Starr v. Chicago Cut Steakhouse, LLC

75 F. Supp. 3d 859, 90 Fed. R. Serv. 3d 695, 2014 U.S. Dist. LEXIS 172645, 2014 WL 7146061
CourtDistrict Court, N.D. Illinois
DecidedDecember 15, 2014
DocketNo. 12 C 04416
StatusPublished
Cited by10 cases

This text of 75 F. Supp. 3d 859 (Starr v. Chicago Cut Steakhouse, LLC) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Starr v. Chicago Cut Steakhouse, LLC, 75 F. Supp. 3d 859, 90 Fed. R. Serv. 3d 695, 2014 U.S. Dist. LEXIS 172645, 2014 WL 7146061 (N.D. Ill. 2014).

Opinion

[863]*863Memorandum Opinion and Order

Honorable EDMOND E. CHANG, United States District Judge

Plaintiffs Amy Starr and Andrew Phelan filed this proposed class-action against their former employer, Chicago Cut Steakhouse, LLC, under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., the Illinois Minimum Wage Law (IMWL), 820 ILCS 105/1 et seq., and the Illinois Wage Payment and Collection Act (IWP-CA), 820 ILCS 115/1 et seq.1 R. 26, First Am. Compl. ¶ 2. Plaintiffs allege that Chicago Cut improperly administered its tip pool by retaining a portion of the tip-pool proceeds for itself. Id. ¶¶ 14-19. Plaintiffs have moved to certify a class as to their state-law tip-pool claims (Counts 1 and 2).2 R. 42, Mot. Class Cert. Plaintiffs have also moved for summary judgment on all of their tip-pool claims (Counts 1, 2, and 3). R. 96, Pis.’ Mot. Summ. J. For the reasons discussed below, Plaintiffs’ motion for summary judgment is denied, and their motion for class certification is granted.

I. Background

Chicago Cut Steakhouse is, as its name says, a steakhouse in Chicago, Illinois. PSOF ¶ 1. Chicago Cut treats many of its employees — servers, runners, barbacks, bartenders, and busboys- — -as “tipped employees” under the tip-credit provisions of the FLSA and IMWL. Id. ¶ 3; R. 106, Def.’s Mot. Summ. J. Resp. Br. at 6. Under these provisions, Chicago Cut is allowed to pay tipped employees 40 percent less than the prevailing minimum wage if the employees are able to make up the difference in tips. R. 44, Pis.’ Class Cert. Br. at 3; see also 29 U.S.C. § 203(m); 820 ILCS § 105/4(c). The difference between the reduced wage and the minimum wage is called the “tip credit.” Pis.’ Class Cert. Br. at 3. To take the tip credit, an employer generally is not allowed to keep any of the tips received by its employees. See 29 U.S.C. § 203(m); 820 ILCS § 105/4(c).

Chicago Cut operates a tip pool on behalf of its tipped employees. PSOF ¶ 15. Servers in the main dining room contribute six percent of their net sales to the tip pool, which is then distributed to runners, bussers, and bartenders. Id. ¶ 16; see also Def.’s Resp. PSOF ¶ 16. For private dining events, the tip pool operates slightly differently. Chicago Cut charges a twenty-percent service charge to private dining clients. See Def.’s Mot. Summ. J. Resp. Br. at .6; R. 61, Pis.’ Position Paper at 3. This service charge is divided among the servers who worked the private event, the tip pool, and a private dining event coordinator. See Pis.’ Position Paper at 3; R. 60, Def.’s Position Paper at 1. Chicago Cut also withholds a portion of this service charge to cover credit card processing fees. Def.’s Mot. Summ. J. Resp. Br. at 7. Plaintiffs Amy Starr and Andrew Phelan, both of whom worked as bartenders at Chicago Cut, argue on behalf of themselves and the proposed class that Chicago Cut improperly operated the tip pool (1) [864]*864by keeping a portion of the tip-pool proceeds for itself and (2) by paying tip-pool proceeds to ineligible employees. First Am. Compl. ¶¶ 14-19; R. 97, Pis.’ Mot. Summ. J. Br. at 6-9; R. 108, Pis.’ Mot. Summ. J. Reply Br. at 9-10.

Plaintiffs allege that this improper tip pool violates the tip credit provisions of the FLSA and IMWL because tipped employees did not receive the full measure of wages that they are due. First Am. Compl. ¶¶ 49-57, 68-77. Plaintiffs claim the improper tip pool also violates the IWPCA because, in withholding tip-pool funds, Chicago Cut paid tipped employees less than the amount agreed to in their employment agreements with Chicago Cut. Id. ¶¶ 58-67. Plaintiffs have moved for class certification on the IMWL and IWP-CA tip-pool claims. Mot. Class Cert. Plaintiffs have also moved for summary judgment on liability for the FLSA, IMWL, and IWPCA tip-pool claims, arguing that the undisputed evidence in the record shows that Chicago Cut improperly operated the private dining tip pool by retaining a portion of the tip pool for credit card fees and paying the private dining event coordinator from the tip-pool proceeds. Pis.’ Mot. Summ. J. Br. at 6-9; Pis.’ Mot. Summ. J. Reply Br. at 9-10.

II. Plaintiffs’ Motion for Summary Judgment3

A. Legal Standard

Summary judgment must be granted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A genuine issue of material fact exists if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In evaluating summary judgment motions, courts must view the facts and draw reasonable inferences in the light most favorable to the non-moving party. Scott v. Harris, 550 U.S. 372, 378, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007). The Court may not weigh conflicting evidence or make credibility determinations, Omnicare, Inc. v. UnitedHealth Grp., Inc., 629 F.3d 697, 704 (7th Cir.2011), and must consider only competent evidence of a type otherwise admissible at trial, Gunville v. Walker, 583 F.3d 979, 985 (7th Cir.2009). The party seeking summary judgment has the initial burden of showing that there is no genuine dispute and that they are entitled to judgment as a matter of law. Carmichael v. Village of Palatine, 605 F.3d 451, 460 (7th Cir.2010); see also Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Wheeler v. Lawson, 539 F.3d 629, 634 (7th Cir. 2008). If this burden is met, the adverse party must then “set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 256, 106 S.Ct. 2505.

B. Analysis

Ordinarily, an employer may only take the tip credit under the FLSA and [865]*865IMWL if each tipped employee retains all of his tips. See 29 U.S.C. § 203(m); 820 ILCS § 105/4(c).4 This restriction does not apply, however, if the tipped employees are participating in a valid tip pool. See 29 U.S.C. § 203(m); 820 ILCS § 105/4(c).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Bayeg v. The Admiral at the Lake
2024 IL App (1st) 231141 (Appellate Court of Illinois, 2024)
Fares v. H B & H LLC
E.D. Wisconsin, 2021
Bennett v. Dart
N.D. Illinois, 2020
Tabiti v. LVNV Funding, LLC
N.D. Illinois, 2019
Balderrama-Baca v. Clarence Davids & Co.
318 F.R.D. 603 (N.D. Illinois, 2017)
Pietrzycki v. Heights Tower Service, Inc.
197 F. Supp. 3d 1007 (N.D. Illinois, 2016)
Holmes v. Godinez
311 F.R.D. 177 (N.D. Illinois, 2015)
Wilkins v. Just Energy Group, Inc.
308 F.R.D. 170 (N.D. Illinois, 2015)

Cite This Page — Counsel Stack

Bluebook (online)
75 F. Supp. 3d 859, 90 Fed. R. Serv. 3d 695, 2014 U.S. Dist. LEXIS 172645, 2014 WL 7146061, Counsel Stack Legal Research, https://law.counselstack.com/opinion/starr-v-chicago-cut-steakhouse-llc-ilnd-2014.