas. Adan Dep. at 51-52. Nicolina claims that she knew
this cxplanation was a lie because one of Adan’s co-workers at Italia Foods had told her that
Adan had been working another full-time job and was therefore unable to work at Ttalia Foods
during much of the last two weeks of December 2001. Nicolina Carabetta Aff. 5. Nicolina
claims that she confronted him with this information and that Adan admitted that the reason he

had missed work at Italia Foods was so that he could work his second job. /d. 4) 13. Although

14



Plaintiffs’ Rule 26(a)(1) Disclosures

Defendants argue summary judgment should be entered in their favor on plaintiffs’
retaliatory discharge claim and Renteria’s Illinois Wage Payment and Collection Act claim
because of deficient Rule 26(a)(1)(C) disclosures. Federal Rule of Civil Procedure 26(a)(1)(C)
provides that a plaintiff must provide a computation of any damages claimed and make available
for inspection and copying the documents or evidentiary material bearing on the nature and
extent of the injurics suffered. Defendants maintain that plaintiffs’ initial and supplemental
disclosures do not contain the required information. Under Rule 37 (c)(1), “a party that without
substantial justification fails to disclose information required by Rule... 26(a)(1)(C) shall not,
unless such failure is harmless, be permitted to usc as evidence al trial, at a hearing, or on a
motion any witness or information not so disclosed.” However, defendants took the deposition
of every plaintiff and during these depositions had ample opportunity to gather information
regarding damages. Defendants have not been prejudiced by the allegedly deficient initial
disclosures, and their request for summary judgment on this ground is denied.
Motion to Dismiss Counterclaim

Plaintiffs Rentcria and Cornejo have moved to dismiss counts 1, 7, and 8 of Italia’s
counterclaim pursuant to Federal Rule of Civil Procedure 12(b)(6). Dismissal for failure to state
a claim is appropriate only if “it appears beyond doubt that the plaintiff can prove no set of facts
in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46
(1957).

Count | of the counterclaim alleges unjust enrichment by Renteria. Italia Foods, which

offered medical and life insurance to its employces and their dependants, contends that Renteria

16



law (count 5). Italia has counterclaimed against Rentcria for restitution and unjust enrichment
and against Juan Comejo for fraud. This case is presently before the Court on cross motions for
summary judgment and certain plaintiffs’ motion to dismiss certain counts of Ttalia’s
counterclaim.
Failure to Pay Overtime Wages

Plaintiffs contend that defendants violated the FLSA and the IMWL by failing to pay
them appropriate overtime wages. Both acts obligate an employer to compensate its cmployees
al one and one-half times the regular rate for all hours worked over forty per week. The FLSA
states that

no employer shall employ any of his employees who in any workweek is . . .

employed in an enterprise engaged in commerce or in the production of goods for

commerce, for a workweek longer than forty hours unless such employee receives

compensation for his employment in excess of the hours above specified at a rate

not less than one and onc half times the regular rate at which he is employed.
29 U.S.C. § 207(a)(1). Apart from permitting recovery of unpaid overtime wages, the FLSA also
permits plaintiffs to receive “an additional equal amount” as liquidated damages. fd. § 216(b).
Where a FLSA violation has occurred, “double damages are the norm.” Walton v. United
Consumers Club, Inc., 786 F.2d 303, 310 (7" Cir. 1986). To avoid liquidated damages, the
employer bears the burden of demonstrating that its violation of the Act occurred in a good faith,
reasonable belief that its actions werc not illegal. If an employer

shows to the satisfaction of the court that the act or omission giving rise to [the

action under the Act] was in good faith and that he had reasonable grounds for

believing that his act or omission was not a violation of the [FLSA] the court may,

in its sound diserction, award no liquidated damages or award any amount thercof
nat to exceed (double damages].

29 U.S.C. § 260.



IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

JOSE RENTERIA, DANIEL ADAN,

J. SOCORRO OLVERA, GABRIELA
OLVERA, ROSA ADAN, JUAN
FRANCISCO CORNEJO, JOSE LUIS
MONTOYO, and LUIS ANGEL REYES,

DOCKETED

AUG 2 5 2003

Plaintiffs,

vs. Case No. 02 C 495
ITALIA FOODS, INC., PETER CARABETTA,
FELIPPO CARABETTA, and

NICOLINA CARABETTA,

Defendants,

MEMORANDUM OPINION AND ORDER

MATTHEW F, KENNELLY, District Judge:

Plaintiffs are former employees of defendant Italia Foods. Defendants Peter Carabeita,
Felippo Carabetta, and Nicolina Carabetta own Italia Foods, which manufactures frozen Italian
food products for distribution to supermarkets. Plaintiffs claim that defendants violated the Fair
Labor Standards Act of 1938, 29 U.S.C. §§ 201-19 (count 1), and the Illinois Minimum Wage
Law, 820 ILCS 105 (count 2), by failing to compensate plaintiffs at a rate of “time and one-half”
for hours worked over forty per week. Certain plaintiffs also claim that defendants violated the
FLSA by discharging them in retaliation for joining this lawsuit (count 3). In addition, plaintiff
Jose Renteria claims that defendants violated the Illinois Wage Payment and Collection Act, 820
ILCS 115/1-115/15 (count 4), for failing to compensate him for all hours worked and to pay him

earned vacation pay, and plaintiff Daniel Adan complains of retaliatory discharge under Illinois

3]



pay and front pay, docs not assume the undocumented worker’s continued (and illegal)
employment by the employer. We therefore agree with the court in Singh v, Jutla & C.D. & R's
Oil, Inc., 214 F. Supp. 2d 1056, 1061-61 (N.D. Cal. 2002) as best we can tell, the only post-
Aloffman Plastic decision to address the point — that compensatory damages for retaliatory
termination under the FLSA remain available to undocumented workers. For these reasons, the
Olveras’ claims for back pay and front pay are stricken, but their claim for compensatory
damages remains for trial.
MHlinois Retaliatory Discharge

Defendants move for summary judgment on Daniel Adan’s state law claim of retaliatory
discharge. Count 5 of the Second Amended Complaint alleges that Danicl Adan was terminated
from his employment at Italia Foods because of his persistent complaints regarding the
cleanliness and safcty conditions of the manufacturing facility, especially the use of spoiled food
products. Although an at-will employee is generally subject to discharge for any reason or no
reason at all, Illinois law recognizes an exception for the tort of retaliatory discharge. To
establish a cause of action for retaliatory discharge, a plaintiff must demonstrate that (1) he was
discharged; (2) his discharge was in retaliation for his activities; and (3) the discharge violates a
clear mandate of public policy. Zimmerman v, Buchheit of Sparta, Inc., 164 Ill. 2d 29, 35, 645
N.E.2d 877, 880 (1994).

Adan has no problem demonstrating the third element; comphance with health codes in
the food industry is “a public concern of the highest magnitude.” Lanning v. Morris Mobile
Meals, Inc., 308 Ill. App. 3d 490, 493, 720 N.E.2d 1128, 131 (1999). Adan’s proof fails,

however, on the second clement of this tort, which requires him to have some evidence, cither

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Adan did in fact work a second job in December 2001 — working 30 hours in the pay period
ending December 23 » he claims he was working the second shift and that it did not interfere
with his work at Italia Foods. See Adan Dep, at 23. Nicolina claims that he was fired because of
his unexplained absence and the fact that he lied about being in Texas when in fact he was
working another job. Nicolina Carabetta Aff. q] 11.

Adan maintains that it was Pctcr’s decision to terminale Adan’s employment and that
Nicolina’s version of why he was fired is irrelevant. See Pls.’ Amended Resp. to Defs.’ Mot. for
Summ. J. at 17. And despite Adan’s confrontation with Nicolina, he maintains that the decision
to terminate Adan was not hers. Jd. It would make no sense, however, for Peter to encourage
Adan to dispose of spoiled food, instruct him on how to detect spoiled pasta, and put him in
charge of sanitary inspections, as Adan has testified, and then fire him for bringing food spoilage
to his attention. in light of Peter Carabatta’s admitted encouragement of Adan’s disposal of
spoiled food, the complete lack of evidence of a retaliatory animus on Peter’s part, the legitimate
reasons for discontinuing Adan’s at-will employment, and the temporal distance between his
final complaint » which was at the latest sometime in early October — and his last day of
employment in late December, Adan has failed to provide evidence from which a reasonable jury
could find a causal connection betwecn his complaints and termination. Because of this
complete [ailure of proof on an element on which he will bear the burden at trial, summary
judgment in defendants’ favor is appropriate on this count. Cefotex Corp. v. Catrett, 477 U.S.
317, 322 (1986) (“Rule 56(c) mandates the entry of summary judgment . . . against a party who
fails to make a showing sufficient to establish the existence of an element cssential to that parly’s

case, and on which that party will bear the burden of proof at trial.”).

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