Zorrilla v. Carlson Rests. Inc.

255 F.Supp.3d 465

Julio ZORRILLA, Tashauna Reid, Matthew Mackey, Jose Fernandez, Benjamin Kramer, Amanda Stewart, Amber Swan, Kristine Zeffield, Sydni Smith, Nichole Marino, John Verdin, Jane Bateman and Joseph Lombard, on behalf of themselves and all others similarly situated, Plaintiffs,

v.CARLSON RESTAURANTS INC., Carlson Restaurants Worldwide, Inc., and T.G.I. Friday's Inc., Defendants.

14 Civ. 2740 (AT) (GWG).

United States District Court, S.D. New York.

Signed May 25, 2017

Brian Scott Schaffer, Frank Joseph Mazzaferro, Joseph A. Fitapelli, Fitapelli & Schaffer LLP, Justin Mitchell Swartz, Sally Jasmine Abrahamson, Molly Anne Brooks, Chauniqua Danielle Young, Cheryl-Lyn Deon Bentley, Deirdre Anne Aaron, Juno Emmeline Turner, Michael Joseph Scimone, Rebecca J. Sobie, Outten & Golden, LLP, New York, NY, for Plaintiffs.

Adam Jeremy Smiley, Brendan M. Sweeney, Gina Renee Merrill, Scott Roblan Rabe, Seyfarth Shaw LLP, New York, NY, Gerald Leonard Maatman, Jr., Jennifer A. Riley, Seyfarth Shaw LLP, Chicago, IL, for Defendants.

MEMORANDUM AND ORDER

ANALISA TORRES, District Judge:

Plaintiffs bring a nationwide wage-and-hour collective action, alleging violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq. , and nine state-specific class actions, with each class alleging violations of the labor and/or the unfair competition laws of California, Colorado, Connecticut, Florida, Illinois, Maryland, Michigan, New Jersey, New York. See Fourth Amended Class Action Complaint ("FAC"), ECF No. 389. Now before the Court is Defendants' motion to dismiss certain state-law claims. ECF No. 399. Specifically, Defendants argue that, as a matter of statutory and regulatory interpretation, the following claims fail: (1) the New Jersey tip-pooling claim, FAC ¶¶ 645–65 (part of the eleventh cause of action); (2) the Connecticut uniform claim, id. ¶¶ 780–84 (twenty-eighth cause of action); (3) the Michigan tip-credit claim, id. ¶¶ 827–38 (thirty-fourth cause of action); and (4) some of the California Unfair Competition Law claims, id. ¶¶ 687–724 (parts of the sixteenth through twentieth causes of action). Defendants also argue that the statute of limitations bars all of the California Labor Code claims. Id. ¶¶ 687–724 (parts of the sixteenth through twentieth causes of action).

For the reasons stated below, the Court GRANTS the motion to dismiss with respect to the New Jersey tip-pooling claim, the Connecticut uniform claim, and the Michigan tip-credit claim. The Court GRANTS IN PART the motion to dismiss the California Unfair Competition Law claims, and DENIES the motion with respect to the California Labor Code claims.

BACKGROUND¹

I. The Parties

Defendants Carlson Restaurants Inc. and Carlson Restaurants Worldwide Inc. (the "Carlson Entities") operate together as a hospitality and travel company employing more than 175,000 people. Id. ¶¶ 12–14. Defendant T.G.I. Friday's Inc. ("T.G.I. Friday's"), a restaurant chain, was at relevant times a wholly owned subsidiary of the Carlson Entities. Id. ¶ 151. Each Defendant "had substantial control over Plaintiffs' working conditions."Id. ¶ 127. And at all relevant times, T.G.I. Friday's "maintained control, oversight, and direction over Plaintiffs and similarly situated employees, including timekeeping, payroll, and other employment practices." Id. ¶ 152.

Julio Zorrilla, Tashauna Reid, Matthew Mackey, Jose Fernandez, Benjamin Kramer, Amanda Stewart, Amber Swan, Kristine Zeffield, Sydni Smith, Nichole Marino, John Verdin, Jane Bateman, and Joseph Lombard (collectively, the "Named Plaintiffs") are former tipped employees at T.G.I. Friday's restaurants owned and/or operated by Defendants. Id. ¶¶ 60–125. The Named Plaintiffs worked at T.G.I. Friday's located in New York, New Jersey, Colorado, California, Connecticut, Illinois, Maryland, Michigan, and Florida. Id. ¶¶ 61, 66, 71, 76, 82, 87, 92, 97, 102, 107, 112, 116, 122.

II. Defendants' Employment Practices

At issue in this motion are Plaintiffs' allegations regarding three of Defendants' employment practices. First, Plaintiffs allege that although "Defendants paid Plaintiffs at a ‘tipped’ minimum wage rate," id. ¶ 19, Defendants also maintained a policy and practice whereby Plaintiffs pooled their tips with non-tipped workers, e.g., id. ¶ 651, and performed "non-tip producing side work" such as "general cleaning," e.g., id. ¶ 24.

Second, Plaintiffs allege that "Defendants maintained a policy and practice whereby tipped workers were required to wear uniforms featuring the T.G.I. Friday's logo." Id. ¶ 46. Plaintiffs further allege that "Defendants did not supply tipped workers with a sufficient number of uniforms for multiple shifts," but instead required Plaintiffs "to purchase" and "pay for the cleaning and maintenance of their [own] uniforms." Id. ¶¶ 47–51.

Third, Plaintiff Swan, the sole Named Plaintiff from California, alleges that, pursuant to Defendants' policies, Swan (1) "perform[ed] work off-the-clock and without compensation," id. ¶ 691; and (2) was not compensated for her labor within 30 days of the end of her employment, id. ¶¶ 722–24.

III. Relevant Procedural History

On April 17, 2014, Plaintiffs filed this lawsuit (the "First Complaint") "seek [ing] to recover minimum wages, overtime compensation, spread-of-hours pay, misappropriated tips, uniform-related expenses, unlawful deductions, and other wages for Plaintiffs and their similarly situated co-workers." Class Action Compl. (the "First Compl.") ¶ 1, ECF No. 1. The First Complaint alleges an opt-in collective action, pursuant to 29 U.S.C. § 216(b), on "behalf of [the original named plaintiffs] and all similarly situated current and former tipped workers employed at T.G.I. Friday's restaurants owned, operated, and/or controlled by Defendants." Id. ¶ 106; see also id. ¶¶ 107–15. The First Complaint also alleges a class action pursuant to Federal Rule of Civil Procedure 23 consisting of "all similarly situated current and former tipped workers employed at T.G I. Friday's in New York." Id. ¶ 116; see also id. ¶¶ 116–31.

On August 1, 2014, the Court issued a Civil Case Management and Scheduling Order. ECF No. 31 ("Scheduling Order"). As part of the Scheduling Order, Plaintiffs represented that "if the Court grants Plaintiffs' contemplated motion for FLSA conditional certification, after the opt-in period, Plaintiffs intend to move to amend to add additional state law claims under Federal Rule of Civil Procedure 23 and class representatives for those claims. Any motion to amend will be made within 30 days after the opt-in period expires...." Id. ¶ 3.

On January 20, 2015, the Court issued a Memorandum and Order conditionally certifying the FLSA collective action, and authorizing notice and expedited discovery. See Flood v. Carlson Rests. Inc. , 14 Civ. 2740, 2015 WL 260436, at *1 (S.D.N.Y. Jan. 20, 2015), ECF No. 116. On August 19, 2015, Plaintiffs sent Court-authorized notice to more than 40,000 tipped workers, and by December 19, 2016, the end of the opt-in period, approximately 4,588 workers had opted in. Decl. of Juno Turner ¶ 12, ECF No. 453; see also Order, ECF No. 287 (extending opt-in period to December 19, 2015). Swan filed a consent-to-join form on September 29, 2015. ECF No. 248.

On January 19, 2016, Plaintiffs sought leave to file a Third Amended Class Action Complaint. ECF No. 345. In the proposed complaint, Swan was, for the first time, a named plaintiff. Decl. of Justin M. Swartz Ex. A ("Proposed Third Am. Class Action Compl."), ¶¶ 6, 92–96, 721–53. Defendants opposed the motion to amend, arguing inter alia that the addition of the new state-law claims would cause them undue prejudice. See, e.g., ECF No. 348 at 9–11. The Court granted Plaintiffs' request to amend, stating:

Although the parties may need to expand discovery in light of the nuances required to establish, or defend against, liability under each state-law claim, the operative facts underlying those claims are largely the same. No significant additional burden is imposed on Defendants should they be required to tailor, around the edges, depositions, interrogatories, or other discovery to account for whatever unique facts may be pertinent for a given state claim.

Flood v. Carlson Rests. Inc., 14 Civ. 2740, 2016 WL 3221146, at *2 (S.D.N.Y. June 7, 2016), ECF No. 361.

On August 2, 2016, the Court granted Plaintiffs' request to file a Fourth Amended Class Action Complaint, ECF No. 382, which was filed on August 17, 2016, ECF No. 389. This complaint restates the opt-in FLSA collective action alleged in the first complaint, see FAC ¶¶ 164–73, and brings pursuant to Federal Rule of Civil Procedure 23 nine state-specific class actions, with each class consisting of a state-wide class consisting of "all similarly situated current and former tipped workers employed at T.G I. Friday's," for each of the nine states in which a Named Plaintiff was employed, id. ¶ 164; see also id. ¶¶ 174–317.

On September 9, 2016, Defendants filed the present motion to dismiss. ECF No. 399.

DISCUSSION

I. Legal Standard

To survive a Rule 12(b)(6) motion to dismiss, "a complaint must contain sufficient factual matter ... to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). On such a motion, the Court may consider only the complaint, documents attached to the complaint, matters of which a court can take judicial notice, or documents that Plaintiffs knew about and relied upon. See Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002). The Court must accept the allegations in the complaint as true and draw all reasonable inferences in favor of the non-movant. ATSI Commc'ns, Inc., 493 F.3d at 98.

When sitting in diversity and adjudicating a question of unsettled state law, as the Court does for many of the issues here, a federal court must "predict...