United States District Court, D. Maryland
KRISTOFER L. PRUSIN, Plaintiff,
CANTON'S PEARLS, LLC, et al., Defendants.
K. Bredar, United States District Judge.
Prusin ("Plaintiff) filed suit against Canton's
Pearls, LLC, and Eric K. Hamilton ("Defendants"),
alleging 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 & Emp't §§ 3-401,
et seq., and the Maryland Wage Payments and
Collection Law ("MWPCL"), Md. Code Ann. Labor &
Emp't §§ 3-501, et seq. Now pending
before the Court is Defendants' Motion for Partial
Summary Judgment on statute of limitations grounds. (ECF No.
27.) The issues have been briefed (ECF Nos. 27, 71, &
77), and no hearing is required, Local Rule 105.6 (D. Md.
2016). For the reasons explained below, Defendants'
motion will be GRANTED IN PART and DENIED IN PART.
previously worked as a server at Canton Dockside, a
restaurant and crab house operated by Defendants. He was
employed in that position from April 2013 through October
2015. During that time, Canton Dockside was managed by Eric
Hamilton and Timothy Mitchell. Hamilton and Mitchell had
previously worked together as servers and shift managers at
another local restaurant, Seaside.
server, Plaintiff was a non-exempt employee within the
meaning of the FLSA and MWHL. Plaintiff was paid an hourly
wage of $3.63 plus voluntary tips and mandatory service
charges paid by customers. At the end of each shift he was given
one-hundred percent of his tips and service charges in cash
less the amount he was required to tip-out to bussers and
bartenders. Servers were required to give bussers thirteen
percent of their tips and to give bartenders five percent of
their beer, wine, and liquor sales. Plaintiff was not
compensated at a different rate for overtime hours-i.e.,
hours worked in excess of forty hours per week.
March 3, 2016, Plaintiff filed this lawsuit alleging that
Defendants violated the FLSA, the MWHL, and the MWPCL by
failing to pay him minimum and overtime wages. Furthermore,
he alleges that these violations were willful, thereby
entitling him to recover damages for the three year period
preceding the filing of this suit. Defendants filed a motion
for partial summary judgment pursuant to Federal Rule of
Civil Procedure 56 arguing that any violation (which they do
not concede) was not willful, and therefore Plaintiff's
FLSA claims should be subject to the default two-year statute
Standard for Summary Judgment
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). The burden is on the moving party to
demonstrate the absence of any genuine dispute of material
fact. Adickes v. S.H. Kress & Co., 398 U.S. 144,
157 (1970). 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). If sufficient evidence exists for a
reasonable jury to render a verdict in favor of the party
opposing the motion, then a genuine dispute of material fact
is present and summary judgment should be denied. See
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). 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
party opposing the motion. Scott v. Harris, 550 U.S.
372, 378 (2007); Iko v. Shreve, 535 F.3d 225, 230
(4th Cir. 2008).
alleges that Defendants willfully violated the FLSA thereby
entitling him to recover up to three years' of back pay.
Defendants contend that any violation was not willful because
they reasonably believed their pay structure was consistent
with the "industry standard" and therefore
presumably lawful. More specifically, Defendants assumed that
William Ottey (Canton Dockside's accountant and former
payroll processor) and Paychex, Inc., (a third-party payroll
processor used by Canton Dockside) would have informed them
of any potential noncompliance with wage laws. They also
contend that they reasonably relied on Defendant Hamilton and
Mr. Mitchell's past experience as servers at Seaside in
determining whether to pay servers at Canton Dockside
Defendants' alleged violations were willful, a three-year
statute of limitations applies to Plaintiffs claims; if not,
a two-year statute of limitations applies. See 29
U.S.C. § 255(a); see also, e.g., Desmond v. PNGI
Charles Town Gaming, LLC, 630 F.3d 351, 357 (4th Cir.
2011). "The question of whether an employer acted
willfully is generally a question of fact." Calderon
v. GEICO Gen. Ins. Co., 809 F.3d 111, 130 (4th Cir.
2015), cert. denied, 137 S.Ct. 53 (2016).
establish that Defendants' conduct was willful, Plaintiff
must show that they "either knew or showed reckless
disregard for the matter of whether [their] conduct was
prohibited by the [FLSA]." Desmond, 630 F.3d at
358 (second alteration in original) (quoting McLaughlin
v. Richland Shoe Co., 486 U.S. 128, 133 (1988)); see
also Calderon, 809 F.3d at 130 ("The burden to
establish willfulness rests with the employee.").
"Negligent conduct is insufficient to show
willfulness." Desmond, 630 F.3d at 358. Nor is
an employer's violation of the FLSA willful where it is
the result of a "completely good-faith but incorrect
assumption that a pay plan complied with the FLSA in all
respects." McLaughlin, 486 U.S. at 135. Indeed,
even where "an employer acts unreasonably, but
not recklessly, in determining its legal obligation" a
violation is not willful. Id. at 135 n.13 (emphasis
added); cf. Williams v. Md. Office Relocators, 485
F.Supp.2d 616, 621 (D. Md. 2007) (noting that willfulness is
a demanding standard, which generally requires "evidence
that the defendant had previously been investigated for FLSA
violations, or evidence of a scheme by the employer to
cover-up FLSA violations"), superseded by statute on
other grounds as recognized by Butler v. DirectSAT USA,
LLC, 307 F.R.D. 445, 450 (D. Md. 2015).
FLSA Minimum Wage Claims
arguendo that they violated the FLSA's minimum
wage provisions, Defendants contend that their conduct was
not willful because they reasonably believed that they were
in compliance with federal and state labor laws.
Specifically, Defendants contend that they assumed they were
in compliance with the law because "it was [their]
understanding . . . that $3.63 an hour across the board was
the industry standard." (ECF No. 27, Ex. B at 60-61,
Mitchell Dep., Corporate Designee.) Moreover, they relied on
third-party payroll processors to advise them of any errors
in their pay structure. (ECF No. 27, Ex. A ¶¶
17-20, Affidavit of Defendant Eric Hamilton.) Notably,