Dorsey v. TGT Consulting, LLC, Civil No. CCB–10–92.

• Court: United States District Courts. 4th Circuit. United States District Court (Maryland)
• Citation: 888 F.Supp.2d 670
• Docket Number: Civil No. CCB–10–92.
• Parties: Craig DORSEY, et al. v. TGT CONSULTING, LLC, et al.
• Decision Date: 20 August 2012

888 F.Supp.2d 670

Craig DORSEY, et al.
v.
TGT CONSULTING, LLC, et al.

Civil No. CCB–10–92.

United States District Court,
D. Maryland.

Aug. 20, 2012.

[888 F.Supp.2d 673]

Howard Benjamin Hoffman, Attorney at Law, Rockville, MD, Bradford W. Warbasse, Attorney at Law, Towson, MD, Stephen J. Springer, Law Office of Stephen J. Springer, Philadelphia, PA, for Craig Dorsey, et al.

Ronald W. Taylor, Todd James Horn, Venable LLP, Baltimore, MD, Steven Lee Tiedemann, JPB Enterprises Inc., Columbia, MD, for TGT Consulting, LLC, et al.

MEMORANDUM
CATHERINE C. BLAKE, District Judge.

Several motions are now pending in this collective action brought under the Fair

[888 F.Supp.2d 674]

Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201–219. Lead plaintiff Craig Dorsey, a former server at the Greene Turtle bar and restaurant at BWI airport, brought this suit for minimum wage and overtime violations on behalf of himself and those similarly situated against The Greene Turtle Franchise Corporation, various related companies, and two executives of those companies. After limited discovery on the issue of the FLSA “tip credit” provision, 29 U.S.C. § 203(m), defendants have filed a motion for summary judgment or in the alternative for decertification of the collective action. Dorsey has filed a cross-motion for summary judgment, as well as a motion for sanctions and a motion in limine protesting evidence provided as part of defendants' summary judgment motion. The parties have each filed a motion to seal portions of their respective briefs and evidence. Dorsey has also filed a motion to strike affirmative defenses pled by the individual defendants and a motion to amend the scheduling order. The motions have been briefed and no hearing is necessary. See Local Rule 105.6. For the following reasons, plaintiffs' motion to seal and motion to strike affirmative defenses will be granted, and all of the other pending motions will be denied.

I. BACKGROUND

The Greene Turtle is a restaurant and bar franchise concept with establishments in Maryland, Delaware, Virginia and the District of Columbia. Defendant Greene Turtle Franchising Corporation (“GTFC”) owns a controlling share in some of the establishments, though not in all of them. Defendant Michael Sanford is the CEO of GFTC. Defendant Teri DeVito is the company's Executive Vice–President, and she oversees human resources for the corporate-owned Greene Turtle locations. Defendant TGT Consulting, LLC (“TGT”) is owned by GTFC and provides payroll services to the Greene Turtle restaurants.

On January 14, 2010, Dorsey brought suit against defendants, alleging various violations of the FLSA, including violations of the statute's minimum wage and overtime provisions. Dorsey amended his complaint several times to add additional plaintiffs and claims. On September 14, 2010, the court conditionally certified the case as an FLSA collective action and approved plaintiffs' request to mail class members a notice of their opportunity to opt into the case. Dorsey v. The Greene Turtle Franchising Corp., No. 10–92, 2010 WL 3655544 (D.Md. Sept. 14, 2010). Approximately sixty current and former employees filed opt-in consent forms, and all of them have been joined as named plaintiffs in the Fourth Amended Complaint. (ECF No. 116.)

On June 21, 2011, the parties agreed to a schedule directed at first addressing plaintiffs' claim that defendants did not properly apply the FLSA tip credit provision in 29 U.S.C. § 203(m). The plan limited discovery to three Greene Turtle locations, at Towson, Verizon Center, and BWI. The plaintiffs would be allowed to depose a corporate representative for defendants and no more than one manager from each of the three locations, and defendants would be allowed to depose no more than two plaintiffs for each of the three locations. The parties would also be allowed to take limited written discovery on the tip credit issue. (Letter to Counsel, June 30, 2011, ECF No. 114.)

During the discovery period that followed, the plaintiffs served document requests on defendants and obtained copies of employee handbooks and training materials. Plaintiffs also served interrogatories and noticed a Rule 30(b)(6) deposition of defendants, for which defendant DeVito was deposed. Plaintiffs did not depose any location managers. Defendants deposed and served document requests on

[888 F.Supp.2d 675]

five of the plaintiffs, Ashton Nicolas, Kristin Murphy, Anna Stair, Tanesha Neal, and Renata Solorzano.

After discovery had been completed, defendants filed the instant motion for summary judgment, or in the alternative for decertification. Defendants' motion included and referenced portions of the depositions taken and the affidavits of two location managers who had not been deposed, Mark Cammarata and Jared Lilly. Defendants also attached copies of the payroll records of plaintiff Nicolas and copies of the employment applications of plaintiffs Solorzano and Neal. Plaintiffs filed a response and cross-motion for summary judgment, referencing the discovery and also the affidavits of other plaintiffs who had not been deposed.

A. Standardized human resources procedures

The record indicates that the Greene Turtle locations overseen by DeVito followed standardized hiring and management procedures. Defendants summarized the process in the motion for summary judgment:

After filling out an employment application, applicants for server or bartender positions are interviewed by a manager at the restaurant where they applied. Upon their hire, each server must complete a training program to learn the menu, how to operate the “MICROS” food and beverage ordering and payment system, how to record work hours, and how to properly serve customers. In addition to classroom training, each server must “shadow” an experienced server for several shifts.

(Def.'s Mot. Summ. J. 7, ECF No. 137–2.)

It also appears from the record that tipped employees were uniformly paid using the tip credit provision of the FLSA, which allows businesses to pay less than the minimum wage to employees who receive tips, as long as certain requirements are met. See29 U.S.C. § 203(m) (2006). As discussed in more depth below, an employer may utilize the tip credit provision of the FLSA only where employees are informed by the employer of the relevant provisions of the FLSA and where the employees are allowed to retain all tips received, except for approved tip pooling policies. ( Id.) The parties disagree as to whether Greene Turtle met these requirements.

B. Evidence that defendants informed employees of the tip credit

According to DeVito's deposition testimony, Greene Turtle managers are trained to tell employees that “they will be receiving a sub minimum wage because they will be reporting their tips.” (DeVito Dep. 61, ECF No. 141–2.) ¹ This alleged policy does not appear to be documented in writing. Newly-hired Greene Turtle managers receive a large training binder, with between three hundred and four hundred pages of material, including material related to human resources. ( Id. at 32.) Managers also receive a checklist to fill out for each new hire. But defendants do not make any claim that either the manager's binder or the checklist contains any reference to a policy of informing new hires about how their wages be calculated.

[888 F.Supp.2d 676]

While there is no documentary evidence of the alleged policy, both Cammarata and Lilly testified in their affidavits that they advised new hires of the tip credit practice. For Cammarata, who worked as the general manager at the BWI location between April 2007 and November 2009 and as a district manager over the BWI and Towson locations from November 2009 to June 2010, this communication allegedly took place during the interview process:

During the interview process, we discussed how the applicant would be trained and paid if hired. In particular, we explained to the applicant that he or she would be required to undergo training, described the training, and explained how he or she would be assigned work. In addition, we discussed how he or she would be paid. Applicants applying for a tipped position were told that during the training period, they would be paid a training wage that was equal to the full minimum wage, but no tips. We explained, however, that once training was completed, their hourly wage would be reduced and that they would earn tips. In other words, applicants were told that their base wage rate would be reduced below the minimum wage after the training period and that they would make up the balance of their income through tips that they earned.

(Cammarata Aff. ¶ 6, ECF No. 137–11.) For Lilly, who worked as an assistant manager at the Verizon Center location from July 2009 until September 2010, the discussion allegedly took place subsequent to the interview:

On the first day of the hiring/training process, I would discuss with the new hire tax forms and rate of pay that the new hire would receive. For individuals hired into tipped positions, I would explain that during their training period, they would be paid a minimum wage equal to the full minimum wage, without tips. I also explained that when their training was complete, their wage would be reduced to the regular server wage (which I believe was $2.38 per hour during my tenure) and that the balance of their income would be from tips. The overwhelming majority of individuals with whom I spoke, in the neighborhood of 95%, were already aware that they would receive a wage lower than the minimum wage rate, which would be supplemented by tips, as a result of prior experience working in other restaurants.

(Lilly Aff. ¶ 7, ECF No. 137–12.) ² Plaintiffs, however, reference affidavits of Morris Bell, who was employed as an assistant manager at both the Verizon Center and the BWI location, and Jeremy Scarborough, who was employed as an assistant manager at the Verizon Center from the Fall of 2008 to February 2009. Bell testified that he had interviewed...