United States District Court, D. Maryland, Southern Division
GEORGE J. HAZEL, District Judge.
This is a wage violation case brought by Plaintiff Jessica Marlene Melgar Morataya against her former employer, Defendant Nancy's Kitchen of Silver Spring, Inc. ("Nancy's Kitchen") and its owner, Roy Barreto, for purported violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., the Maryland Wage and Hour Law ("MWHL"), Md. Code, Lab. & Empl. Article ("LE") § 3-401 et seq., and the Maryland Wage Payment and Collection Law ("MWPCL"), Md. Code, LE § 3-501 et seq. Pending before the Court is Plaintiff's Second Motion for Partial Summary Judgment. See ECF No. 52. In ruling on Plaintiff's previous motion, the Court found that Defendants were not entitled to a tip credit under the FLSA, specifically 29 U.S.C. § 203(m), to offset against their minimum wage and overtime obligations. See ECF No. 44.
Plaintiff's Second Motion for Partial Summary Judgment seeks to further sharpen the issue. Plaintiff now asks the Court to find that Defendants' weekly cash payments to Plaintiff not only fail to qualify as a tip credit, but also cannot otherwise satisfy Defendants' FLSA obligations. See ECF No. 52 at 1. Defendants, on the other hand, assert that the weekly cash payments they gave to Plaintiff should factor into Plaintiff's hourly wage calculations because they were not tips. See ECF No. 53 at 1. A hearing was held on June 16, 2015. See Loc. R. 105.6 (Md.). For the reasons outlined below, Plaintiff's Second Motion for Partial Summary Judgment is GRANTED, in part, and DENIED, in part.
Nancy's Kitchen is a restaurant located at 3808 International Drive, Silver Spring, Maryland. See ECF No. 39-2. Plaintiff alleges that she began working for Nancy's Kitchen around 2007. See ECF No. 39-11 at ¶ 2. She first worked as a busser, clearing tables, and began working as a server around 2010 or 2011. See ECF No. 53-3 at 22-26. Only two or three individuals worked as servers for Nancy's Kitchen during the relevant time period. See ECF No. 53-2 at 12.
In the course of discovery for this case, Plaintiff was deposed. She testified that, while she was a server, she was never permitted to keep the tips she received from customers. See ECF No. 41-4 at 6. Instead, she was required to take tips to Mr. Barreto, the owner of Nancy's Kitchen, or put them in a designated bag, which was called the "kitty." See id. Plaintiff testified that Mr. Barreto decided how the tips from the kitty were divided. See id. at 8.
Mr. Barreto was also deposed. In slight contrast to Plaintiff, he stated that Plaintiff was permitted to keep her tips if she worked alone because "that's her tip, she keeps it." See ECF No. 53-2 at 4. But if Plaintiff was not alone, she was required to put her tips in the kitty. See ECF No. 39-7 at 17 & 20. Mr. Barreto explained that everyone who worked together then received money in separate envelopes. See ECF No. 53-2 at 3. Specifically, he said, "[t]he people who are working as a team, they get [an envelope], including the credit card, whatever is put in." See id. This daily amount was paid weekly in cash. See ECF No. 53-3 at 22-26. Mr. Barreto indicated that he gave tip money to Plaintiff, John Fernandes (another server), and possibly a busser. See ECF No. 39-7 at 20. Mr. Barreto also said that tips paid by credit card all go "to the bank and then I make the envelopes based on whatever money I collect." ECF No. 53-2 at 6.
When Mr. Barreto was again asked to clarify how he treated the tips put into the kitty, Mr. Barreto said, "[t]hose are being given as tip credit." See ECF No. 42-1 at 15. This, according to Mr. Barreto, is "[t]he time they work, plus the tip for the whole day, it gets shared." Id. He also said he used the money from the kitty, in part, to purchase goods used at the restaurant. See ECF No. 53-2 at 19. At another point in the deposition, he once again agreed that the tips from the kitty were distributed to employees; he said he kept the money from the kitty to the side to make the envelopes and gave employees the tip credit. See id. at 12-16. When asked about the amount of tips given to the employees, Mr. Barreto testified that he paid the employees a fixed amount each day regardless of the amount of tips in the kitty. See ECF No. 53-2 at 7. Mr. Barreto explained that "[i]t is just a fixed amount. They've been told, because I told her earlier, business can be slow or busy. There could be - if it's slow, I take the bullet; if it's busy, it's okay, I mix it up, however I can make them happy to work there." See id. at 19.
According to Mr. Barreto, the daily payments equaled or exceeded the amount Plaintiff would have received if she had kept all of her tips. See ECF No. 53-2 at 21. According to Plaintiff, she expressed concern about whether she was receiving enough tip money and Mr. Barreto increased her wage to $65 a day on the weekends. See ECF No. 41-4 at 13.
Further explaining how Plaintiff was paid, Defendants have provided the Court with a spreadsheet purporting to show Plaintiff's hours and pay from December 2010 to July 2013. See ECF No. 53-3 at 22-26. The spreadsheet appears to have been created by the restaurant's accountant, Agnelo Gonsalves. See ECF No. 39-15 at 6. The spreadsheet also appears to have been created after the fact and not contemporaneously. See ECF No. 39-15 at 6-7. In 2010, when Plaintiff was working as a busser, the spreadsheet indicates that she was paid $7.25 per hour. See ECF No. 53-2 at 22-26. In March 2011, when she became a server, Plaintiff began receiving $4.00 per hour. See id. In July 2013, her hourly wage was increased to $4.15 per hour. See id. The spreadsheet notes what portion of Plaintiff's hourly wage was paid in cash and what portion was paid by check. See id. The spreadsheet also contains a column entitled "other cash payments" and indicates that Plaintiff received between $540 and $660 in cash every two weeks. See id. The spreadsheet also shows the amount of tips Plaintiff reported for each pay period. See id.
Plaintiff's employment with Defendants ended on July 12, 2013. See ECF No. 53-2.
II. STANDARD OF REVIEW
Summary judgment is proper when there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law. Meson v. GATX Tech. Servs. Corp., 507 F.3d 803, 806 (4th Cir. 2007); see also Fed.R.Civ.P. 56(a). A genuine issue of material fact exists when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The moving party bears the burden of demonstrating that no genuine dispute exists with regard to material facts. Pulliam Inv. Co. v. Cameo Props., 810 F.2d 1282, 1286 (4th Cir. 1987). Notably, the moving party can demonstrate that there is no genuine issue of material fact by establishing that "there is an absence of evidence in support of the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). If the party seeking summary judgment demonstrates that there is no admissible evidence to support the nonmoving party's case, the burden shifts to the nonmoving party to identify specific facts showing that there is a genuine issue for trial. Lorraine v. Markel Am. Ins. Co., 241 F.R.D. 534, 535 (D. Md. 2007). However, the "mere existence of some alleged factual ...