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Perez v. El Torazo Mexican Restaurant, Inc.

United States District Court, W.D. Kentucky, Louisville Division

December 11, 2017

FELIPE CRUZ PEREZ and MARLIN PALMA, on behalf of themselves and others similarly situated PLAINTIFFS


          Greg N. Stivers, Judge United States District Court.

         This matter is before the Court on Plaintiffs' Motion for Conditional Certification (DN 26). The motion has been fully briefed and is ripe for decision. For the reasons stated below, the Court GRANTS the motion and ADOPTS Plaintiffs' proposed notice and consent forms with modifications.

         I. BACKGROUND

         This action is brought to recover unpaid compensation in the form of unpaid wages and overtime allegedly owed to Plaintiffs, who are former employees of Defendants, El Torazo Mexican Restaurant, Inc. (“El Torazo”) and Gustavo Ortiz (“Ortiz”) (collectively, “Defendants”) pursuant to the Fair Labor Standards Act (“FLSA”) and the Kentucky Wage and Hour Act (“KWHA”). (Second Am. Compl. ¶¶ 1-2, 55-78, DN 34). Plaintiffs claim they were forced to participate in a “tip pooling” agreement in which they were required to remit approximately 1.5% of all food and beverage sale orders to restaurant management. (Second Am. Compl. ¶¶ 37, 68).

         The original plaintiff, Felipe Cruz Perez (“Perez”), filed the Complaint on August 24, 2016. (Compl., DN 1). Perez amended the Complaint on January 11, 2017. (Am. Compl., DN 18). On March 17, 2017, Perez moved for leave to amend the Complaint again to add Marlin Palma (“Palma”) as a plaintiff and assert a collective action.[1] (Pl.'s Mot. Leave Am. Compl., DN 21). Plaintiffs filed the pending Motion for Conditional Certification, which is fully briefed and ripe for decision. (Pls.' Mot. Conditional Certification, DN 26 [hereinafter Pls.' Mot. Cond. Cert.]).


         This action arises under the laws of the United States and the Court has jurisdiction pursuant to 28 U.S.C. § 1331 and has supplemental jurisdiction over Plaintiffs' state law claims under 28 U.S.C. § 1367(a).


         Class actions under 29 U.S.C. § 216(b) require that: “(1) the plaintiffs must actually be similarly situated, and (2) all plaintiffs must signal in writing their affirmative consent to participate in the litigation.” Comer v. Wal-Mart Stores, Inc., 454 F.3d 544, 546-47 (6th Cir. 2006) (internal quotation marks omitted) (citation omitted). “Unlike class actions under Fed.R.Civ.P. 23, collective actions under FLSA require putative class members to opt into the class, ” and “[t]hese opt-in employees are party plaintiffs, unlike absent class members in a Rule 23 class action.” O'Brien v. Ed Donnelly Enters., Inc., 575 F.3d 567, 583 (6th Cir. 2009) (citation omitted), abrogated on other grounds by Campbell-Ewald Co. v. Gomez, 136 S.Ct. 663 (2016). Therefore, the Court's task is to “first consider whether plaintiffs have shown that the employees to be notified” of the collective action “are, in fact, similarly situated.” Comer, 454 F.3d at 546- 47 (6th Cir. 2006) (internal quotation marks omitted) (citation omitted). If the plaintiffs meet this burden, then “[t]he district court may use its discretion to authorize notification of similarly situated employees to allow them to opt into the lawsuit.” Id. (citation omitted). Therefore, these similarly-situated employees must be notified of the lawsuit. Id.

         “Courts have used a two-phase inquiry when determining whether employees are similarly situated.” Hathaway v. Shawn Jones Masonry, No. 5:11-CV-121, 2012 WL 1252569, at *2 (W.D. Ky. Apr. 13, 2012). “The first phase takes place at the beginning of discovery.” Id. “Authorization of notice requires only a modest factual showing that the plaintiff's position is similar, not identical, to the positions held by the putative class members.” Id. (internal quotation marks omitted) (citing Comer, 454 F.3d at 546). “At this stage, courts generally consider the pleadings and any affidavits which have been submitted.” Id. (citation omitted). The initial certification is “conditional and by no means final.” Comer, 454 F.3d at 546 (citation omitted). “If the court conditionally certifies the class, the putative class members are given notice and the opportunity to opt in.” Hathaway, 2012 WL 125259, at *2 (citation omitted).[2]


         Since Plaintiffs bring their Motion for Conditional Certification within the “first phase” of class certification, the Court considers whether the proposed class consists of similarly situated Plaintiffs under the “fairly lenient” standard set forth by the Sixth Circuit. Comer, 454 F.3d at 547 (citation omitted). The Court must then determine that the proposed notice is “timely, accurate, and informative” as to properly notify the proposed class. Hoffmann-La Roche, Inc. v. Sperling, 493 U.S. 165, 166 (1989). The Court will consider each step in turn.

         A. Class Certification of “Similarly Situated” Employees

         Plaintiffs seek to certify a class of “servers, waiters, waitresses, and other tipped employees” (hereinafter “Tipped Employees”) employed by Defendants from August 24, 2013 on. (Pls.' Mem. Supp. Mot. Conditional Certification 5-6, DN 26 [hereinafter Pls.' Mem.]). Plaintiffs contend that the class is similarly situated under Section 216(b) because: (1) the same type of invalid policy of “tip pooling” applied to similar types of Tipped Employees, (2) the Tipped Employees were paid the same rate for all hours of work, whether tip-producing or not, (3) the Tipped Employees were not informed of the application of a tip credit by Defendants, (4) the Tipped Employees were not paid the minimum wage, and (5) the Tipped Employees were not adequately compensated for overtime work. (Pls.' Mem. 17-18). Employees in the proposed class all engaged in the service industry, performed duties to accomplish serving food and drink to customers, and experienced similar policies and alleged underpayments working for Defendants. (Perez Decl. 1-3, DN 26-1; Palma Decl. 1-3, DN 26-2; Perez Second Decl. 1-3, DN 39-1; Palma Second Decl. 1-3, DN 39-2; Pls.' Reply Supp. Mot. Conditional Certification 5-6, DN 39).

         Defendants argue that Plaintiffs' declarations are speculative, self-serving, and reliant on inadmissible hearsay, and are therefore not sufficient to establish a class of similarly situated plaintiffs. (Defs.' Resp. Pls.' Mot. Conditional Certification 5-11, DN 38 [hereinafter Defs.' Resp.]).[3] Defendants further allege that the proposed class is overbroad, as it includes potential plaintiffs who, unlike Plaintiffs, were not servers and worked in both locations of the restaurant. (Defs.' Resp. 12). Defendants finally argue that Plaintiffs' affidavits fail to identify how they are similarly situated to other potential class members, and that Plaintiffs have failed to obtain any affidavits from non-server employees who have not received minimum and/or overtime wages. (Defs.' Resp. 12).

         This Court has found similar declarations relating to observations of FLSA violations in the workplace as sufficient evidence to find a similarly situated class of plaintiffs in the first phase of certification. See Hathaway, 2012 WL 1252569, at *3-4. These declarations are sufficient to meet the modest showing needed to find a similarly situated class. Id. (certifying a class based on affidavits of laborers describing workplace travel); Comer, 454 F.3d at 546-47. As to Defendants' argument of overbreadth, this Court has previously certified a class under situations where a uniform corporate policy applied to similar, but not identical, types of employees. Bassett v. Tenn. Valley Auth., No. 5:09-CV-00039, 2013 WL 665068, at *2-9 (W.D. Ky. Feb. 22, 2013) (certifying a class that consisted of many different types of employees including laborers, foremen, managers, and equipment operators with varying duties). Further, such a varied group of employees can still constitute a class even under the stricter standard of the “second phase” of class certification. See Id. (various types of employees in the construction process similarly situated in the later stage of the certification process). Thus, a class may be certified regardless of the differing categories of employees in the proposed class.

         At a minimum, Plaintiffs have offered a modest showing sufficient to meet their burden under the fairly lenient standard to establish a similarly situated class. Comer, 454 F.3d at 546. The Court finds such ...

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