Sanchez v. Roka Akor Chi. LLC
| Decision Date | 07 January 2016 |
| Docket Number | Case No. 14-cv-4645 |
| Parties | MANUEL SANCHEZ, on behalf of himself and all other persons similarly situated, known and unknown, Plaintiff, v. ROKA AKOR CHICAGO LLC, Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
MEMORANDUM OPINION & ORDER
Plaintiff Manuel Sanchez, for himself and on behalf of the class he seeks to represent ("Plaintiffs"), bring this lawsuit against Defendant Roka Akor Chicago LLC ("Roka Akor"), alleging that Roka Akor violated the minimum wage provisions of the Fair Labor Standards Act ("FLSA") and the Illinois Minimum Wage Law ("IMWL") by illegally taking a "tip credit" against its servers' minimum wages. Sanchez argues that Roka Akor forfeited its right to take a tip credit for two reasons: (1) it required its employees to distribute a portion of their tips to the Executive Chef and Head Chef, both of whom qualify as "employer[s]" under the FLSA and IMWL; and/or (2) it required its employees to distribute a portion of their tips to certain "kitchen" staff and the "polisher," both of whom are non-tipped employees. Dkt. 61. Plaintiffs have moved to certify a class as to their IMWL claim and for conditional certification for their FLSA claim. For the reasons discussed below, plaintiffs' motion for class certification is granted. Additionally, plaintiffs' FLSA claims may proceed as a collective action.
Roka Akor is a Japanese sushi and steak restaurant in Chicago, Illinois. Named Plaintiff Manuel Sanchez and Opt-in Plaintiffs Bradley Smith, Douglass Pfundstein, and Bulmaro Damaso worked as servers at Roka Akor during the relevant time period. Roka Akor treats many of its employees, including servers, as "tipped employees" under the tip-credit provisions of the FLSA and IMWL. Additionally, Roka Akor operates and facilitates a tip pool on behalf of its tipped employees. The participants in the tip pool vary somewhat between the lunch shift and the dinner shift. During the dinner shift, there are five categories of employees that share in the tip pool: (1) runner; (2) server assistant; (3) bar; (4) kitchen; and (5) polisher. During the lunch shift, bar service is typically lighter, so the bartender and polisher are not included in the tip-out. In addition, the runner serves as the server assistant during the lunch shift. The tip pool is managed through an Excel spreadsheet that is used to calculate a server's tip out for each shift.
Under the provisions of the FLSA and IMWL, Roka Akor is allowed to pay its tipped employees less than the prevailing minimum wage if the employees are able to make up the difference in tips. see 29 U.S.C. § 203(m); 820 ILCS § 105/4(c). The difference between the reduced wage and the minimum wage is called the "tip credit." In order to take the tip credit, each tipped employee must ordinarily retain all of his tips. see 29 U.S.C. § 203(m); 820 ILCS § 105/4(c). This restriction does not apply, however, if the tipped employees are participating in a valid tip pool. see 29 U.S.C. § 203(m); 820 ILCS § 105/4(c). To be valid under the FLSA and IMWL, the tip pool must only include employees who "customarily and regularly receive tips," and the employer "may not retain any of the employees' tips for any other purpose." Starr v. Chicago Cut Steakhouse, LLC, 75 F.Supp.3d 859, 865 (N.D. Ill. 2014). If an employerimproperly operates a tip pool, the employer cannot take the tip credit provision under either the FLSA or IMWL. Id.
Plaintiffs argue that the tip pool arrangement is improper for two reasons: (1) the Executive and Head Chef (part of the "kitchen" category) qualify as "employers" under the FLSA and IMWL and are therefore ineligible to participate in the tip pool; and (2) other kitchen staff members and the polisher are "non-tipped" employees because they do not have more than de minimis customer interaction. Roka Akor argues that the Executive and Head Chef are not employers and that the tipped kitchen staff and polisher qualify as tipped employees. Roka Akor also argues that assuming arguendo that the Executive and Head Chef are employers and/or the tipped kitchen staff and polisher do not qualify as tipped employees, the tip pool is still lawful because it was a voluntary tip pool.
Plaintiffs have moved for class certification on the IMWL tip pool claims and for conditional certification of the FLSA tip pool claims. As explained below, plaintiffs' motion for certification on the IMWL tip pool claims is granted and this court will skip conditional certification of the FLSA claim and allow it to proceed as a collective action.
The decision to certify a class action rests within the discretion of the district court. Mira v. Nuclear Measurements Corp., 107 F.3d 466, 471 (7th Cir. 1997). "[T]he party seeking class certification assumes the burden of demonstrating that certification is appropriate." Retired Chicago Police Ass'n v. City of Chicago, 7 F.3d 584, 596 (7th Cir. 1993). The named plaintiff bears the burden of showing by a preponderance of the evidence that all of Rule 23'srequirements are satisfied. Comcast Corp. v. Behrend, — U.S. —, 131 S.Ct. 2541, 2551 (2011). The requirements of Federal Rule of Civil Procedure are as follows: (1) the class is so numerous that joinder of all members is impracticable (numerosity); (2) there are questions of law or fact common to the class (commonality); (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class (typicality); and (4) the representative parties will fairly and adequately protect the interests of the class (adequacy). Fed. R. Civ. P. 23(a)
If plaintiffs meet this initial burden, they must then show that the proposed class satisfies one of the three requirements set forth in Rule 23(b). See Oshana v. Coca-Cola Co., 472 F.3d 506, 513 (7th Cir. 2006). Because plaintiffs seek money damages, they must meet the requirements of Rule 23(b)(3). Therefore, plaintiffs must show that "questions of law or fact common to the members of the class predominate over any questions affecting only individual members (predominance), and that a class action is superior to all other available methods for fair and efficient adjudication of the controversy (superiority)." Fed. R. Civ. P. 23(b)(3); see also Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 814 n.5 (7th Cir. 2012). In addition to Rule 23 requirements, plaintiffs must also provide a workable class definition by demonstrating that the members of the class are identifiable. See Oshana, 472 F.3d at 513.
The court "must make whatever factual and legal inquiries necessary to ensure that requirements for class certification are satisfied before deciding whether a class should be certified, even if those considerations overlap the merits of the case." Am. Honda Motor Co. v. Allen, 600 F.3d 813, 815 (7th Cir. 2010) (citing Szabo v. Bridgeport Machs., Inc., 249 F.3d 672, 676 (7th Cir. 2001)). Although Szabo stands for the proposition that the court is not free to accept all of the complaint's allegations when deciding whether to certify a class, the decision whether to certify a class is not based on a preliminary assessment of the ultimate merits of theplaintiffs' claims. Rahim v. Sheahan, 2001 WL 1263493, at *10 (N.D. Ill. Oct. 19, 2001). Rather, the preliminary inquiry is into the merits of those allegations that bear on the suitability of a case for class treatment under Rule 23(a) and (b). Id. To base class certification on a prediction of who will win the case would be at odds with Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (1974). Id. In the end, the court has "broad discretion to determine whether certification of a class-action lawsuit is appropriate." Ervin v. OS Restaurant Servs., Inc., 632 F.3d 971, 976 (7th Cir. 2011).
Plaintiffs advance class-action claims based on alleged violations of the Illinois Minimum Wage Law, 820 ILCS 105/1 et seq. Plaintiffs have proposed the following class under rule 23(b)(3):
All persons employed by Defendant as servers from June 19, 2011, to the conclusion of this action, who contributed a portion of their tips to Defendant's tip out arrangement.
To be certified, this class must meet the Rule 23(a) requirements of numerosity, commonality, typicality and adequacy, as well as the Rule 23(b) requirements of predominance and superiority. Starr v. Chicago Cut Steakhouse, LLC, 75 F.Supp.3d 859, 871 (N.D. Ill. 2014). The court will address each of these requirements in turn.
To meet the numerosity requirement, a plaintiff must show that the proposed class is "so numerous that joinder of all members is impracticable." Fed. R. Civ. P. 23(a)(1). "[A] plaintiff does not need to demonstrate the exact number of class members as long as a conclusion is apparent from good-faith estimates." Barragan v. Evanger's Dog and Cat Food Co., 259 F.R.D.330, 333 (N.D. Ill. 2009). Although there is no bright-line rule for exactly how many members are enough to establish a class, this district has found that that "[g]enerally, where class members number at least 40, joinder is considered impracticable and numerosity is satisfied." Oplchenski v. Parfums Givenchy, Inc., 254 F.R.D. 489, 495 (N.D. Ill. 2008); see also Pruitt v. City of Chicago, 472 F.3d 925, 926-27 (7th Cir. 2006) (); Swanson v. Am. Consumer Indus., Inc., 415 F.2d 1326, 1333 n.9 (7th Cir. 1969) ().
In its answer and affirmative defenses to plaintiff's first amended complaint, Roka Akor admitted to having employed at least 40 individuals as servers during the relevant time period. Dkt. 50, ¶ 30. However, Roka Akor argues that plaintiffs have not established that more than 40 servers "contributed a portion of...
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