Graham v. Famous Dave's of Am., Inc.
| Decision Date | 23 September 2020 |
| Docket Number | Civil Action No. DKC 19-0486 |
| Parties | CHRISTOPHER GRAHAM, on behalf of himself and all others similarly situated v. FAMOUS DAVE'S OF AMERICA, INC., and Doe Defendants 1-10 |
| Court | U.S. District Court — District of Maryland |
Plaintiff Christopher Graham, on his own behalf and on behalf of those similarly situated, filed this suit on February 19, 2019, against his former employer, Famous Dave's of America, Inc. ("Famous Dave's"). He alleges violations of the Fair Labor Standards Act of 1938, 29 U.S.C. §201 et seq., the Maryland Wage and Hour Law, Md.Code, Lab. & Empl. §3-401 et seq., the Maryland Wage Payment and Collection Law ("MWPCL"), Md.Code, Lab & Empl. §3-501 et seq., and Maryland common law. He has filed a motion to certify conditionally a collective action pursuant to the FLSA and a class action for a state law claim pursuant to Fed.R.Civ.P. 23. (ECF No. 26). Specifically, he seeks to "conditionally certify a collective [action] of all Tipped Employees employed by Defendant from February 19, 2016 to the present." (ECF No. 27, at 26). As to the proposed class, Plaintiff seeks certification of "[a]ll current and former Tipped Employees who have worked for Defendants in the State of Maryland during the statutory period covered by this Complaint and who do not opt-out of this action (the 'MD State Class')." (ECF No. 27, at 33).
In addition to the conditional certification motion, other pending motions are: a motion for partial summary judgment (ECF No. 34); a motion to strike a declaration (ECF No. 54); a motion for discovery sanctions (ECF No. 59), filed by Plaintiff; and seven motions to seal (ECF Nos. 31, 36, 40, 47, 51, 53, 57). The issues have been briefed, and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, the motion to certify conditionally a collective action will be granted in part and denied in part, the motion to certify a class will be granted in part and denied in part, the motion to strike will be denied, the motion for discovery sanctions will be denied, and the motions to seal will be denied in part and granted in part, with instructions.
Defendant Famous Dave's is a national restaurant chain offering barbeque style food with a principal place of business in Minnetonka, Minnesota. At the start of 2017, Famous Dave's owned and operated forty-four restaurants in various states. See United States Securities and Exchange Commission ("SEC"), Form 10-K For the Fiscal Year Ended December 31, 2017: Famous Dave's of America, Inc., http://ir.famousdaves.com/static-files/204acf3c-52a9-4757-9b6b-6e1c29625e61. By November 2017, however, Famous Dave's didnot own any stores in Maryland, having refranchised eight Company-owned restaurants, including four Maryland locations in Columbia, Frederick, Laurel and Waldorf as well as four Virginia locations. Id.1 It currently owns 30 locations in Minnesota, Wisconsin, Indiana, New York, New Jersey, Iowa, Michigan and Ohio, with multiple franchisees nationwide.
Mr. Graham is a resident of the state of Maryland and was employed by Famous Dave's as a server in the Waldorf location from January 27, 2016 to July 1, 2017. (ECF No. 37-3). Although he occasionally worked at large catering jobs for Famous Dave's at an over minimum wage rate, Mr. Graham typically worked and was paid at a server's cash wage2 plus tips from customers. This wage remained stagnant regardless of how many tips were received. He alleges that when he worked smaller catering jobs (typically half an hour or an hour long), he was also paid this cash wage. His typical shift started at 3:00 p.m. and ended around 12:30 a.m. Occasionally he would work the "early shift" on Saturday or Sunday mornings.
On the late shift, Mr. Graham was required to perform "break down" work at the restaurant's closing. This work included tasks like wiping down the tables, refilling salt and pepper shakers, wiping down serving stations, washing dishes, etc. At times he worked in excess of forty hours a week and alleges that he was "repeatedly" told to clock out and then finish his side or closing work. When working morning shifts, he was required to perform "prep" work that included making coffee, filing sauce bottles, filling ice buckets, etc. Mr. Graham asserts that, while performing these tasks, he was also clocked in under the "server" job code that paid a cash wage otherwise below minimum wage before tips.
Since January of 2016, Famous Dave's opted to utilize a "tip credit" for Plaintiff and other servers, hosts and bartenders employed by Famous Dave's ("Tipped Employees"), that would allow Famous Dave's to claim a percentage of the employees' tips as payment under Federal and State minimum wage laws in order to pay them a cash wage of less than the applicable minimum wage. Mr. Graham argues that Famous Dave's failed adequately to inform him and other Tipped Employees of the tip credit provisions as required by law, pointing to the "Tip Credit Notice" Famous Dave's used in Maryland (ECF No. 29). Particularly, he alleges there "was no difference in the Tip Credit Notice based on the state that arestaurant was located in," (ECF No. 27, at 14), although the uniformity of such forms by state is now in dispute.
Mr. Graham also alleges that Famous Dave's did not provide managers with any specific "instructions or training" on how to provide the tip credit notification, (ECF No. 26-3, at 14), but Famous Dave's asserts that such instructions were left to local managers. (ECF No. 37, at 8-10) (citing 37-1, at 6). For example, Demetrius Weeden ("Mr. Weeden"), a manager at Famous Dave's Waldorf location for the entirety of Mr. Graham's employment there, states that a manager or training server would explain Famous Dave's tip policy and tip credit to all newly hired Tipped Employees as standard practice at that location. (ECF No. 44-7, at 2). Although Plaintiff disputes that such training occurred as a practice, he argues that the notification was deficient for Tipped Employees even with such localized practices. Further, such deficiencies, Mr. Graham asserts, bar Famous Dave's from utilizing a tip credit at all, under state or federal law, making the cash wages paid to all Tipped Employees effectively below the minimum wage and thus illegal.
Further, Mr. Graham argues that Famous Dave's utilized, and forced him to take part in, an illegal tip pool when it included "expeditors" within the pool, despite being normally untipped employees. Similarly, he alleges that Famous Dave's illegally required Tipped Employees to use their own tips to pay out employerexpenses like "dine and dash" ("walkout") customers who leave without paying and other cash shortages. Mr. Graham points to two instances in which he was required to reimburse Famous Dave's out of his own tips for walk outs. Lastly, Plaintiff implies that the "side work" (untipped) work which Mr. Graham and others were required to do may have exceeded the maximum amount of untipped work that Tipped Employees are allowed to perform by law when being paid a cash wage based on a tip credit.
The declaration for Demetrius Weeden is relevant to the disposition of several motions and the motion to strike it will be considered first. Mr. Graham argues that he suffered "surprise and prejudice" at Famous Dave's submission of the declaration along with its opposition to the motion to certify. (ECF No. 37-2). Plaintiff seeks discovery sanctions as a result. Fed.R.Civ.P. 37(c)(1) aims to prevent such surprise or potential prejudice to a party by barring the use of evidence where a party "without substantial justification fails to disclose information required by [Fed.R.Civ.P.] 26(a) or 26(e)(1), or to amend a prior response to discovery as required by [Fed.R.Civ.P.] 26(e)(2)." S. Sts. Rack and Fixture, Inc. v. Sherwin-Williams Co., 318 F.3d 592, 595 (4th Cir. 2003). Fed.R.Civ.P. 26(a) requires a general duty to disclose during discovery, while 26(e)(1) provides a duty to supplement discovery responses and disclosures that are incorrector incomplete. Fed.R.Civ.P. 26(a),(e)(1). Only if a party fails one of these requirements does it have to show that the error was "harmless or substantially justified" according to the Southern States factors set out by Plaintiff. Wiseman v. Wal-Mart Stores, Inc., No. 1:16-cv-04030-SAG, 2017 WL 4162238 at * 4 (D.Md. 2017) (citing S. Sts., 318 F.3d at 596-97).
To start, as Famous Dave's points out, this motion is improperly framed as a discovery issue as it did not fail adequately to address the discovery requests made of it by Mr. Graham. (ECF No. 55, at 4). In the Requests for Admissions made to Famous Dave's, both Request 6 and Request 8 specifically ask whether Tipped Employees were "verbally" apprised of the specific amount of tip credit to be claimed by Defendant and of the fact that the tip credit could not exceed the amount of tips actually received by that employee. (ECF No. 26-5, at 5-6). In response to both questions, Famous Dave's explained that while it had no such policy verbally to inform employees of these things, "individual Famous Dave's managers may have verbally informed certain [] tipped employees regarding the policy." (ECF No. 26-5, at 6). In fact, Plaintiff's Interrogatory 18 asks for the identity of all managers or individuals "holding a management-level position" in Defendant's Maryland stores. (ECF No. 54-3, at 11). In response, Famous Dave's identified a list of such managers and their locations that clearly identified Mr. Weeden as a pastGeneral Manager of the Waldorf store. (ECF No. 56). This information was not news to Plaintiff as Mr. Graham himself identified Mr. Weeden as one of his managers while he was working at the Waldorf location. (ECF 44-4, at 5).
Presumably knowing all this, Plaintiff opts not to claim surprise over the identity of Mr. Weeden as a party with relevant...
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