Gionfriddo v. Jason Zink Llc

• Decision Date: 11 March 2011
• Docket Number: Civil Action No. RDB–09–1733.
• Parties: Tara GIONFRIDDO, et al., Plaintiffs,v.JASON ZINK, LLC, et al., Defendants.
• Court: U.S. District Court — District of Massachusetts

769 F.Supp.2d 880

17 Wage & Hour Cas.2d (BNA) 882

Tara GIONFRIDDO, et al., Plaintiffs,

v.JASON ZINK, LLC, et al., Defendants.

Civil Action No. RDB–09–1733.

United States District Court, D. Maryland.

March 11, 2011.

Gregg Cohen Greenberg, Philip B. Zipin, The Zipin Law Firm LLC, Silver Spring, MD, for Plaintiffs.Howard Benjamin Hoffman, Howard B. Hoffman Esquire Attorney at Law, Rockville, MD, for Defendants.

MEMORANDUM OPINION

RICHARD D. BENNETT, District Judge.

On July 1, 2009, Plaintiffs Tara Gionfriddo, Eric Gilbert, Aaron Zetzer, and Astrid Garrison filed this collective action against Defendants Jason Zink, Jason Zink, LLC, and JR Zink, Inc. for alleged unlawful wage and hour practices pursuant to the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq., the Maryland Wage and Hour Law, Md. Code Ann. Lab. & Empl. §§ 3–401 et seq. , and the Maryland Wage Payment and Collection Law, Md. Code Ann. Lab. & Empl. §§ 3–501 et seq. Currently pending before this Court is Plaintiffs' Motion for Partial Summary Judgment (ECF No. 45), Defendants' Cross Motion for Summary Judgment (ECF No. 51), Defendants' Motion to Decertify the collective action (ECF No. 61), and Defendants' Motion to Dismiss Plaintiffs' Second Amended Complaint, or in the alternative, Defendants' Motion for Summary Judgment (ECF No. 66). This Court has reviewed the record, as well as the pleadings and exhibits, and conducted a hearing on February 9, 2011, pursuant to Local Rule 105.6 (D. Md. 2010). The fundamental question in this case is whether the FLSA expressly prohibits an owner-employer from participating in employee tip pools. This is an issue of first impression in this District and in the Fourth Circuit. For the reasons that follow, this Court follows the clear weight of authority and holds that an owner-employer may not participate in such tip pools. Accordingly, for the reasons stated below, Plaintiffs' Motion for Partial Summary Judgment (ECF No. 45) is GRANTED in part and DENIED in part; Defendants' Cross Motion for Summary Judgment (ECF No. 51) is GRANTED in part and DENIED in part; Defendants' Motion to Decertify (ECF No. 61) is GRANTED; and Defendants' Motion to Dismiss Plaintiffs' Second Amended Complaint (ECF No. 66) is DISMISSED as moot.

FACTUAL AND PROCEDURAL BACKGROUND

Defendant Jason Zink is the owner and operator of two taverns, the Don't Know Tavern, and the No Idea Tavern, which are both located in the Federal Hill neighborhood of Baltimore City. More specifically, Mr. Zink is the sole owner of both JR Zink, Inc., a Maryland corporation, that owns the No Idea Tavern (“No Idea”) and Jason Zink, LLC, a Maryland limited liability company that owns the Don't Know Tavern (“Don't Know”). JR Zink, Inc. and Jason Zink, LLC, in conjunction with Mr. Zink are the Defendants in this case (collectively, “Defendants”). Mr. Zink possesses management authority and “generally supervises and controls both Don't Know and No Idea” (collectively, “Taverns”). Defs.' Cross Mot. Summ. J. at 13, ECF No. 51–1. In addition to operating and supervising the Taverns, Mr. Zink works as a bartender, serving drinks to and conversing with the patrons, at the two establishments. In conjunction with his working as a bartender, Mr. Zink receives tips from tavern patrons and contributes those tips to a collective “tip pool” that is subsequently divided up among the bartenders according to a formula that takes into account the number of hours worked by each bartender. Mr. Zink, in what appears to be his primary mode of compensation from his tavern businesses, shares in the tip pool with the other bartenders according to the formula. Although Mr. Zink has received modest K–1 distributions from his tavern businesses, he does not take a salary from either entity.

The named Plaintiffs are four former employees of No Idea and Don't Know. With the exception of Astrid Garrison, who was employed as a sous chef at Don't Know, the Plaintiffs are bartenders who formerly worked at Don't Know and No Idea. Plaintiffs allege that while they were employed by No Idea and Don't Know, Defendants unlawfully deprived them of wages under federal and state law. Specifically, Plaintiffs allege that Defendants violated the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201 et seq., the Maryland Wage and Hour Law (“MWHL”), Md. Code Ann. Lab. & Empl. §§ 3–401 et seq. , and the Maryland Wage Payment and Collection Law (“MWPCL”), Md. Code Ann. Lab. & Empl. §§ 3–501 et seq.¹ On February 14, 2010, Brian Emar joined the lawsuit as an opt-in Plaintiff, and on February 19, 2009 filed a consent form pursuant to 29 U.S.C. § 216(b) of the FLSA.

At the crux of Plaintiffs' case is their contention that, although Mr. Zink frequently worked alongside the bartender Plaintiffs and contributed to the collective tip pool, he was prohibited from retaining any of those tips as a result of his status as the owner of the Taverns. Essentially, Plaintiffs argue that because Mr. Zink is the owner of the Taverns, he is precluded from receiving tips from the tip pool while simultaneously taking a “tip credit” under the FLSA and the MWHL.²

Because Defendants have filed a motion to decertify the collective action on the ground that some of the plaintiffs are not similarly situated, a brief discussion of the facts and circumstances surrounding each individual plaintiff's employment with the Taverns is warranted.

Plaintiffs Tara Gionfriddo, Eric Gilbert, and Aaron Zetzer are all former bartenders at the Taverns. Their claims are identical—they argue that they were unlawfully deprived of wages under federal and state law as a result of Mr. Zink's participation in the tip pool—that is, because Mr. Zink is the owner of the Taverns, he is prohibited from taking any share of the money collected in the tip pool. Plaintiff Brian Emar, who joined this action as an opt-in plaintiff, is a former bartender at both No Idea and Don't Know. He claims that during the time he worked at the Taverns, he received no wages at all, aside from the tips he retained after the tip pool was divided amongst the bartenders. Plaintiff Astrid Garrison's claims are substantially different from the other bartender plaintiffs. As previously mentioned, she worked as a sous chef at Don't Know. As a sous chef, she did not participate in any tip pooling arrangement, but rather, was paid wages in the form of checks and cash. Garrison's claims center on the argument that she did not receive proper overtime and regular wage compensation.

Because the makeup of this collective action will substantially affect this Court's analysis, Defendants' Motion to Decertify will be addressed first, with the cross motions for summary judgment discussed second.

MOTION TO DECERTIFY—STANDARD OF REVIEW

Collective action lawsuits brought under the Fair Labor Standards Act have been described as “a unique species of group litigation” that differs from the more common class action suits brought under Rule 23 of the Federal Rules of Civil Procedure. See 7B Charles A. Wright, Arthur R. Miller & Mary K. Kane, Federal Practice and Procedure § 1807 (3d ed. 2005). Under the FLSA, a plaintiff may bring an action on behalf of himself and other employees so long as the other employees are “similarly situated” to the plaintiff. 29 U.S.C. § 216(b) (A FLSA collective 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.”). As this Court has previously indicated, a two-step inquiry is employed in deciding whether to certify a collective action under the FLSA:

First, upon a minimal evidentiary showing that a plaintiff can meet the substantive requirements of 29 U.S.C. § 216(b), the plaintiff may proceed with a collective action on a provisional basis. Second, following discovery, the court engages in a more stringent inquiry to determine whether the plaintiff class is “similarly situated” in accordance with the requirements of § 216, and renders a final decision regarding the propriety of proceeding as a collective action.

Rawls v. Augustine Home Health Care, Inc., 244 F.R.D. 298, 300 (D.Md.2007) (internal citations omitted). The second, more “stringent” phase of collective action certification under the FLSA is often prompted by a defendant's filing of a motion to decertify, and is often referred to as the “decertification stage.” See Syrja v. Westat, Inc., 756 F.Supp.2d 682, 686, 1956 WL 95230, at *3 (D.Md. Nov. 2, 2010).

Generally, plaintiffs bear the burden of showing that their claims are “similarly situated,” but courts have ruled that “similarly situated” need not mean “identical.” See, e.g., Hipp v. Liberty Nat. Life Ins. Co., 252 F.3d 1208, 1217 (11th Cir.2001). Nevertheless, district courts have broad discretion to determine whether a collective action is an appropriate means for prosecuting an FLSA cause of action. Id. at 1219; see also Choimbol v. Fairfield Resorts, Inc., 475 F.Supp.2d 557, 563 (E.D.Va.2006); 7B Charles A. Wright, Arthur R. Miller & Mary K. Kane, Federal Practice and Procedure § 1807, n. 44 (3d ed. 2005). In making this determination, courts typically consider 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.” Rawls, 244 F.R.D. at 300 (quoting Thiessen v. Gen. Elec. Capital Corp., 996 F.Supp. 1071, 1081 (D.Kan.1998)).

MOTION TO DECERTIFY—ANALYSIS

As a preliminary matter, it should be noted that this Court has never entered an order conditionally certifying this collective action, and the Plaintiffs have never explicitly requested such a certification. However, on October 29, 2009, Plaintiffs filed a Motion to Facilitate Identification and Notification of Similarly–Situated Employees. See ECF...