Rosell v. VMSB LLC, 20-20857-Civ-WILLIAMS/TORRES

CourtUnited States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Southern District of Florida
PartiesISRAEL ROSELL and ROBERTO GONZALEZ for themselves and on behalf of those similarly situated, Plaintiffs, v. VMSB, LLC d/b/a GIANNI'S and d/b/a CASA CASUARINA, a Florida Limited Liability Company, Defendant.
Decision Date22 June 2021
Docket Number20-20857-Civ-WILLIAMS/TORRES


ISRAEL ROSELL and ROBERTO GONZALEZ for themselves and on behalf of those similarly situated, Plaintiffs,

VMSB, LLC d/b/a GIANNI'S and d/b/a CASA CASUARINA, a Florida Limited Liability Company, Defendant.

No. 20-20857-Civ-WILLIAMS/TORRES

United States District Court, S.D. Florida

June 22, 2021



This matter is before the Court on Israel Rosell's and Robert Gonzalez's (collectively, “Plaintiffs”) and VMSB, LLC's (“Defendant”) cross-motions for summary judgment. [D.E. 112, 114]. Each party filed their respective responses [D.E. 122, 124] and replies. [D.E. 130, 132]. Therefore, the motions are now ripe for disposition. After careful consideration of the motions, responses, replies, relevant authorities, and for the reasons discussed below, Plaintiffs' motion for summary judgment should be DENIED and Defendant's motion for summary judgment should be GRANTED in part and DENIED in part.[1]



Plaintiffs are a group of current and former employees, seeking relief against Defendant for alleged violations of the minimum wage and overtime requirements provided under the Fair Labor Standards Act (“FLSA”) and the Florida Minimum Wage Act (“FMWA”).[2] In 2015, Defendant assumed control over operations of an up-scale high-volume restaurant on Miami Beach and compensated staff members with a combination of an hourly wage and a shared automatic fee.

With the use of the automatic fee, Defendant billed guests a specific percentage[3] of the total sales price for food and beverage and included the cost on every check regardless of the size of the guest party or the amount of the bill. However, in some circumstances, Defendant removed the fee depending on customer satisfaction. If, for example, a customer made an employee aware of a service complaint then management offered the guest a free drink or dessert, discounted an item from a bill, or removed the service charge entirely. Neither servers nor bartenders had the authority to remove a service charge. When employees presented a final check to customers, it included a separate line to include a discretionary tip. If customers left a gratuity, the employee who serviced the guest was under no obligation to share it with colleagues.


Plaintiffs now seek summary judgment because, although Defendant compensated them with a direct wage of $5.65/hour, that amount falls below the minimum wage requirements under state and federal law. Plaintiffs discount the automatic fee they received because that amount should be construed as a tip and not considered toward any of the employer's wage obligations. Defendant disagrees because the record shows that Plaintiffs received a salary of approximately $12.98/hour when the direct wage is combined with the service charge - an amount well above any statutory requirements. Defendant also claims that Plaintiffs' overtime claim fails because, as a retail or service establishment, an exemption applies to the No. of hours worked. Now that each party has filed their respective responses and replies, the cross-motions for summary judgment are now ripe for disposition.


The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a).

A party asserting that a fact cannot be or is genuinely disputed must support the assertion by: (A) citing to particular parts of materials in the record, including depositions, documents, electronically stored information affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions interrogatory answers, or other materials; or (B) showing that materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact

Fed. R. Civ. P. 56(c)(1). On summary judgment, the inferences to be drawn from the underlying facts must be viewed in the light most favorable to the party opposing


the motion. See Matsushita Electric Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 597 (1986) (quoting another source).

In opposing a motion for summary judgment, the nonmoving party may not rely solely on the pleadings, but must show by affidavits, depositions, answers to interrogatories, and admissions that specific facts exist demonstrating a genuine issue for trial. See Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323B24 (1986). The existence of a mere “scintilla” of evidence in support of the nonmovant's position is insufficient; there must be evidence on which the jury could reasonably find for the nonmovant. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). A court need not permit a case to go to a jury . . . when the inferences that are drawn from the evidence, or upon which the non-movant relies, are implausible. See Mize v. Jefferson City Bd. Of Educ., 93 F.3d 739, 743 (11th Cir. 1996) (citing Matsushita, 475 U.S. at 592-94).

At the summary judgment stage, the Court's function is not to “weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.” Anderson, 477 U.S. at 249. In making this determination, the Court must decide which issues are material. A material fact is one that might affect the outcome of the case. See Id. at 248 (“Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted.”). “Summary judgment will not lie if the dispute about a


material fact is genuine, that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id.


Both parties seek summary judgment on the question of whether Defendant violated the FLSA and the FMWA. Plaintiff says that Defendant is liable under both statutes because it failed to adequately compensate employees on an hourly basis and for the time worked more than forty hours per week. Plaintiffs also claim that Defendant seeks to avoid liability with the use of a service charge but that any reliance on this payment structure is meritless and cannot absolve Defendant of its requirements to comply with minimum wage and overtime laws. Plaintiff construes Defendant's automatic fee as a tip and outside the regular rate of pay for an employee because (1) customers had the option to refuse payment based on service complaints, and (2) when Defendant filed its federal income taxes, it failed to include this fee as part of its gross receipts. Because the evidence shows that Plaintiffs' compensation fell below statutory minimums and that employees worked overtime without just compensation, Plaintiffs ask that the Court enter partial summary judgment on liability as to all counts and limit trial to issues of willfulness and damages. Defendant opposes Plaintiffs' motion in all respects because the relief requested is both factually and legally incorrect. Defendant says that Plaintiffs' compensation exceeds all statutory requirements because, when the automatic fee


is added to the hourly wage, employees received at least $12.98/hour.[4] Defendant also claims that Plaintiffs' overtime claim fails because the restaurant is a service establishment, the rate of pay is greater than one and one-half times the minimum hourly rate, and more than half of any employee's compensation is from commissions on goods or services. Given this exemption, Defendant concludes that all of Plaintiffs' claims fail as a matter of law and that the Court should grant Defendant's motion for summary judgment.

A. General Principles of the FLSA and the FMWA

We begin with some basics about the FLSA and FMWA. Congress enacted the FLSA to protect all covered workers from substandard wages and oppressive working hours. See Barrenttine v. Arkensas-Best Freight Sys., 450 U.S. 728, 739 (1981); 29 U.S.C. § 202(a); see also Pellon v. Bus. Representation Int'l, Inc., 528 F.Supp.2d 1306, 1309 (S.D. Fla. 2007) (“One of the primary purposes of the FLSA is to protect employees from substandard wages, ” with the general requirement that employers compensate employees with a statutory minimum rate for work performed). The law was designed to ensure that any employee covered under the law would receive “[a] fair day's pay for a fair day's work[.]” Barrenttine, 450 U.S. at 739. In other words, “[b]y establishing a floor for wages and a ceiling for hours worked without overtime compensation, lawmakers attempted ‘to compensate those who labored in excess of the statutory maximum No. of hours for the wear and tear of extra work and to spread employment through inducing employers to


shorten hours because of the pressure of extra cost.”' Allen v. Bd. of Pub. Educ. for Bibb Cty., 495 F.3d 1306, 1311 (11th Cir. 2007) (quoting Bay Ridge Operating Co. v. Aaron, 334 U.S. 446, 460, (1948)). To that end, “the statute requires payment of minimum wages and overtime pay, 29 U.S.C § 206, § 207, and gives employees deprived of these payments the right to receive them. 29 U.S.C § 216(b); Maluvik v. Ameripark, LLC, 694 Fed.Appx. 705, 705 (11th Cir. 2017).; see also Lyon v. Whisman, 45 F.3d 758, 764 (3rd Cir. 1995) (“The substantive sections of the FLSA, narrowly focusing on the minimum wage rates and maximum working hours, bear out its limited purpose.”).

The FLSA obligations are simple for employees receiving a traditional hourly wage. Employers meet their FLSA obligations, in these situations, with direct compensation paying more than the statutory minimum-wage and overtime requirements. But, compliance with the FLSA is trickier in certain industries where...

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