United States District Court, D. Maryland
ERICK RIVERA et al., Plaintiffs, on behalf of themselves and others similarly situated,
MO'S FISHERMAN EXCHANGE, INC. et al., Defendants.
Lipton Hollander United States District Judge.
Second Amended Complaint (ECF 108), plaintiffs Erick Rivera,
Edwin Garcia Sosa, Pierre Etheridge, and Dallas Royer, on
behalf of themselves and others similarly situated, filed a
wage action against seven corporations that operate six
restaurants at which plaintiffs previously worked: Mo's
Fisherman's Exchange, Inc. (d/b/a Mo's and Mo's
Towson); Mo's Pulaski Highway Corp. (d/b/a Mo's White
Marsh, Mo's Seafood Restaurant, and Mo's); Mo's
Crab and Pasta Factory, Inc. (d/b/a Mo's Crab & Pasta
and Mo's Little Italy); Mo's Belair Seafood, Inc.
(d/b/a Mo's Fisherman's Wharf and Mo's Inner
Harbor); Mo's Fisherman's Ritchie Highway,
Inc. (d/b/a Mo's Seafood Factory); Mo's Eastern
Avenue, Inc. (d/b/a Mo's Seafood Factory Neighborhood Bar
& Grill, and Mo's Neighborhood Bar & Grill); and
Fisherman's Wharf Inner Harbor, Inc. (d/b/a Mo's
Fisherman's Wharf and Mo's Inner Harbor). ECF 108,
¶¶ 12-18. Plaintiffs also sued defendant Mohammed
S. Manocheh, who owns and operates each of the restaurants.
Id. ¶¶ 19, 28. I shall refer to defendants
collectively as “Mo's.”
particular, plaintiffs allege violations of the Fair Labor
Standards Act (“FLSA”), 29 U.S.C. §§
201 et seq.; the Maryland Wage and Hour Law
(“MWHL”), Md. Code (2016 Repl. Vol.),
§§ 3-401 et seq. of the Labor and
Employment Article (“L.E.”); and the Maryland
Wage Payment and Collection Law (“MWPCL”), L.E.
§§ 3-501 et seq. ECF 108, ¶ 1. They
assert, inter alia, that defendants willfully failed
to pay plaintiffs the wages due and owing, including minimum
wages and overtime wages. Id.
subsequently moved to certify the FLSA claim as a collective
action under 29 U.S.C. § 216(b). ECF 25. The motion was
vigorously litigated. See ECF 28; ECF 33. By
Memorandum Opinion (ECF 37) and Order (ECF 38) of June 23,
2016, I granted conditional certification. Thereafter,
numerous individuals opted into the suit. The case has also
been voluntarily dismissed as to many plaintiffs, including
the original named plaintiff, Melvin Mendoza. See
motions are now pending; this Memorandum Opinion addresses
three of them. Defendants have filed a motion to decertify
the collective action, asserting that plaintiffs are not
similarly situated. ECF 139. The motion is supported by a
memorandum of law (ECF 139-2) (collectively, “Motion to
Decertify”) and voluminous exhibits. Plaintiffs oppose
the Motion to Decertify (ECF 144) and have submitted many
exhibits. Defendants replied. ECF 145.
pending are the parties' cross-motions for partial
summary judgment. Plaintiffs moved for partial summary
judgment on the issues of defendant Manocheh's personal
liability under the FLSA and defendants' ability to claim
a “tip credit” under the FLSA. ECF 140 (motion);
ECF 140-1 (memorandum of law) (collectively,
“Plaintiffs' Motion”). Plaintiffs' Motion
is accompanied by thirty-four exhibits. Defendants have filed
a combined opposition to Plaintiffs' Motion and a
cross-motion for partial summary judgment on the issues of
defendants' eligibility for the “tip credit”
and plaintiffs' entitlement to overtime wages prior to
July 1, 2014. ECF 142 (“Defendants' Motion”).
Defendants' Motion is accompanied by thirty-seven
exhibits. Plaintiffs oppose Defendants' Motion, and
replied in support of their own, with several exhibits. ECF
146. Thereafter, defendants replied. ECF 147.
addition, plaintiffs have filed a Motion for Sanctions for
Spoliation of Evidence. ECF 132. That motion is not addressed
in this Memorandum Opinion.
hearing is necessary to resolve the three motions.
See Local Rule 105.6. For the reasons that follow, I
shall deny the Motion to Decertify; I shall grant
Plaintiffs' Motion in part and deny it in part; and I
shall grant Defendants' Motion in part and deny it in
Factual and Procedural Background
Melvin Mendoza, Erick Rivera, and Armando Portillo filed the
initial Complaint on May 19, 2015. ECF 1. Defendants answered
on November 3, 2015. ECF 13. The action was conditionally
certified on June 22, 2016. ECF 38. An Amended Complaint was
filed on March 21, 2017 (ECF 87), and the Second Amended
Complaint was docketed July 19, 2017. ECF 108. Since then,
quite a number of named and opt-in plaintiffs were
voluntarily dismissed. See ECF 111, ECF 112, ECF
to plaintiffs, there are currently 30 plaintiffs in the case,
all of whom are former employees of Mo's. See
ECF 140-1 at 18. They were employed in various positions,
including as servers, bartenders, busboys, food preparers,
cooks, and dishwashers. See ECF 144 at 12, 12-13
n.29-34. The majority of plaintiffs received tips.
Therefore, those individuals were paid at a below-minimum
wage rate. See ECF 140-3 (defendants' responses
to plaintiffs' interrogatories) at 6-8. However, they
allege that their tips were frequently withheld or taken by
defendants, either because defendants deducted a 3% credit
card processing fee from their tips, or because plaintiffs
were required to reimburse the restaurants for their
customers' unpaid bills. See ECF 144 at 14, 14
n.41, 14 n.42.
plaintiffs claim unpaid overtime wages. They allege that
during certain weeks they worked more than forty hours, but
were not paid time-and-a-half wages for their overtime hours.
See Id. at 12, 12 n.27-28. In addition, plaintiffs
allege that they were denied their straight-time wages for
extended periods. See Id. at 16, 16
n.52. For example, several plaintiffs have
alleged that they were not paid any wages during their
training periods, which often lasted multiple weeks.
Id. at 16 n.53-54.
facts are included in the Discussion.
enacted the FLSA in 1938 “to protect all covered
workers from substandard wages and oppressive working hours,
‘labor conditions [that are] detrimental to the
maintenance of the minimum standard of living necessary for
health, efficiency and general well-being of
workers.'” Barrentine v. Arkansas-Best Freight
Sys., Inc., 450 U.S. 728, 739 (1981) (quoting 29 U.S.C.
§ 202(a)) (alterations in Barrentine); see
Encino Motorcars, LLC v. Navarro, ___ U.S.___, 136 S.Ct.
2117, 2121 (2016); Morrison v. Cnty. of Fairfax,
Va., 826 F.3d 758, 761 (4th Cir. 2016); see also
McFeeley v. Jackson Street Entertainment, LLC, 825 F.3d
235, 240 (4th Cir. 2016) (“Congress enacted the FLSA to
protect ‘the rights of those who toil, of those who
sacrifice a full measure of their freedom and talents to the
use and profit of others.'”) (citations omitted).
its provisions, “the FLSA requires employers to pay
overtime to covered employees who work more than 40 hours in
a week.” Encino Motorcars, LLC v. Navarro, ___
U.S.___, 138 S.Ct. 1134, 1138 (2018) (citation omitted);
see Perez v. Mortgage Bankers Ass'n, ___ U.S.
___, 135 S.Ct. 1199, 1204 (2015), Integrity Staffing
Solutions, Inc. v. Busk, ___ U.S. ___, 135 S.Ct. 513,
516 (2014); see also Harbourt v. PPE Casino Resorts Md.,
LLC, 820 F.3d 655, 658 (4th Cir. 2016) (“The FLSA
requires that employers pay employees the minimum hourly wage
‘for all hours worked.'”) (quoting Perez
v. Mountaire Farms, Inc., 650 F.3d 350, 363 (4th Cir.
2011)). In particular, the FLSA has established the
“general rule that employers must compensate each
employee ‘at a rate not less than one and one-half
times the regular rate' for all overtime hours that an
employee works.” Darveau v. Detecon, Inc., 515
F.3d 334, 337 (4th Cir. 2008) (quoting 29 U.S.C. §
the FLSA is now “best understood as the ‘minimum
wage/maximum hour law.” Trejo v. Ryman Hospitality
Properties, Inc., 795 F.3d 442, 446 (4th Cir. 2015)
(citation omitted). As the Fourth Circuit said in Monahan
v. Cnty. of Chesterfield, Va., 95 F.3d 1263, 1266-67
(4th Cir. 1996): “The two central themes of the FLSA
are its minimum wage and overtime requirements. . . . The
FLSA is clearly structured to provide workers with specific
minimum protections against excessive work hours and
substandard wages.” (Internal quotations omitted).
the MWHL governs minimum wages and overtime. See
L.E. §§ 3-413, 3-415, 3-420. It authorizes an
employee to bring an action against an employer to recover
unpaid wages due under the statute. L.E. § 3-437.
See generally Friolo v. Frankel, 373 Md. 501, 819
A.2d 354 (2005). The term “wage” is defined as
“all compensation that is due to an employee for
employment.” L.E. § 3-401(d).
MWPCL, also known as the Wage Act, “sets specific
terms for payment mandated elsewhere in the Wage and
Hour Law.” Campusano v. Lusitano Construction,
LLC, 208 Md.App. 29, 37, 56 A.2.3d 303, 308 (2012)
(emphasis in Campusano). Like the MWHL, the MWPCL
provides an employee with the right to bring a civil suit
against an employer to recover unpaid wages. See
L.E. § 3-507.2(a); Baltimore Harbor Charters, Ltd. v.
Ayd, 365 Md. 366, 382-83, 780 A.2d. 303, 312-13 (2001);
Mohiuddin v. Doctor's Billing & Management
Solutions, Inc., 196 Md.App. 439, 446, 9 A.3d 859, 863
(2010) (citations omitted).
Wage Act “protects employees from wrongful withholding
of wages upon termination.” Stevenson v. Branch
Banking and Trust Corporation, t/a BB&T, 159 Md.App.
620, 635, 861 A.2d 735, 743 (2004) (citing L.E. §
3-505). “The principal purpose of the Act ‘was to
provide a vehicle for employees to collect, and an incentive
for employers to pay, back wages.'” Medex v.
McCabe, 372 Md. 28, 39, 811 A.2d 297, 304 (2002)
(citation omitted). The Wage Act does not focus on “the
amount of wages payable but rather the duty to pay whatever
wages are due on a regular basis and to pay all that is due
following termination of the employment.”
Friolo, 373 Md. at 513, 819 A.2d at 362.
term “wage” includes commissions, bonuses when
they are compensation for services and not a gratuity, and
work-related incentive fees. L.E. § 3-501(c)(2); see
Medex, 372 Md. at 35-37, 811 A.2d at 302;
Whiting-Turner v. Fitzpatrick, 366 Md. 295, 306; 783
A.2d 667, 673 (2001). If “a court finds that an
employer withheld the wages of an employee in violation of
[the MWPCL] and not as a result of a bona fide dispute, the
court may award the employee an amount not exceeding 3 times
the wage, and reasonable counsel fees and other costs.”
L.E. § 3-507.1(b).
Motion to Decertify
the FLSA, plaintiffs may maintain a collective action against
their employer for violations under the act pursuant to 29
U.S.C. § 216(b).” Quinteros v. Sparkle
Cleaning, Inc., 532 F.Supp.2d 762. 771 (D. Md. 2008).
Section 216(b) states, in pertinent part:
An action . . . may be maintained against any employer . . .
in any Federal or State court of competent jurisdiction by
any one or more employees for and in behalf of himself or
themselves and other employees similarly situated. No.
employee shall be a party plaintiff to any such action unless
he gives his consent in writing to become such a party and
such consent is filed in the court in which such action is
§ 216(b) “establishes an ‘opt-in'
scheme, whereby potential plaintiffs must affirmatively
notify the court of their intentions to be a party to the
suit.” Quinteros, 532 F.Supp.2d at 771.
to § 216(b), “[d]eterminations of the
appropriateness of conditional collective action
certification and court-facilitated notice are left to the
court's discretion.” Syrja v. Westat,
Inc., 756 F.Supp.2d 682, 686 (D. Md. 2010). Generally,
when assessing whether to certify a collective action
pursuant to the FLSA, district courts in this circuit adhere
to a two-stage process. See, e.g., Butler v.
DirectSAT USA, LLC, 876 F.Supp.2d 560, 566 (D. Md.
2012); see also Flores v. Unity Disposal & Recycling,
LLC, GJH-15-196, 2015 WL 1523018, at *2-3 (D. Md. Apr.
2, 2015); Rawls v. Augustine Home Health Care, Inc.,
244 F.R.D. 298, 300 (D. Md. 2007).
the first stage, commonly referred to as the notice stage,
the court makes a threshold determination of whether the
plaintiffs have demonstrated that potential class members are
similarly situated, such that court-facilitated notice to
putative class members would be appropriate.”
Butler, 876 F.Supp.2d at 566 (internal quotations
omitted). The second stage is sometimes referred to as the
decertification stage. Id. “In the second
stage, following the conclusion of discovery, the court
engages in a more stringent inquiry to determine whether the
plaintiff class is [in fact] similarly situated in accordance
with the requirements of § 216, and renders a final
decision regarding the propriety of proceeding as a
collective action.” Syrja, 756 F.Supp.2d at
686 (internal quotations and citations omitted) (alterations
in Syrja). The Motion to Decertify pertains to the
plaintiffs bear the burden of showing that their claims are
‘similarly situated, ' but courts have ruled that
‘similarly situated' need not mean
‘identical.'” Gionfriddo v. Jason Zink,
LLC, 769 F.Supp.2d 880, 886 (D. Md. 2011) (citation
omitted). “Essentially, collective action members are
similarly situated when there are ‘issues common to the
proposed class that are central to the disposition of the
FLSA claims and that such common issues can be substantially
adjudicated without consideration of facts unique or
particularized as to each class member.'”
Randolph v. PowerComm Const, Inc., 309 F.R.D. 349,
368 (D. Md. 2015) (quoting LeFleur v. Dollar Tree Stores,
Inc., 30 F.Supp.3d 463, 468 (E.D. Va. 2014)).
courts have “broad discretion to determine whether a
collective action is an appropriate means for prosecuting an
FLSA cause of action.” Gionfriddo, 769
F.Supp.2d at 886. In making this determination, “courts
have considered three factors: (1) the disparate factual and
employment settings of the individual plaintiffs; (2) the
various defenses available to defendant which appear to be
individual to each plaintiff; and (3) fairness and procedural
considerations.” Randolph, 309 F.R.D. at 368
(citation and internal quotation marks omitted).
argue that all three of these factors point toward
decertification. See ECF 139-2.
Factual and Employment Settings of the Plaintiffs
maintain that plaintiffs cannot prove they were
'"victims of a common policy or plan that violated
the law'” because, in essence, plaintiffs'
allegations rest on multiple, partially overlapping
violations of the FLSA. See ECF 139-2 at 11 (quoting
Marroquin v. Canales, 236 F.R.D. 257, 260 (D. Md.
2006)). According to defendants, plaintiffs “cannot
prove that Mo's used a company-wide policy of failing to
advise Plaintiffs of their tip credit rights . . . because a
large number of Plaintiffs admitted they . . . were properly
advised of their tip credit rights.” ECF 139-2 at
12-13. It appears that, of the 25 tipped-employee plaintiffs,
nine were timely informed of their tip credit rights, six
plaintiffs were belatedly informed of their tip credit
rights, and ten never received notice at all. See
ECF 144 at 13-14.
defendants claim that there is “no evidence that
Mo's implemented or used a company-wide policy of
refusing to pay overtime to employees, ” because
“several Plaintiffs . . . were paid overtime wages, at
least during certain weeks, and seven Plaintiffs are not even
pursuing unpaid overtime claims.” ECF 139-2 at 13.
Defendants also assert that many of plaintiffs' overtime
claims are contradicted by defendants' records for their
Point-of-Sale system. Id. at 14.
to defendants, there could not have been a company-wide
policy of not paying straight wages for non-overtime hours
because “less than half of the Plaintiffs claim that
they were not paid their straight wages for several weeks or
months” (ECF 139-2 at 16), and not all plaintiffs (25
of 30) claim that they were not paid their straight wages for
the hours they worked. Id. at 14. Defendants make
the same argument as to claims based on tip misappropriation
and deductions, emphasizing: “Plaintiffs tell different
stories about how Defendants violated the law, but none of
the allegations apply to more than a handful of
Plaintiffs.” Id. at 16-17.
nimbly deflect these assertions, observing: “If
pursuing multiple FLSA claims were a bar to collective
liability, Defendants would be rewarded for violating the law
in numerous ways.” ECF 144 at 7. Nor does the fact that
not all plaintiffs join in all claims require
decertification. “If common questions predominate, the
plaintiffs may be similarly situated even though the recovery
of any given plaintiff may be determined by only a subset of
those common questions.” Alvarez v. City of
Chicago, 605 F.3d 445, 449 (7th Cir. 2010).
core, this case concerns three issues: the denial of overtime
pay; the misappropriation of plaintiffs' tips; and the
failure to pay a minimum wage. Plaintiffs have presented
evidence that, of the 24 plaintiffs who allegedly worked more
than forty hours in a week, all of them were denied at least
some of their overtime pay. See ECF 144 at 19, 19
n.59. Defendants cannot defeat this claim by citing a few
instances in which overtime was paid. Rather, as plaintiffs
point out, “[i]f some Plaintiffs did in fact receive
overtime pay sporadically, their recovery will be reduced by
that amount.” ECF 144 at 25.
also present evidence that defendants systematically (if not
universally) underpaid plaintiffs by (1) improperly taking a
tip credit to reduce their hourly wage, in violation of 29
U.S.C. § 203(m) (either through the failure to inform
plaintiffs of their tip credit rights or by unlawfully
retaining portions of their tips) (see ECF 144 at
27-30), or (2) simply failing to pay wages earned for hours
worked. Id. at 31-32. The former set of alleged
minimum wage violations allegedly affected 24 of the 25