Guzman v. GF, Inc.

YOLANDA GUZMAN, et al., Plaintiffs, v. GF, INC., d/b/a IL CANALE, et al., Defendants.

No. 19-cv-2338 (DLF)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

June 14, 2021

MEMORANDUM OPINION AND ORDER

The plaintiffs are individuals who worked as servers, bartenders, and bussers for the defendants' restaurant, Il Canale. They bring this action against the defendants under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201, et seq., the D.C. Minimum Wage Act Revision Act of 1992 (DCMWA), D.C. Code § 32-1001, et seq., and the D.C. Wage Payment and Collection Law (DCWPCL), D.C. Code § 32-1301, et seq., alleging the plaintiffs were not paid the effective minimum wage or overtime pay and that the defendants violated the relevant wage protection statutes by failing to provide certain required notices. Before the Court is the plaintiffs' Motion for Conditional Certification of a Collective Action and Notice to Potential Plaintiffs (Pls.' Mot.), Dkt. 23. For the reasons that follow, the Court will grant in part and deny in part the plaintiffs' motion.

I. BACKGROUND

According to the complaint and the plaintiffs' affidavits, Il Canale is a large Italian restaurant operating in the District of Columbia, owned and operated by Giuseppe Farruggio and managed by Alessandro Farruggio (collectively, "defendants"). Guzman Aff. ¶¶ 1-3, Dkt. 23-1. Plaintiff Yolanda Guzman worked at Il Canale as a busser, id. ¶ 4, and plaintiff Eneias Aboubacar worked as a server and filled in as a bartender, Aboubacar Aff. ¶ 3, Dkt. 23-2.

The plaintiffs allege that the defendants paid tipped employees—bussers, servers, and bartenders—"below the minimum wage, while similarly failing to meet the requirements to off-set their minimum wage obligations with a legal 'tip credit.'" Pls.' Mot. at 2. Under a tip credit system, an employer may pay an employee less than the standard minimum wage as long as the employee receives tips sufficient to ensure the employee ultimately receives the minimum wage for each hour worked. See Stephens v. Farmers Rest. Grp., 291 F. Supp. 3d 95, 108 (D.D.C. 2018). "An employer may only avail itself of the tip credit if it informs its employees of the [credit] and allows them to retain all of their tips, except that an employer may require employees to pool their tips with other employees who 'customarily and regularly receive tips.'" Camara v. Mastro's Rests. LLC, 340 F. Supp. 3d 46, 50 (D.D.C. 2018) (quoting 29 U.S.C. § 203(m)(2)(A)). The plaintiffs allege that Il Canale "failed to provide notice to Plaintiffs" regarding tip-credit and other wage related requirements; failed to permit the plaintiffs to retain all gratuities they received; and "unlawfully deducted or assigned Plaintiffs' wages by way of shift fees, kickbacks, and tip assignments in violation of District of Columbia law." Pls.' Mot. at 2-3. According to the plaintiffs, the defendants also failed to compensate them at the required rate for all overtime hours worked each week. Id. at 3.

Il Canale employed at least 103 tipped employees at its restaurant from April 6, 2017 through April 6, 2020. Defs.' Response to Pls.' First Set of Interrogatories, No. 8, Dkt. 23-3. 55 of these employees were servers, 43 were bussers, and 5 were bartenders. Pls.' Mot. at 4. Based on conversations with other tipped employees and a review of their paystubs, Guzman and Aboubacar, through affidavits filed with the Court, claim to have firsthand knowledge that otherIl Canale employees faced similar unlawful employment practices. Guzman Aff. at 1; Aboubacar Aff. at 1.

The plaintiffs filed this lawsuit on August 2, 2019 seeking to recover damages for unpaid wages plus liquidated damages, pre- and post-judgment interest, and attorney's fees and costs. See Compl., Dkt. 1; Am. Compl., Dkt. 16. The plaintiffs have now moved to obtain conditional certification of a collective action for all three counts of their amended complaint, which the defendants oppose. See Pls.' Mot.; Defs.' Opp'n, Dkt. 29.

II. LEGAL STANDARDS

The FLSA authorizes plaintiffs seeking to recover unpaid wages to pursue a collective action by suing on behalf of "other employees similarly situated." 29 U.S.C. § 216(b). The FLSA's collective action procedures are minimal and require only that (1) employees be similarly situated, and (2) other employees who seek to be a party to the collective action opt in to the lawsuit by filing their written consent in the court where the action is pending. 29 U.S.C. § 216(b). Rule 23 of the Federal Rules of Civil Procedure, which generally governs class-action lawsuits, does not apply to FLSA collective actions. See, e.g., Thompson v. Linda and A., Inc., 779 F. Supp. 2d 139, 143 (D.D.C. 2011). Both the D.C. Payment and Collection of Wages Law and the D.C. Minimum Wage Act Revision Act permit collective actions that are "[c]onsistent with the collective-action procedures of the Fair Labor Standards Act." D.C. Code § 32-1308(a)(1)(C)(iii); D.C. Code § 32-1012(a).

Courts follow a two-stage process to assess whether an FLSA collective action should be certified. See, e.g., Castillo v. P & R Enters., 517 F. Supp. 2d 440, 445 (D.D.C. 2007). In the first stage, referred to as "conditional certification," "the court mak[es] an initial determination to send notice to potential opt-in plaintiffs who may be 'similarly situated' to the named plaintiffswith respect to whether a FLSA violation has occurred." Myers v. Hertz Corp., 624 F.3d 537, 555 (2d Cir. 2010). At this stage, plaintiffs need only make a "modest factual showing that they and potential opt-in plaintiffs together were victims of a common policy or plan that violated the law." Id. (internal quotation marks omitted). "[A]ll that is needed is some evidence, beyond pure speculation, of a factual nexus between the manner in which the employer's alleged policy affected a plaintiff and the manner in which it affected other employees." Ayala v. Tito Contractors, 12 F. Supp. 3d 167, 170 (D.D.C. 2014) (alterations and internal quotation marks omitted). The standard of proof is low at this stage because its purpose is "merely to determine whether similarly situated plaintiffs do in fact exist." Myers, 624 F.3d at 555 (internal quotation marks omitted). "If a plaintiff can make this showing, a court will conditionally certify the class." Ayala, 12 F. Supp. 3d at 170.

If the court conditionally certifies the class, the second stage tasks the court with determining, "on a fuller record," whether the collective action "may go forward by determining whether the plaintiffs who have opted in are in fact 'similarly situated' to the named plaintiffs." Myers, 624 F.3d at 555. If the court later finds that the opt-in plaintiffs are not similarly situated, the court may dismiss their claims without prejudice and "de-certif[y]" the lawsuit. Id. "It is at this stage that a court's inquiry is typically more searching." Guevara v. Spartan Enters., No. 20-cv-1383, 2020 WL 6870007, at *3 (D.D.C. Nov. 23, 2020).

At all times, "the court has a managerial responsibility to oversee the joinder of additional parties to assure that the task is accomplished in an efficient and proper way." Hoffmann-La Roche, Inc. v. Sperling, 493 U.S. 165, 170-71 (1989). The Court therefore must exercise its duty to "ensur[e] that notice to putative class members is timely, accurate, andinformative" when considering the motion. Stephens, 291 F. Supp. 3d at 105 (internal quotation marks omitted).

III. ANALYSIS

The plaintiffs' motion seeks the conditional certification of a class of "all current and former tipped bussers, servers, and bartenders" who worked at Il Canale from April 6, 2017 to April 6, 2020, Pls.' Mot. at 4, 22; an order requiring the defendants to provide "the names, last known home addresses, email addresses (business and home), home and cellular telephone numbers, and last four digits of the social security numbers" of all potential class members, id. at 22; approval of the proposed Notice to Potential Plaintiffs, Dkt. 23-7, see Pls.' Mot. at 23; permission to mail and email notice of the purported class to all potential class members, id.; and an order directing the defendants to post at Il Canale's office a notice and a consent form for the purported class, id.

A. Conditional Certification

To obtain conditional certification and the Court's approval to send notices to potential class members, the plaintiffs must make "a modest factual showing" that they and the other potential class members "were victims of a common policy or plan that violated the law." Myers, 624 F.3d at 555 (internal quotation marks omitted). In other words, "the conditional-certification standard turns on whether plaintiffs have . . . put forth a common legal theory upon which each member is entitled to relief." Stephens, 291 F. Supp. 3d at 109 (internal quotation marks omitted).

According to the plaintiffs, they and the purported class were subjected to eight illegal policies, falling broadly into four categories. See Pls.' Reply at 3-4, Dkt. 30. First, the defendants failed to (1) pay tipped employees overtime wages, even when they worked morethan 40 hours in a week. Id. Second, the defendants failed to (2) pay employees the effective tip-credit minimum wage. Id. Third, the defendants failed to qualify for the tip credit because they failed to allow employees to retain all tips (3) by withholding some tips during lunch shifts and (4) by subjecting tipped employees to a system of fines. Id. And finally, the defendants failed to qualify for the tip credit because they did not provide employees with a series of required notices, including (5) notice of the rate and basis of their pay, (6) notice of the defendants' tip-sharing policy, (7) notice that employees could retain all tips; and (8) notice of the percentage by which tips paid via credit card were reduced. Id. Because the plaintiffs have put forth "a series of policies that allegedly caused" violations of law "in different ways,"...