Wilson v. Hunam Inn, Inc., Civ. Action No. 14–1522 (EGS)

• Decision Date: 01 September 2015
• Docket Number: Civ. Action No. 14–1522 (EGS)
• Citation: 126 F.Supp.3d 1
• Parties: Sara Wilson, On behalf of herself and all others similarly situated, Plaintiff, v. Hunam Inn, Inc., et al., Defendants.
• Court: U.S. District Court — District of Columbia

126 F.Supp.3d 1

Sara Wilson, On behalf of herself and all others similarly situated, Plaintiff,

v.Hunam Inn, Inc., et al., Defendants.

Civ. Action No. 14–1522 (EGS)

United States District Court, District of Columbia.

Signed September 1, 2015

Kenneth C. Gauvey, The Law Practice of Ken C. Gauvey, LLC, Hyattsville, MD, for Plaintiff.

Joseph Peter Harkins, Steven E. Kaplan, Littler Mendelson, P.C., Washington, DC, for Defendants.

MEMORANDUM OPINION

Emmet G. Sullivan, United States District Judge

Plaintiff Sara Wilson, on behalf of herself and all others similarly situated, brings this action against Defendant Hunam Inn, Inc., and individual Defendants Donald Eric Little, and David Perruzza, alleging violations of the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., and the D.C. Minimum Wage Act (DCMWA), D.C. Code § 32–1001 et seq. Defendants move for partial dismissal of Ms. Wilson's complaint, or in the alternative, for partial summary judgment. Upon consideration of the motion, the response and reply thereto, the entire record, and the applicable law, Defendants' motion is DENIED.

I. BACKGROUND

Ms. Wilson is a former bartender at a D.C. nightclub operated by Defendant Human Inn, Inc. Compl., ECF No. 1 at ¶¶ 1, 2. Human Inn, Inc. is a D.C. corporation doing business under the names "Cobalt" and "30 Degrees." Id. at ¶ 2. Defendant Donald Eric Little is the sole owner and President of Human Inn, Inc. Id. at ¶ 3; see also Defs.' Mot., ECF No. 8–2 at ¶ 3. Defendant David Perruzza is a corporate officer at Human Inn, Inc., whose responsibilities include signing payroll checks. Compl., ECF No. 1 at ¶ 4; Defs.' Mot. at 8–2 at ¶ 4.

Ms. Wilson alleges that while employed as a bartender at Cobalt, she was not paid minimum wage or overtime. Compl., ECF No. 1, at ¶¶ 14, 15. Ms. Wilson alleges that her employers used an invalid "tip pooling" arrangement to avoid paying their employees minimum wage. Id. at ¶¶ 18, 53, 55. While under certain circumstances the FLSA allows employers to pay "tipped employees" at an hourly rate below the minimum wage, Ms. Wilson argues that the tip pooling arrangement used at Cobalt failed to meet the statutory criteria. Id. at 56. First, Ms. Wilson alleges that under the tip pool system, she and the other bartenders were forced to share their tips with non-tipped employees, such as "bar backs" and "floor employees," who do not ordinarily receive tips from customers. Id. at ¶ 55. Second, at some point during Ms. Wilson's employ with Cobalt, the nightclub's cleaning staff was fired and Ms. Wilson and the other bartenders were required to assume additional cleaning duties, such as cleaning the nightclub bathrooms. Id. at ¶¶ 1819. Ms. Wilson argues that these additional cleaning duties were not exempt from the minimum wage requirement and that the bartenders should have been paid minimum wage for time spent performing this work. Id. at ¶ 18. She further alleges that the Defendants failed to provide her adequate notice that she would be compensated under the "tipped employee" exemption to the FLSA's minimum wage requirement. Id. at ¶ 60. Finally, Ms. Wilson alleges that she worked an average of 32 to 42 hours per week, but was not compensated for overtime work. Id. at ¶ 19.

On October 21, 2014, Defendants moved for partial dismissal of the Plaintiff's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), or in the alternative, for partial summary judgment pursuant to Rule 56. Defs.' Mot., ECF No. 8–3. Defendants first move to dismiss Plaintiff's complaint as to Mr. Little and Mr. Perruzza, arguing that Mr. Little and Mr. Perruzza are not "employers" under the FLSA or DCMWA and therefore not liable under the law. Id. at 6–8. Second, Defendants argue that Ms. Wilson has failed to sufficiently plead a "willful" violation of the FLSA, and that therefore, Plaintiff's "third year" FLSA claims should be dismissed. Id. at 8–9.

In the alternative, Defendants move for partial summary judgment. First, Defendants argue that Ms. Wilson never worked more than 40 hours per week and therefore, the Court should grant summary judgment for the Defendants on Ms. Wilson's overtime claims under the FLSA and DCMWA. Defs.' Mot., ECF No. 8–3 at 10–11. Second, Defendants rearticulate their claims that Mr. Little and Mr. Perruzza are not Ms. Wilson's employers and seek summary judgment as to themselves individually. Id. at 13–16.

II. STANDARDS OF REVIEW

A. Motion to Dismiss

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6)"tests the legal sufficiency of a complaint." Browning v. Clinton, 292 F.3d 235, 242 (D.C.Cir.2002). A complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief, in order to give the [D]efendant fair notice of what the ... claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (internal quotation marks omitted). While detailed factual allegations are not necessary, Plaintiff must plead enough facts to "raise a right to relief above the speculative level." Id.

When ruling on a Rule 12(b)(6) motion, the court may consider "the facts alleged in the complaint, documents attached as exhibits or incorporated by reference in the complaint, and matters about which the Court may take judicial notice." Gustave–Schmidt v. Chao, 226 F.Supp.2d 191, 196 (D.D.C.2002). The court must construe the complaint liberally in Plaintiff's favor and grant Plaintiff the benefit of all reasonable inferences deriving from the complaint. Kowal v. MCI Commc'ns Corp., 16 F.3d 1271, 1276 (D.C.Cir.1994). The Court must not accept inferences that are "unsupported by the facts set out in the complaint." Id. "Nor must the court accept legal conclusions cast in the form of factual allegations." Id. "[O]nly a complaint that states a plausible claim for relief survives a motion to dismiss." Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

B. Motion for Summary Judgment

Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The party seeking summary judgment bears the "initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (internal quotation marks omitted). To defeat summary judgment, the nonmoving party must "designate specific facts showing there is a genuine issue for trial". Id. at 324, 106 S.Ct. 2548. A dispute is "genuine" only if a reasonable fact-finder could find for the non-moving party; a fact is only "material" if it is capable of affecting the outcome of the litigation. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; Laningham v. U.S. Navy, 813 F.2d 1236, 1241 (D.C.Cir.1987). In considering whether there is a genuine dispute as to material fact, the court must draw all reasonable inferences in favor of the non-moving party. Tao v. Freeh, 27 F.3d 635, 638 (D.C.Cir.1994).

III. ANALYSIS

A. Ms. Wilson has sufficiently pleaded that Mr. Little and Mr. Perruzza are her employers under the FLSA and DCMWA

Mr. Little and Mr. Perruzza argue that Ms. Wilson's allegations are insufficient to establish that they were her "employers" under the FLSA or DCMWA. Defs.' Mot., ECF No. 8–3 at 6. Accordingly, the individual Defendants seek dismissal of the complaint.¹ The FLSA defines employer to include "any person acting directly or indirectly in the interest of the employer in relation to any employee ..." 29 U.S.C. § 203(d). The DCMWA contains nearly identical language. See D.C. Code § 32–1002 ("The term ‘employer’ includes any individual, partnership, association, corporation, business trust, or any other person or group of persons acting directly or indirectly in the interest of an employer in relation to an employee ..."). Accordingly, courts construe the federal and local statues coterminously for purposes of determining who is liable as an employer. See Guevara v. Ischia, Inc., 47 F.Supp.3d 23, 26 (D.D.C.2014) ; Villar v. Flynn Architectural Finishes, Inc., 664 F.Supp.2d 94, 96 (D.D.C.2009).

The Supreme Court has emphasized the "expansiveness of the Act's definition of ‘employer.’ " Falk v. Brennan, 414 U.S. 190, 195, 94 S.Ct. 427, 38 L.Ed.2d 406 (1973). Indeed, the definition of employer is "necessarily a broad one in accordance with the remedial purpose of the Act." Morrison v. Int'l Programs Consortium, 253 F.3d 5, 11 (D.C.Cir.2001).² In determining whether a party should bear liability as an employer, courts look to the "economic reality" of the employment relationship. Morrison, 253 F.3d at 10–11. Courts must assess the "totality of the circumstances," considering factors such as whether the putative employer (1) had the power to hire and fire the employees; (2) supervised and controlled employee work; (3) determined the rate and method of payment, and (4) maintained employment records. Id. at 11 (quoting Henthorn v. Dept . of Navy, 29 F.3d 682, 684 (D.C.Cir.1994) ).

An employee may have more than one employer under the FLSA. Ventura v. B EBO Foods, Inc., 595 F.Supp.2d 77, 85 (D.D.C.2010). Application of the economic reality test may demonstrate that corporate officers, along with the corporation itself, are liable as employers. Id. Indeed, the "overwhelming weight of authority" considers a corporate officer with "operational control of a corporation's covered enterprise" an employer under the FLSA. See Ruffin v. New Destination, 800 F.Supp.2d 262, 269 (D.D.C.2011) (citing Donovan v. Agnew, 712 F.2d 1509, 1511 (1st Cir.1983) ). Further, "[o]ne...