Crowell v. M St. Entm't

• Decision Date: 25 April 2023
• Docket Number: 3:21-cv-00517
• Parties: CONNOR CROWELL, on behalf of himself and all similarly situated employees, Plaintiff, v. M STREET ENTERTAINMENT, LLC et al., Defendants.
• Court: U.S. District Court — Middle District of Tennessee

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CONNOR CROWELL, on behalf of himself and all similarly situated employees, Plaintiff, v. M STREET ENTERTAINMENT, LLC et al., Defendants.

No. 3:21-cv-00517

United States District Court, M.D. Tennessee, Nashville Division

April 25, 2023

MEMORANDUM

ALETA A. TRAUGER UNITED STATES DISTRICT JUDGE

Before the court are (1) the plaintiffs' Motion for Partial Summary Judgment (Doc. No. 203) and (2) the defendants' Motion for Partial Summary Judgment (Doc. No. 208). To the extent possible, the court has considered the motions separately. As set forth below, both motions will be granted in part and denied in part.

I. BACKGROUND AND ISSUES

Plaintiff Connor Crowley filed this collective action on July 7, 2021 on his own behalf and that of a collective of similarly situated employees (collectively referred to herein as “plaintiffs”), asserting claims under the Fair Labor Standards Act (“FLSA”) and seeking to recover unpaid minimum wages and overtime. (Doc. No. 1.) With the court's leave, the plaintiffs recently filed the First Amended Collective Action Complaint (“FAC”), adding two new defendants: Chris Hyndman and MSEG, LLC. (Doc. No. 283.)^[1] The FAC is now the operative pleading. In the FAC the plaintiffs allege that the defendants collectively operate six restaurants in Nashville and collectively employ the plaintiffs as a single employer. In March 2021, this court conditionally certified a collective action comprised of “all current and former front-of-house employees who worked for the defendants at the Nashville, Tennessee restaurants Kayne Prime, Moto, Saint Anejo, Tavern Midtown, Virago, or Whiskey Kitchen in a non-managerial position” during the relevant time period. (Doc. No. 96.)

Most of the plaintiffs were, for at least some period of time, paid a cash hourly wage lower than $7.25 under the tip-credit provisions of the FLSA. Their FLSA claims are premised on allegations that the defendants: (1) failed to satisfy the requirements for utilizing the tip credit provisions of the FLSA to meet their minimum wage and overtime obligations, as a result of which the defendants are disqualified from claiming a tip credit; (2) required the plaintiffs to work off the clock by requiring them to study for menu tests and attend meetings; (3) required the plaintiffs to pay out of pocket for “tools of the trade,” including uniforms and equipment; (4) required tipped employees to spend more than 20% of each shift on non-tip-producing work while paying them less than the required minimum wage of $7.25 for the time spent doing that work; and (5) improperly calculated overtime pay. (FAC ¶¶ 3, 5, 82.) The plaintiffs also allege that the defendants' noncompliance with the FLSA was “willful” and that, as a result, the plaintiffs are entitled to the benefit of a three-year statute of limitations, as set forth in 29 U.S.C. § 255(a). (FAC ¶¶ 146-47, 155-56.)

The plaintiffs seek summary judgment on a number of discrete issues, but not on all of their claims. They seek judgment that:

(1) Chris Hyndman and MESG, LLC are both “employers” of the plaintiffs for purposes of their FLSA claims and, with the already named defendants, form a single employer under the FLSA;

(2) the defendants violate (or violated) the FLSA's tip-credit provision by not providing adequate notice to the plaintiffs of their intent to take a tip credit, by exerting improper control over the plaintiffs' tips, and by not permitting the plaintiffs to retain all of their tips;

(3) the defendants violate (or violated) the FLSA's overtime provisions and tipcredit provisions by failing to pay overtime compensation to the plaintiffs at the proper rate, which, the plaintiffs claim, also resulted in the defendants' claiming a greater tip credit than permitted by the FLSA;

(4) time the plaintiffs spent studying or preparing for menu tests or other tests related to their employment is compensable under the FLSA; and

(5) the plaintiffs are entitled to liquidated damages under the FLSA.

(See Doc. No. 204, at 1-2.) The defendants oppose summary judgment on all of these issues, except, as discussed below, the question of liquidated damages. They have filed a Response in opposition to the plaintiffs' motion (Doc. No. 246), a Response to the plaintiffs' Statement of Undisputed Material Facts (“plaintiffs' SUMF”) (Doc. No. 247), their own Statement of Additional Material Facts (“defendants' SAMF”) (Doc. No. 248), and a vast quantity of evidentiary material. The plaintiffs filed a Response to the defendants' SAMF (Doc. No. 263), a Reply to the defendants' Response to the plaintiffs' SUMF (Doc. No. 262), a Reply brief (Doc. No. 261), and their own evidentiary materials.

The defendants also seek summary judgment on a few discrete issues, including that:

(1) the defendants paid the plaintiffs above minimum wage from May 2020 through April 2021 and did not take a tip credit during that time period, so the plaintiffs' claims relating to the tip credit during this time fail as a matter of law;

(2) the claims of any plaintiffs who were only employed for a few weeks and were never paid less than the minimum wage should be dismissed altogether;

(3) the defendants never included non-tipped employees in the tip pool distributions at any of the restaurants; (4) the defendants did not unlawfully retain any portion of the gratuity included as part of customers' bills for large parties and private events;

(5) any FLSA violation by the defendants was not willful.

(See Doc. No. 214, passim.) The plaintiffs filed a Response opposing the motion (Doc. No. 242) and a Response to the defendants' Statement of Undisputed Material Facts (“defendants SUMF”) plus a Statement of Additional Facts (the “plaintiffs' SAMF”) (Doc. No. 243). The defendants filed a Response to the plaintiffs' SAMF (Doc. No. 266) and a Reply (Doc. No. 265). More evidentiary materials were filed in support of and in opposition to the defendants' motion.

In their Response to the defendants' motion, the plaintiffs concede that the defendants paid more than the minimum wage and did not take a tip credit from May 2020 through April 2021, but they otherwise maintain that the defendants are not entitled to summary judgment on the identified issues. (Doc. No. 242.)^[2]

II. RULE 56 STANDARD OF REVIEW

Summary judgment is appropriate where there is “no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “By its very terms, this standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original). In other words, even if genuine, a factual dispute that is irrelevant or unnecessary under applicable law is of no value in defeating a motion for summary judgment. On the other hand, “summary judgment will not lie if the dispute about a material fact is ‘genuine.'” Id.

“[A] fact is ‘material' within the meaning of Rule 56(a) if the dispute over it might affect the outcome of the lawsuit under the governing law.” O'Donnell v. City of Cleveland, 838 F.3d 718, 725 (6th Cir. 2016) (citing Anderson, 477 U.S. at 248). A dispute is “genuine” “if the evidence is such that a reasonable jury could return a verdict for the non-moving party.” Peeples v. City of Detroit, 891 F.3d 622, 630 (6th Cir. 2018).

The party bringing the summary judgment motion has the initial burden of identifying and citing specific portions of the record-including, inter alia, depositions, documents, affidavits, or declarations-that it believes demonstrate the absence of a genuine dispute over material facts. Pittman v. Experian Info. Sols., Inc., 901 F.3d 619, 627-28 (6th Cir. 2018); Fed.R.Civ.P. 56(c)(1)(A). If the non-moving party asserts that a fact is genuinely disputed, it generally “must support the assertion by . . . citing to particular parts of materials in the record.” Fed.R.Civ.P. 56(c)(1)(A); see also Pittman, 901 F.3d at 628 (“The nonmoving party ‘must set forth specific facts showing that there is a genuine issue for trial.'” (quoting Anderson, 477 U.S. at 250)). The court must view the facts and draw all reasonable inferences in favor of the non-moving party. Pittman, 901 F.3d at 628. Credibility judgments and the weighing of evidence are improper. Hostettler v. Coll. of Wooster, 895 F.3d 844, 852 (6th Cir. 2018).

The standard of review for cross-motions for summary judgment does not differ from the standard applied when only one party to the litigation has filed a summary judgment motion. Ferro Corp. v. Cookson Grp., PLC, 585 F.3d 946, 949 (6th Cir. 2009); Taft Broad. Co. v. United States, 929 F.2d 240, 241 (6th Cir. 1991). On cross-motions for summary judgment, “the court must evaluate each party's motion on its own merits, taking care in each instance to draw all reasonable inferences against the party whose motion is under consideration.” Taft, 929 F.2d at 248.

III. PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT

A. Liquidated Damages

In their Response to the Plaintiffs' Statement of Undisputed Material Facts, the defendants concede that they have stipulated that they have withdrawn the affirmative defense of good faith against the plaintiffs' claim for liquidated damages under the FLSA, asserted in their Answer, and that they will not rely on a defense of good faith.

Under the FLSA, successful claimants are entitled to “the payment of wages lost” as a result of the FLSA violations, plus “an additional equal amount as liquidated damages.” 29 U.S.C. § 216(b). A court “in its sound discretion” may reduce the amount of liquidated damages...