Cardenas v. Edita's Bar & Rest.

MEMORANDUM AND ORDER

RACHEL P. KOVNER, UNITED STATES DISTRICT JUDGE

Plaintiffs Jhon E. Cardenas, Cesar A. Romero, and Jose David Perez Mejia brought this collective action against defendants Edita's Bar & Restaurant, Inc., Doll's Rest Inc., and Edith F. Valdivia alleging violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and the New York Labor Law (“NYLL”), N.Y. Lab. L. § 650 et seq. After the lead plaintiffs filed their amended complaint, Angely Peralta, Reidel Garcia, Cristian Canas, and Alejandro Vargas joined the collective action. Now, plaintiffs have moved for summary judgment on their federal and state wage claims, their state spread-of-hours claims, and a new claim that defendants failed to provide adequate wage notices and statements. For the reasons set out below, plaintiffs' motion is granted in part and denied in part.

BACKGROUND

I. Factual Background

The following facts are taken from the parties' Rule 56.1 statements and relevant portions of the record and are undisputed unless otherwise noted.

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Defendants Edita's Bar and Restaurant Inc. (“Edita's”) and Doll's Rest Inc. (“Doll's”) operate bars in New York. See Pls.' Rule 56.1 Statement ¶¶ 1-3, 35 (Dkt. #45) (“Pls.' Statement”). Both corporations are owned by defendant Edith F. Valdivia, also known as Edith D'Angelo (“D'Angelo”), who acts as the chief executive and sole corporate officer for Edita's. Ibid. Along with D'Angelo, Luis Ruiz owns part of Doll's. Id. ¶ 3. Edita's does business as the Flamingo Restaurant and Lounge, and Doll's is associated with a bar that has the same name. Id. ¶¶ 1-3. In 2017 and 2018, Edita's gross sales were approximately $450, 000, and Doll's totaled $200, 000. Id. ¶ 34.

Edita's has around twelve regular employees, including managers, waiters, barmaids, and a DJ, and Doll's employs at least six or seven people. Id. ¶¶ 16, 18. The bars share some employees. Id. ¶ 19; Affirmation of Jesse Rose (“Aff. Rose”) Ex. 2 at 16:5-9 (Dkt. #44-2). When an employee at one location got sick, D'Angelo would send a replacement from the other. Pls.' Statement ¶ 20. The parties dispute whether each bar also employed between forty and fifty women who would dance with customers for a fee. Id. ¶¶ 17-18.

D'Angelo hires and fires employees for both bars, sets employee schedules, and determines their pay. Id. ¶ 7. Prospective employees use one form to apply for jobs at Edita's and Doll's, and before D'Angelo hires a new employee, she tells them that they would be required to work at both bars. Id. ¶¶ 24-25. The bars serve the same “finger food” and have the same “rules of employment.” Id. ¶¶ 8, 21, 22. D'Angelo's husband delivered supplies to both bars, and when supplies ran out at Doll's, employees would replenish inventory from Edita's. Id. ¶ 47. D'Angelo operates the bars out of one office. Id. ¶ 23.

Sometime around 2007, the bars started using a fingerprinting machine to track employee hours. Id. ¶ 9. The parties dispute when the machine broke, but D'Angelo testified that it

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stopped working in 2013 or 2014. Pls.' Statement ¶ 11; Defs.' Resp. to Pls.' Rule 56.1 Statement at 3 (Dkt. #48-3) (“Defs.' Resp.”); Aff. Rose Ex. 2 at 25:25-27:5; id. Ex. 4 at 39:17-40:2; id. Ex. 5 at 23:19-24:2. After the machine broke, D'Angelo used schedules to track the hours that employees worked. Pls.' Statement ¶ 12. Those schedules served as the only basis for determining how much employees would be paid. Id. ¶ 13. D'Angelo threw them away every day. Id. ¶ 12..

The bars made daily payments to employees in cash. Id. ¶ 26. D'Angelo kept receipts for those payments. Id. ¶ 27. But instead of describing an employee's hourly wages, the receipts document only the tips paid to the employee. Id. ¶ 29.

Defendants assert that D'Angelo discarded the paper copies of employee schedules after inputting the records into a digital payroll system. See Defs.' Resp. at 3-4. Although the record does not clearly indicate that D'Angelo entered the schedules into the computer, during discovery, D'Angelo produced records that reflect employee hours, pay, and tips earned at each bar, which the plaintiffs summarized in spreadsheets and submitted as Exhibit 10 to their motion. See Aff. Rose Ex. 2 at 42:16-43:5; id. Ex. 10; Pls.' Mem. in Supp. of Mot. for Summ. J. at 5 (Dkt. #43-1) (“Pls.' Mem.”); Pls.' Reply at 3 (Dkt. #49).

Plaintiffs worked as waiters and bartenders for Edita's and Doll's between 2006 and 2017. Pls.' Statement ¶¶ 35, 46, 56, 62, 79, 88. They allege that they consistently worked more than forty hours per week and did not receive minimum wages, overtime compensation, or spread-of-hours compensation-an extra hour's pay when they worked more than ten hours in a day. See, e.g., id. ¶¶ 37-39, 48-49, 50-51, 57-58, 63-64, 71-76, 80-85.

Defendants dispute the number of days and hours per week that the plaintiffs worked and the wages that plaintiffs received. See, e.g., Defs.' Resp. at 8-13, 17-21. In support, defendants

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cite the spreadsheets that plaintiff created as summaries of defendants' records. See Aff. Rose Ex. 10. The spreadsheets include records for Cardenas, Romero, Vargas, and Peralta, but not for Mejia, Canas, and Garcia. See Aff. Rose Ex. 10.

Both federal and New York labor law permit an employer to pay qualifying employees less than minimum wage if they receive tips. See 29 U.S.C. § 203(m); 12 N.Y.C.R.R. § 146-1.3. Under both the FLSA and the NYLL, to claim such a “tip credit, ” an employer must give an employee notice. See ibid. D'Angelo gave verbal notice to Cardenas and Romero. See, e.g., Aff. Rose Ex. 4 at 58:17-59:3; id. Ex. 5 at 34:18-19; Pls.' Statement ¶¶ 40, 54. Mejia, Canas, Peralta, Vargas, and Garcia allege that they never received notice of the tip credit. Pls.' Statement ¶¶ 60, 65, 76, 85, 90. D'Angelo testified in her depositions that her practice was to provide verbal notice to employees. See, e.g., Aff. Rose Ex. 4 at 58:17-59:3; id. Ex. 5 at 34:18-19.

II. Procedural Background

On December 18, 2017, Cardenas, Romero, and Mejia filed an amended complaint on behalf of themselves and other similarly situated persons bringing claims under the FLSA and NYLL. See Am. Compl. (Dkt. #15). The complaint alleges that defendants failed to pay plaintiffs minimum or overtime wages, violated New York's “spread-of-hours” requirement to pay employees an extra hour's pay on days when they work more than ten hours, and made illegal deductions from employee wages. Id. ¶¶ 33-52. Plaintiffs ask the Court to award liquidated damages and prejudgment interest. Id. at 9-10 (“Prayer For Relief”). Canas, Garcia, Peralta, and Vargas consented to join the collective action. See Consent to Become Party (Dkt #23, #24, #25, #26).

After completing discovery, plaintiffs moved for summary judgment on their minimum wage, overtime, and spread-of-hours claims. Pls.' Mem. at 13-20. In addition, they moved for

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summary judgment on a claim-not raised in the complaint-that defendants failed to provide proper wage notices and wage statements. Id. at 21-22.

STANDARD OF REVIEW

Summary judgment is appropriate when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “An issue of fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Frost v. N.Y.C. Police Dep't, 980 F.3d 231, 242 (2d Cir. 2020) (quoting SCR Joint Venture L.P. v. Warshawsky, 559 F.3d 133, 137 (2d Cir. 2009)). “A fact is material if it might affect the outcome of the suit under governing law.” Ibid. The movant bears the burden of “demonstrat[ing] the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Where “the burden of persuasion at trial would be on the non-moving party, ” the movant “may satisfy his burden of production” either “(1) by submitting evidence that negates an essential element of the non-moving party's claim, or (2) by demonstrating that the non-moving party's evidence is insufficient to establish an essential element of the non-moving party's claim.” Nick's Garage, Inc. v. Progressive Cas. Ins. Co., 875 F.3d 107, 114 (2d Cir. 2017) (citation omitted).

In assessing the record, I consider cited “depositions, documents, electronically stored information, affidavits or declarations, stipulations . . ., admissions, [and] interrogatory answers[.]” Fed.R.Civ.P. 56(c)(1)(A). I view “the evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in that party's favor.” Tracy v. Freshwater, 623 F.3d 90, 95 (2d Cir. 2010). “It is a settled rule that credibility assessments, choices between conflicting versions of the events, and the weighing of evidence are matters for the jury, not for

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the court on a motion for summary judgment.” McClellan v. Smith, 439 F.3d 137, 144 (2d Cir. 2006) (internal quotation marks, alterations, and citation omitted).

DISCUSSION

Plaintiff's motion for summary judgment is granted in part. All plaintiffs are entitled to summary judgment on defendants' liability for failing to pay the minimum wage under the FLSA and the NYLL, as well as summary judgment on defendants' liability for spread-of-hours violations under the NYLL. Some plaintiffs are also entitled to summary judgment as to defendants' liability for overtime under the FLSA and NYLL. As to the amount of damages owed, only Mejia's minimum and overtime wage claims and spread-of-hours claims are susceptible to...