Illinois Appellate Court Extends Reach of IWPCA to Individual Defendant with Limited Illinois Contacts

In September 2013, the Appellate Court of Illinois for the Second District affirmed a decision finding individual defendant Roy Brown liable for a violation of the Illinois Wage Payment and Collection Act (“IWPCA”) in Elsener v. Brown, 2013 IL App (2d) 120209 (Ill. App. 2nd Dist., Sept. 10, 2013).  Brown was the President of both Brown Business Ledger, LLC (“BBL”), the company for which Plaintiff James Elsener worked, and BBL’s parent company, Brown Publishing Company (“BPC”).  Plaintiff filed a lawsuit against BBL and Brown alleging he was discharged without cause in August 2009 and that his employment contract, which was entered into in June 2008 and signed by Plaintiff and also Brown on behalf of BBL, entitled Plaintiff to his remaining compensation for the three-year term of the contract.

Among other things, the IWPCA provides a legal remedy for employees who do not receive all compensation owed to them by their employers pursuant to an employment contract or agreement.  The IWPCA provides it “applies to all employers and employees in this State . . ..”  820 ILCS § 115/1.  The IWPCA further provides that “[A]ny officers of a corporation or agents of an employer who knowingly violate the provisions of this Act shall be deemed to be the employers of the employees of the corporation.”  820 ILCS § 115/13.

On appeal, Brown argued that the IWPCA does not apply to him because, at all relevant times, he was an Ohio resident with his office in Ohio and that he had little or no contact with Illinois in his capacity as president of BBL, a company with its principal place of business in Illinois.  However, in affirming the trial court’s decision against Brown, the court noted that while Brown was located in Ohio “his offices there were part of the operational center of a publishing conglomerate that included multiple subsidiaries, one of which was BBL.”  In finding Brown was in the State of Illinois for purposes of the IWPCA, the appellate court further stated “[o]ur holding recognizes the reality that today’s communications technology permits managers to achieve a virtual presence between states.”

The appellate court also upheld the determination that Brown knowingly permitted BBL to violate the IWPCA.  The affirmed judgment in favor of Plaintiff was for $158,696.12 plus costs, attorneys’ fees, and prejudgment interest.  The IWPCA provides authority for an award of prejudgment interest and attorneys’ fees.  In accordance with a bankruptcy stay, no judgment was entered against BBL.

The decision in Elsener v. Brown is one of the recent decisions by Illinois state and federal courts that have broadened the applicability and reach of the IWPCA.  Employers with any connection to Illinois should be aware of the importance of complying with the IWPCA.  For over half a century, McMahon Berger has represented employers in all facets of employment law.  If you have any questions or comments with respect to Illinois wage and hour law, or would like advice related to the drafting and use of employment contracts, please contact our St. Louis Employment Law Firm at 314-567-7350.

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