Cork v. Applebee’s of Michigan, Inc

608 N.W.2d 62, 239 Mich. App. 311
CourtMichigan Court of Appeals
DecidedApril 4, 2000
DocketDocket 206868
StatusPublished
Cited by31 cases

This text of 608 N.W.2d 62 (Cork v. Applebee’s of Michigan, Inc) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cork v. Applebee’s of Michigan, Inc, 608 N.W.2d 62, 239 Mich. App. 311 (Mich. Ct. App. 2000).

Opinion

Kelly, J.

Plaintiffs appeal as of right the trial court’s order of September 23, 1997, granting defendant’s motion to dismiss pursuant to MCR 2.116(C)(4) and (8) on the basis that plaintiffs failed to exhaust their administrative remedies. We affirm in part, reverse in part, and remand for further proceedings.

Plaintiffs were employed by defendant as servers in defendant’s restaurant. They alleged that defendant had a policy of “tip-sharing” implemented in the restaurant whereby plaintiffs, in order to maintain employment, were required to make cash payments to bartenders and other employees at the end of each shift. Plaintiffs claim that defendant benefited directly from the tip-sharing policy by allowing defendant to pay the bartenders and other employees less while shifting the burden to pay wages onto plaintiffs.

In their complaint, plaintiffs alleged violations of the wages and fringe benefits act (wfba), MCL 408.471 et seq.-, MSA 17.277(1) et seq., violations of public policy based on MCL 750.351; MSA 28.583, conversion, unjust enrichment, and breach of contract. In addition to a general denial of liability, defendant asserted an affirmative defense that plaintiffs’ claims were barred for failing to exhaust their administrative remedies. Specifically, defendant asserted that MCL 408.481(1); MSA 17.277(H)(1) required plaintiffs to file their claim with the Department of Labor.

On May 6, 1996, the trial court entered a stay of proceedings pending the resolution of a similar case *314 in this Court. 1 Further, the court ordered that the stay would not extend beyond June 30, 1997. On July 2, 1997, defendant filed its motion to dismiss, claiming plaintiffs had failed to exhaust their administrative remedies before commencing the instant lawsuit. On July 25, 1997, the stay was lifted by order of the trial court.

On August, 13, 1997, plaintiffs filed a motion to certify the instant lawsuit as a class action wherein plaintiffs alleged that as many as four hundred former and current employees had been adversely affected by defendant’s policy. Defendant responded by claiming that the tip-sharing policy had been eliminated in 1995, and that participation in the policy by employees was voluntary.

On September 12, 1997, the trial court granted defendant’s motion to dismiss, finding that the court lacked jurisdiction because plaintiffs failed to exhaust their administrative remedies pursuant to the wfba. In adopting a prior ruling of the Wayne Circuit Court (see n 1, supra), the trial court stated, in part:

[Y]our client did not exhaust his or her administrative remedies.
Once you do that, then you have the next issue, then you have class on appeal, and I will deal with that. But right now, you need to have — plaintiff has to exhaust their administrative remedies.
So I think that is the same ruling of Judge Giovan, ruled and the Court will adopt that ruling and proceed to consolidate this case.
* * *
*315 [W]hen I read the Motion on the Failure to Exhaust Administrative Remedies, it was very clear to me that there had not been an exhaustion of administrative remedies, and I’m granting defendant’s motion, to be dismissed. The case is being dismissed.
The Court is automatically dismissing not on its merit, but because the case is closed, Motion for Certification of Class.

On appeal, plaintiffs claim the trial court erred in granting defendant’s motion to dismiss for failing to exhaust their administrative remedies, regardless of plaintiffs’ other claims based on common-law causes of action. We agree in part.

Defendant’s motion to dismiss was brought under MCR 2.116(C)(4) and (8). We review a grant or denial of a motion to dismiss de novo. Borman v State Farm Fire & Casualty Co, 198 Mich App 675, 678; 499 NW2d 419 (1993). When viewing a motion under MCR 2.116(C)(4), this Court must determine whether the pleadings demonstrate that the defendant was entitled to judgment as a matter of law, or whether the affidavits and other proofs show that there was no genuine issue of material fact. Steele v Dep’t of Corrections, 215 Mich App 710, 712; 546 NW2d 725 (1996). Dismissal may be granted pursuant to MCR 2.116(C)(8) on the ground that the opposing party “has failed to state a claim on which relief can be granted.” Radtke v Everett, 442 Mich 368, 373; 501 NW2d 155 (1993). All factual allegations are accepted as true, as well as any reasonable inferences or conclusions that can be drawn from the facts. Id. The motion should be granted only when the claim is so clearly unenforceable as a matter of law that no factual development could possibly justify a right of recovery. Wade v Dep’t of Corrections, 439 Mich 158, *316 163; 483 NW2d 26 (1992). In addition, statutory interpretation is a question law that this Court reviews de novo. American Medical Security, Inc v Allstate Ins Co, 235 Mich App 301, 303; 597 NW2d 244 (1999).

The issue is whether the exclusive remedies portion of the wfba supersedes plaintiffs’ claims for violation of public policy based on MCL 750.351; MSA 28.583, conversion, unjust enrichment, and breach of contract. Additionally, we must determine whether the language in the wfba regarding administrative remedies is permissive or mandatory, which requires an analysis of the wfba itself.

The preamble to the wfba states:

An act to regulate the time and manner of payment of wages and fringe benefits to employees; to prescribe rights and responsibilities of employers and employees, and the powers and duties of the department of labor; to require keeping of records; to provide for settlement of disputes regarding wages and fringe benefits; to prohibit certain practices by employers; to prescribe penalties and remedies; and to repeal certain acts and parts of acts.

The wfba defines wages as “all earnings of an employee whether determined on the basis of time, task, piece, commission, or other method of calculation for labor or services except those defined as fringe benefits under subdivision (e) above.” MCL 408.471(f); MSA 17.277(1)®. The clear language of this section indicates to this Court that tips are included in the definition of wages. The wfba precludes an employer from “demand[ing] or receiv[ing], directly or indirectly from an employee, a fee, gift, tip, gratuity, or other remuneration or consideration, as a condition of employment or continuation of employment.” MCL 408.478(1); MSA 17.277(8)(1). If an *317 employee believes his employer has violated the wfba, he may file a complaint with the Department of Labor. MCL 408.481(1); MSA 17.277(H)(1). 2

In the instant case, plaintiffs alleged in their complaint that defendant’s actions were in violation of the wfba.

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Cite This Page — Counsel Stack

Bluebook (online)
608 N.W.2d 62, 239 Mich. App. 311, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cork-v-applebees-of-michigan-inc-michctapp-2000.