Pellon v. Business Representation Intern., Inc.

• Decision Date: 17 December 2007
• Docket Number: No. 06-22738-CIV.,06-22738-CIV.
• Parties: Jason A. PELLON, et al., Plaintiffs, v. BUSINESS REPRESENTATION INTERNATIONAL, INC. and Joseph C. Lorenzo, Defendants.
• Court: U.S. District Court — Southern District of Florida

528 F.Supp.2d 1306

Jason A. PELLON, et al., Plaintiffs, v. BUSINESS REPRESENTATION INTERNATIONAL, INC. and Joseph C. Lorenzo, Defendants.

No. 06-22738-CIV.

United States District Court, S.D. Florida, Miami Division.

December 17, 2007.

COPYRIGHT MATERIAL OMITTED

Jamie H. Zidell, K. David Kelly, Miami Beach, FL, for Plaintiffs.

Michael W. Casey, III, Mark J. Beutler, Epstein Becker & Green, Miami, FL, for Defendants.

ORDER GRANTING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT, DISMISSING PLAINTIFFS' REMAINING STATE LAW CLAIMS, AND DENYING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT

FEDERICO A. MORENO, District Judge.

Summary Judgment is GRANTED in favor of Defendants on the issue of alleged Fair Labor Standards Act tip credit violations resulting from: improper tip credit notice, Plaintiffs' performance of tasks outside of their prescribed job duties, and a constructive tip pooling arrangement resulting from a two dollar baggage service fee imposed by American Airlines. Furthermore, the Court will not exercise supplemental jurisdiction over Plaintiffs' state law contract claim pertaining to the service fee and any agreement between the parties regarding that fee, nor will it rule on any claim under the Florida minimum wage or living wage laws (except insofar as Plaintiffs rely on the latter to support its conception of proper skycap job duties under the FLSA). Therefore, those state law claims are DISMISSED with leave to refile in state court. Because the Court herein grants Defendants' Motion for Summary Judgment, Plaintiffs' Motion for Summary Judgment is DENIED.

I. BACKGROUND

In this suit, 53 members of the "skycap" vocation working at Miami International Airport allege federal minimum wage violations by their employers, Business Representation International, Inc. ("BRI") and Joseph C. Lorenzo.¹ In particular, Plaintiffs argue that Defendant BRI has claimed invalid tip credit against the minimum wage under the Fair Labor Standards Act ("FLSA"); Plaintiffs seek damages, including back pay at a full minimum wage rate, as a result. Plaintiffs and BRI serve American Airlines passengers. The primary duties of a skycap include meeting airline travelers at the curb and assisting them with their luggage. The parties disagree about what other tasks should be performed by skycaps as a part of their job duties. They also dispute whether Plaintiffs were adequately informed of Defendants' claim of a tip credit used toward Defendants' obligation to pay Plaintiffs minimum wage. Finally, Plaintiffs take issue with Defendants' implementation and alleged promise to share American Airlines' two dollar per bag service fee.

Plaintiffs filed their motion for Partial Summary Judgment as to Tip Credit and Liability Regarding Hourly Wages and for the Imposition of Liquidated Damages (D.E. No. 82) on July 23, 2007. Defendants filed their Motion, for Summary Judgment (D.E. No. 86) on July 24, 2007. Both motions have been fully briefed.

II SUMMARY JUDGMENT STANDARD

Summary judgment is authorized when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The burden of establishing the absence of a genuine issue of material fact lies with the moving party. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The burden then shifts to the party opposing the motion, who must set forth specific facts and establish the essential elements of his case on which he will bear the burden of proof at trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

Inferences are drawn in favor of the non-moving party, but such inferences "must, in every case, fall within the range of reasonable probability and not be so tenuous as to amount to speculation or conjecture." Thompson Everett, Inc. v. Nat'l Cable Advert., 57 F.3d 1317, 1323 (4th Cir.1995). The non-moving party "may not rest upon the mere allegations or denials of the adverse party's pleadings." Fed.R.Civ.P. 56(c). Rule 56(e) mandates that a party moved against respond with affidavits, depositions, or otherwise, in order to reflect that there are material facts which must be presented to a jury for resolution. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 159-61, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). Conclusory allegations without specific supporting facts have no probative value. Leigh v. Warner Bros., Inc., 212 F.3d 1210, 1217 (11th Cir. 2000) (citing Evers v. Gen. Motors Corp., 770 F.2d 984, 986 (11th Cir.1985)). A party resisting summary judgment "must meet the rnovant's affidavits with opposing affidavits setting forth specific facts to show why there is an issue for trial." Id. (internal citations omitted). Thus, where the record could not support a finding by the trier of fact for the non-movant, there is no genuine issue for trial and summary judgment is appropriate. Matsushita, 475 U.S. at 587, 106 S.Ct. 1348. Although there may be evidence somewhere within the non-moving party's submitted record that might create a genuine issue of material fact, "[t]he district judge is not required to comb the record to find some reason to deny a motion for summary judgment." Forsberg v. Pacific N.W. Bell Tel. Co., 840 F.2d 1409, 1418 (9th Cir. 1988).

III. ANALYSIS

A. Tip Credit Notice

The first issue the Court will address is whether BRI properly informed Plaintiffs that the company intended to take a tip credit against their wages under the FLSA. The Court holds that Plaintiffs were sufficiently informed.

One of the primary purposes of the FLSA is to protect employees from substandard wages. Prior to July 24, 2007, the federal minimum wage was $5.15. 29 U.S.C. § 206(a)(1). Employers were permitted to pay a reduced wage as low as $2.13 if the difference was made up in tips. The difference between the amount an employee must be paid under the minimum wage law and the amount directly paid to a tipped employee is commonly referred to as a "tip credit." See 29 U.S.C. § 203(m); 29 C.F.R. § 531.51. The tip credit is not an exemption; instead, it is set forth in the definition of the required minimum wage. The following requirements must be met to satisfy Section 203(m): (1) the tip credit must be claimed for qualified tipped employees; (2) the employees must receive proper notice of Section 203(m); and (3) all tips received by the employees must be retained by them. Elements (1) and (3) are not at issue in this case, so the question before the Court is the definition of proper notice under the tip credit provision.

Statutes are interpreted with the aim of giving effect to the drafters' intent, which initially entails examining the plain meaning of the statutory language. Anderson v. Cagle's, Inc., 488 F.3d 945, 955 (11th Cir.2007). To do this, courts must look at statutory words'"ordinary, contemporary, common meaning." Id. (internal citations omitted). The FLSA has both an "Exemptions" section, 29 U.S.C. § 213, and a "Definitions" section, 29 U.S.C. § 203. Exemptions are to be construed strictly against employers, but the Eleventh Circuit has held that that is not the case with Section 203(o), which addresses changing clothes under the definition of "Hours Worked." Id. at 955-56. If the Eleventh Circuit applies an ordinary meaning analysis to a term used under Section 203(o), then surely this Court must apply the same analysis to a term used under Section 203(m). Therefore, the Court will not adhere to other jurisdictions' imposition of a higher level of scrutiny on the definition of Section 203(m) because it would be contrary to Eleventh Circuit precedent.

Relevant to the case at hand, the Court must address what is required for employees to be "informed by the employer of the provisions of this subsection," namely the tip credit provision. 29 U.S.C. § 203(m). Essentially, an employer must inform its employees that it intends to treat tips as satisfying part of the employer's minimum wage obligations. Kilgore v. Outback Steakhouse of Florida, Inc., 160 F.3d 294, 298 (6th Cir.1998). "Employers do not have to `explain' the tip credit to employees, however; it is enough to `inform' them of it." Chan, v. Triple 8 Palace, Inc., No. 03 Civ. 6048(GEL), 2006 WL 851749, at *19 (S.D.N.Y.2006) (citing Kilgore, 160 F.3d at 298-300). To "inform" an employee requires less effort than it would to "explain" the tip credit to the employees. Kilgore, 160 F.3d 294, at 298. One court addressing skycaps in particular held that explaining to the plaintiffs that they would receive $2.13 per hour and the remainder of their pay would be in tips satisfied the notice requirement of 29 U.S.C. § 203(m). Hardwick v. Complete Skycap Servs., Inc., 04-CV-88 (D.Ariz. 2005), aff'd, 2007 WL 2050867 (9th Cir. July 13, 2007). Department of Labor regulations explicitly require employers to post "a notice explaining the [FLSA minimum wage provisions]." 29 C.F.R. § 516.4. Because it would defy logic to require the display of inadequate information regarding the minimum wage and employer tip credit, a prominently displayed poster using language approved by the Department of Labor to explain 29 U.S.C. § 203(m) is sufficient notice.

The Court follows Judge Patricia A. Seitz's decision in Thomas v. J.R. Eight, Inc. as it pertains to the sufficiency of tip credit notice. See No. 01-1067-CIV-SEITZ (S.D.Fla.2002) (D.E. No. 63). In Thomas, Judge Seitz ruled that verbal notice given to the plaintiff that he would be paid $2.13 plus tips, combined with a prominently displayed poster concerning the tip credit qualified as adequate notice and summary judgment was appropriate. The facts of this case are very similar regarding the issue of notice. The poster in Thomas was the same type as Defendants in this case have posted. Moreover, Plaintiffs were orally informed that their salary would be $2.15 (or more) plus tips and their paychecks informed them of their salary...