An interesting decision was recently handed down by the Northern District of Illinois pertaining to wage payments – or the lack thereof. The case, Enger v. Chicago Carriage, arose out a dispute between some former and current Chicago taxi drivers[“drivers”] and the cab services for whom they worked and the owners of those services[“cab defendants”].

In order to drive for one of the cab defendants, the drivers are required to pay fees to the cab defendants. The fees are paid either weekly[$125] or weekly[$500-800]. The drivers are NOT paid. Their only source of income is what they manage to keep in tips and fares after paying the related expenses, including fuel, upkeep and sometimes insurance. Consequently, if a driver has a bad day, he can make less than the minimum wage during his shift. And, on a really bad day, drivers can finish in the hole – having made less than their expenses. Lastly, most of the drivers involved worked 12 hour days, 6 days a week – and are NOT paid overtime.

Historically, drivers in Chicago are considered employees. But over the last 10 years, lots of cab companies have moved to classify drivers as independent contractors – even though the cab defendants still have significant control of the activities of drivers.

So the drivers banded together and sued, alleging the cab defendants had violated the Illinois Wage Payment and Collections Act[“the Act”]. The Act provides a cause of action for wrongfully withholding compensation pursuant to a contract or agreement. All plaintiffs suing under the Act must allege they were working under a “contract” or “agreement”. And, Illinois courts have properly interpreted “agreement” very broadly. The parties don’t have to be very formal – and past conduct can show an agreement.

The drivers got over the “agreement” hurdle. But they still fell short. The Act doesn’t grant any independent right of wages to plaintiffs – instead, it is only an enforcement mechanism for payment of wages set forth in an agreement or contract. Because the agreement as alleged in the complaint did NOT allege the cab defendants were to make payments to the drivers, the Court booted the lawsuit.

So if you represent former employees trying to collect unpaid wages, be sure to allege – and be able to prove – that the agreement called for payments to be made to the employee by the defendant.

Getting back to the cabbies – all is not lost. The Court gave them permission to amend their complaint and try again.