Walsh v. Sofia & Gicelle, Inc.

Decision Date05 August 2021
Docket NumberCivil Action TDC-19-0934
CourtU.S. District Court — District of Maryland
PartiesMARTIN J. WALSH, 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.
MEMORANDUM OPINION

THEODORE D. CHIANG United States District Judge

The United States Secretary of Labor ("DOL") 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 back wages and liquidated damages due to Defendants' employees under the FLSA. After granting summary judgment to DOL on Defendants' recordkeeping violations and certain minimum wage and overtime claims, and otherwise denying summary judgment, the Court then conducted a three-day bench trial to determine liability and damages on all remaining issues. Pursuant to Federal Rule of Civil Procedure 52(a), the Court now provides its findings of fact and conclusions of law. For the reasons set forth below, the Court finds Defendants liable for the majority of the remaining minimum wage and overtime claims, but that Defendants are not liable for claims relating to one employee who is exempt from the FLSA requirements as an executive and two individuals who were not proven to be employees. Accordingly, the Court will enter judgment for DOL and award damages as detailed in the accompanying Order.

FINDINGS OF FACT

Relevant background relating to this case is set forth in the Court's memorandum opinion on the Motion for Summary Judgment. Scalia v. Sofia & Gicelle, Inc., No TDC-19-0934, 2020 WL 7828770 (D. Md. Dec. 30, 2020).

At trial on July 7, 8, and 9, 2021, the following witnesses testified: 13 current or former bartenders and servers ("service staff'), consisting of Mary Jane Parker Glenda Lopez, Brook Miles, Destinee Kent, Janay McPherson Christina Faulks, Kennedi Collins, Hannah Klove, Chrishauna Brooks, Mellissa Albrecht, Jose Hernandez, Jose Alvarez, and Enrique Ferman; three current or former cooks and dishwashers ("kitchen staff'), consisting of Joseph Yearwood, Jimmy Simmons, and Roberto Reyes; two employees of AM Accounting, the firm retained by Fast Eddie's to provide payroll services, consisting of Martha Moscoso and Adrianna Leon; Claudia Villarreal Cuevas, the DOL Wage and Hour Investigator who led the investigation into Defendants' FLSA violations; and Defendant Maria Aguilar.[1] Based on the witness testimony, as well as the exhibits and stipulations presented at trial, the Court finds the following facts.

I. Employer Coverage

Since October 22, 2015, Maria Aguilar has been the sole owner and president of Sofia & Gicelle, Inc., d/b/a/ Fast Eddie's, Sports and Billiards ("Fast Eddie's"), a Maryland corporation with a restaurant in Suitland, Maryland. Fast Eddie's, a full-service restaurant, night club, bar, and pool hall, is an enterprise engaged in interstate commerce and has had employees who handle and sell goods and materials moving in interstate commerce, such as cooking ingredients, alcoholic beverages, and cleaning supplies from outside of Maryland. Fast Eddie's has had annual gross sales totaling more than $500, 000 at all times relevant in this case. Aguilar, as the manager of the day-to-day operations of Fast Eddie's, has acted directly or indirectly in the interest of an employer, specifically, Fast Eddie's.

As relevant to this case and as stated in the memorandum opinion on the Motion for Summary Judgment, the parties entered into an agreement on October 6, 2017 that tolled the statute of limitations ("the Tolling Agreement") from that date forward.

II. Employee Coverage

DOL has asserted claims for unpaid minimum wages and overtime pay on behalf of 53 individuals alleged to be current or former Fast Eddie's employees, as listed in DOL's back wage calculations. See Trial Exhibit ("Ex.") 12. Defendants have maintained that three of the listed individuals, Roberto Reyes, Tina Doe, and Nancy Doe, are not subject to the FLSA pay requirements either because they are exempt under the FLSA or were not in fact employees of Fast Eddie's.

A. Roberto Reyes

Reyes is the husband of Maria Aguilar and works in the kitchen at Fast Eddie's as a salaried employee earning $1, 500 every two-week pay period. Reyes generally works four to five days per week from 11:00 a.m. to 12:00 midnight and averages between 50 to 60 hours of work each week. Among Reyes's duties are managing the hiring and termination process for kitchen staff, including by recommending individuals to Aguilar for hire, making work schedules for kitchen staff, ordering food for the kitchen, monitoring cooks' work to ensure it is done properly, and preparing and cooking food. As stated by Aguilar during her testimony, Reyes hired at least one specific kitchen staff member, Tracy Morgan, and in an interview during the DOL investigation, the report of which was admitted into evidence, James Hudson, a server who began work at Fast Eddie's in December 2015, stated that he was hired by Reyes, who he believed to be one of the owners.

In the kitchen, Reyes supervises two cooks who work at different times during the daytime and nighttime shifts, as well as one dishwasher who works full-time at Fast Eddie's. As a general matter, Reyes ensures that everything in the kitchen is under control throughout the day and across various kitchen-related tasks.

B. Tina Doe and Nancy Doe

The only witness who testified about "Tina Doe" and "Nancy Doe," as identified in DOL's list of employees owed back wages, was Aguilar, who testified that those individuals were employed by an outside contractor retained by customers hosting events at Fast Eddie's to help with service and decorations. Although "Tina" and "Nancy" appear on a single, undated Fast Eddie's work schedule from July 2016, Ex. 8, Aguilar testified that they were sometimes listed on schedules to note for other employees that they would be working with these contractors on the identified days. Although a declaration submitted by Parker identified Tina and Nancy as servers, no trial witnesses disputed Aguilar's testimony about the status of these two individuals.

III. Pay Practices
A. Service Staff

Fast Eddie's service staff, consisting of bartenders and servers, were typically compensated with an hourly wage paid through a paycheck and with tips received from customers.

1. Hourly Wage

Based on the testimony of multiple service staff members, including servers Miles, McPherson, and Faulks, and bartenders Lopez, Hernandez, and Ferman, service staff members generally received an hourly pay rate of $3.63 per hour, which is the applicable local minimum wage rate for tipped employees. However, several employees did not receive such an hourly wage for some or all of their work. For instance, certain service staff, including Parker and Kent, were required to stay at Fast Eddie's after their shifts ended and they had clocked out in order to clean the restaurant and to wait for their turn to receive tips received from customer credit card payments, but were not paid for that additional time. Some employees, such as Parker, did not receive any hourly wage when they were going through training. Likewise, as reflected in his interview statement, Hudson did not receive any wages or tips during his first week on the job. Other employees, including Lopez, Miles, and Faulks, received paychecks that did not fully reflect all of the hours they worked. At certain times, service staff such as Lopez received an hourly wage for only 20 hours per week, even though she worked more than 40 hours per week.

Other service staff, such as Collins, Brooks, and Klove, never received a paycheck from Fast Eddie's and were instead compensated only through tips from customers. Relatedly, in the year before she stopped working at Fast Eddie's, Lopez was asked to not cash the checks she received, so her compensation for that period of time was limited to the tips she received as a bartender.

From this evidence, the Court finds that while many service staff received an hourly wage of $3.63 at Fast Eddie's, certain employees were not paid an hourly wage for some or all of their hours worked.

2. Tips

As a general matter, service staff received tips from customers to supplement their hourly wages. Tips paid by customers in cash were typically directly retained by the server. When a customer paid tips by credit card, that money was tracked through a central system and given to the customer's server in cash at the end of the night, when the server closed out. The bartenders pooled all of their credit card tips from the night and divided the total equally among the bartenders who worked that night.

Service staff, however, did not keep all of the tips they earned throughout their shifts. All service staff members, at the end of their shifts, were required to contribute $10 from their tips to pay a cleaning person. Several employees including Miles and Kent, testified that the fee increased to $20 per night if an employee did not want to assist with the cleaning that night. According to Brooks, the fee varied from $10 to $20 depending on how popular or in demand the event at Fast Eddie's had been that evening. Employees who did not make enough in tips in a given shift to cover the fee still had to pay the fee out of their own pocket. The fee was collected either by a bartender, a manager, or another individual. Brooks testified that she had to hand...

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