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Gerry v. Lin

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

January 14, 2019

DANIELLE GERRY, for herself and others Similarly situated PLAINTIFF
v.
CHENG “BENNY” LIN, TAOQING “AMY” WANG, YAMATO STEAKHOUSE OF JAPAN CORP., and YAMATO STEAK HOUSE INC. DEFENDANTS

          MEMORANDUM OPINION AND ORDER

          JOSEPH H. McKINLEY JR., DISTRICT JUDGE

         This matter is before the Court on a motion by Plaintiff, Danielle Gerry, for partial final summary judgment against Defendant, Yamato Steakhouse of Japan Corp., [DN 28] and a motion by Defendant, Yamato Steakhouse of Japan Corp., for extension of time up to and including January 8, 2019 in which to file its sur-reply [DN 49]. Fully briefed, these matters are ripe for decision.

         I. STANDARD OF REVIEW

         Before the Court may grant a motion for summary judgment, it must find that there is no genuine dispute as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The moving party bears the initial burden of specifying the basis for its motion and identifying that portion of the record that demonstrates the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Once the moving party satisfies this burden, the non-moving party thereafter must produce specific facts demonstrating a genuine issue of fact for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).

         Although the Court must review the evidence in the light most favorable to the non-moving party, the non-moving party must do more than merely show that there is some “metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Instead, the Federal Rules of Civil Procedure require the non-moving party to present specific facts showing that a genuine factual issue exists by “citing to particular parts of materials in the record” or by “showing that the materials cited do not establish the absence . . . of a genuine dispute[.]” Fed.R.Civ.P. 56(c)(1). “The mere existence of a scintilla of evidence in support of the [non-moving party's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [non-moving party].” Anderson, 477 U.S. at 252. It is against this standard the Court reviews the following facts.

         II. BACKGROUND

         This action arises out of alleged violations of wage-and-hour-laws under the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. (“FLSA”), by Defendants. Plaintiff, Danielle Gerry (“Gerry”), claims in part that Defendants utilized the tip credit exemption under FLSA § 203(m) without providing the information required by this section and underpaid Gerry for all non-overtime hours.

         Gerry worked as a server in Yamato Steakhouse's restaurant in Madisonville, Kentucky from April 29, 2016 until December 20, 2017. The restaurant is owned by Defendant, Cheng Lin. At the start of Gerry's employment, Defendant, Taoqing Wang, the manager of the restaurant, verbally explained to Gerry that she would receive $2.50 per hour plus tips. Wang testified that she told each employee if they had questions they could speak to the restaurant's accountant. Lin testified that Wang told the employees they could contact the accountant with questions and that Lin personally gave all employees the accounting firm's phone number. In addition to the conversation between Gerry and Wang regarding Plaintiff's pay, Defendants contend that the restaurant also maintained a sign in the office explaining the tip credit exception to the federal minimum wage. The sign specifically provided in relevant part:

TIP CREDIT Employers of “tipped employees” who meet certain conditions may claim a partial wage credit based on tips received by their employees. Employers must pay tipped employees a cash wage of at least $2.13 per hour if they claim a tip credit against their minimum wage obligation. If an employee's tips combined with the employer's cash wage of at least $2.13 per hour do not equal the minimum hourly wage, the employer must make up the difference.

         (DN 35-3, DN 48-2.)

         Gerry filed this cause of action on January 26, 2018, asserting claims for recovery of minimum wage under the FLSA, recovery of overtime wage under the FLSA, unjust enrichment, conversion, breach of contract, nonpayment of wages under KRS § 337.020, violations of the Internal Revenue Code, and retaliatory termination in violation of the FLSA. (DN 1.) Gerry filed this current motion for final partial summary judgment against Defendant, Yamato Steakhouse of Japan Corp. (“Yamato”), requesting the Court to find that Yamato did not provide Gerry with the proper notice required by 29 U.S.C. § 203(m) and 29 C.F.R. § 531.59 of the FLSA, and therefore was not entitled to claim a tip credit or pay Gerry less than the minimum wage of $7.25 per hour. Gerry represents that she worked 2, 315.2 hours at a rate of $2.50 per hour and seeks entry of a judgment for the remainder owed in the amount of $10, 997.20 in favor of Gerry against Yamato. Gerry seeks to make the judgment final pursuant to Fed.R.Civ.P. 54(b) due to alleged solvency issues with Yamato in Madisonville.

         III. DISCUSSION

         A. Tip-Credit Exception

         The FLSA generally sets forth the provisions for a minimum wage. Kilgore v. Outback Steakhouse of Fla.,160 F.3d 294, 297 (6th Cir. 1998) (citing 29 U.S.C. § 206)). “Section 203(m) of FLSA allows employers to pay less than the minimum wage to those employees who receive tips through the tip credit mechanism, which allows employers to include an employee's tips in calculating the employee's wage.” Hardesty v. Litton's Mkt. & Rest., Inc., 2013 WL 1343920, *4 (E.D. Tenn. Apr. 2, 2013). The FLSA imposes conditions for those employers who wish to use a tip credit, stating in relevant part: “The preceding [two] sentences [establishing the tip credit] shall not apply with respect to any tipped employee unless such employee has been informed by the employer of the provisions of this subsection, and all tips received by ...


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