Roman v. Guapos Iii, Inc.

Decision Date06 September 2013
Docket NumberCivil Action No. DKC 12–2821.
Citation970 F.Supp.2d 407
PartiesRaul Molina ROMAN, et al. v. GUAPOS III, INC., et al.
CourtU.S. District Court — District of Maryland


Michael K. Amster, Amster Law Firm LLC, Rockville, MD, Gregg Cohen Greenberg, The Zipin Law Firm LLC, Silver Spring, MD, for Plaintiffs.

Craig James Franco, Hans Paul Riede, Timothy M. McConville, Odin Feldman and Pittleman PC, Reston, VA, for Defendants.


DEBORAH K. CHASANOW, District Judge.

Presently pending and ready for review in this wage and hour law case are two motions filed by Defendants: (1) a motion to dismiss all claims against Defendants Hector Rincon; Hector Rincon, Jr.; Guapo's Bethesda, Inc.; Guapo's Restaurant, Inc.; Guapo's of Fair Lakes, Inc.; and Guapos of Virginia, Inc. (ECF No. 27),1 and (2) a motion for a protective order. (ECF No. 19). The issues have been fully briefed, and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, the motion to dismiss will be granted in part and denied in part. Defendants' motion for a protective order will be granted.

I. Background

The following facts are alleged in the second amended complaint. (ECF No. 25). There are five Guapo's restaurants, each separately incorporated and each a Defendant in this case. Plaintiffs are three individuals who either were or are employed currently as busboys or waiters at the Guapo's restaurant in Gaithersburg, Maryland, which is incorporated as “Guapos III, Inc. (Gaithersburg Guapo's”). ( Id. ¶¶ 49–51). Plaintiffs contend that they worked between forty (40) and seventy-seven (77) hours a week at the Gaithersburg Guapo's. ( Id. ¶¶ 49–51). They do not allege that they have worked at any other Guapo's. They allege that Guapo's paid the Plaintiff waiters $2.63 per hour for the first forty hours per week worked, which was subsequently amended to $3.63 per hour on or about November 1, 2012. Plaintiff busboys were paid $3.85 per hour for the first forty weeks worked. Plaintiffs allege that they were not paid any rate after the first forty hours. ( Id. ¶ ¶ 52–53). Additionally, Plaintiffs allege that Defendants took a “tip credit” from their wages without providing the proper notice. ( Id. ¶¶ 54–55). 2 Plaintiffs allege that these actions were taken by Defendants intentionally, willfully, and in bad faith. ( Id. ¶ 58).

Plaintiffs also name three individuals as Defendants: Hector Rincon, Hector Rincon, Jr., and Fidel Rincon. Plaintiffs allege that Hector Rincon is the President and primary owner of all Guapo's. ( Id. ¶ 10). Plaintiffs allege, on information and belief that Mr. Rincon, as the President and primary owner of all Guapo's, had the power to: hire, fire, suspend, and otherwise discipline Plaintiffs; control Plaintiffs' work schedule; and set and determine or had the power to set the rate and method of Plaintiffs' pay. ( Id. ¶ 10). Plaintiffs allege, on information and belief, that Defendant Hector Rincon, Jr. was the co-owner and manager of the Gaithersburg Guapo's. Mr. Rincon, Jr. allegedly had the same powers as his father in regards to the Gaithersburg Guapo's. ( Id. ¶ 11). Plaintiffs allege that Defendant Fidel Rincon was the manager of the Gaithersburg Guapo's. Fidel Rincon allegedly was in charge of the day-to-day operations at the Gaithersburg Guapo's, to include: supervising Plaintiffs; setting and controlling employees' work schedules; and setting and determining employees' rate and method of pay. ( Id. ¶ 12).

Plaintiffs contend that, despite their separate incorporation, all five Guapo's corporations are run as a “single enterprise” that is headed by Hector Rincon with assistance from various Rincon family members. The complaint alleges that all Guapo's serve substantially the same food and beverage under a common name and logo; advertise on a common website; use a common bookkeeper, payroll system, and employment model; and are represented by a common defense counsel. ( Id. ¶¶ 19, 22, 40).

II. Procedural History

On March 11, 2013, Plaintiffs filed their second amended complaint. (ECF No. 25). Plaintiffs contend that Defendants willfully, intentionally, and in bad faith failed to pay them the minimum wage and overtime for hours worked in violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and the Maryland Wage and Hour Law (“MWHL”), Md.Code, Lab. & Empl. § 3–401 et seq. They bring an FLSA collective action on behalf of themselves and “all current and former ‘tipped employees' of Defendants ... employed during the period September 20, 2009 through the present” who were subject to Defendants' policy of not compensating employees the minimum wage and not compensating them at the overtime rate for time worked beyond forty (40) hours a week. ( Id. ¶ 42). Plaintiffs also bring a class action for Defendants' MWHL violations on behalf of Defendants' “tipped employees” employed in Maryland. ( Id. ¶¶ 30–39). All Defendants except Fidel Rincon and Guapos III, Inc., moved to dismiss the claims against them for lack of subject matter jurisdiction and failure to state a claim. (ECF No. 27). Plaintiffs opposed the motion (ECF No. 29), and Defendants replied. (ECF No. 32). Defendants have also filed a motion for a protective order to preclude Plaintiffs from taking a deposition of Guapo's Bethesda, Inc.; Guapo's Restaurant, Inc.; Guapo's of Fair Lakes, Inc.; and Guapo's of Virginia, Inc. (ECF No. 19). Plaintiffs opposed the motion (ECF No. 26), and Defendants replied. (ECF No. 29).

III. Standard of Review

The arguments raised by Defendants in the motion to dismiss—lack of subject matter jurisdiction and failure to state a claim—implicate different standards of review. First, the motion to dismiss for lack of subject matter jurisdiction is governed by Federal Rule of Civil Procedure 12(b)(1). Generally, “questions of subject matter jurisdiction must be decided ‘first, because they concern the court's very power to hear the case.’ Owens–Illinois, Inc. v. Meade, 186 F.3d 435, 442 n. 4 (4th Cir.1999) ( quoting 2 James Wm. Moore, et al., Moore's Federal Practice § 12.30[1] (3d ed.1998)). The Plaintiff always bears the burden of proving that subject matter jurisdiction properly exists in federal court. See Evans v. B.F. Perkins Co., a Div. of Standex Int'l Corp., 166 F.3d 642, 647 (4th Cir.1999). In considering a Rule 12(b)(1) motion, the court “may consider evidence outside the pleadings” to help determine whether it has jurisdiction over the case before it. Richmond, Fredericksburg & Potomac R.R. Co. v. United States, 945 F.2d 765, 768 (4th Cir.1991); see also Evans, 166 F.3d at 647. The court should grant such a motion “only if the material jurisdictional facts are not in dispute and the moving party is entitled to prevail as a matter of law.” Richmond, 945 F.2d at 768.

Second, Defendants' arguments that the complaint fails to state a plausible claim of relief are governed by Federal Rule of Civil Procedure 12(b)(6). The purpose of a motion to dismiss under Rule 12(b)(6) is to test the sufficiency of the complaint. Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir.2006). A plaintiff's complaint need only satisfy the standard of Rule 8(a), which requires a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Rule 8(a)(2) still requires a ‘showing,’ rather than a blanket assertion, of entitlement to relief.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 n. 3, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). That showing must consist of more than “a formulaic recitation of the elements of a cause of action” or “naked assertion[s] devoid of further factual enhancement.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal citations omitted).

At this stage, all well-pleaded allegations in a complaint must be considered as true, Albright v. Oliver, 510 U.S. 266, 268, 114 S.Ct. 807, 127 L.Ed.2d 114 (1994), and all factual allegations must be construed in the light most favorable to the plaintiff. See Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir.1999) ( citing Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir.1993)). In evaluating the complaint, unsupported legal allegations need not be accepted. Revene v. Charles Cnty. Comm'rs, 882 F.2d 870, 873 (4th Cir.1989). Legal conclusions couched as factual allegations are insufficient, Iqbal, 556 U.S. at 678, 129 S.Ct. 1937, as are conclusory factual allegations devoid of any reference to actual events. United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir.1979).

IV. Analysis

Defendants contend that Plaintiffs have failed to establish subject matter jurisdictionbecause their complaint fails sufficiently to allege that Defendants were Plaintiffs' “employer” for purposes of the FLSA and MWHL. Plaintiffs respond that, despite the separate incorporation of each Guapo's restaurant, they have made sufficient allegations of common ownership and practices to constitute a “single employer” for FLSA purposes. Plaintiffs further contend that Hector Rincon and Hector Rincon, Jr. controlled enough of the characteristics of Plaintiffs' employment to constitute an “employer.” For the reasons that follow, the court will grant the motion to dismiss for Defendants Guapos Bethesda, Inc.; Guapo's Restaurant, Inc.; Guapo's of Fair Lakes, Inc.; and Guapo's Virginia, Inc. (“Corporate Defendants). The court will deny the motion to dismiss for Defendants Hector Rincon and Hector Rincon, Jr. (“Individual Defendants).

A. Corporate Defendants

The FLSA mandates payment of a minimum wage for covered employees and payment at the overtime rate for each hour worked in excess of forty per week. See Schultz v. Capital Intern. Sec. Inc., 466 F.3d 298, 304 (4th Cir.2006) ( citing29 U.S.C. §§ 206(a)(1), 207(a)(1)). The MWHL similarly requires that “employers pay the applicable minimum wage to their employees and, in [§§ 3–415...

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