Chicago Business Litigation Lawyer Blog

Our Illinois overtime rights lawyers were interested to see a recent ruling on unpaid overtime from the Seventh U.S. Circuit Court of Appeals. In Musch v. Domtar Industries, No. 08-4305 (7th Cir. Nov. 25, 2009), Alan Musch and his colleagues were maintenance workers at two Wisconsin paper mills owned by Domtar Industries. In their lawsuit, they say their job routinely exposes them to dangerous chemicals, requiring them to put on special protective gear before shifts and to shower and change after. They are not paid for the time it takes to do those things, however. They sued for unpaid overtime pay for the showering and changing time, as well as for time spent shaving, a requirement under Domtar company policy.

After the case was filed, Domtar moved for summary judgment dismissing the case. It argued that company policy says workers should shower and change immediately after exposure to a hazardous chemical, even if that means the employee goes into overtime. Because it has that policy, the company argued, overtime compensation was inappropriate. The district court agreed and granted summary judgment for Domtar. After the court declined to reconsider, the plaintiffs appealed both rulings. They argued that the district court missed or ignored evidence showing that chemicals actually were on workers’ skin; that is, they do not shower because they merely think they might have the chemicals. Thus, changing and showering time is appropriate for overtime pay under the Fair Labor Standards Act.

In its analysis, the Seventh Circuit started by noting that the FLSA and Wisconsin law both require employers to pay for all of the work employees do. However, federal law makes a distinction between work and preliminary or postliminary activities. Changing and washing is ordinarily considered preliminary or postliminary, the court wrote, but may sometimes be considered part of the job if it’s “integral” and “indispensable” to the job. The plaintiffs argued evidence showed that they didn’t always realize there were chemicals on their skin until the end of shifts, meaning showering after shifts would be following the company’s stated policy.

The Seventh Circuit disagreed. The plaintiffs’ evidence showed that showers were sometimes necessary, it wrote, but not that the Domtar policy of showering after any exposure was insufficient. Furthermore, the court said, employees admitted to bringing work clothes home to wash them, suggesting that they don’t believe the chemical exposure is that serious. Finally, employees are free to seek overtime under the existing company policy when they are required to shower and change, the Seventh said. Because these are all “normal conditions” under the meaning of the FLSA, the post-shift changing and showering is postliminary activity, not an essential job requirement, the court wrote. Thus, it upheld the trial court’s orders.

Continue reading "Employees Not Entitled to Compensation for Showering Time After Shift" »

Our Chicago consumer fraud attorneys were interested to see a split decision from earlier this year in a case involving a dispute over faulty home repairs. In Kunkel v. P.K. Dependable Construction, No. 5-07-0684 (Ill. 5th Feb. 13, 2009), Herbert and Jeral Dean Kunkel sued P.K. Dependable Construction for failing to adequately replace their roof and adding new leaks. They also alleged that P.K. failed to provide the consumer rights pamphlet required under the Illinois Home Repair and Remodeling Act. Their lawsuit alleged breach of contract and warranty and violations of the Illinois Consumer Fraud Act.

The Kunkels hired P.K. in July of 2003 to replace their roof, which had been leaking over their porch but nowhere else. The contract included a five-year warranty for defects and said P.K. would check for sheeting damage after tearing off shingles and make any repairs necessary for an additional fee. Mrs. Kunkel testified that during the work, she witnessed P.K. employees knocking loose the home’s stucco siding. When she complained, they patched the areas with cement. Aside from some sheeting damage, the work proceeded without incident and the Kunkels paid in full. Unfortunately, it rained a few days later and the Kunkels discovered leaks inside their home. They estimate that P.K. made 20 to 25 attempts over the next three years to fix the leaks, but not all were successful. They entered into evidence an estimate of $1,475 to repair the water damage to their kitchen ceiling.

At a bench trial, a roofing contractor hired by the Kunkels testified that the best way to fix the problem was to remove and replace the roof for an estimate of $5,250. A P.K. employee, Tim Utley, testified that damage he had seen to the sheeting suggested that there were leaks before his company did its work. He also contradicted Mrs. Kunkel’s testimony on the stucco siding, saying he did not tear it up and that it would be impossible to do what their roofing expert suggested because the condition of the stucco was so poor. Utley said he told Mr. Kunkel that he should replace the stucco siding because that was the source of the leaks, testimony that the Kunkels dispute. In the end, the court found for the Kunkels, awarding them $6,725 in compensatory damages (the amount of the kitchen ceiling and roof replacement estimates) and $6,151.50 in attorney fees and court costs. After a motion to reconsider was denied, P.K. appealed.

The Fifth District started with P.K.’s contention that the trial court’s decision was against the manifest weight of the evidence. The trial judge had to resolve conflicts in the evidence, the court wrote, but there was plenty of evidence to support the way the judge resolved it. Thus, the Fifth declined to disturb that ruling. It next turned to the question of whether damages were correctly set. The damages were based on estimates submitted by the Kunkel’s expert and another contractor. This follows Illinois law requiring damages for defective workmanship to reflect the cost of correcting the defects, the court said. Again, witnesses for P.K. testified otherwise, but the Fifth District declined to second-guess the trial judge. And attacks on the sufficiency of the estimate came late, the court said, because P.K. did not challenge its admission into evidence at the time or cross-examine the expert about it. Thus, the damages stand.

Next, the Fifth examined P.K.’s challenge to the Kunkel’s attorney fees award. The Consumer Fraud Act allows plaintiffs to recover attorney fees, the court wrote, but they must prove actual damages. In this case, that finding was based on the trial court’s determination that P.K. violated the section of the Home Repair and Remodeling Act requiring it to provide a consumer rights pamphlet. It’s true that undisputed evidence shows that P.K. did not provide the pamphlet, the court wrote, but the Act requires that violations be knowing to be actionable. No evidence is in the record showing knowledge or state of mind, the court wrote, so there was no violation of the Act. The court also noted that there was no evidence showing that P.K.’s failure to provide the pamphlet caused actual damages. Finally, it disagreed with the trial court’s finding that P.K. failed to complete its work, which would also violate the Act, because it did not believe the Legislature intended to equate defective performance with no performance at all. Thus, it vacated the attorney fee award.

Continue reading "Attorney Fees Not Available When Failure to Provide Home Repair Pamphlet Was Unintentional" »

Vincent L. DiTommaso

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Peter S. Lubin

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DiTommaso-Lubin has more than two and half decades of experience helping business clients unravel the complexities of Illinois and out-of-state business laws. Our Chicago business, commercial, class-action and consumer litigation lawyers represent individuals, family businesses and enterprises of all sizes in a variety of legal disputes, including disputes among partners and shareholders as well as lawsuits between businesses and and consumer rights, auto fraud, and wage claim individual and class action cases. In every case, our goal is to resolve disputes as quickly and sucessfully as possible, helping business clients protect their investements and get back to business as usual. From offices in Oak Brook, near Wheaton, Naperville, Evanston, and Chicago, we serve clients throughout Illinois and the Midwest.

If you’re facing a business oe class-action lawsuit, or the possibility of one, and you’d like to discuss how the experienced Illinois business dispute attorneys at DiTommaso-Lubin can help, we would like to hear from you. To set up a consultation with one of our Chicago, Wheaton, Elmhurst, Geneva, Aurora, Elgin, Rockford or Naperville business trial attorneys and class action and consumer trial lawyers, please call us toll-free at 1-877-990-4990 or contact us through the Internet.

In our work as Illinois and nationwide wage and hour attorneys, we frequently see workers who have been misclassified as exempt from overtime. Whether this was an honest mistake or an intentional attempt to save money, it effectively “steals” wages from the misclassified employees. DiTommaso-Lubin stands up for the rights of workers in Chicago, Illinois and throughout the country who are victims of overtime wage theft, including misclassified employees as well as those pressured to work off the clock; lie on timesheets; or simply not paid an overtime rate. Our Oak Brook, Waukegan, Elgin, Warrenville, Lisle, Wheaton, Northbrook, Aurora, Elgin, Evanston, Joliet and Chicago unpaid overtime lawyers handle both individual and class action employment cases. Based in Chicago and Oak Brook, Ill., we represent clients throughout Illinois, the Midwest and the United States.

DiTommaso-Lubin prosecutes and defends cases involving controversies over a covenant not to compete, or other restrictive covenants. Our Illinois restrictive covenant attorneys represent clients in active litigation over the validity and enforcement of these covenants, as well as helping to evaluate whether litigation may arise over such a contract. With more than 25 years of experience, we have handled these claims for businesses of every size, from large corporations to family-owned businesses, as well as individual employees. Based near Naperville, Aurora, Geneva, Lisle, Warrenville, Downers Grove, Wheaton, Wilmette, Evanston, Ill., and downtown Chicago, we represent clients throughout the state of Illinois, as well as in Indiana and Wisconsin. To learn more about how our Illinois covenant not to compete lawyers can help you, please do not hesitate to contact us through our Web site or call toll-free at 1-877-990-4990.

In These Times online edition has posted excerpts from book "Crisis of Wage Theft". You can read the excerpts by clicking here.

The book describes the billions of dollars in wages are being illegally stolen from millions of workers each and every year through large corporations failing to pay workers minimum wages or time and half for overtime. It states:

Billions of dollars in wages are being illegally stolen from millions of workers each and every year. The employers range from small neighborhood businesses to some of the nation’s largest employers—Wal-Mart, Tyson, McDonald’s, Target, Pulte Homes, federal, state, and local governments and many more.

Wage theft occurs when workers are not paid all their wages, workers are denied overtime when they should be paid it, or workers aren’t paid at all for work they’ve performed. Wage theft is when an employer violates the law and deprives a worker of legally mandated wages.

Wage theft is widespread and pervasive across all types of companies. Various surveys have found that:

• 60 percent of nursing homes stole workers’ wages.
• 89 percent of nonmonitored garment factories in Los Angeles and 67 percent of nonmonitored garment factories in New York City stole workers’ wages.
• 25 percent of tomato producers, 35 percent of lettuce producers, 51 percent of cucumber producers, 58 percent of onion producers, and 62 percent of garlic producers hiring farm workers stole workers’ wages.
• 78 percent of restaurants in New Orleans stole workers’ wages.
• Almost half of day laborers, who tend to focus on construction work, have had their wages stolen.
• 100 percent of poultry plants steal workers’ wages.

Although wage theft is the most pernicious when employers steal money from workers earning low wages, wage theft affects many middle-income workers too, including construction workers, nurses, dieticians, writers, bookkeepers, and many more. Wage theft affects young workers, mid-career workers, and older workers. Although some of the worst wage theft occurs when immigrant workers aren’t paid minimum wage or aren’t paid at all, the largest dollar amounts are stolen from native-born white and black workers in unpaid overtime.

Millions of workers are having their wages stolen. Two, possibly as many as 3, million workers aren’t being paid the minimum wage. More than 3 million workers are misclassified by their employers as independent contractors when they are really employees, which means their employers aren’t paying their share of payroll taxes and many workers are being illegally denied overtime pay. Untold millions more aren’t being paid overtime because their employers claim they are exempt from the overtime laws, when they really aren’t. Several million more aren’t being paid for their breaks or have illegal deductions made from paychecks. The scope of these abuses is staggering.

Continue reading "Excerpts From the "Crisis of Wage Theft" Disclose That Wage Theft is Causing Workers to Lose Billions of Dollars in Unpaid Overtime" »

If you believe you know someone who has been a victim of auto fraud or has been deceived into buying a flood, rebuilt wreck or salvage vechicle or who has been cheated on car financing or an extended warranty DiTommaso-Lubin may be able to help rectify the problem. We or experienced co-counsel are prepared to file suit in the right case anywhere in the country. For a free consultation on your rights as an employee, contact us today.

Our Auto Fraud, RV Fraud, and Boat Fraud private law firm and our affliated co-counsel handle individual and class action consumer rights, lemon law, and auto fraud lawsuits that government agencies and public interest law firms may decide not pursue. Class action lawsuits our law firm has been involved in or spear-headed have led to substantial awards totalling over a million dollars to organizations including the National Association of Consumer Advocates, the National Consumer Law Center, and local law school consumer programs. DiTommaso-Lubin is proud of our achievements in assisting national and local consumer rights organizations obtain the funds needed to ensure that consumers are protected and informed of their rights. By standing up to employee and consumer fraud and rip-offs, and in the right case filing employee or consumer protection lawsuits and class-actions you too can help ensure that consumers' rights are protected from unscrupulous, illegal or dishonest practices.

In our work as Illinois and nationwide wage and hour attorneys, we frequently see workers who have been misclassified as exempt from overtime. Whether this was an honest mistake or an intentional attempt to save money, it effectively “steals” wages from the misclassified employees. DiTommaso-Lubin stands up for the rights of workers in Chicago, Illinois and throughout the country who are victims of overtime wage theft, including misclassified employees as well as those pressured to work off the clock; lie on timesheets; or simply not paid an overtime rate. Our Oak Brook, Waukegan, Wheaton, Northbrook, Aurora, Elgin, Evanston, Joliet and Chicago unpaid overtime lawyers handle both individual and class action employment cases. Based in Chicago and Oak Brook, Ill., we represent clients throughout Illinois, the Midwest and the United States.

Our Chicago overtime rights lawyers were interested in a recent wage and hour decision out of the Second Circuit. In Whalen v. J. P. Morgan Chase Co., No. 08-4092 (2nd. Cir. Nov. 20, 2009), a group of loan underwriters sued J.P. Morgan Chase, their employer, for unpaid overtime in a proposed class action. The plaintiffs contended that they were misclassified as administrative employees, because their duties did not meet the federal Department of Labor’s definition of administrative duties. The district court in New York disagreed and granted summary judgment for Chase. But the Second Circuit reversed that judgment, saying loan underwriters cannot be exempt administrative employees because their work furthered Chase’s core business of making loans, rather than helping to run or direct the company.

For four years, plaintiff Andrew Whalen worked for Chase as an underwriter. His job was to evaluate whether to grant loans to individuals, using detailed guidelines provided by Chase. Some underwriters were sometimes permitted to deviate from these standards. Whalen contended that he frequently worked more than 40 hours a week, but Chase classified him as an administrative employee exempt from the overtime provisions of the Fair Labor Standards Act. Whalen eventually sued for a declaratory judgment that Chase violated the FLSA by failing to pay overtime, but Chase prevailed on cross-motions for summary judgment. Whalen appealed.

The Second started by looking at the definition of administrative employees. The federal Department of Labor says administrative work is “directly related to management policies or general business operations” and “customarily and regularly exercises discretion and independent judgment.” Using a variety of documents from the Department on the financial services industry, the court drew a distinction between exempt employees with advisory duties and non-exempt employees who carry out the employer’s day-to-day operations.

Whalen’s job was to sell loans according to Chase’s detailed standards, the court wrote, not to advise customers on which loans to get. This puts the job firmly on the “production” side of Chase’s business, the court wrote, as distinct from management duties or “general business operations” such as human resources. Furthermore, the Second wrote, Chase itself referred to underwriters’ duties as “production” work. In doing so, the court drew a distinction between “production” and “administrative” work supported by its own past decision in Reich v. State of New York, 3 F.3d 581 (2d Cir. 1993) as well as by precedents in the Ninth, Third and First Circuits. Whalen’s job did not met the management/general business operations test set forth by the Department of Labor, the court wrote, which is enough to conclude that he was not a bona fide administrative employee. Thus, the Second Circuit reversed the trial court’s summary judgment decision.

Continue reading "Loan Underwriters Are ‘Production’ Employees Eligible for Overtime, Court Rules" »

As the below video shows it is easy for dishonest cars dealers to sell you a rebuilt wreck or flood vechicle by simply making quick cosmetic fixes.

If you believe you know someone who has been a victim of auto fraud or has been deceived into buying a flood, rebuilt wreck or salvage vechicle or who has been cheated on car financing or an extended warranty DiTommaso-Lubin may be able to help rectify the problem. We or experienced co-counsel are prepared to file suit in the right case anywhere in the country. For a free consultation on your rights as an employee, contact us today.

Our Auto Fraud, RV Fraud, and Boat Fraud private law firm and our affliated co-counsel handle individual and class action consumer rights, lemon law, and auto fraud lawsuits that government agencies and public interest law firms may decide not pursue. Class action lawsuits our law firm has been involved in or spear-headed have led to substantial awards totalling over a million dollars to organizations including the National Association of Consumer Advocates, the National Consumer Law Center, and local law school consumer programs. DiTommaso-Lubin is proud of our achievements in assisting national and local consumer rights organizations obtain the funds needed to ensure that consumers are protected and informed of their rights. By standing up to employee and consumer fraud and rip-offs, and in the right case filing employee or consumer protection lawsuits and class-actions you too can help ensure that consumers' rights are protected from unscrupulous, illegal or dishonest practices.

Our Naperville, Evanston, Aurora, Waukegan, Arlington Heights, Downers Grove, Lisle, Evanston, Elgin, Elmhurst, Joliet, Elgin, Woodridge, Naperville, Highland Park, Northbrook, Wilmette, Wheaton, Waukegan, Oak Brook, Lombard, Hinsdale and Chicago consumer law, auto fraud and lemon law lawyers and attorneys provide assistance in car, RV and automobile and consumer fraud and consumer rights cases including in Illinois and throughout the country. You can click here to see a description of the some of the many individual and class-action consumer cases we have handled. A video of our lawsuit which helped ensure more fan friendly security at Wrigley Field can be found here. You can contact one of our Chicago area consumer rights, predatory lending or consumer protection lawyers who can assist in lemon law, auto fraud, RV fraud, wage claim, lemon law, unfair debt collection, junk fax, prerecorded telephone solicitations, and other consumer fraud or consumer class action cases by filling out the contact form at the side of this blog or by clicking here.

This video describes how senior citizens and disabled persons are often targeted for consumer scams and rip-offs.

Based in Chicago, Wilmette and Oak Brook, Ill., DiTommaso-Lubin handles informercial, stock broker, auto dealer and RV dealer fraud and other consumer fraud and lemon law litigation for clients in Wheaton, Naperville,Wheaton, Waukegan, Evanston, Joliet, Aurora, Elgin, Lisle and in other parts of Illinois, the Midwest and throughout the United States. In addition to helping individuals and families, our Chicago class action attorneys have successfully handled numerous consumer rights class actions. If you believe you're a victim of fraud and misrepresentations or a deceptive business practice, please contact us as soon as possible to learn about your rights at a free consultation.

Our Chicago consumer protection attorneys were pleased to see a pro-consumer decision from the First District Court of Appeal recently. In Dubey v. Public Storage Inc., Ill. 1st No. 1-09-0094 (Oct. 23. 2009), the appeals court upheld a decision in favor of a woman who lost everything in her storage unit due to a record-keeping error. Varitka Dubey made all of her payments for a rented storage unit on time, but Metropublic Storage Fund repossessed all of the property in her unit and sold it at auction for “nonpayment.” The problem that turned out to apply to a different unit. This decision upholds a jury’s award in Dubey’s favor, but reduces the amount to conform to her agreement to store no more than $5,000 worth of property.

Dubey entered the storage unit rental agreement in September of 2002. At that time, she signed an agreement that the property she would store would be worth no more than $5,000 and that Metropublic wouldn’t be responsible for losses of more than that amount. The agreement also said that Metropublic could pursue all legal remedies if Dubey failed to meet her obligations under the agreement. Dubey testified in court that she did not notice the unit listed on her rental agreement, nor was it emphasized by the Metropublic employee who helped her. She then moved personal property into the unit that she claimed was worth $150,000. She visited the unit several more times through the end of 2002. Her rent was automatically charged to a credit card and always paid on time.

In February of 2003, Dubey returned to her unit and discovered that her key didn’t work. A Metropublic employee told her that the unit was not hers. The employee opened the unit and Dubey discovered that nearly all of her property was gone except for some broken toys belonging to her daughters. Further investigation showed that records showed someone else was listed as the owner of the unit Dubey had used, and that Dubey’s rental agreement listed a different unit. At trial, testimony showed that the unit had already been rented to someone else. The employee told Dubey her property had been auctioned off in January for non-payment of the rent, for total proceeds of $99,145. Dubey asked about personal items like family photos and was told that they were probably thrown out, but denied permission to search the garbage.

Dubey sued Metropublic for breach of contract, conversion and violations of the Illinois Consumer Fraud and Deceptive Business Practices Act. Metropublic countersued for breach of contract because Dubey stored property worth more than $5,000 in her unit. At trial, the jury found for Dubey on all counts, awarding her
$755,000 in compensatory and punitive damages on the common-law claims and $276,580 in compensatory and punitive damages for the Consumer Fraud Act claims. She was also awarded attorney fees. Both parties appealed, with Dubey asking for more compensatory damages to reflect the true value of the lost property, and Metropublic arguing that Dubey shouldn’t have been awarded three different recoveries for the same injury and that she shouldn’t have been awarded more than the $5,000 listed in the contract. It also disputed the decision, the punitive damages and the attorney fees.

The First’s analysis started by agreeing that, under Illinois law, Dubey may recover only once for the breach of contract and conversion claims. Thus, it reduced the compensatory damages for those claims to $5,000 from $10,000. However, its analysis did not extend to the Consumer Fraud Act, and it let the $69,145 awarded under that count stand. The court then addressed the claim that the Consumer Fraud Act award should not have been larger than $5,000. The court found that Metropublic had waived that issue by ignoring chances to bring it up before and during trial. But even if it were not waived, the court declined to reconsider the trial court’s finding that the clause was an exculpatory clause invalid under the Landlord and Tenant Act. In addition to dismissing Metropublic’s arguments, the court found the contract unconscionable because Dubey had no time to read it closely and Metropublic didn’t stress the $5,000 limit.

The court then dispensed with every argument Metropublic made except its argument that the punitive damages award is unconstitutional. Among the tests for whether a punitive award is unconstitutionally excessive is the ratio of punitive to compensatory damages. The U.S. Supreme Court said in State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408, 425, 155 L. Ed. 2d 585, 605-06, 123 S. Ct. 1513, 1524 (2003) that very few ratios significantly exceeding single digits will satisfy due process. The ratio for the conversion award was 149 to 1, a disparity the First found disturbing. It also found that Dubey may be entitled to more compensatory damages for her losses, since the it had found the rental contract invalid. Thus, it vacated those two damages awards and sent them back to trial court for reconsideration.

Continue reading "Appeals Court Upholds Verdict in Case Over Storage Company Incorrectly Selling Property" »