Rivera v. Mo's Fisherman Exch., Inc., Civil Action No. ELH-15-1427

Decision Date01 May 2018
Docket NumberCivil Action No. ELH-15-1427
PartiesERICK RIVERA et al., Plaintiffs, on behalf of themselves and others similarly situated, v. MO'S FISHERMAN EXCHANGE, INC. et al., Defendants.
CourtUnited States District Courts. 4th Circuit. United States District Court (Maryland)

ERICK RIVERA et al., Plaintiffs, on behalf of themselves and others similarly situated,
MO'S FISHERMAN EXCHANGE, INC. et al., Defendants.

Civil Action No. ELH-15-1427


May 1, 2018


In a Second Amended Complaint (ECF 108), plaintiffs Erick Rivera, Edwin Garcia Sosa, Pierre Etheridge, and Dallas Royer, on behalf of themselves and others similarly situated, filed a wage action against seven corporations that operate six restaurants at which plaintiffs previously worked: Mo's Fisherman's Exchange, Inc. (d/b/a Mo's and Mo's Towson); Mo's Pulaski Highway Corp. (d/b/a Mo's White Marsh, Mo's Seafood Restaurant, and Mo's); Mo's Crab and Pasta Factory, Inc. (d/b/a Mo's Crab & Pasta and Mo's Little Italy); Mo's Belair Seafood, Inc. (d/b/a Mo's Fisherman's Wharf and Mo's Inner Harbor);1 Mo's Fisherman's Ritchie Highway, Inc. (d/b/a Mo's Seafood Factory); Mo's Eastern Avenue, Inc. (d/b/a Mo's Seafood Factory Neighborhood Bar & Grill, and Mo's Neighborhood Bar & Grill); and Fisherman's Wharf Inner Harbor, Inc. (d/b/a Mo's Fisherman's Wharf and Mo's Inner Harbor). ECF 108, ¶¶ 12-18. Plaintiffs also sued defendant Mohammed S. Manocheh, who owns and operates each of the restaurants. Id. ¶¶ 19, 28. I shall refer to defendants collectively as "Mo's."

In particular, plaintiffs allege violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 et seq.; the Maryland Wage and Hour Law ("MWHL"), Md. Code (2016 Repl.

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Vol.), §§ 3-401 et seq. of the Labor and Employment Article ("L.E."); and the Maryland Wage Payment and Collection Law ("MWPCL"), L.E. §§ 3-501 et seq. ECF 108, ¶ 1. They assert, inter alia, that defendants willfully failed to pay plaintiffs the wages due and owing, including minimum wages and overtime wages. Id.

Plaintiffs subsequently moved to certify the FLSA claim as a collective action under 29 U.S.C. § 216(b). ECF 25. The motion was vigorously litigated. See ECF 28; ECF 33. By Memorandum Opinion (ECF 37) and Order (ECF 38) of June 23, 2016, I granted conditional certification.2 Thereafter, numerous individuals opted into the suit. The case has also been voluntarily dismissed as to many plaintiffs, including the original named plaintiff, Melvin Mendoza. See ECF 112.

Four motions are now pending; this Memorandum Opinion addresses three of them. Defendants have filed a motion to decertify the collective action, asserting that plaintiffs are not similarly situated. ECF 139. The motion is supported by a memorandum of law (ECF 139-2) (collectively, "Motion to Decertify") and voluminous exhibits. Plaintiffs oppose the Motion to Decertify (ECF 144) and have submitted many exhibits. Defendants replied. ECF 145.

Also pending are the parties' cross-motions for partial summary judgment. Plaintiffs moved for partial summary judgment on the issues of defendant Manocheh's personal liability under the FLSA and defendants' ability to claim a "tip credit" under the FLSA. ECF 140 (motion); ECF 140-1 (memorandum of law) (collectively, "Plaintiffs' Motion"). Plaintiffs' Motion is accompanied by thirty-four exhibits. Defendants have filed a combined opposition to Plaintiffs' Motion and a cross-motion for partial summary judgment on the issues of defendants' eligibility for the "tip credit" and plaintiffs' entitlement to overtime wages prior to July 1, 2014.

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ECF 142 ("Defendants' Motion"). Defendants' Motion is accompanied by thirty-seven exhibits. Plaintiffs oppose Defendants' Motion, and replied in support of their own, with several exhibits. ECF 146. Thereafter, defendants replied. ECF 147.

In addition, plaintiffs have filed a Motion for Sanctions for Spoliation of Evidence. ECF 132. That motion is not addressed in this Memorandum Opinion.

No hearing is necessary to resolve the three motions. See Local Rule 105.6. For the reasons that follow, I shall deny the Motion to Decertify; I shall grant Plaintiffs' Motion in part and deny it in part; and I shall grant Defendants' Motion in part and deny it in part.

I. Background
A. Factual and Procedural Background

Plaintiffs Melvin Mendoza, Erick Rivera, and Armando Portillo filed the initial Complaint on May 19, 2015. ECF 1. Defendants answered on November 3, 2015. ECF 13. The action was conditionally certified on June 22, 2016. ECF 38. An Amended Complaint was filed on March 21, 2017 (ECF 87), and the Second Amended Complaint was docketed July 19, 2017. ECF 108. Since then, quite a number of named and opt-in plaintiffs were voluntarily dismissed. See ECF 111, ECF 112, ECF 114.

According to plaintiffs, there are currently 30 plaintiffs in the case, all of whom are former employees of Mo's. See ECF 140-1 at 18. They were employed in various positions, including as servers, bartenders, busboys, food preparers, cooks, and dishwashers. See ECF 144 at 12, 12-13 n.29-34.3 The majority of plaintiffs received tips. Therefore, those individuals were paid at a below-minimum wage rate. See ECF 140-3 (defendants' responses to plaintiffs'

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interrogatories) at 6-8. However, they allege that their tips were frequently withheld or taken by defendants, either because defendants deducted a 3% credit card processing fee from their tips, or because plaintiffs were required to reimburse the restaurants for their customers' unpaid bills. See ECF 144 at 14, 14 n.41, 14 n.42.

Many plaintiffs claim unpaid overtime wages. They allege that during certain weeks they worked more than forty hours, but were not paid time-and-a-half wages for their overtime hours. See id. at 12, 12 n.27-28. In addition, plaintiffs allege that they were denied their straight-time wages for extended periods. See id. at 16, 16 n.52.4 For example, several plaintiffs have alleged that they were not paid any wages during their training periods, which often lasted multiple weeks. Id. at 16 n.53-54.

Additional facts are included in the Discussion.

B. Wage Statutes
1. The FLSA

Congress enacted the FLSA in 1938 "to protect all covered workers from substandard wages and oppressive working hours, 'labor conditions [that are] detrimental to the maintenance of the minimum standard of living necessary for health, efficiency and general well-being of workers.'" Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 739 (1981) (quoting 29 U.S.C. § 202(a)) (alterations in Barrentine); see Encino Motorcars, LLC v. Navarro, ___U.S.___, 136 S. Ct. 2117, 2121 (2016); Morrison v. Cnty. of Fairfax, Va., 826 F.3d 758, 761 (4th Cir. 2016); see also McFeeley v. Jackson Street Entertainment, LLC, 825 F.3d 235, 240 (4th Cir. 2016) ("Congress enacted the FLSA to protect 'the rights of those who toil, of those who

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sacrifice a full measure of their freedom and talents to the use and profit of others.'") (citations omitted).

Among its provisions, "the FLSA requires employers to pay overtime to covered employees who work more than 40 hours in a week." Encino Motorcars, LLC v. Navarro, ___ U.S. ___, 138 S. Ct. 1134, 1138 (2018) (citation omitted); see Perez v. Mortgage Bankers Ass'n, ___U.S.___, 135 S. Ct. 1199, 1204 (2015), Integrity Staffing Solutions, Inc. v. Busk, ___U.S.___, 135 S. Ct. 513, 516 (2014); see also Harbourt v. PPE Casino Resorts Md., LLC, 820 F.3d 655, 658 (4th Cir. 2016) ("The FLSA requires that employers pay employees the minimum hourly wage 'for all hours worked.'") (quoting Perez v. Mountaire Farms, Inc., 650 F.3d 350, 363 (4th Cir. 2011)). In particular, the FLSA has established the "general rule that employers must compensate each employee 'at a rate not less than one and one-half times the regular rate' for all overtime hours that an employee works." Darveau v. Detecon, Inc., 515 F.3d 334, 337 (4th Cir. 2008) (quoting 29 U.S.C. § 207(a)(1)).

Thus, the FLSA is now "best understood as the 'minimum wage/maximum hour law." Trejo v. Ryman Hospitality Properties, Inc., 795 F.3d 442, 446 (4th Cir. 2015) (citation omitted). As the Fourth Circuit said in Monahan v. Cnty. of Chesterfield, Va., 95 F.3d 1263, 1266-67 (4th Cir. 1996): "The two central themes of the FLSA are its minimum wage and overtime requirements. . . . The FLSA is clearly structured to provide workers with specific minimum protections against excessive work hours and substandard wages." (Internal quotations omitted).

2. State Statutes

Generally, the MWHL governs minimum wages and overtime. See L.E. §§ 3-413, 3-415, 3-420. It authorizes an employee to bring an action against an employer to recover unpaid wages due under the statute. L.E. § 3-437. See generally Friolo v. Frankel, 373 Md. 501, 819 A.2d

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354 (2005). The term "wage" is defined as "all compensation that is due to an employee for employment." L.E. § 3-401(d).

The MWPCL, also known as the Wage Act, "sets specific terms for payment mandated elsewhere in the Wage and Hour Law." Campusano v. Lusitano Construction, LLC, 208 Md. App. 29, 37, 56 A.2.3d 303, 308 (2012) (emphasis in Campusano). Like the MWHL, the MWPCL provides an employee with the right to bring a civil suit against an employer to recover unpaid wages. See L.E. § 3-507.2(a);5 Baltimore Harbor Charters, Ltd. v. Ayd, 365 Md. 366, 382-83, 780 A.2d. 303, 312-13 (2001); Mohiuddin v. Doctor's Billing & Management Solutions, Inc., 196 Md. App. 439, 446, 9 A.3d 859, 863 (2010) (citations omitted).

The Wage Act "protects employees from wrongful withholding of wages upon termination." Stevenson v. Branch Banking and Trust Corporation, t/a BB&T, 159 Md. App. 620, 635, 861 A.2d 735, 743 (2004) (citing L.E. § 3-505). "The principal purpose of the Act 'was to provide a vehicle for employees to collect, and an incentive for employers to pay, back wages.'" Medex v. McCabe, 372 Md. 28, 39, 811 A.2d 297, 304 (2002) (citation omitted). The Wage Act does not focus on "the amount of wages payable but rather the duty to pay whatever wages are due on a regular basis and to pay all that is due following termination of the employment." Friolo, 373 Md. at 513, 819 A.2d at...

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