Illinois court renews drivers’ challenge to beer distributor’s program of deducting cost of stale beer left on shelves from drivers’ commissions – distributor’s arguments claim stale beer rotation is a health/safety/welfare issue.

It’s great to see a distributor living up to its distribution agreement obligations – rotating out stale beer for fresh beer (if this isn’t in your craft beer distribution agreement, it should be). In this recent opinion from the Illinois Appellate Court, Byrne v. Hayes Beer Distributing Company, a driver brought a challenge to the way a distributor implemented getting stale beer off the shelves.

The case stems from a challenge to Hayes Beer Distribution Company’s policy of “deducting money from its delivery drivers’ commissions for beer that stayed on the shelf too long and became stale.”

In short and as described in the opinion, Hayes compensated drivers for each case delivered to stops on a driver’s route with commissions and also deducted certain costs from a driver’s commission payments when a driver did things like accepted a bad check or counterfeit currency or didn’t collect the full amount due (yes, I know, and no, the opinion doesn’t state how a driver would know that a check was bad). In addition to those obligations, in the collective bargaining agreement between Hayes and the the Union representing Hayes’ drivers there’s a statement that a driver’s duties include checking all code dates and rotating all stock to ensure product freshness.

In order to monitor driver rotation of product Hayes has outside sales representatives periodically check the expiration date on the beer bottles and cans. When a sales representative discovers beer has remained on the shelf beyond the expiration date, the sales representative removes the beer from the shelf and gives the driver who services that location a report containing the date of discovery and the quantity of stale beer.

The opinion states that Hayes’ considers the removal of stale beer found by the sales rep and not the driver a return of the product and deducts the cost of the stale beer from the driver’s wages for the pay period in which Hayes discovered the stale beer. If the driver removes the beer from the shelf before the expiration date and returns it to the distribution center Hayes does not deduct the cost from the driver’s wages.

A driver brought an action for himself and other drivers arguing that Illinois law requires the drivers to agree to such deductions before Hayes’ can make them. Specifically, that Hayes’ policy violated Section 9 of the Illinois Wage Act (820 ILCS 115/9) which requires employees to agree to a wage deduction in writing at the time of the deduction. The case was up on appeal to review the issue of whether the collective bargaining agreement preempted the wage law thereby removing the authority for the Illinois Department of Labor lacked jurisdiction to decide the dispute (the dispute resolution procedures agreed to by the Union and Hayes under the collective bargaining agreement would control). For those of you interested, the appellate court found that the collective bargaining agreement’s failure to mention the deduction scheme while referencing the drivers’ duties to rotate stale beer for fresh beer meant the agreement was not implicated and that the Department therefore had jurisdiction render a decision.

For our purposes, what’s interesting is the incentivization program and Hayes’ arguments in claiming the system was impliedly required under the collective bargaining agreement.

In making its point about this requirement Hayes’ stated that not only did its own distribution agreements required the rotation of stock, but that the Illinois Liquor Control Commission regulations mandated rotating products. Arguing that the policy for deducting from the drivers’ commission stale beer “is a reasonable measure to comply with the Illinois Liquor Control Commission regulations, which are intended to ensure ‘the health, safety, and welfare of the People of the State of Illinois.’”

It’s hard to see how this argument isn’t at bottom an argument that rotation is somehow required under the regs for the health, safety, and welfare of Illinois citizens. If that’s the case, one wonders which one – health, safety, or welfare.  There are rules against adulteration, and refilling containers for sure. Even regulations that implement them. But there’s not a specific regulation stating that a beer past its code date is a risk to health, safety, or welfare. Perhaps it’s time to adopt one forcing the removal of products from the shelves.

Ashley Brandt

Hi there! I’m happy you’re here. My name is Ashley Brandt and I’m an attorney in Chicago representing clients in the Food and Beverage, Advertising, Media, and Real Estate industries. A while back I kept getting calls and questions from industry professionals and attorneys looking for advice and information on a fun and unique area of law that I’m lucky enough to practice in. These calls represented a serious lack of, and need for, some answers, news, and information on the legal aspects of marketing and media. I've got this deep seeded belief that information should be readily available and that the greatest benefit from the information age is open access to knowledge... so ... this blog seemed like the best way to accomplish that. I enjoy being an attorney and it’s given me some amazing opportunities, wonderful experiences, and an appreciation and love for this work. I live in Chicago and work at an exceptional law firm, Goldstein & McClintock, with some truly brilliant people. Feel free to contact me at any time with any issues, comments, concerns… frankly, after reading this far, I hope you take the time to at least let me know what you think about the blog and how I can make it a better resource.

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