United States District Court, D. Maryland
JEFFREY B. MOULD, Plaintiff
NJG FOOD SERVICE INC., et al., Defendants
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
For Jeffrey B. Mould, Plaintiff: Francis R Laws, LEAD ATTORNEY, Julia Ann Carolan, Thomas and Libowitz PA, Baltimore , MD.
For Kathleen Yanek, Julianne Lodowski, On behalf of themselves and others similarly situated, Consol Plaintiffs: Francis R Laws, Julia Ann Carolan, Thomas and Libowitz PA, Baltimore , MD; Martin Eugene Wolf, Gordon, Wolf & Carney, Chts., Towson , MD.
For Scott Clempner, Consol Plaintiff: Francis R Laws, LEAD ATTORNEY, Julia Ann Carolan, Thomas and Libowitz PA, Baltimore , MD.
For Njg Food Service, Inc., doing business as The Crab Bag, Oc Crabbag, LLC, Nolen J. Graves, Albert Levy, Defendants: Howard Benjamin Hoffman, Howard B Hoffman Attorney at Law, Rockville , MD.
For Howard Wimbrow, Movant: James L Otway, Otway Russo and Rommel PC, Salisbury , MD.
James K. Bredar, United States District Judge.
Jeffrey B. Mould (" Plaintiff" ) brought this suit against NJG Food Service, Inc. (" NJG" ), OC Crabbag, LLC (" Crabbag" ), Nolen J. Graves, and Albert Levy (collectively " Defendants" ) for violations of the Fair Labor Standards Act (" FLSA" ), 29 U.S.C. § § 201 et seq., the Maryland Wage and Hour Law (" MWHL" ), Md. Code Ann., Labor & Employment § § 3-401 et seq., the Maryland Wage Payment and Collection Law (" MWPCL" ), Md. Code Ann., Labor & Employment § § 3-503 et seq., the Internal Revenue Code (" IRC" ), 26 U.S.C. § 7434, as well as for the common law torts of conversion and unjust enrichment. Now pending before the Court are (1) Defendants' cross-motion for summary judgment (ECF No. 104); (2) Plaintiff's motion for partial summary judgment (ECF No. 120); and (3) Defendants' supplemental motion for summary judgment (ECF No. 169). Also pending before the Court is (4) Defendants' motion to strike (ECF No. 136). The issues have been briefed and no hearing is required. Local Rule 105.6.
For the reasons set forth below, Defendants' cross-motion for summary judgment (ECF No. 104) and supplemental motion for summary judgment (ECF No. 169) are GRANTED IN PART and DENIED IN PART; Plaintiff's motion for partial summary judgment (ECF No. 120) is GRANTED IN PART and DENIED IN PART; and Defendants' motion to strike (ECF No. 136) is GRANTED IN PART and DENIED IN PART.
I. FACTUAL BACKGROUND
Plaintiff Mould worked as a server at the Crab Bag, a restaurant in Ocean City, Maryland from February 13, 2011 until he was suspended on June 23, 2013 and ultimately terminated on June 27, 2013.
(ECF No. 104-6, Ex. 3, " Mould Depo."  at 13, 31.) As a server, Plaintiff was paid an hourly wage of $3.63 and an overtime hourly wage of $7.26. (ECF No. 121-6; Mould Depo. at 162.) Defendant Levy is the general manager of the Crab Bag. (ECF No. 120-11, Ex. 8, " Levy Depo." at 21.) Defendant Graves, as the owner, sole-shareholder, and president of NJG Food Service, Inc. (which operated under the " doing business as" designation of the Crab Bag), as well as the sole member of OC Crabbag, LLC, is the sole owner of the Crab Bag restaurant. (ECF No. 104-4, Ex. 1, " Corp. Designee Depo."  at 236.)
At the end of each shift, Plaintiff and other servers at the Crab Bag received a " revenue report," which provided servers with " recommended contributions" to a tip pool as part of their daily " revenue report."  (ECF No. 137-6, ¶ ¶ 17-19.) Money contributed to the tip pool was then shared with other Crab Bag employees, including cooks, crab steamers, and prep cooks, according to an apportionment formula devised by Defendant Levy. (Levy Depo, 76-78; Corp. Designee Depo at 24.)
Starting in December 2011, Defendant Levy implemented a new policy regulating how servers should report their tips for tax purposes. ( See ECF No. 120-21.) Under this policy, servers, including Plaintiff, were no longer supposed to report the amount of their tips at the end of their shift. Rather, Defendants approximated employees' tip income as 10% of cash sales (i.e., checks that customers paid with cash) and 100% of tips paid by credit card. ( Id. ) This policy did not specifically take into account tips that servers contributed to the tip pool. (ECF No. 120-4, Ex. 1, " Mould Aff." at ¶ 21.) Further, where a customer left no tip on a credit card sale, the sale was treated as a cash sale, and 10% of the amount was added to the server's total tip income. ( Id.) As a result of this policy, Plaintiff's income was overstated on his 2012 W-2 tax form. ( Id. at ¶ 22.)
On May 1, 2012, Plaintiff filed the present lawsuit alleging violations of the Fair Labor Standards Act of 1928 (" FLSA" ), 29 U.S.C. § § 201 et seq., the Maryland Wage and Hour Law (" MWHL" ), Md. Code Ann., Labor & Employment § § 3-401 et seq., the Maryland Wage Payment and Collection Law (" MWPCL" ), Md. Code Ann. Labor & Employment § § 3-503 et seq., and the Internal Revenue Code (" IRC" ), 26 U.S.C. § 7434, as well as common law torts of conversion and unjust enrichment. (ECF No. 1.) Subsequently, on June 14, 2013, at a servers' meeting, and in the presence of Defendant Levy, Plaintiff stood up and explained that the restaurant's tip pooling policy was illegal and that management was over-reporting servers' wages to the Internal Revenue Service (" IRS" ). (Mould Depo. 139-42.) Plaintiff further explained that he had filed a lawsuit against the restaurant and invited other servers to do the same. ( Id. )
On June 7, 2013, while watching a live video feed from the restaurant, Defendant Levy witnessed Plaintiff putting his arm around Taylor Roes, a hostess. (Levy Depo. 104-06.) Defendant Levy felt something
about the situation was " not right." ( Id. ) Later, Levy talked to Roes who indicated that Plaintiff made her " feel uncomfortable." ( Id. at 121.) On June 23, 2013, Levy called Roes into his office to enquire if there had been any further problems with Plaintiff. ( Id. at 128.) She reported that Plaintiff still behaved in a way that made her feel uncomfortable, in that he touched her lower back and made comments regarding her personal life that she felt were inappropriate. (ECF No. 104-10.) At Levy's request, Roes made a written statement to this effect. ( Id. )
After this conversation, Defendant Levy suspended Plaintiff and began asking other employees about Plaintiff's behavior. (Levy Depo. at 127.) As part of his investigation, Defendant Levy collected statements from a number of other employees who also noted Plaintiff's inappropriate workplace behavior. (ECF Nos. 104-11, -12, -13, -14, -15.) On June 27, 2013, Defendant Levy terminated Mould. (Mould Depo. 13, 31.)
On September 4, 2013, with leave of Court (ECF No. 26), Plaintiff filed an amended complaint, which included a count of retaliation in violation of the FLSA (Count X). (ECF No. 33.)
Additional relevant facts will be addressed later in the opinion.
II. STANDARD FOR SUMMARY JUDGMENT
A party seeking summary judgment must show " that there is no genuine dispute as to any material fact" and that he is " entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). If a party carries this burden, then the court will award summary judgment unless the opposing party can identify specific facts, beyond the allegations or denials in the pleadings, that show a genuine issue for trial. Fed.R.Civ.P. 56(e)(2). To carry these respective burdens, each party must support its assertions by citing specific evidence from the record. Fed.R.Civ.P. 56(c)(1)(A). The court will assess the merits of the motion, and any responses, viewing all facts and reasonable inferences in the light most favorable to the opposing party. Scott v. Harris, 550 U.S. 372, 378, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007); Iko v. Shreve, 535 F.3d 225, 230 (4th Cir. 2008).
A. Defendants' motion to strike inadmissible evidence (ECF No. 136)
Rule 56(c)(2) of the Federal Rules of Civil Procedure provides that " a party may object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence." Fed.R.Civ.P. 56(c)(2). As the Advisory Committee notes to the 2010 amendments mention, " [t]he objection functions much as an objection at trial, adjusted for the pretrial setting. . . . There is no need to make a separate motion to strike. . . ." Fed.R.Civ.P. 56 Advisory Committee notes. Pursuant to this rule, Defendants have objected to the admissibility of evidence submitted by Plaintiff Mould as part of his opposition to Defendants' motion for summary judgment. (ECF No. 136.)
Rather than rule on all of Defendants' objections at the onset, the Court will consider the admissibility of material cited by Plaintiff if and when that material becomes relevant to the Court's adjudication of this matter.
The Court will make one exception to this procedure with regard to Plaintiff's exhibit 25 (ECF No. 121-4), which contains " true and correct copies of photographs [Plaintiff] obtained from Facebook and Instagram." (Mould Aff. ¶ 2.) While
Plaintiff provides that these pictures are " true and correct copies of photographs that [he] viewed on Facebook and Instagram," such a statement is insufficient to authenticate the photographs as substantially correct representations of the behavior they purport to represent. Further, it does not provide when such behavior occurred. The Court shall therefore disregard the pictures in Exhibit 25 as inadmissible evidence.
B. Plaintiff and Defendants' respective motions for summary judgment (ECF Nos. 104, 120, 169)
1. Counts I and IV (FLSA violations--Minimum wage and overtime)
Plaintiff's claim in Counts I and IV is that Defendants failed to pay him the minimum wage and the minimum overtime rate for hours worked in excess of forty in any given week required by the FLSA. 29 U.S.C. § § 206(a), 207(a); 215(a)(2). Specifically, the issue here turns on whether Defendants were entitled to take a " tip credit" to satisfy these minimum wage and overtime rate requirements. 29 U.S.C. § 203(m); Gionfriddo v. Jason Zink, LLC, 769 F.Supp.2d 880, 893 (D. Md. 2011) (" Tipped employees . . . are required to receive at least the minimum wage, but their employers are permitted to pay a direct wage of $2.13 per hour and then take a 'tip credit' to meet the $7.25 per hour minimum wage requirement." )
Section 203(m) provides that an employer may not take a tip credit with regard to an employee's wages unless (1) " such employee has been informed by the employer of the provisions of this subsection" and (2) " all tips received by such employee have been retained by the employee, except that the subsection shall not be construed to prohibit the pooling of tips among employees who customarily and regularly receive tips." § 203(m); Dorsey v. TGT Consulting, LLC, 888 F.Supp.2d 670, 680-81 (D. Md. 2012). These two requirements are " strictly construed." Id.; Copantitla v. Fiskardo Estiatorio, Inc., 788 F.Supp.2d 253, 287 (S.D.N.Y. 2011) (quoting Chung v. New Silver Palace Rest., 246 F.Supp.2d 220, 229 (S.D.N.Y. 2002)).
The Court begins by turning to the first requirement, the notice requirement. Here, Defendants assert that " there is no dispute of fact that Mould was informed by The Crab Bag that The Crab Bag was taking a tip credit against his wages." (ECF No. 104-1 at 40.) To support this assertion, Defendants rely on a " review of Mould's paychecks." ( Id. ) Specifically, they offer that Plaintiff was aware that, as a tipped employee, he received an hourly wage of $3.63/hour (and an overtime rate of $7.26/hour) and that this rate was less than the rate paid to non-tipped employees, which varied between $7.25/hour and $9/hour. (Mould Dep. at 147, 169, 171.) Further, Defendants argue that Plaintiff, like all servers, knew that tips constituted part of their income for tax purposes. (ECF No. 104-1 at 41; ECF No. 104-18.) However, beyond the information included on employees' paychecks, Defendants did not provide employees with any further information regarding the provisions of section 203(m). (ECF No. 137 at 47; Mould Aff. ¶ 16.)
The information included on Plaintiff's paychecks fails to meet the notice requirement of section 203(m). In Dorsey, this Court found that an earnings statement that contained no reference to the federal minimum wage " could not alone have informed employees that their tipped wage was subminimum and that a certain percentage of their tips was being applied to meet federal minimum wage requirements." 888 F.Supp.2d at 682;
see also Kilgore v. Outback Steakhouse of Florida, Inc., 160 F.3d 294, 299-300 (6th Cir. 1998) (holding that an employer does satisfy the notice requirement where he informs employees of his intention to " use the tip credit against the minimum wage" ); Martin v. Tango's Restaurant, Inc., 969 F.2d 1319, 1322 (1st Cir. 1992) (holding section 203(m) to " require at the very least notice to employees of the employer's intention to treat tips as satisfying part of the employer's minimum wage obligations" ); Perez v. Prime Steak House Restaurant Corp., 939 F.Supp.2d 132, 138-39 (D.P.R. 2013) (holding that an employer does not satisfy the notice requirement if he " makes no mention of minimum wage," as section 203(m) " requires, at a minimum, that the employer inform the employee of its intention to use the tip credit towards satisfying the federal minimum wage requirements" ); Reich v. Chez Robert, Inc., 821 F.Supp. 967, 977 (D.N.J. 1993) (noting that an employer does not meet its obligation to " inform" under the FLSA when it tells its tipped employees that they will be paid a specific wage but does not explain that that wage is below the minimum wage and that it is permitted by law based on the employees' tips), rev'd on other grounds, 28 F.3d 401 (3d Cir. 1994). Here, just as in Dorsey, Plaintiff's paychecks contained no reference to the federal minimum wage. Therefore, they could not, standing alone, satisfy the notice requirement of section 203(m).
On the basis of the undisputed facts set forth by the parties, the Court therefore concludes that Defendants failed to comply with the notice requirement of section 203(m).
The Court now turns to the issue of whether Defendants also violated section 203(m) by implementing a tip-pooling policy that included employees other than " employees who customarily and ...