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Morataya v. Nancy's Kitchen of Silver Spring, Inc.

United States District Court, D. Maryland, Southern Division

May 20, 2016



          GEORGE J. HAZEL United States District Judge

         Plaintiff. Jessica Marlene Melgar Morataya ("Plaintiff or "Morataya"). filed this lawsuit against Defendants Nancy's Kitchen of Silver Spring. Inc. ("Nancy's Kitchen") and Roy G. Barreto (collectively, "Defendants") 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. [1]A two-day bench trial was conducted on October 26 and 27. 2015. For the reasons that follow, the Court enters judgment in favor of the Plaintiff and awards damages in the amount of $66.571.18.

         I. BACKGROUND

         Plaintiff initiated this action with the filing of a Complaint on June 27. 2013. ECF No. 1. and amended her Complaint on July 1. 2013, ECF No. 4. The Court has previously ruled on two motions for summary judgment, which narrowed the issues for trial. In its January 12. 2015 Memorandum Opinion, the Court ruled that: Defendant Vanda L. Barreto was not Plaintiffs employer and was thus dismissed from the case as a defendant: Nancy's Kitchen was properly classified as an enterprise engaged in commerce in 2012 and 2013 for purposes of the FLSA: Defendants were not entitled to "tip credit" as an offset against their minimum wage and overtime obligations under the FLSA; and. Roy Barreto was Plaintiffs employer, ECF No. 44. The Court's July 7. 2015 Memorandum Opinion further narrowed the "tip credit" issue and found that Defendants' payment methods, including the weekly cash payments, violated the FLSA's minimum wage requirements for tipped employees and that Defendants are. therefore, responsible for paying Plaintiff minimum, and potentially, overtime wages. ECF No. 56. The following issues were left to be resolved at trial: (1) the number of hours worked by Plaintiff during the relevant periods and the amount of wages paid by Defendants for the hours worked during those periods; (2) whether Plaintiff is entitled to liquidated damages under 29 U.S.C. § 216(b); and, (3) whether Plaintiff is entitled to enhanced damages under Md. Code Ann.. Empl. Art., § 3-507.1(b). The first issue is a fact-based determination and thus will be primarily addressed in the Court's Findings of Fact. The second and third issues require both fact-finding and conclusions of law and will be primarily addressed in the Court's Conclusions of Law.


         The Court heard testimony from both Plaintiff Morataya and Defendant Barreto. Defendants called two additional witnesses: Angelo Gonsalves. who presented information in chart form that had been provided to him by Barreto: and John Fernandes. a waiter at Nancy's Kitchen, who at the time of trial, remained employed by Barreto. Although the respective testimonies of Gonsalves and Fernandes were helpful to the Court, the core issues are found in the disputes between the testimony of Morataya and Barreto.

         Morataya testified that she began employment at Nancy's Kitchen on October 27. 2007 and worked there until July 7. 2013. She began as a busser before becoming a waitress on March 12, 2011. As a busser. she was paid $7.25 per hour. She testified that, as a busser. she worked between 58-64 hours per week, spread out over 6 or 7 days per week, but was only paid for 40 hours per week regardless of the hours she worked. When she became a waitress in March 2011. her hourly wage was changed to $4 per hour. Morataya was told by Barreto that she could keep her own tips when she was the only person working on the floor but. when she was not, the tips she received were to be placed in a bag so that they could be shared between her. Fernandes. and Barreto. She received pay envelopes once per week with cash, which constituted the weekly cash payment for tips received: and a paycheck in an envelope every other week, which included a mix of cash and checks for her hourly wages. The weekly cash payments for tips were paid at a flat rate of $45 per day regardless of the tips actually received."[2] That amount was raised to $50 per day on May 2. 2012. Her hours fluctuated during her employment there. From the time she became a waitress on March 12, 2011 until she began going to school on May 2. 2011. she worked approximately 63.25 hours per week. From the time she began school until the time she left her employment at Nancy's Kitchen on July 7. 2013, Morataya worked approximately 57 hours per week.

         Barreto testified that he has operated Nancy's Kitchen since 1998. As the owner, he does scheduling, payroll, deliveries, waiting, cooking, washing, and "whatever it takes to get the place going." He testified that he hired Morataya in 2007 and began paying her wages primarily in cash, at her request, in 2009. In 2010, he began paying her partially by cheek. He denied that Morataya's job classification ever changed from busser to waitress or server. In response to questioning from Morataya's counsel, he claimed that he did not "understand what is a waitress and what is a server." He testified that everyone, including him, did the same job. He claimed that it was difficult to teach Morataya how to perform new tasks because her English was limited. Barreto testified that he paid her $7.25 per hour in 2010 and that she was paid S8 per hour from 2011-2013. He stated that references to $4 an hour on the pay envelopes entered into evidence referred to a "half-hourly" rate because Morataya wanted to be paid half in cash and half in check. Although, in a sworn affidavit, he previously referred to an "hourly wage" of $4 per hour and to the weekly cash payments as "tips." at trial, he testified that the weekly cash payments were part of her hourly wages leading to a total of $8 per hour. He acknowledges that he did not have records regarding Morataya's hours worked, other than for 2013. and claims that they were originally kept on thermal paper, which faded and were eventually discarded.

         The Court does not credit Barreto's testimony. First. Barreto testified that he paid Morataya an hourly wage of $8 beginning in March 2011. which would be above minimum wage. Yet, no document, other than a chart prepared for the purposes of litigation, supported this assertion. To the contrary, however, the payment envelopes retained by Morataya. in which she received her wages, indicate clearly that she was being paid $4 or, at times. $4.15 per hour. The envelopes were filled out by Barreto's wife, who typically provided the payments to the employees. Specifically, a number of the envelopes stated the hours worked, followed by "$ 4.15" or "$ 4."' followed by a number that reflected the hours worked multiplied by 4.15 or 4. Other envelopes reflect a number of hours being subtracted by a smaller number, which the parties agreed was the portion of the total hours being paid by check, followed by "$4" and then a number equaling the number of hours not being paid by check multiplied by 4. The only other source of payment made by Nancy's Kitchen to Morataya was the weekly cash payments, which the Court has already found was payment for tips collected and not hourly wages. Thus, not only is Barreto's testimony regarding an $8 per hour payment not supported, it is directly refuted. The Court finds, therefore, that Barreto was untruthful on this point and merely attempted to reconstitute the weekly cash payment, which he had previously stated was payment for tips, as a part of her hourly wage, as a result of the Court's prior ruling that those weekly cash payments would not be allowed as an offset against wages owed because of his failure to comply with the FLSA requirements for payment of tips.

         Additionally, Barreto repeatedly denied that Morataya's duties ever changed significantly from when she was hired as a busser, that she never assumed the role of "server" or "waiter." and claimed to not understand what those words meant. The Court had the opportunity to observe Barreto's testimony and while there were times when it became apparent that there were limitations to his English, it is simply not credible that he did not know what these words mean. Indeed, in his deposition testimony, he repeatedly acknowledged that Morataya was a waitress.

         It is also significant that it is the Defendants' failure to keep and maintain records for all relevant years that requires the Court to rely on oral testimony to establish the hours worked. Although a limited number of payroll documents and time sheets were maintained and admitted into evidence, most were destroyed. An employer "has a duty to keep proper and accurate records of the employee's wages, hours, and other conditions and practices of employment." McFeeley v. Jackson St. Entm'l. LLC., 47 F.Supp.3d 260. 276 (D. Md. 2014) {citing Donovan v. Kentwood Dev. Co., Inc., 549 F.Supp. 480. 485 (D. Md. 1982)). Thus, while Plaintiff "carries the burden of proof in an FLSA claim for overtime wages." Randolph v. Powercomm Constr., Inc., 309 F.R.D, 349. 362 (D. Md. 1982))(citing Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680. 68687. 66 S.Ct 1187. 90 L.Ed. 1515 (1946)). the "burden is light, especially when the employer's records are inaccurate or inadequate, " id.

         Three witnesses. Morataya. Barreto. and Fernandes. testified to their recollection of Morataya's schedule. They differed by varying degrees. These differences are not unimportant as, for example, the difference between whether she was scheduled to begin at 7am or 8am on a given day, multiplied over the course of multiple years, significantly changes the damage calculation. As indicated, the Court does not credit Barreto's version of events and thus will not engage in a lengthy recitation of his recollection of her schedule, which was sometimes internally inconsistent. Femandes's recollection differed slightly from Morataya but the Court finds Morataya credible and finds her to be a more reliable source than Fernandes regarding her own schedule.

         For these reasons, the Court credits Morataya's testimony regarding her hours worked and payments received.[3] But even this finding leaves some uncertainty as there were, of course, periods of fluctuation. Indeed, as counsel for defense pointed out in closings, the relatively few timesheets available to the Court show fluctuations in hours and Morataya testified to occasional days off. albeit few. as well as days where she worked additional hours to provide coverage for Fernandes or Barreto. With these potential fluctuations in mind, the Court finds that Morataya worked, on average, 62 hours per week from the date she was hired on June 27. 2010 until she became a waitress on March 12. 2011: 63 hours per week between March 12, 2011 and May 2. 2011 when she began school; and 57 hours per week between May 2. 2011 and when her employment ended on July 13. 2013. The Court further finds that she only received payment for 40 hours per week from June 27. 2010 until March 12. 2011. Finally, the Court finds that from March 12. 2011 until June 9, 2013, she was paid $4 per hour and from June 9. 2013 until July 12. 2013, she was paid $4.15 per hour.

         III. ...

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