Reich v. Chez Robert, Inc.

• Decision Date: 08 April 1993
• Docket Number: Civ. No. 87-2219 (AET).
• Citation: Reich v. Chez Robert, Inc., 821 F.Supp. 967 (D. N.J. 1993)
• Parties: Robert B. REICH, Secretary of Labor, United States Department of Labor, Plaintiff, v. CHEZ ROBERT, INC., and Robert Sliwowski, Individually and as Owner and President, Defendants.
• Court: U.S. District Court — District of New Jersey

821 F. Supp. 967

Robert B. REICH, Secretary of Labor, United States Department of Labor, Plaintiff, v. CHEZ ROBERT, INC., and Robert Sliwowski, Individually and as Owner and President, Defendants.

Civ. No. 87-2219 (AET).

United States District Court, D. New Jersey.

April 8, 1993.

As Amended April 12 and 22, 1993.

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Leslie P. Brody, U.S. Dept. of Labor, the Solicitor, New York City, for plaintiff.

Steven William Suflas, Archer & Greiner, P.C., Haddonfield, NJ, for defendants.

OPINION

ANNE E. THOMPSON, District Judge.

The Secretary of Labor (hereinafter "Secretary") filed a Complaint on June 4, 1987, alleging that Defendants had willfully violated the minimum wage, overtime and record keeping provisions of the Fair Labor Standards Act of 1938 (hereinafter "Act"). The Secretary seeks an injunction under Section 17 of the Act to restrain the withholding of unpaid minimum wage and overtime compensation. See 29 U.S.C.A. § 217 (West 1987). The Secretary also seeks liquidated damages under Section 16(c) of the Act equal in amount to the back wages due for the minimum wage and overtime violations. See 29 U.S.C.A. § 216(c) (West 1978).

Defendant Chez Robert, Inc. (hereinafter "Chez Robert") is a restaurant located in and organized under the laws of the State of New Jersey, having its principal place of business at 329 Haddon Avenue, Westmont, New Jersey. Defendant Robert Sliwowski has at all times material to this action been the chef, owner and chief operator of Chez Robert, exercising the regular management of the restaurant, including the hiring and firing of restaurant personnel.

During the trial of this matter, which occurred between March 23, 1992 and May 13, 1992, the parties presented extensive evidence to the Court of disputed employment facts and disparate numbers, calculations as to hours worked and wages paid. The Court's task was to determine the wide impact of this evidence and to make specific findings as to the identity of the employees, what jobs they held, what hours they worked and what earnings they accrued. This Memorandum and Order sets forth the Court's findings of fact and conclusions of law pursuant to Fed.R.Civ.P. 52(a).

I. The Trial

The former restaurant employees of Defendant Chez Robert were the major witnesses. Through their testimony it was established that Defendants largely failed to keep records as required by law. This was particularly true from 1984 to 1987. Further, their testimony established that Defendants failed to pay employees the proper overtime wage and failed to comply with other mandated components of the Fair Labor Standards Act. Although the testimony of the Secretary's witnesses clearly established a number of Act violations, the trial also revealed that no single remedy exists for determining the precise damages owed to each employee. No employee worked the same set hours per week, nor the same number of hours per day. Some were employed for a short period of time such as two weeks, some for a longer period of time such as two years. Some employees worked when the restaurant was busy, some worked when business was slow. Each employee's testimony differed based on his or her gender, experience, job title, and time of year that he or she was employed.

Twenty-six of Defendants' former employees testified as witnesses for the Secretary. The testimony of another two witnesses was admitted into the record pursuant to Fed. R.Evid. 801(d)(2)(D)¹. Twenty-five testified about their employment as waiters or waitresses at Chez Robert between the years of 1984 and 1987. These witnesses confirmed the undisputed fact that waiters and waitresses at Chez Robert were paid a wage rate of $2.01 per hour during the first forty hours of the work week. Witnesses further testified that many employees (particularly the male employees) worked in excess of forty hours per week, but that time cards would be removed once an employee reached forty hours and that no further records were kept for that week. Employees were compensated for their overtime work by an amount, usually between $10-$30, upon reporting their overtime hours to Defendant Sliwowski or his mother at the end of each overtime shift. Many employees testified that they did not receive any payment for their first day of work.

Testimony also revealed that while at work, employees were required to do various "side work." This included such tasks as setting the tables in the dining rooms, cleaning and polishing restaurant facilities, preparing food, and arranging flowers.

Finally, employees testified that men were required to wear a tuxedo and white tuxedo shirt, and that women were required to wear a black skirt and white shirt or apron. These uniforms had to be purchased and maintained by the employee, at his or her own expense. The Secretary claims that the expenses incurred by employees for uniforms and maintenance fees reduced many employees' wages below the lawful minimum rate for each workweek.

Defendants Chez Robert, Inc. and Robert Sliwowski now assert four major claims in their defense. First, Defendants rely on the tip credit provisions of Section 3(m) of the Act and claim that the required amount to be paid to tipped employees is 60% the applicable minimum wage, or $2.01 per hour. See 29 U.S.C.A. § 203(m) (1978).² Second, Defendants claim that records of employees' work hours were kept in the form of payroll reports, time cards, and tip sheets. Third, Defendants assert that uniforms were not a condition of employment and that almost all of the waiters and waitresses employed by Defendants already owned formal wear from previous employment. Fourth, Defendants claim that meals provided to employees for which they were not charged entitle Defendant to a meal credit pursuant to Section 3(m) of the Act.

II. General Findings of Fact

A. Burden of Proof

Under Section 16(b) of the Act, an employee bringing suit for unpaid minimum wages and unpaid overtime compensation bears the burden of proving by a preponderance of the evidence that he or she performed work for which he or she was not properly compensated. Anderson v. Mt. Clemens Pottery, 328 U.S. 680, 687, 66 S.Ct. 1187, 1192, 90 L.Ed. 1515 (1946), reh'g denied, 329 U.S. 822, 67 S.Ct. 25, 91 L.Ed. 699 (1946); McLaughlin v. DialAmerica Mktg., Inc., 716 F.Supp. 812, 823 (D.N.J.1989), aff'd sub nom. Dole v. DialAmerica, 935 F.2d 1281 (3d Cir.1991), cert. denied, ___ U.S. ___, 112 S.Ct. 583, 116 L.Ed.2d 608 (1991). When the employer has complied with the Act and has maintained proper and adequate records, the burden of the employee is discharged by securing production of those records. McLaughlin v. DialAmerica, 716 F.Supp. at 823. However, where an employer has failed to keep adequate records as required by Section 211 of the Act, the employee meets the required burden if he or she can prove that work was performed for which he or she did not receive proper compensation, and if the employee produces sufficient evidence to show the "amount and extent of that work as a matter of just and reasonable inference." Anderson, 328 U.S. at 687, 66 S.Ct. at 1192. If a higher standard of proof were required, an employee would be unfairly penalized, and it would "place a premium on an employer's failure to keep proper records in conformity with his or her statutory duty." See id.

The burden then shifts to the employer to negate the reasonableness of the inference to be drawn from the employee's evidence. McLaughlin v. DialAmerica, 716 F.Supp. at 823. If the employer is unable to meet this burden, the court may determine and award damages to the employees. Id. The district court may award damages even though the result can only be reached by approximation. Hodgson v. American Concrete Co., 471 F.2d 1183, 1186 (6th Cir.1973), cert. denied, 412 U.S. 949, 93 S.Ct. 3007, 37 L.Ed.2d 1001 (1973). Thus, the determination of what damages will be awarded is based upon the credibility of the evidence presented before the trial judge, including the weight to be accorded to the compliance officer's computations. Id. at 1186; see also McLaughlin v. DialAmerica, 716 F.Supp. at 824.

B. Uniform Expenses

Section 6(a) of the Act required employers to pay employees a minimum wage of $3.35 per hour during the applicable period of time. 29 U.S.C.A. § 206(a) (1978).³ The cost of uniforms and their laundering, where the nature of the business requires the employee to wear a uniform, is a benefit to the employer and must be deducted when computing wages. Marshall v. Krystal Co., 467 F.Supp. 9, 13 (E.D.Tenn.1978); 29 C.F.R. § 531.3(d) (1991).

At trial, almost all of the employees testified that they were told by either the person who hired them (usually Defendant Sliwowski) or another employee that they were required to wear tuxedos. As a result, almost all newly hired employees would purchase at least one outfit of formal attire including a tuxedo or skirt, tuxedo shirts, bow tie, and cummerbund. According to the testimony of the waiters, the full cost of the required outfit would range between $125.00 to over $300.00. Of the three female employees claiming uniform costs, two testified to spending $65.00 and $70.00, the third testified to having purchased a tuxedo outfit at a cost of $215.00. Replacement shirts and tuxedos were also purchased at a comparable or lesser cost.

Numerous waiters also testified that the cleanliness and condition of their tuxedos were criteria upon which they were assigned the more lucrative work areas of the restaurant. Waiters and waitresses were required to pay for the cost of dry-cleaning jackets, trousers and shirts. Some waiters testified that they spent as much as $25.00 to $30.00 per week maintaining and cleaning their clothes. Female employees testified to spending between $3.00 to $15.00 per week for clothing maintenance.

Defendant Sliwowski, while asserting that uniforms were not...