Walsh v. Leon
| Decision Date | 10 August 2022 |
| Docket Number | Civil Action 2:21-cv-531 |
| Court | U.S. District Court — Eastern District of Virginia |
| Parties | MARTIN J. WALSH, SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR, Plaintiff, v. RUBEN LEON, JOSE R. FLORES, JUAN P. GONZALEZ, and PLAZA AZTECA GREAT NECK, INC., PLAZA AZTECA JEFFERSON, INC. d/b/a PLAZA AZTECA RESTAURANTE MEXICANO 4, PLAZA AZTECA SUFFOLK, INC., PLAZA AZTECA GRANBY ST., INC., P.A. LASKIN, INC., PLAZA AZTECA SHORT PUMP, INC., DON VALERIO OF STERLING, INC. d/b/a PLAZA AZTECA STERLING, PLAZA AZTECA BROAD, INC., PLAZA AZTECA DOCK LANDING, INC., PLAZA AZTECA GAVIOTAS, INC., P.A. GLEN ALLEN, INC., PLAZA AZTECA HAMPTON, INC., MARTINEZ-HAYGOOD, INC. d/b/a PLAZA AZTECA MEXICAN RESTAURANTE, PA PROVIDENCE, INC., PA SEMINOLE INC., PLAZA AZTECA WARWICK, INC. d/b/a PLAZA AZTECA NEWPORT NEWS CI, PA WAYNESBORO, INC., P.A. WESTCHESTER, INC., PA WILLIAMSBURG, INC., PLAZA AZTECA YORKTOWN, INC., PLAZA AZTECA INC. d/b/a PLAZA AZTECA RESTAURANTE MEXICANO 1, P.A. LEESBURG, INC., PLAZA AZTECA DENBIGH, INC., PLAZA AZTECA NORFOLK OUTLET, INC., P.A. MIDLOTHIAN, INC., SALSA'S THIMBLE SHOALS INC., PA METHUEN, INCORPORATED, REBECO MEXICAN BAR AND GRILL CORP., PLAZA AZTECA SEEKONK, INC. d/b/a REBECO MEXICAN BAR & GRILL, PLAZA AZTECA WASHINGTON MALL, INC., PLAZA AZTECA ROBINSON TOWNSHIP, INC., PLAZA AZTECA LANCASTER, INC., PLAZA AZTECA WYOMISSING, INC., PLAZA STATE COLLEGE, INC., TORO BUCKLAND, LLC d/b/a TORO AZTECA AND PLAZA AZTECA MANCHESTER, PLAZA AZTECA OF MANCHESTER, INC., PLAZA AZTECA NEWINGTON, INC., PLAZA AZTECA ENFIELD, INC., MONTEREY OF CALIFORNIA, INC., P. A. GREENVILLE INC., PA OBX, INC., PLAZA AZTECA ELIZABETH CITY, INC., PLAZA AZTECA SICKLERVILLE, INC., PLAZA AZTECA KING OF PRUSSIA, INC., PLAZA AZTECA EXTON, INC., PLAZA AZTECA KENNETT SQUARE, INC., PLAZA AZTECA PLYMOUTH MEETING, INC., all doing business as PLAZA AZTECA, Defendants. |
Before the Court is Defendants Ruben Leon, Jose R. Flores, Juan P Gonzalez (“Individual Defendants”), and forty-seven (47) corporations doing business as Plaza Azteca's (“Plaza Restaurants” or “Corporate Defendants”) (collectively “Defendants”) Motion to Dismiss. Defs.' Mot Dismiss, ECF No. 11. Defendants move to dismiss Plaintiff Martin J. Walsh, Secretary of Labor, United States Department of Labor's (“Plaintiff' or “Secretary”) Complaint in its entirety pursuant to Federal Rules of Civil Procedure 8(a)(2), 12(b)(2), and 12(b)(6).[1] Id. at 2; Defs.' Mem. Supp. Mot. Dismiss 2, ECF No. 12 (“Defs.' Mem. Supp.”). The Court has considered the memoranda of the parties and this matter is now ripe for determination. See Defs.' Mem. Supp.; Pl.'s Mem. Opp'n to Defs.' Mot. Dismiss, ECF No. 17 (“Pl.'s Mem. Opp'n”); Defs.' Reply to Pl.'s Mem. Opp'n to Defs.' Mot. Dismiss, ECF No. 20 (“Defs.' Reply”). Upon review, the Court finds that a hearing on this Motion is not necessary. See E.D. Va. Local Civ. R. 7(J). For the reasons stated herein, Defendants' Motion to Dismiss is GRANTED IN PART AND DENIED IN PART.
On September 21, 2021, Plaintiff filed a Complaint against Defendants to enjoin them from violating the provisions of Sections 6, 7, 11(c), 15(a)(2), and 15(a)(5) of the Fair Labor Standards Act of 1938, as amended (“FLSA” or “Act”). Compl. at 2-3 (citing 29 U.S.C. §§ 206, 207, 211(c), 215(a)(2), and 215(a)(5)). Relevant to Defendants' Motion to Dismiss and stated in the light most favorable to Plaintiff, the following facts are drawn from the Complaint and attachments thereto. See Adams v. Bain, 697 F.2d 1213,1219 (4th Cir. 1982).
Defendants operate a chain of Mexican restaurants throughout the United States that employ various servers, hosts, bartenders, busboys, runners, cooks, chefs, dishwashers, sous chefs, grill cooks, and guacamole preparers (“guacamoleros”). Compl. at ¶¶ 1, 10. The primary duties of these employees are to wait on, serve, and prepare food and drinks for Defendants' customers, and to maintain a clean kitchen and facility. Id. at ¶ 11. Defendant Ruben Leon, at all relevant times, resided in Virginia Beach, Virginia, and was an owner and/or officer of all of the Plaza Restaurants. Id. at ¶¶ 16-17. Leon made decisions regarding, and implemented, the pay practice and policies that applied to all of the Plaza Restaurants. Id. at ¶¶ 18-19. Defendant Jose Rafael Flores is, and at all relevant times was, an owner of Plaza State College, Inc. Id. at ¶ 23. Defendant Plaza State College, Inc. is a Pennsylvania corporation that operates a full-service restaurant and bar business in State College, Pennsylvania. Id. at ¶ 93. Defendant Juan Pablo Gonzalez is, and at all relevant times was, an owner of Plaza Azteca Myerstown, Inc. and Plaza Azteca Lancaster, Inc., and the manager at Plaza Azteca Wyomissing, Inc. Id. at ¶¶ 30-31. Defendant Plaza Azteca Wyomissing, Inc. is a Pennsylvania corporation that operates a full service restaurant and bar in Reading, Pennsylvania. Id. at ¶ 119.
On or about July 8, 2016, Defendant Leon created PA Global, Inc., a Virginia corporation with a principal office and a registered office in Newport News, Virginia. Id. at ¶ 40. Leon is, and was during the relevant period, the president of PA Global, Inc. Id. at ¶ 41. Under Leon's direction, PA Global hired contractors to implement uniform practices across the Plaza Restaurants, including practices concerning payroll and timekeeping. Id. at ¶¶ 42-43. On or about December 2016, the Plaza Restaurants contracted with PA Global to, among other things, train management employees, procure contracts, and retain “professional services,” including a common payroll service provider called Gerencia Virtual. Id. at ¶ 44. PA Global went on to secure common arrangements on behalf of the Plaza Restaurants, including medical insurance for some management employees, waste collection services, gift cards, and checking accounts. Id. at ¶ 45. The Plaza Restaurants sent records of employees' hours worked to Gerencia Virtual and utilized the service to prepare payrolls. Id. at ¶¶ 46-48.
Plaintiff alleges that, under the direction of and with oversight from Defendant Leon and others, every Plaza Restaurant maintained a policy or practice of paying a predetermined pay amount to back-of-the-house employees, resulting in FLSA violations for overtime and, in some cases, minimum wage. Id. at ¶ 2. Defendants attempted to disguise this unlawful policy or practice by creating false payroll records that purported to show that employees received an overtime premium when, in reality, they did not. Id. at ¶ 3. Defendant Leon orchestrated, designed, and monitored the unlawful payment practices at the Plaza Restaurants. Id. at ¶ 5. Some of the Defendants also violated the FLSA in other ways at certain Plaza Restaurants, including by failing to pay a cash wage to employees who worked only for tips and by improperly seizing employee tips. Id. at ¶ 6. Accordingly, Plaintiff asserts 13 total claims, constituting: four claims against all Defendants; four claims against Defendants Leon, Flores, and Plaza State College, Inc.; one claim against Defendant Flores, only; three claims against Defendants Leon, Gonzalez, and Plaza Azteca Wyomissing, Inc.; and one claim against Defendant Gonzalez, only. Compl. at ¶¶ 52-137.
Specifically, Plaintiff asserts the following four claims against all Defendants:
Plaintiff asserts four claims against Leon, Flores, and Plaza State College, Inc.:
Plaintiff asserts one claim against Flores, only:
Claim 9. Additional Violations of the Minimum Wage, Overtime and Recordkeeping Provisions of the Act (Compl. at ¶ 118).
Plaintiff asserts three claims against Leon, Gonzalez, and Plaza Azteca Wyomissing, Inc.:
Finally, Plaintiff asserts one claim against Gonzalez, only:
Claim 13. Additional Violations of the Minimum Wage, Overtime and Recordkeeping Provisions of the Act (Compl. at ¶ 137).
Plaintiff prays for injunctive relief, compensatory relief, back wages, and liquidated damages or, alternatively, prejudgment interest. Compl. at 25-26. Defendants move to dismiss Plaintiff's Complaint, in its entirety and with prejudice, pursuant to Federal Rules of Civil Procedure 8(a)(2), 12(b)(2), and 12(b)(6).[2] Defs.' Mot. Dismiss at 2; Defs.' Mem. Supp.
Federal Rule of Civil Procedure 12(b)(2) provides for the dismissal of an action against a party where the court lacks personal jurisdiction. Fed. R. Civ. Proc. 12(b)(6). Personal jurisdiction must be authorized both by the forum state's long-arm statute and by the Due Process...
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