Chicago Business Litigation Lawyer Blog
A Cook County judge on June 3 in the case of Robert Buono v. Intelligentsia Coffee, Inc., Emily Mange, and Doug Zell gave the green light for this lawsuit to proceed against the founders of Chicago-based Intelligentsia Coffee, Inc. for allegedly withholding more than $15 million in profits from the company’s former CEO. Last November, plaintiff Robert Buono sued Intelligentsia and two company co-founders, Emily Mange and Doug Zell, for breach of contract and violation of Illinois’ Wage Payment and Collection Act (IWPCA). Buono, former counsel for the coffee retailer and supplier, was hired in 2011 as co-chief executive and president under an employment contract that set out compensation of salary, annual bonus, and a share of future profits that was to gradually rise to 15 percent.
In his complaint, Buono claimed his management decisions helped grow the company into a successful chain by the time Peet’s Coffee & Tea purchased a majority stake in Intelligentsia for a reported $100 million in late 2015. During his tenure, Intelligentsia’s profits rose 61 percent. Mange and Zell dismissed Buono in 2014. In count I of his complaint for violation of IWPCA, he claims he is owed profits from 2012 until the date of his termination, which should have been paid at the time of his departure. In count II for breach of contract, he claims he is owed $15 million, which should have been his share of the Peet’s sale. Buono argued in his suit that he accepted a below-market salary in exchange for the cut of future profits, without which he would not have agreed to take the position.
In his opinion denying the defendants’ motion to dismiss the complaint, Judge John C. Griffin ruled that Buono has sufficiently pled the minimum allegations required to allow his suit to go forward.
Under IWPCA, a separated employee is owed “final compensation” of all unpaid wages, unused vacation time, commissions, and other compensation pursuant to any employment contract or agreement between employer and employee, which is due at time of separation. In their motion to dismiss, the defendants argued that IWPCA does not apply to shared profits; Judge Griffin disagreed, writing that the language of the Act does not expressly exclude such profits from the definition of “final compensation,” nor had the defendants cited any Illinois authority to that effect. “To sufficiently plead a cause of action under IWPCA, the employee must allege he is owed compensation pursuant to an employment contract…” which Buono has done, the judge concluded.
The defendants were given until June 24 to answer the complaint.
Intelligentsia operates popular coffee shops in Chicago and recently opened several locations in Los Angeles and New York. The company also supplies coffee to area cafes and restaurants, and plans to expand into supermarket sales as part of the Peet’s sale.
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