2023 IL App (1st) 220020
Ill. App. Ct.2023Background:
- Plaintiffs Carmen Mercado and Jorge Lopez were hourly assembly workers at S&C and received periodic nondiscretionary payments described as KPI, MIS, success-sharing, and seniority bonuses.
- Plaintiffs allege S&C excluded those bonuses when computing the regular rate for overtime, resulting in underpayment in violation of the Illinois Minimum Wage Law (Wage Law).
- After separation, S&C issued small “adjustment payments” to Mercado ($486.74) and Lopez ($10.33); plaintiffs say these were insufficient to cover unpaid overtime plus statutory interest and penalties.
- S&C moved to dismiss under section 2-615 (failure to state a claim) and section 2-619.1 (including 2-619 defenses), arguing the bonuses are excluded from the regular rate under 56 Ill. Adm. Code 210.410 and, alternatively, that the adjustment payments eliminated plaintiffs’ damages.
- The trial court held the regulation’s plain language excludes sums not measured by or dependent on hours worked but declined to decide whether the particular bonuses fell in that category; it struck a conclusory portion of S&C’s affidavit but denied the 2-615 dismissal and granted dismissal under 2-619(a)(9) because the adjustment payments satisfied plaintiffs’ alleged underpayment.
- The appellate court affirmed: it upheld the trial court’s statutory interpretation, found no adequate factual showing of ongoing underpayment after uncontested adjustment payments, and affirmed dismissal for failure to plead damages.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether bonuses must be included in the "regular rate" for overtime | Bonuses (KPI, success sharing, seniority) are not gifts and must be included when computing regular rate | Bonuses are not measured by or dependent on hours worked and fall within 56 Ill. Adm. Code 210.410(a) exclusions | Court applied plain text of regulation: sums not measured by or dependent on hours worked are excluded; whether these bonuses qualify is a factual question but the regulation's reading is valid |
| Whether plaintiffs plead damages after receiving adjustment payments | Adjustments were insufficient and plaintiffs still entitled to treble damages, 5% monthly penalties, and fees regardless of when adjustments were paid | Adjustments accounted for alleged underpayments (including bonus amounts and interest); plaintiffs admitted receipt and retention, so no remaining damages | Court found uncontested affidavit showed bonuses were factored into adjustments and plaintiffs kept them, so plaintiffs failed to plead an ongoing underpayment; dismissal affirmed |
| Whether the court erred by relying on S&C affidavit (conclusory) | Plaintiffs argued affidavit’s conclusory claim about bonuses should be disregarded | S&C argued affidavit established that bonuses were not hour-dependent and that adjustments used a disclosed formula | Appellate court disagreed with trial court’s striking of the affidavit portion but reached same result: plaintiffs provided no contrary evidence and could not contest the affidavit on appeal |
Key Cases Cited
- JPMorgan Chase Bank, N.A. v. Earth Foods, Inc., 238 Ill. 2d 455 (Ill. 2010) (apply plain statutory meaning when text is clear)
- DeLuna v. Burciaga, 223 Ill. 2d 49 (Ill. 2006) (statutory interpretation principles; rely on statute’s plain text)
- Porter v. Decatur Memorial Hospital, 227 Ill. 2d 343 (Ill. 2008) (de novo review of section 2-619 dismissal)
- Kedzie & 103rd Currency Exchange, Inc. v. Hodge, 156 Ill. 2d 112 (Ill. 1993) (standard on appeal whether factual issue precludes dismissal)
- People v. Woodard, 175 Ill. 2d 435 (Ill. 1997) (courts must not rewrite clear statutory text)
- Solich v. George & Anna Portes Cancer Prevention Center of Chicago, Inc., 158 Ill. 2d 76 (Ill. 1994) (do not look beyond unambiguous statutory language)