Opinion ID: 3168605
Heading Depth: 2
Heading Rank: 1

Heading: IWPCA Claims

Text: On appeal, the drivers contend that the district court relied on an overly narrow definition of “wages” that improperly excluded tips and other forms of indirect compensation. Specifically, the drivers argue that the implied contract allowing them to collect fares and tips from passengers provides for indirect compensation from defendants, and thus, the district court improperly dismissed their IWPCA claims. The drivers also maintain that defendants violated the No. 15-1057 5 IWPCA, which prohibits employers from taking deductions from an employee’s wages unless certain conditions are met,2 by requiring the drivers to pay shift fees and bear their own operating expenses. The IWPCA provides employees with a cause of action against employers for the timely and complete payment of earned wages. 820 ILCS 115/3. The Act defines “wages” narrowly—a wage is “compensation owed an employee by an employer pursuant to an employment contract or agreement between the 2 parties … .” 820 ILCS 115/2 (emphasis added). As such, to state a claim under the IWPCA, the drivers are required to demonstrate that they are owed compensation from defendants pursuant to an employment agreement. See, e.g., Brand v. Comcast Corp., No. 12 CV 1122, 2013 WL 1499008, at  (N.D. Ill. Apr. 11, 2013) (holding that “to state a claim under the IWPCA, [plaintiff] must allege that [defendant] owed him the unpaid wages pursuant to an employment contract or agreement”); Dominguez v. Micro Ctr. Sales Corp., No. 11 C 8202, 2012 WL 1719793, at  (N.D. Ill. May 15, 2012) (“[T]he IWPCA mandates overtime pay or any other specific kind of wage only to the extent the parties’ contract or agreement requires such pay.”). Like the district court, we assume that the parties’ relationship is governed by an implicit employment contract. We agree with the district court that the drivers’ IWPCA claims fail because the drivers have not demonstrated that 2 The employer may take deductions from wages if those deductions are: “(1) required by law; (2) to … benefit … the employee; (3) in response to a valid wage assignment or wage deduction order; [or] (4) made with the express written consent of the employee, given freely at the time the deduction is made … .” 820 ILCS 115/9. 6 No. 15-1057 defendants owed them “wages.” It is undisputed that the parties’ employment agreement did not obligate defendants to compensate the drivers—it only required defendants to make their cabs and medallions available to the drivers so that they could collect tips and fares from passengers. In fact, the drivers admitted in their complaint that they “receive no wages; instead, their only source of income is what they manage to make in fares and tips.” In spite of this admission, the drivers insist that we should construe “wages” as including indirect compensation.3 To support this argument, the drivers primarily rely on cases from other state courts involving exotic dancers who successfully brought claims for unpaid wages under their state minimum wage statutes, despite the fact that they received no base wages from their employers. E.g., Terry v. Sapphire Gentlemen’s Club, 336 P.3d 951, 953 (Nev. 2014); In re Wage Claims of Smith v. Tyad, Inc., 209 P.3d 228, 233 (Mont. 2009); State ex rel. Roberts v. Bomareto Enters., Inc., 956 P.2d 254, 255 (Or. Ct. App. 1998). The problem with this argument is that those state minimum wage statutes define “wages” broadly to include tips and other forms of indirect 3 Defendants contend that because the drivers admit in their complaint that they do not receive wages, we should not consider this argument on appeal because it relies on “new facts.” See Flying J Inc. v. City of New Haven, 549 F.3d 538, 542 n.1 (7th Cir. 2008) (observing that allegations in plaintiff’s briefs must be consistent with the statement of facts contained in the complaint). Although the drivers’ admission is telling, their argument that they earn “wages” does not rest on a different factual picture than that in the complaint. Rather, the drivers contend that we should interpret the IWPCA’s definition of wages as encompassing income earned from third parties. Thus, we are not precluded from addressing the drivers’ argument in this appeal. No. 15-1057 7 compensation and are thus distinguishable. The drivers do not cite to a single case interpreting the IWPCA as including indirect compensation in its narrow definition of “wages.” By contrast, the Illinois Minimum Wage Law, which sets the minimum hourly rate that an employee must be paid regardless of the underlying employment agreement, defines “wages” broadly to include “compensation due to an employee by reason of his employment, including allowances … for gratuities … .” 820 ILCS 105/3(b) (emphasis added). In other words, the legislature evidenced its ability to define “wages” so as to encompass indirect forms of compensation in a neighboring wage law. This textual difference further supports our conclusion that an employee suing under the IWPCA must seek to collect compensation owed by his employer, and not third parties. See Keene Corp. v. United States, 508 U.S. 200, 208 (1993) (“[W]here [the legislature] includes particular language in one section of a statute but omits it in another …, it is generally presumed that [the legislature] acts intentionally and purposely in the disparate inclusion or exclusion.” (quoting Russello v. United States, 464 U.S. 16, 23 (1983)) (internal quotation marks omitted)). Lastly, the drivers argue that even under the IWPCA’s narrow definition, the district court ignored evidence that the drivers receive “wages” from defendants in the form of credit card remittances. When a passenger pays by credit card, that fare may be processed by the taxi company’s credit card processing service and remitted to the driver by defendants (although some drivers use their own credit card processing services to bypass defendants altogether). But the fact that payment sometimes flows through defendants does not alter the reality that the obligation to pay the driver aris- 8 No. 15-1057 es from the passenger, and not the taxi company. If, for example, the passenger’s credit card was declined and the passenger had no cash to pay for the fare, the taxi company would not be required to compensate the driver for the money that the passenger should have paid. In other words, the taxi company is nothing more than an intermediary, and it is inaccurate to characterize any remittance from defendants as a wage. Because the drivers have not shown that they are entitled to wages from defendants, their argument that defendants made improper deductions from their wages by requiring them to pay fees and expenses fails as a matter of law. Defendants do not pay the drivers’ wages and so they cannot be sued for taking deductions from those non-existent wages. More broadly, it is inaccurate to characterize the shift fees and other expenses that the drivers voluntarily pay to operate defendants’ cabs as a deduction. Instead, the drivers’ payment of fees and expenses is the consideration offered in exchange for the right to lease a cab and medallion under the parties’ implicit agreement. And although the drivers agreed to pay those fees and expenses, they now attempt to use the IWPCA to rewrite the terms of their employment agreement. But again, the IWPCA provides no substantive relief beyond what the underlying employment contract requires. In other words, the IWPCA exists to hold the employer to his promise under the employment agreement; by asking the judiciary to graft new terms into an employment contract without employer’s consent, the drivers turn the IWPCA on its head.4 4Although the drivers have failed to state a claim under the IWPCA, we note that there are arguably other avenues of redress for the allegedly No. 15-1057 9