AMY J. ST. EVE, District Judge.
Plaintiffs Kathleen Hughes, Imogen Oliver, and Virginia Sherwood are former exotic dancers at the Pink Monkey, an adult entertainment business allegedly owned and operated by Defendants. They bring this action alleging violations of the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. ("FLSA") (Count I), the Illinois Minimum Wage Law ("IMWL") (Count II), the Illinois Wage Payment and Collection Act ("IWPCA") (Count III), the Racketeer Influence and Corruption Act, 18 U.S.C. 1964 ("RICO") (Count IV), and, as to Virginia Sherwood, retaliatory discharge under the FLSA, IMWL, and IWPCA (Count V). Plaintiffs claim that Defendants misclassified them as independent contractors instead of employees, failed to pay them minimum wage or overtime pay, and unlawfully confiscated their tips. (See R.1, Compl.).
On September 8, 2015, Defendants Scarlett's G.P., Inc. and Mark Vajdik moved to dismiss the Complaint under Federal Rule of Civil Procedure 12(b)(6) and 9(b) for failure to state a claim upon which relief can be granted and, as to the RICO claim, for failure to allege fraud with particularity. (R.10). On October 19, 2015, the remaining Defendants, Clinton Entertainment Management, LLC and Scarlett's L.P.,
The Pink Monkey (the "Club") is an adult club offering semi-nude dance entertainment. (R.1, Compl. ¶ 9). Defendants Clinton, Scarlett's G.P., Inc., and Scarlett's L.P. "maintain ownership, recruitment, management, and/or operational interest" in the Pink Monkey. (Id.). Defendant Mark Vajdik ("Vajdik") is the President of Scarlett's G.P., Inc. and a general partner of Scarlett's L.P. (Id. ¶¶ 7-8). Defendants employ 20-40 exotic dancers on any given day. (Id. ¶ 14). Dancers must work a minimum of three shifts each week. (Id. ¶ 35). Defendants "dictate[] the common employment policies applicable in the Club," including policies relating to work status classification and tip splitting among Club employees. (Id. ¶ 10).
Each dancer signs a contract purporting to classify her as an independent contractor. (Id. ¶ 18; see also R.1-1, Form 1099 showing a payment of $17,275.00 in "non-employee compensation" to Plaintiff Sherwood, attached as Exhibit B to the Compl.). Defendants do not compensate dancers on a set salary or wage basis. (R.1, Compl. ¶ 13). Rather, dancers generate their income through tips received while performing "exotic table, chair, couch, lap, and/or VIP room dances." (Id. ¶ 20). These tip amounts are mandatory and non-discretionary; the Pink Monkey—not the individual dancer—establishes these fixed prices for "Cabana" dances and "VIP Room" dances. (Id. ¶¶ 36-37; R.1-1, Pink Monkey Handbook at 5, attached as Exhibit A to the Compl.). For Cabana dances, for example, the Pink Monkey charges $30 per dance, which the dancer collects from the patron. (Id. ¶ 21; R.1-1, Exhibit A at 5). The Club's floor host continuously tracks each Cabana dance. (R.1, Compl. ¶¶ 38-39). For VIP dances, the patron pays the Club a set fee according to duration and method of payment — for example, $200 in cash for 15 minutes in the VIP room. (Id. ¶ 21; R.1-1, Exhibit A at 5). At the end of her shift, the dancer receives her fixed cut of the VIP dance fees. (R.1, Compl. ¶ 30; R.1-1, Exhibit A at 5-6 ("First you will be paid for any V.I.P. rooms you did that evening")).
Before checking out for the evening, the dancer must pay the mandatory "tip-out" fee, which "is 15% of [her] total earnings for the evening," as well as remit to the Club $5 for each Cabana dance performed. (R.1-1, Exhibit A at 6; R.1, Compl. ¶¶ 21, 30). The "tip-out" goes to Club managers, floor hosts, doormen, disc jockeys, and other employees who do not normally receive tips from patrons. (R.1, Compl. ¶¶ 34, 41, 113). In addition, dancers must pay the "House Mom" a fixed disc jockey/House Mom fee for each shift, as well as a fixed House Fee, as determined by the dancer's start time. (Id. ¶¶ 21, 30; R.1-1, Exhibit A at 1).
Plaintiffs now allege that Defendants misclassified them and denied them the minimum wage and overtime pay guaranteed to employees under the FLSA, IMWL, and IWPCA. In particular, Plaintiffs allege they are employees—not independent contractors—of the Pink Monkey under the relevant "economic reality test," (id. ¶¶ 25-50), and that Defendants paid them "no wages whatsoever" and forced them to "work eight (8) hours or more without breaks and without overtime pay" in violation of the FLSA, IMWL, and IWPCA. (Id. ¶¶ 59, 30). Plaintiffs further contest the Tip Splitting Policy as unlawful, claiming that they are entitled to retain all patron tips as their sole property. (Id. ¶¶ 52-54). Plaintiffs seek unspecified back wages, overtime compensation, and tip recovery, along with applicable interest and liquidated damages. (E.g., id. ¶ 76).
"A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) challenges the viability of a complaint by arguing that it fails to state a claim upon which relief may be granted." Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 736 (7th Cir. 2014). Under federal pleading standards, a "complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic v. Twombly, 550 U.S. 544, 570 (2007)). "[T]he court must review the complaint to determine whether it contains enough fact to raise a reasonable expectation that discovery will reveal evidence to support liability for the wrongdoing alleged." Adams, 742 F.3d at 729 (citation omitted). A complaint will not survive a motion to dismiss, however, "simply because the defendants managed to figure out the basic factual or legal grounds for the claims." Id. In reviewing a complaint, the Court must accept all "factual allegations as true, and must draw all reasonable inferences in the plaintiff's favor." Virnich v. Vorwald, 664 F.3d 206, 212 (7th Cir. 2011). "[L]egal conclusions and conclusory allegations merely reciting the elements of the claim," however, "are not entitled to this presumption" of truth. Id.
"Beyond the requirements of Rule 12(b)(6), Rule 9(b) requires all allegations of fraud to be `state[d] with particularity.'" Simonian v. Blistex, Inc., No. 10 CV 01201, 2010 WL 4539450, at *2 (N.D. Ill. Nov. 3, 2010) (quoting Fed.R.Civ.P. 9(b)).
The FLSA requires an employer to pay minimum and overtime wages to each of "his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce[.]" 29 U.S.C. §§ 206(a), 207(a)(1). The FLSA defines an "enterprise engaged in commerce" as an enterprise that "has employees engaged in commerce or in the production of goods for commerce . . . and . . . whose annual gross volumes of sales made or business done is not less than $500,000." 29 U.S.C. § 203(s)(1)(A)(i-ii).
Defendants do not presently challenge the characterization of Plaintiffs as "employees" within the meaning of the FLSA. Contra Reich v. ABC/York-Estes Corp., 64 F.3d 316, 322 (7th Cir. 1995) (noting that a "core issue in this case is whether the dancers are `employees' . . . If not (that is, if the dancers are independent contractors), the [FLSA] does not apply"). Instead, Defendants challenge Plaintiffs' failure to allege that Plaintiffs, the Club, and/or Defendants are "engaged in commerce," as required on an FLSA claim. See Hicks v. Avery Drei, LLC, 654 F.3d 739, 745-46 (7th Cir. 2011) (discussing whether plaintiff was "engaged in commerce" and noting that, "to prevail on her FLSA claim for overtime wages, [plaintiff] must first demonstrate that she or her "Employer" . . . falls within the Act so as to trigger its substantive provisions"); see also Torres v. Pallets 4 Less, Inc., No. 14 CV 4219, 2015 WL 920782, at *2-3 (N.D. Ill. Mar. 2, 2015) (discussing individual-based and enterprise-based coverage under the FLSA).
Plaintiffs, in response, point to their general allegations that the Pink Monkey is a business establishment that is open to the general public, employs many dancers (as well as doormen, managers, and disc jockeys), and processes credit card transactions. The Complaint does not even allege, however, the type of FLSA coverage (individual versus enterprise) under which Plaintiffs claim protection. Plaintiffs offer no specific details of interstate commerce, and make no attempt to address the monetary threshold triggering enterprise coverage. While the Court is mindful that discovery has not yet proceeded, Plaintiffs have made no effort to demonstrate the applicability of the FLSA in the Complaint.
Additionally, Defendants fault Plaintiffs for failing to distinguish among them and failing to identify which Defendant is the "employer" for purposes of FLSA liability. The failure to distinguish between Defendants is impermissible insofar as it "fails to place each [d]efendant on notice as to its alleged wrongful conduct." Specht v. Google, Inc., 660 F.Supp.2d 858, 865 (N.D. Ill. 2009). Plaintiffs respond by arguing that "the ownership and control of the Pink Monkey is indeed a confusing Gordian knot" and that "the unraveling of the confusing ownership will have to be done through discovery." (R.14, Pls.' Response at 5-6; see also R.20, Pls.' Response at 7-8).
Even assuming complicated ownership, though, Plaintiffs offer no specific allegations regarding any named Defendant's role in the misclassification and/or tip splitting policies of which they now complain.
Given Plaintiffs' deficient pleading, the Court dismisses the FLSA claim without prejudice to re-plead. See Berger, 2015 WL 2208200 at *3 (dismissing FLSA claim against entity defendants without prejudice); Specht, 660 F. Supp. 2d at 865 (dismissing claim against entity defendants with leave to re-plead to "distinguish between [d]efendants and allege supporting factual information of some specificity as to each [d]efendant").
The Court now turns to the merits of Plaintiffs' FLSA claims. Here, too, Plaintiffs have failed to plead "enough fact[s] to raise a reasonable expectation that discovery will reveal evidence to support liability for the wrongdoing alleged." Adams, 742 F.3d at 729. Plaintiffs allege three forms of wrongdoing in connection with their FLSA claim: (1) failure to pay statutory wages; (2) failure to pay overtime compensation; and (3) failure to return Plaintiffs' tip "property." (R.1, Compl. ¶¶ 52, 54, 57-61). The Complaint does not offer "sufficient factual matter" to state a claim for relief that is facially plausible as to any of these categories. Ashcroft, 556 U.S. at 678.
The parties do not dispute that the FLSA requires a subject employer to pay its employees a minimum hourly wage, and to compensate its employees at one and one-half times the regular rate for a workweek longer than forty hours. See 29 U.S.C. §§ 206, 207. Plaintiffs contend that they "never received any wage or other compensation" during the course of their employment at Pink Monkey, in violation of 29 U.S.C. § 206. (R.1, Compl. ¶¶ 20, 59). Rather, Defendants paid them tips, and "no part of those amounts can be used to offset Defendants' obligation to pay minimum wages to its dancers." (Id. ¶ 63). Plaintiffs further contend that the FLSA tip credit provision, 29 U.S.C. § 203(m), does not apply to reduce the Club's minimum wage obligations. (Id. ¶¶ 64-66).
Defendants argue that the Complaint negates any minimum wage violation, because it alleges that Plaintiffs received—at the very least—fixed dance fees from the VIP room. The Complaint makes clear that these fees were fixed, mandatory, non-discretionary, paid directly to the Club, recorded by the Club, and (seemingly) included in the Club's gross receipts. (R.1, Compl. ¶¶ 21-22, 30, 36-39).
Plaintiffs point to their allegation that the Pink Monkey did not include dance fees in its gross receipts and argue that, in any event, this issue is fact-intensive and more suitable for summary judgment than disposition at the 12(b)(6) stage. The Court recognizes that "the employer bears the burden of proving that it is entitled to the service charge credit" under the FLSA. Reich, 157 F.R.D. at 680; cf. Demos v. City of Indianapolis, 302 F.3d 698, 701 (7th Cir. 2002) (noting that the "FLSA is a remedial act and exemptions from its coverage are to be narrowly construed against employers") (citation omitted). Plaintiffs' own submission, however, reflects that the Pink Monkey may be entitled to this credit. (R.1, Compl. ¶¶ 21-22, 30, 36-39; R.1-1, Exhibit A). Ultimately, Plaintiffs' contradictory pleading on the issue of whether the Pink Monkey included dance fees in its gross receipts (compare R.1, Compl. ¶ 22 with ¶ 62) precludes the Court from determining this issue at this juncture.
Even setting this issue aside, however, the Complaint suffers from serious pleading deficiencies warranting dismissal of the FLSA claim. Count I recites the elements of a minimum wage violation (29 U.S.C. § 206), yet Plaintiffs make no allegations as to their actual earnings or the hours worked for which they seek unpaid minimum wages. Under well-established pleading standards, "a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. Because Plaintiffs offer no factual details suggesting a right to relief above the speculative level, their unpaid wage claim fails. See White v. Classic Dining Acquisition Corp., No. 1:11-CV-712-JMS-MJD, 2012 WL 1252589, *4-6 (S.D. Ind. Apr. 13, 2012).
Plaintiffs' claim for overtime compensation (29 U.S.C. § 207) fares no better. Plaintiffs assert that "[a]t such times as Plaintiffs worked more than forty hours in a week, they were not paid time and a half." (R.1, Compl. ¶ 58). Here, again, Plaintiffs offer no factual detail regarding overtime hours worked, monies earned, or monies purportedly due. Other courts in this district have dismissed complaints which merely recite the elements of an FLSA claim without supporting factual detail. See Silver v. Townstone Fin., Inc., No. 14-CV-1938, 2015 WL 1259507 (N.D. Ill. Mar. 17, 2015); Kwan Bom Cho v. GCR Corp., No. 12 C 4562, 2013 WL 675066 (N.D. Ill. Feb. 22, 2013); Robertson v. Steamgard, No. 11 C 8571, 2012 WL 1232090 (N.D. Ill. Apr. 12, 2012); Butler v. E. Lake Mgmt. Grp., Inc., No. 10-CV-6652, 2012 WL 2115518 (N.D. Ill. June 11, 2012); Wilson v. Pioneer Concepts, Inc., No. 11-CV-2353, 2011 WL 3950892 (N.D. Ill. Sept. 1, 2011). To avoid dismissal, Plaintiffs counter that they "have not kept records and cannot specify dates that they worked overtime." (R.20, Pls.' Response at 6; see also R.1, Compl. ¶¶ 70-75). This position, however, ignores that "an employee who brings suit for unpaid overtime compensation has the burden of proving that she performed work for which she was not properly compensated." Gatto v. Mortgage Specialists of Illinois, Inc., 442 F.Supp.2d 529, 535 (N.D. Ill. 2006) (discussing Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687-88 (1946)). This burden is "not an insurmountable one[,]" but Plaintiffs must present some allegation as to unpaid overtime hours. Skelton v. Am. Intercontinental Univ. Online, 382 F.Supp.2d 1068, 1072 (N.D. Ill. 2005). Plaintiffs must do more than "merely parrot the statutory language of the claims that they are pleading (something that anyone could do, regardless of what may be prompting the lawsuit)." Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009). Rather, Plaintiffs must "provid[e] some specific facts to ground those legal claims." Id. Their failure to do so here defeats their overtime compensation claim.
Plaintiffs also claim an interest in recovering their tip "property" under the FLSA. (R.1, Compl. ¶¶ 60, 62, 76; R.14, Pls.' Response at 6-7 ("Defendants confiscated part of these tips by requiring tip-outs . . .")). Plaintiffs cite no case law recognizing or even discussing this claim under the FLSA. Defendants direct the Court's attention to a recent Fourth Circuit case, which held that the FLSA does not create a private right to bring a claim for lost "tip" wages pursuant to a tip sharing arrangement. See Trejo v. Ryman Hospitality Prop., Inc., 795 F.3d 442 (4th Cir. 2015). The Court agrees with the reasoning in Trejo.
The FLSA is "designed to protect workers from the twin evils of excessive work hours and substandard wages." Howard v. City of Springfield, Illinois, 274 F.3d 1141, 1148 (7th Cir. 2001). Its principal provisions, therefore, establish wage and hour standards. See 29 U.S.C. §§ 206, 207. Section 203(m) addresses the tip credit and tip pooling mechanisms. See 29 U.S.C. § 203(m). Section 203(m) does not, however, provide a freestanding cause of action for "tipped employees" to recover damages from the improper administration of a tip pool. Rather, "[i]f an employer improperly operates a tip pool, the employer cannot take the tip credit under either the FLSA or the IMWL." Starr v. Chicago Cut Steakhouse, LLC, 75 F.Supp.3d 859, 864-65 (N.D. Ill. 2014) (citing implementing regulations and collecting cases). Courts in this Circuit routinely adjudicate FLSA disputes concerning "tipped employee" practices that are tethered to a minimum wage or overtime claim. See, e.g., Ervin v. OS Rest. Servs., Inc., 632 F.3d 971, 974 (7th Cir. 2011) (analyzing FLSA allegations of improper tip pooling in the context of the "minimum wage and maximum hour provisions of . . . the FLSA"); see also Driver v. AppleIllinois, LLC, 890 F.Supp.2d 1008, 1033 (N.D. Ill. 2012) (noting that an employer is "required to comply with the minimum wage requirements of . . . the FLSA" and regulations made thereunder regarding tipped employee practices); Frebes v. Mask Restaurants, LLC, No. 13 C 3473, 2013 WL 5290051, at *1 (N.D. Ill. Sept. 18, 2013) ("Plaintiffs allege that Defendants violated the FLSA and IMWL because food runners are not customarily tipped employees. Accordingly, Plaintiffs contend that Defendants did not pay them the required minimum wage").
The Court is not aware, however, of any authority sustaining a standalone private cause of action for an alleged tip sharing violation under the FLSA, untethered to an alleged minimum wage or maximum hour violation. Furthermore, Plaintiffs have failed to identify any such support. The Court thus finds that Plaintiffs cannot dispute the Tip Splitting Policy—unrelated to a wage or overtime claim—under the guise of the FLSA. See Trejo, 795 F.3d at 448 (noting that the "the statutory language of the FLSA, including § 203(m), simply does not contemplate a claim for wages other than minimum or overtime wages") (citation and quotation omitted).
The Court dismisses with prejudice Plaintiffs' claim for tip recovery under the FLSA. Because the pleading defects as to unpaid wages and overtime compensation may be curable, the Court dismisses Plaintiffs' claim for minimum and overtime wages under the FLSA without prejudice.
Count II alleges a violation of the Illinois minimum wage law, IMWL, 820 ILCS 105. Plaintiffs do not dispute that the IMWL parallels the FLSA, and that the same legal analysis applies to claims made thereunder. See Knapp v. City of Markham, No. 10 C 03450, 2011 WL 3489788, at *8 (N.D. Ill. Aug. 9, 2011) ("Claims brought under the FLSA and IMWL are evaluated using the same general analysis"); Silver, 2015 WL 1259507, at *1 ("The FLSA and IMWL . . . are analyzed using the same legal framework"). The Court therefore dismisses Count II without prejudice, for the reasons set forth as to Count I.
Count III alleges a violation of the state law guaranteeing the timely and complete payment of due wages, IWPCA, 820 ILCS 115. The IWPCA "defines `wages' narrowly—a wage is `compensation owed an employee by an employer pursuant to an employment contract or agreement between the 2 parties. . . ." Enger v. Chicago Carriage Cab Corp., No. 15-1057, 2016 WL 106878, at *2 (7th Cir. Jan. 11, 2016) (citing 820 ILCS 115/2) (emphasis in original). The IWPCA "does not grant any independent right to payment of wages and benefits; instead it only enforces the terms of an existing contract or agreement." Enger v. Chicago Carriage Cab Co., 77 F.Supp.3d 712, 717 (N.D. Ill. 2014), aff'd sub nom, 2016 WL 106878 (Jan. 11, 2016). Here, Plaintiffs identify a contract purporting to classify each dancer as an independent contractor. (R.1, Compl. ¶ 18). Plaintiffs do not, however, set forth any allegations as to the compensation terms of this contract, let alone allege that the contract promised the requested relief. (See id. ¶ 115 seeking "unpaid minimum wages" and "reimbursement of any other deductions and confiscated tips" through the IWPCA). Plaintiffs here "do not plead that the relevant agreement provided for payment of any sort by Defendants." Enger, 77 F. Supp. 3d at 717. Thus, they have failed to state a claim regarding a lack of minimum wage or overtime pay under the IWPCA. Accordingly, the Court dismisses Count III without prejudice.
In Count IV, Plaintiffs seek to impose RICO liability on Defendants. RICO claims are subject to the heightened fraud pleading standard set forth in Federal Rule of Civil Procedure 9(b). Rule 9(b) requires that a plaintiff describe the "who, what, when, where, and how of the fraud." Cincinnati Life Ins. Co. v. Beyrer, 722 F.3d 939, 948 (7th Cir. 2013) (citation omitted). In the context of a RICO claim, the plaintiff must "at a minimum, describe the predicate acts [of fraud] with some specificity and state the time, place, and content of the alleged communications perpetrating the fraud" as well as plead "sufficient facts to notify each defendant of his alleged participation in the scheme." Goren v. New Vision Int'l, Inc., 156 F.3d 721, 726 (7th Cir. 1998) (citations omitted).
Plaintiffs fail to meet this standard. As Defendants observe, Paragraph 118 of the Complaint (1) fails to describe any predicate act triggering RICO liability; (2) fails to state, with any factual detail, the circumstances constituting the fraud; and (3) fails to distinguish among Defendants.
In Count V, Plaintiff Virginia Sherwood brings a claim for retaliatory discharge against Defendants under the FLSA, IWPCA, and/or the IMWL. (R.1, Comp. ¶ 124). Ms. Sherwood claims that the Club fired her "for her efforts to exercise her legal rights" to be a statutory employee rather than an independent contractor. (Id. ¶ 123).
As an initial matter, the IMWL does not contain an express private right of action for retaliatory discharge. See 820 ILCS 105/11(c)-(d). Rather, "it is the duty of the Department of Labor to inquire diligently for any violations of this Act, and to institute the action for penalties herein provided, and to enforce generally the provisions of this Act." Id. The Court declines to read an implied civil remedy for retaliation into this statute. See Skelton, 382 F. Supp. 2d at 1078 (relying on precedent from the Illinois Appellate Court and reasoning that the criminal penalties provided under the IMWL are sufficient to deter retaliatory activities). The Court dismisses Ms. Sherwood's claim for retaliatory discharge under the IMWL with prejudice.
The IWPCA, by contrast, clarifies that "[a]n employee who has been unlawfully retaliated against shall be entitled to recover . . . in a civil action . . . all legal and equitable relief as may be appropriate." See 820 ILCS 115/14(c). Unlawful retaliation under the IWPCA occurs when an employer discharges or otherwise discriminates against an employee for complaining "that he or she has not been paid in accordance with the provisions of this Act." Id. Ms. Sherwood does not allege retaliation on the basis of any request for wages under the IWPCA. Nor has she alleged that the Pink Monkey failed to pay her "in accordance with the provisions of [the IWPCA]." As such, Ms. Sherwood's action for retaliatory discharge under the IWPCA fails. See Barker v. Atl. Pac. Lines, No. 13 C 1272, 2013 WL 4401382, at *9 (N.D. Ill. Aug. 14, 2013) ("Accordingly because [plaintiff] did not allege retaliation in violation of his request for compensation under the IWPCA, he cannot maintain a claim for IWPCA retaliation"); Reid v. Neighborhood Assistance Corp. of Am., No. 11 C 8683, 2013 WL 1087557, at *9 (N.D. Ill. Mar. 14, 2013), aff'd, 749 F.3d 581 (7th Cir. 2014) (dismissing IWPCA retaliatory discharge claim where plaintiffs failed to demonstrate that the employer owed the complained-of overtime pay "pursuant to a contract or agreement").
The FLSA makes it unlawful for an employer "to discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to [the FLSA]." 29 U.S.C. § 215(a)(3).
Defendants challenge Ms. Sherwood's retaliation allegations as legally insufficient and factually unsound. After examining the record, the Court agrees.
Plaintiffs' pleading attaches a letter, dated February 5, 2015, from Plaintiffs' counsel to Defendant Vajdik. In this letter, Plaintiffs' counsel explains that Ms. Sherwood retained him to "represent her in an employment action" relating to the "misclassification of her as an independent contractor as opposed to an employee[.]" (R.1-1, Feb. 5, 2015 Ltr. attached as Exhibit D to the Compl.). Counsel makes a pre-litigation settlement demand, noting that he "suggested to Ms. Sherwood that she not return to work at the Pink Monkey until this matter is resolved." (Id.).
According to Ms. Sherwood, in April 2015—months after her counsel sent the initial demand letter—she advised the Club that she would "return to work" as an employee, not as an independent contractor. (R.1, Compl. ¶ 119; R.1-1, Apr. 24, 2015 Ltr. from Ms. Sherwood to the General Manager of the Pink Monkey and Apr. 29, 2015 Ltr. from Plaintiffs' Counsel to the Pink Monkey, both attached as Exhibit E to the Compl.). The April 24th letter from Ms. Sherwood states, "on the advice of my attorney, since the Club has not been paying me properly, I have not worked [at the Pink Monkey] while negotiations were pending. I now find that I must return to work." (R.1-1, Exhibit E).
On May 1, 2015, an attorney representing Defendant Clinton responded to the April 29th letter, noting that Ms. Sherwood "effectively terminated her independent services agreement without notice on October 27, 2014. Having abandoned her obligations to the Company, we are not interested in and reject your client's proposal [to return to work]." (R.1-1, May 1, 2015 Ltr. from Michael Gurland to Plaintiffs' Counsel, attached as Exhibit F to the Compl.).
Ms. Sherwood now contends that her April 24th letter was a "complaint" triggering anti-retaliation protection, that she engaged in protectable expression (asserting her right to be a W-2 employee versus an independent contractor), and that Defendants unlawfully "terminated" her on May 1, 2015. (R.14, Pls.' Response at 9-10; R.20, Pls.' Response at 11-14). Even assuming that she engaged in protected activity, however, Ms. Sherwood has not alleged that a "causal link existed between the protected expression and the adverse action." Kasten, 703 F.3d at 972. In particular, the Complaint (¶¶ 119-23) and the exhibits thereto do not support a finding that Ms. Sherwood's April 24 invocation of her alleged right to be a statutory employee was the cause of her alleged discharge on May 1. Rather, the record reflects that Ms. Sherwood voluntarily stopped working at the Pink Monkey in February 2015 pending pre-litigation settlement negotiations. (See R-1.1, Exhibit D). Months later, "now [finding] that [she] must return to work," Ms. Sherwood offered to return to the Pink Monkey. (Exhibit E). Pink Monkey rejected that offer. (Exhibit F). Simply put, there is no "discharge" (or otherwise discriminatory conduct) evidenced under these facts to sustain a retaliation claim under FLSA Section 215. Ms. Sherwood offers no authority to support her theory that an employee (or an independent contractor) has the right to return to a job she voluntarily left following the advice of counsel.
For the reasons set forth above, the Court dismisses Ms. Sherwood's retaliation claim under the IMWL with prejudice. The Court dismisses Ms. Sherwood's retaliation claim under the IWPCA and the FLSA without prejudice.
For the foregoing reasons, the Court grants both motions to dismiss. (R.10; R.18). The Court dismisses the Complaint without prejudice. If Plaintiffs intend to pursue their claims, they must file an amended complaint consistent with this Memorandum Opinion and Order on or before March 7, 2016.
