Scalia v. Sofia & Gicelle, Inc.

Decision Date30 December 2020
Docket NumberCivil Action No. TDC-19-0934
PartiesEUGENE SCALIA, SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR, Plaintiff, v. SOFIA & GICELLE, INC., d/b/a Fast Eddie's, Sports & Billiards, a corporation, and MARIA AGUILAR, individually, and as President and owner of the aforementioned corporation, Defendants.
CourtU.S. District Court — District of Maryland

The Secretary of Labor and the United States Department of Labor (collectively, "DOL") have filed this action to enjoin Defendants Sofia & Gicelle, Inc. d/b/a Fast Eddie's, Sports & Billiards ("Fast Eddie's") and Maria Aguilar, the president and owner of Fast Eddie's, from violating the recordkeeping, minimum wage, and overtime pay provisions of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201-219 (2018), and for judgment against Defendants for back wages and liquidated damages due to employees of Defendants pursuant to the FLSA. Presently pending before the Court are DOL's Motion for Summary Judgment and Defendants' Cross Motion for Partial Summary Judgment. The Court held a hearing on both Motions on December 14, 2020. For the reasons set forth below, DOL's Motion will be GRANTED IN PART and DENIED IN PART, and Defendants' Cross Motion will be DENIED.


As relevant here, the FLSA applies certain minimum wage and overtime pay requirements upon employers whose employees are "engaged in commerce or in the production of goods for commerce," or who are "employed in an enterprise engaged in commerce or in the production of goods for commerce." See 29 U.S.C. §§ 206(a), 207(a). Fast Eddie's is a full-service restaurant, night club, bar, and pool hall located in Suitland, Maryland. Since at least October 22, 2015, Fast Eddie's has been owned by Sofia & Gicelle, Inc., a Maryland corporation, and Aguilar has been the sole owner and president of the company and the manager of the day-to-day operations of Fast Eddie's. The parties do not dispute that since October 22, 2015, Fast Eddie's has been an "enterprise engaged in commerce" as defined in 29 U.S.C. § 203(s)(1), including that it has had employees "handling, selling, or otherwise working on goods or materials that have been moved in or produced for" interstate commerce and has had an annual gross volume of sales or business of not less than $500,000. Id. The parties also do not dispute that both Fast Eddie's and Aguilar are "employers" as defined in 29 U.S.C. § 203(d). From October 22, 2015 to February 1, 2020 ("the relevant time period"), Fast Eddie's employed bartenders and servers, collectively referred to as "service staff," and cooks and dishwashers, collectively referred to as "kitchen staff." Compl. ¶ 8(a), ECF No. 1. DOL has brought this FLSA action for unpaid minimum wages and overtime pay on behalf of 52 current or former Fast Eddie's employees, as listed in the Second Revised Schedule A to the Complaint ("Schedule A"). See Joint Record ("J.R") 16-17, ECF Nos. 52-1, 53-1, 54-1, 55-1, 56-1, 57-1, 57-2, 57-3.

I. Recordkeeping

During the relevant time period, Fast Eddie's maintained certain records relating to employees' hours and pay. Specifically, Defendants retained computerized "Employee Time Card and Job Detail" records ("the Timecard Records") for select time periods from March 2016 throughthe end of 2019. The Timecard Records provide the employees' names, positions, and the times they clocked in and out each day, as well as the total number of hours worked by each employee in a given week and the pay corresponding to those hours. These records also contain notations for the number of hours worked in a given week beyond the standard 40-hour work week.

The available Timecard Records are very limited. No Timecard Records are available for the time periods from October 22, 2015 to March 5, 2018 except for limited records for (1) one two-week pay period from March 21, 2016 to April 3, 2016, for which there are only partial entries for a cook and a server, with detailed information for only some of the hours worked during the pay period; and (2) a pay period from January 23, 2017 to February 5, 2017, for which there are only partial records for a cook, three servers, and a dishwasher. Though the Timecard Records from March 2018 through the end of 2019 generally appear to be complete for the identified employees, not all of the personnel on the Fast Eddie's payroll have Timecard Records. For instance, Anthoni Morales, a cook, appears on the company's payroll from January 2017 to May 2018, but there are no Timecard Records for Morales during this time period.

Defendants also have a running Payroll Check Register covering the time period from May 2016 to February 2020. These records list, for each paycheck issued, the name of the employee, the date of issue, the gross and actual pay amounts, the number of pay hours, and an entry listing tip amounts for service staff. For kitchen staff who make only hourly wages, the tip amount entries are empty.

Finally, Defendants possess some reports, for unspecified years, entitled "Employee Sales and Tip Totals by Revenue Center" that reflect sales made by bartenders and servers to customers, listing the numbers of guests and checks, and in some instances referencing the amount and percentage of tips related to those transactions. They also have limited records from January andFebruary 2020 listing hours and tip percentages for certain employees. Aguilar acknowledges, however, that she did not retain any records specifically listing the amounts of tips and commissions received by bartenders and servers.

II. Minimum Wages

At Fast Eddie's, wages are paid out differently based on whether the employee is a member of the service staff or the kitchen staff. Service staff receive a base hourly wage, tips, and commissions for the sale of alcoholic beverages, but they pay back part of their tips as a cleaning fee. DOL alleges that service staff received less than the federal minimum wage of $7.25 per hour and, in some instances, less than the federal minimum base wage for tipped employees of $2.13 per hour. According to Defendants' two accountants, Adriana Leon and Martha Moscoso of AM Accounting Services (collectively, "the accountants"), service staff usually received base pay of $3.63 per hour, the minimum base wage for tipped employees in Prince George's County, Maryland, in which Fast Eddie's is located. Several bartenders and servers have reported an hourly wage of $3.63 per hour, with at least one server reporting that it was $2.75 per hour. Although some bartenders and servers worked between 30 to 50 hours per week, for the two-week pay periods covered by the paychecks issued from May 6, 2016 to December 23, 2016, service staff consistently received their base hourly wage either for only 20 hours for a full two-week pay period—averaging to 10 hours per week—or for 20 hours per week, even when they actually worked more hours per week. One service staff employee has reported not being paid any hourly wage for a 25 to 30 hour work week. As a result, during this time period, the effective hourly wage for many service staff employees, based on actual hours worked, was lower than $3.63 per hour and, in some instances, below the federal minimum wage for tipped employees of $2.13 perhour. Moreover, some of the bartenders and servers have asserted that on certain nights, their hourly wages combined with their tips did not add up to the federal minimum wage of $7.25.

According to Aguilar, service staff have been paid a base wage of approximately $3.75 to $3.83 per hour and received their tips, which included cash and credit card tips paid in cash to the employee daily. Although Aguilar asserts that bartenders and servers earn between $30 and $70 per hour when wages, tips, and commissions on alcoholic beverages are combined, she does not know precisely how much the bartenders and servers make in tips, keeps records of the amount of tips for only one month before discarding them, and thus does not report the amount of tips to the accountants for payroll purposes. Rather, Aguilar submits to the accountants the number of hours each bartender or server has worked in a given pay period, and the accountant calculates and records the amount in tips that the bartender or server would need to earn in order to meet the federal minimum wage of $7.25. Finally, at the end of every shift, each bartender or server is required to pay $5.00 to $10.00 from the employee's earned tips back to the restaurant to pay for cleaning of the restaurant by the dishwashers. According to Aguilar, these payments are voluntary.

As for the non-tipped kitchen staff, DOL alleges that some of these employees received a standard biweekly salary regardless of the number of hours worked, or worked more hours than the number for which they were paid, resulting in an effective hourly wage below the federal minimum wage. Aguilar asserts that Fast Eddie's has paid kitchen staff the full local minimum wage of between $11.50 to $12.00 an hour.

III. Overtime Pay

DOL has alleged that 11 members of Fast Eddie's service staff and kitchen staff worked overtime but were not properly compensated for such work. Multiple bartenders and servers have reported working over 40 hours per week on at least one occasion without receiving overtime pay.Based on the Payroll Check Register reflecting that from May until December 2016, Defendants regularly paid service staff for only 20 hours during a two-week pay period, such employees who worked more than 40 hours in a week during that time period did not receive any pay for overtime hours. At least one server has reported that although he was paid for overtime hours worked, he received only the standard hourly rate, not the overtime premium rate.

According to Defendants, the assigned shifts of Fast Eddie's service staff reflect that those employees do not, in the regular course, work overtime hours and instead typically work only 20 to 35 hours per week....

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