Peter Enger v. Chicago Carriage Cab Corp.
812 F.3d 565
7th Cir.2016Background
- Plaintiffs are current and former Chicago taxi drivers who leased cabs from defendant taxi companies by paying daily or weekly "shift fees" and covering operating expenses (fuel, taxes, upkeep). Their only income came from passenger fares and tips.
- Drivers alleged class claims under the Illinois Wage Payment and Collection Act (IWPCA) for improper charges, unpaid wages/minimum wage and overtime, and an unjust enrichment claim; defendants moved to dismiss.
- The district court assumed an implied employment agreement existed but dismissed the IWPCA claims because that agreement did not obligate defendants to pay drivers wages; unjust enrichment was dismissed as duplicative.
- On appeal, drivers argued IWPCA’s narrow definition of "wages" should include tips/indirect compensation and that credit-card remittances from companies constituted wages; defendants argued drivers were paid by passengers, not employers.
- The Seventh Circuit affirmed: under the IWPCA "wages" means compensation owed by the employer under an agreement; here defendants merely provided access to cabs/medallions and were intermediaries for fares, so drivers were not owed wages by defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether "wages" under IWPCA includes tips/indirect compensation | "Wages" should be construed broadly to include fares/tips the drivers earn while using defendants' cabs | IWPCA defines "wages" narrowly as compensation owed by employer under an employment contract; tips arise from passengers, not employer | Court held IWPCA requires employer-owed compensation under a contract; tips/indirect pay do not qualify |
| Whether the implied employment agreement obligated defendants to pay drivers | Implied contract entitled drivers to compensation (including indirect compensation) from defendants | The implied agreement only required defendants to provide cabs/medallions; it did not obligate defendants to pay drivers | Court held the implied agreement did not obligate defendants to pay wages, so IWPCA claims fail |
| Whether requirements to pay shift fees/operate expenses constitute unlawful deductions from wages under IWPCA | Shift fees and expenses are deductions from wages and thus unlawful under IWPCA | No wages are paid by defendants to deduct from; fees are consideration to lease the cab, not deductions from employer wages | Court held no unlawful deduction because defendants did not pay wages; fees are lease consideration |
| Viability of unjust enrichment claim | Drivers: defendants were unjustly enriched by requiring payments to work | Defendants: relationship governed by an implied contract, so unjust enrichment cannot remedy alleged contractual terms | Court held unjust enrichment fails where claim duplicates or seeks to alter contract terms; claim dismissed |
Key Cases Cited
- Citadel Grp. Ltd. v. Wash. Reg'l Med. Ctr., 692 F.3d 580 (7th Cir.) (standards for de novo review of Rule 12(b)(6) dismissal)
- R.J.R. Servs., Inc. v. Aetna Cas. & Sur. Co., 895 F.2d 279 (7th Cir.) (plaintiff must show some set of facts entitling relief to survive dismissal)
- Keene Corp. v. United States, 508 U.S. 200 (Supreme Court) (interpretive presumption when legislature includes language in one statute but omits in another)
- Russello v. United States, 464 U.S. 16 (Supreme Court) (same statutory-interpretation principle)
- Cleary v. Philip Morris Inc., 656 F.3d 511 (7th Cir.) (unjust enrichment claim rises or falls with related contractual claim)
- Utility Audit, Inc. v. Horace Mann Serv. Corp., 383 F.3d 683 (7th Cir.) (unjust enrichment does not lie where parties have a contract)