Filed: May 31, 2017
Latest Update: May 31, 2017
Summary: MEMORANDUM OPINION AND ORDER KEITH STARRETT , District Judge . For the reasons below, the Court denies Defendants' Motion to Dismiss [44]. I. BACKGROUND Plaintiffs Mariah Thomas, Harley Yancey, Victoria Rendfelt, Shauna Bennett, Alexis Campbell, Hannah Cobb, Kassidy Gilley, Kayla Hobbs, Kalee McSwain, Jarrika Morrow, Cherish Osbourne, Taylor Rodgers, Bethany Sellers, Constance Shoaf, Courtney Smith, Kayla Stille, Haylie Wells, Tiffany Wells, Norma Williams, and Bridget Worrell ("Plainti
Summary: MEMORANDUM OPINION AND ORDER KEITH STARRETT , District Judge . For the reasons below, the Court denies Defendants' Motion to Dismiss [44]. I. BACKGROUND Plaintiffs Mariah Thomas, Harley Yancey, Victoria Rendfelt, Shauna Bennett, Alexis Campbell, Hannah Cobb, Kassidy Gilley, Kayla Hobbs, Kalee McSwain, Jarrika Morrow, Cherish Osbourne, Taylor Rodgers, Bethany Sellers, Constance Shoaf, Courtney Smith, Kayla Stille, Haylie Wells, Tiffany Wells, Norma Williams, and Bridget Worrell ("Plaintif..
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MEMORANDUM OPINION AND ORDER
KEITH STARRETT, District Judge.
For the reasons below, the Court denies Defendants' Motion to Dismiss [44].
I. BACKGROUND
Plaintiffs Mariah Thomas, Harley Yancey, Victoria Rendfelt, Shauna Bennett, Alexis Campbell, Hannah Cobb, Kassidy Gilley, Kayla Hobbs, Kalee McSwain, Jarrika Morrow, Cherish Osbourne, Taylor Rodgers, Bethany Sellers, Constance Shoaf, Courtney Smith, Kayla Stille, Haylie Wells, Tiffany Wells, Norma Williams, and Bridget Worrell ("Plaintiffs") filed their Second Amended Complaint [30] with this Court on September 16, 2016, against Defendants Bayou Fox, Inc., d/b/a Hooters; Dothan Wings, Inc.; Gulf Coast Wings, Inc.; Homestar Restaurant Group, LLC; Robert L. Fox; Stuart K. Houston; and Phil Robinson ("Defendants"). (2d Am. Compl. [30].) This action centers around Plaintiffs' employment as servers by Defendants in their Dothan, Alabama, and Panama City, Florida, restaurant locations. Plaintiffs bring a claim against Defendants for violating the minimum wage provisions of the Fair Labor Standards Act ("FLSA").
Plaintiffs allege that "Defendants violated the minimum wage requirements of the FLSA by taking a tip credit against their minimum wage obligations for substantial non-tipped work servers were required to work." (2d Am. Compl. [30] ¶ 40.) Plaintiffs claim that this "non-tipped" work was compensated at $2.13 per hour, and that there was no opportunity to earn tips during the time they were performing this work because "they were no longer serving customers." (2d Am. Compl. [30] ¶ 48.) "[N]on-tipped" work performed prior to the restaurants' opening included "taking down chairs, wiping tables and menus, setting out menus, making tea, rolling silverware, filling salt and pepper shakers, inspecting and cleaning glasses when necessary, cutting fruits and vegetables, filling ice machines, [and] attending" meetings. (2d Am. Compl. [30] ¶ 44.) Plaintiffs also allege that they were required to perform additional "side work" while the restaurant was open that included "washing and rolling silverware, sweeping their area, cleaning tables, filling condiments, making tea, refilling ice machines and running checkout." (2d Am. Compl. [30] ¶ 47.) Plaintiffs claim that they could work up to 2.5 hours in a 4.5-hour or 7.5-hour shift performing "non-tipped" work. (2d Am. Compl. [30] ¶¶ 49, 53.) Plaintiffs assert that they spent more than 20% of their working time performing "non-tip-producing activities," (2d Am. Compl. [30] ¶ 56), and as a result "are entitled to $7.25 per hour for all of the time they were engaged in non-tipped duties . . . ." (2d Am. Compl. [30] ¶ 58.)
II. DISCUSSION
A. Standard of Review
Defendants filed their Motion to Dismiss [44] under Federal Rule of Civil Procedure 12(b)(6). For a claim to survive a Rule 12(b)(6) motion, it must include "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In evaluating the motion, the Court accepts "the allegations in the complaint as true and construe[s] them in the light most favorable to the plaintiff[]." Ray v. Spirit Airlines, Inc., 836 F.3d 1340, 1347 (11th Cir. 2016). However, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678. "While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Id. at 679.
B. FLSA Minimum Wage Claim
Defendants argue that Plaintiffs fail to adequately plead an FLSA minimum wage claim because Plaintiffs do not allege that their total pay for a workweek divided by the number of hours worked is below the minimum wage of $7.25 per hour. (Br. Supp. Defs.' Mot. Dismiss [44-1] p. 8.) Defendants rely on the holding in United States v. Klinghoffer Bros. Realty Corp. to assert that the Court should only consider the total amount of compensation in a given week to determine if the FLSA's minimum wage requirements are satisfied. United States v. Klinghoffer Bros. Realty Corp., 285 F.2d 487, 490 (2d Cir. 1960).
While Defendants are correct that "[c]ompliance with the FLSA is measured by the workweek," Arriaga v. Fla. Pac. Farms, L.L.C., 305 F.3d 1228, 1237 (11th Cir. 2002), the FLSA contains other requirements for tipped employees that are not accounted for under Defendants' suggested approach. The FLSA requires that tipped employees be compensated at a rate of $2.13 per hour in addition to the money they receive in the form of tips, as long as the sum of their wages and tips is at or above the minimum wage, $7.25 per hour. 29 U.S.C. §§ 203(m), 206(a)(1). The difference between the minimum wage and the lower rate of compensation for tipped employees is commonly referred to as the "tip credit." Pellon v. Bus. Representation Int'l, Inc., 528 F.Supp.2d 1306, 1309-10 (S.D. Fla. 2007). Under Defendants' reasoning, the requirement that tipped employees be paid any cash wage would effectively be read out of the statute. As long as a tipped employee collected enough in tips to make the minimum wage on average in a workweek, the employer could pay the employee nothing and still not be subject to an FLSA claim. Romero v. Top-Tier Colo. LLC, 849 F.3d 1281, 1285 (10th Cir. 2017). Klinghoffer was decided in 1960, well before Congress amended the FLSA to include the tip credit provision in § 203(m), and it does not account for the statutory requirements that currently apply to wages for tipped employees. Id. Even if a tipped employee receives more in wages than the minimum wage for a given week, there may still be a violation of the FLSA due to the employer's failure to satisfy the requirements of the tip credit provision. See Perez v. Palermo Seafood, Inc., 548 F.Supp.2d 1340, 1347-48 (S.D. Fla. 2008).
The tip credit provision only applies to tipped employees. 29 U.S.C. § 203(m). A tipped employee is defined as "any employee engaged in an occupation in which [s]he customarily and regularly receives more than $30 a month in tips." 29 U.S.C. § 203(t). Plaintiffs do not allege that they are not tipped employees. Recognizing that employees can sometimes work in multiple occupations for the same employer, the U.S. Department of Labor ("DOL") promulgated a regulation clarifying that employees working in both a tip-generating occupation and an occupation that does not generate tips are only subject to the tip credit provision for the time spent in the tip-generating occupation and are entitled to the full minimum wage for time spent in the occupation that does not generate tips. 29 C.F.R. § 531.56(e). Additionally, the regulation clarifies that employees in tip-generating occupations are subject to tip credit wages when performing "related duties" that are not directed at producing tips "occasionally" or "part of [the] time." Id. However, the regulation does not clarify how employees should be paid when they are in tip-generating occupations but perform related duties not directed at producing tips more than occasionally. The regulation provides no definition for "occasionally" and "part of [the] time." "The regulation's failure to address these questions makes it ambiguous." Fast v. Applebee's Int'l, Inc., 638 F.3d 872, 877 (8th Cir. 2011) (citing Barnhart v. Walton, 535 U.S. 212, 218, 122 S.Ct. 1265, 152 L. Ed. 2d 330 (2002)).1
The DOL's Field Operations Handbook ("FOH") further defines the application of the dual jobs regulation, 29 C.F.R. § 531.56(e). U.S. Dep't of Labor, Field Operations Handbook § 30d00(f) (Nov. 17, 2016), https://www.dol.gov/whd/FOH/FOH_Ch30.pdf (visited May 30, 2017). Employers may "take a tip credit for time spent in duties related to the tipped occupation of an employee, even though such duties are not by themselves directed toward producing tips, provided such related duties are incidental to the regular duties of the tipped employees and are generally assigned to the tipped employee." Id. When a tipped employee spends over 20% of her work hours in related duties, the employee is entitled to the full minimum wage for those hours. Id.
The dual jobs rule was created by the DOL, and its interpretation is controlling unless "plainly erroneous or inconsistent with the regulation." Auer v. Robbins, 519 U.S. 452, 461, 117 S.Ct. 905, 137 L. Ed. 2d 79 (1997). In this case, the DOL's interpretation is neither plainly erroneous nor inconsistent with 29 C.F.R. § 531.56(e). The dual jobs rule in § 531.56(e) indicates that "a waitress who spends part of her time cleaning and setting tables, toasting bread, making coffee and occasionally washing dishes or glasses" is still subject to the tip credit provision of the FLSA. The inclusion of the words "part of her time" and "occasionally" indicate some temporal threshold under which the tip credit may still be invoked. The DOL interpretation in the FOH is consistent with the regulation because it further defines and clarifies the dual jobs rule without contradicting it. Because Plaintiffs have alleged that they spent "in excess of 20% of their working time during a shift or week . . . performing . . . non-tip-producing activities" during which they were paid the tip credit wage, Plaintiffs have stated a claim sufficient to survive Defendants' Motion to Dismiss [44]. (2d Am. Compl. [30] ¶¶ 48, 56.)
Defendants also contend that the 20% rule as expressed in the FOH should be rejected because it is unworkable. (Br. Supp. Defs.' Mot. Dismiss [44-1] pp. 17-20.) They argue that the application of the rule would be too unwieldy because "side work" for servers occurs both during service hours and outside of service hours, making timekeeping difficult. The Court does not need to address this issue in the abstract. In this case, Plaintiffs allege that they performed non-tip-producing work before and after their shifts, and after being "called off" from serving customers in tip-producing work. (2d Am. Compl. [30] ¶¶ 41, 47, 54.) Plaintiffs only seek compensation for the non-tip-producing work that occurred in discrete time periods when they were not serving customers. (Pls.' Resp. Defs.' Mot. Dismiss [54] p. 32.) Defendants rely on Pellon v. Business Representation International, Inc. as support for the idea that the 20% rule is unworkable. (Br. Supp. Defs.' Mot. Dismiss [44-1] p. 23.) The court in Pellon rejected the application of the 20% rule to skycaps because it was unfeasible for the skycaps to divide the various tasks they performed over a workday to calculate what portion of time was spent on tasks that did not produce tips. Pellon v. Bus. Representation Int'l, Inc., 528 F.Supp.2d 1306, 1313-14 (S.D. Fla. 2007), aff'd, 291 F. App'x. 310 (11th Cir. 2008). But Pellon is distinguishable because Plaintiffs state several discrete periods during which they were performing duties that were not directed at producing tips. Accordingly, Plaintiffs' claim is sufficient to survive Defendants' Motion to Dismiss [44] in light of the DOL's 20% rule.
III. CONCLUSION
IT IS THEREFORE ORDERED AND ADJUDGED that the Motion to Dismiss [44] is denied.
SO ORDERED AND ADJUDGED.
CIVIL APPEALS JURISDICTION CHECKLIST
1. Appealable Orders: Courts of Appeals have jurisdiction conferred and strictly limited by statute:
(a) Appeals from final orders pursuant to 28 U.S.C. § 1291: Final orders and judgments of district courts, or final orders of bankruptcy courts which have been appealed to and fully resolved by a district court under 28 U.S.C. § 158, generally are appealable. A final decision is one that "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Pitney Bowes, Inc. v. Mestre, 701 F.2d 1365, 1368 (11th Cir. 1983) (citing Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 633, 89 L.Ed. 911 (1945)). A magistrate judge's report and recommendation is not final and appealable until judgment thereon is entered by a district court judge. 28 U.S.C. § 636(b); Perez-Priego v. Alachua County Clerk of Court, 148 F.3d 1272 (11th Cir. 1998). However, under 28 U.S.C. § 636(c)(3), the Courts of Appeals have jurisdiction over an appeal from a final judgment entered by a magistrate judge, but only if the parties consented to the magistrate's jurisdiction. McNab v. J & J Marine, Inc., 240 F.3d 1326, 1327-28 (11th Cir. 2001).
(b) In cases involving multiple parties or multiple claims, a judgment as to fewer than all parties or all claims is not a final, appealable decision unless the district court has certified the judgment for immediate review under Fed.R.Civ.P. 54(b). Williams v. Bishop, 732 F.2d 885, 885-86 (11th Cir. 1984). A judgment which resolves all issues except matters, such as attorneys' fees and costs, that are collateral to the merits, is immediately appealable. Budinich v. Becton Dickinson & Co., 486 U.S. 196, 201, 108 S.Ct. 1717, 1721-22, 100 L.Ed.2d 178 (1988); LaChance v. Duffy's Draft House, Inc., 146 F.3d 832, 837 (11th Cir. 1998).
(c) Appeals pursuant to 28 U.S.C. § 1292(a): Under this section, appeals are permitted from the following types of orders:
i. Orders granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions; However, interlocutory appeals from orders denying temporary restraining orders are not permitted. McDougald v. Jenson, 786 F.2d 1465, 1472-73 (11th Cir. 1986);
ii. Orders appointing receivers or refusing to wind up receiverships; and
iii. Orders determining the rights and liabilities of parties in admiralty cases.
(d) Appeals pursuant to 28 U.S.C. § 1292(b) and Fed.R.App.P. 5: The certification specified in 28 U.S.C. § 1292(b) must be obtained before a petition for permission to appeal is filed in the Court of Appeals. The district court's denial of a motion for certification is not itself appealable.
(e) Appeals pursuant to judicially created exceptions to the finality rule: Limited exceptions are discussed in cases including, but not limited to: Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546, 69 S.Ct. 1221, 1225-26, 93 L.Ed. 1528 (1949); Atlantic Fed. Sav. & Loan Ass'n v. Blythe Eastman Paine Webber, Inc., 890 F.2d 371, 376 (11th Cir. 1989); Gillespie v. United States Steel Corp., 379 U.S. 148, 157, 85 S.Ct. 308, 312, 13 L.Ed.2d 199 (1964).
2. Time for Filing: The timely filing of a notice of appeal is mandatory and jurisdictional. Rinaldo v. Corbett, 256 F.3d 1276, 1278 (11th Cir. 2001). In civil cases, Fed.R.App.P. 4(a) and (c) set the following time limits:
(a) Fed.R.App.P. 4(a)(1): A notice of appeal in compliance with the requirements set forth in Fed.R.App.P. 3 must be filed in the district court within 30 days after the order or judgment appealed from is entered. However, if the United States or an officer or agency thereof is a party, the notice of appeal must be filed in the district court within 60 days after such entry. THE NOTICE MUST BE RECEIVED AND FILED IN THE DISTRICT COURT NO LATER THAN THE LAST DAY OF THE APPEAL PERIOD — no additional days are provided for mailing. Special filing provisions for inmates are discussed below.
(b) Fed.R.App.P. 4(a)(3): "If one party timely files a notice of appeal, any other party may file a notice of appeal within 14 days after the date when the first notice was filed, or within the time otherwise prescribed by this Rule 4(a), whichever period ends later."
(c) Fed.R.App.P. 4(a)(4): If any party makes a timely motion in the district court under the Federal Rules of Civil Procedure of a type specified in this rule, the time for appeal for all parties runs from the date of entry of the order disposing of the last such timely filed motion.
(d) Fed.R.App.P. 4(a)(5) and 4(a)(6): Under certain limited circumstances, the district court may extend or reopen the time to file a notice of appeal. Under Rule 4(a)(5), the time may be extended if a motion for an extension is filed within 30 days after expiration of the time otherwise provided to file a notice of appeal, upon a showing of excusable neglect or good cause. Under Rule 4(a)(6), the time to file an appeal may be reopened if the district court finds, upon motion, that the following conditions are satisfied: the moving party did not receive notice of the entry of the judgment or order within 21 days after entry; the motion is filed within 180 days after the judgment or order is entered or within 14 days after the moving party receives notice, whichever is earlier; and no party would be prejudiced by the reopening.
(e) Fed.R.App.P. 4(c): If an inmate confined to an institution files a notice of appeal in either a civil case or a criminal case, the notice of appeal is timely if it is deposited in the institution's internal mail system on or before the last day for filing. Timely filing may be shown by a declaration in compliance with 28 U.S.C. § 1746 or a notarized statement, either of which must set forth the date of deposit and state that first-class postage has been prepaid.
3. Format of the notice of appeal: Form 1, Appendix of Forms to the Federal Rules of Appellate Procedure, is a suitable format. See also Fed.R.App.P. 3(c). A pro se notice of appeal must be signed by the appellant.
4. Effect of a notice of appeal: A district court lacks jurisdiction, i.e., authority, to act after the filing of a timely notice of appeal, except for actions in aid of appellate jurisdiction or to rule on a timely motion of the type specified in Fed.R.App.P. 4(a)(4).
