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Knox v. Jones Group

United States District Court, S.D. Indiana, Indianapolis Division

September 16, 2016

v. JONES GROUP, AVON WINGS, LLC doing business as BUFFALO WILD WINGS, BW WINGS MANAGEMENT LLC, COLDWATER WINGS, LLC, COLONIAL WINGS, LLC, COOL WINGS, LLC, DANVILLE WINGS II, LLC, GREENCASTLE WINGS, LLC, MECHANICSVILLE WINGS, LLC, SHELBYVILLE WINGS, LLC, and VINCENNES WINGS, LLC Defendants.

          ORDER

          TIM A. BAKER, UNITED STATES MAGISTRATE JUDGE

         This order comes on the heels of the District Judge's denial of Defendants' motion to dismiss. [Filing No. 77.] In light of this denial, and for reasons explained below, the Magistrate Judge finds it is appropriate to conditionally certify and notify potential class members about this suit. In total, four motions currently pend before the Magistrate Judge: Plaintiffs' motion for step-one notice [Filing No. 27], Defendants' motion to submit supplemental authority [Filing No. 75], Plaintiffs' motion to toll the statute of limitation [Filing No. 62], and Plaintiffs' motion to compel [Filing No. 56]. Each motion is addressed below.

         I. Background

         Plaintiffs brought this action against Defendants for allegedly violating the Fair Labor Standards Act. In short, Plaintiffs allege that Defendants paid them an hourly tip-wage of $2.13, but required them to perform substantial amounts of non-tipped work and pay for shortages and walkouts from their tips. Defendants filed a motion to dismiss in response to Plaintiffs' complaint. While that motion was pending, Plaintiffs filed the present motion for step-one notice. Plaintiffs wish to pursue this case as a collective action, and seek conditional certification to notify potential Plaintiffs about this suit and allow them to opt in. Defendants reasonably requested that the Magistrate Judge postpone ruling on the motion for step-one notice until the District Judge ruled on Defendants' motion to dismiss. The Magistrate Judge obliged.

         After a brief delay, the District Judge denied Defendants' motion to dismiss, finding that Plaintiffs' claims are viable. The delay was primarily to allow the District Judge an opportunity to consider the recent decision of Schaefer v. Walker Bros. Enterprises, Inc., ___F.3d___, 2016 WL 3874171, *2 (7th Cir. 2016), which recognized the Department of Labor's interpretation of the Field Operations Handbook that a tipped employee may be paid a tip-wage, unless performing dual jobs or unrelated non-tipped work more than 20 percent of the time. [Filing No. 66.] The Schaefer court found that the majority of the duties complained about, such as making coffee and cleaning tables, were related. For time spent performing the unrelated duties, wiping burners and woodwork and dusting picture frames, the Schaefer court held that the tipped employees may be paid a tip-wage because their time spent on that work was “negligible, ” and well under 20 percent of a shift. Schaefer, 2016 WL 3874171, at *3.

         The District Judge noted that Schaefer did not clarify whether the Department of Labor's 20 percent rule for unrelated work is controlling. [Filing No. 77, at ECF p. 16-18.] However, because a 20 percent threshold for unrelated work is a reasonable quantifier, the District Judge denied Defendants' motion to dismiss. The District Judge explained that unlike the plaintiffs in Schaefer, Plaintiffs here allege that they spend 50 percent of their time as servers and 35-40 percent of their time as bartenders, performing unrelated non-tipped work while earning a tip-wage.

         The District Judge's denial indicates that the pleadings sufficiently allege a violation of FLSA because the alleged time spent on unrelated non-tipped work is more than negligible and above the 20 percent threshold. With this decision in hand, the Magistrate Judge turns to whether conditional certification for step-one notice is appropriate.

         II. Step-one notice

         Plaintiffs ask the Court to conditionally certify their class and authorize Plaintiffs' counsel to notify them about this action. Plaintiffs' proposed class is comprised of “current and former employees of Defendants' Buffalo Wild Wings restaurants who were paid sub-minimum wages in the last three years.”[1] [Filing No. 27.] Plaintiffs argue these individuals are “similarly situated, ” and submit a proposed notice for Court approval. [Filing No. 28-10.] Defendants argue that Plaintiffs' proposed class is not similar enough to warrant conditional certification. Alternatively, Defendants argue that the proposed notice should be rejected and access should be limited so that participation is not encouraged. As explained below, conditional certification is appropriate and the step-one notice is approved with one addition.

         A. Similarly situated individuals

         Plaintiffs moved pursuant to section 16(b) of the FLSA to conditionally certify this suit as a collective action and to authorize class notice. Section 16(b) permits a collective action against an employer for unpaid minimum wages “by any one or more employees for and on behalf of himself or themselves and other employees similarly situated.” 29 U.S.C. § 216(b) (2012); see Alvarez v. City of Chicago, 605 F.3d 445, 448 (7th Cir. 2010) (“The [FLSA] gives employees the right to bring their FLSA claims through a ‘collective action' on behalf of themselves and other ‘similarly situated' employees.”). The appropriateness of conditional certification therefore rests on whether Plaintiffs are “similarly situated” to their proposed class.

         Neither the FLSA nor the Seventh Circuit has set forth criteria for determining whether employees are similarly situated. Rottman v. Old Second Bancorp, Inc., 735 F.Supp.2d 988, 990 (N.D.Ill. 2010). However, courts in this district and around the country have settled on a two-step procedure for dealing with collective actions under the FLSA. Id.; Carter v. Indianapolis Power & Light Co., No. IP-02-cv-01812-SEB-VSS, 2003 WL 23142183, *3 (S.D. Ind. 2003). The first step allows the Court to analyze the pleadings and any affidavits to determine whether notice should be given to similarly situated individuals-a conditionally certified class. Carter, 2003 WL 23142183, at *3.The second step allows the Court to determine whether that class should be decertified or restricted because various potential class members are not in fact similarly situated. Id.

         At step one, the Court decides whether the proposed class is similarly situated. The Court only requires Plaintiffs to make a minimal threshold showing that they are similarly situated to the employees on whose behalf they are seeking to pursue this claim. Carter, 2003 WL 23142183, *3; see also Frebes v. Mask Restaurants, LLC, No. 13 C 3473, 2014 WL 1848461, at *2 (N.D.Ill. 2014) (“the ‘similarly situated' standard is liberal”); Rottman, 735 F.Supp.2d at 990 (“courts have interpreted the ‘similarly situated' requirement leniently”); Howard v. Securitas Security Services, USA Inc., No. 08 C 2746, 2009 WL 140126, at *5 (N.D.Ill. 2009) (“the court looks for no more than a ‘minimal showing' of similarity”). Because the similarly situated standard is liberally applied, a step-one inquiry generally results in the conditional certification of a class. Rottman, 735 F.Supp.2d at 990.

         The standard is lenient at step one because the final determination of whether collective action members are similarly situated occurs at step two. Carter, 2003 WL 23142183, *3. (citing Champneys v. Ferguson Enterprises, Inc. 2003 WL 1562219, *4 (S.D. Ind. 2003)). At the second step, the Court's inquiry becomes more stringent. Frebes, 2014 WL 1848461, at *2. At that point, discovery has taken place and the Court is in a better position to reevaluate the class to determine whether it should “proceed to trial on a collective basis.” Id.

         1. Plaintiffs' showing

         Plaintiffs argue they are similarly situated to current and former servers and bartenders of Defendants' Buffalo Wild Wings restaurants who were paid a tip-wage in the last three years. As support, Plaintiffs provide eight declarations that demonstrate within the past three years, Defendants have paid servers and bartenders at their restaurants a tip-wage even when performing job duties that do not allow them to earn tips. [Filing No. 28-1, at ECF p. 2; Filing No. 28-2, at ECF p. 2-3; Filing No. 28-3, at ECF p. 2; Filing No. 28-4, at ECF p. 2; Filing No. 28-5, at ECF p. 2; Filing No. 28-6, at ECF p. 2; Filing No. 28-7, at ECF p. 2; Filing No. 28-8, at ECF p. 2.] One declaration provides copies of checklists containing additional duties allegedly enforced by management, requiring servers and bartenders to perform non-tipped duties. [Filing No. 28-5, at ECF p. 8-17.] Declarants estimate that they spend 30 to 60 percent of their time performing non-tipped work. [Filing No. 28-1, at ECF p. 7 (50%; 35-40%); Filing No. 28-2, at ECF p. 7 (50%; 40%); Filing No. 28-3, at ECF p. 6 (50%); Filing No. 28-4, at ECF p. 5 (50%); Filing No. 28-5, at ECF p. 6 (40%); Filing No. 28-6, at ECF p. 6 (50-60%); Filing No. 28-7, at ECF p. 6 (30-35%); Filing No. 28-8, at ECF p. 6 (40-50%).] Declarants also allege that servers and bartenders are required to reimburse restaurants from their tips for customer walkouts and cash drawer shortages. [Filing No. 28-1, at ECF p. 7; Filing No. 28-2, at ECF p. 7; Filing No. 28-3, at ECF p. 6; Filing No. 28-4, at ECF p. 6 Filing No. 28-5, at ECF p. 6; Filing No. 28-6, at ECF p. 6; Filing No. 28-7, at ECF p. 6; Filing No. 28-8, at ECF p. 6.]

         Plaintiffs' complaint essentially makes the same allegation: that Defendants pay servers and bartenders a tip-wage “even when it requires those employees to perform non-tipped work that is unrelated to their tipped occupation.” [Filing No. 1, at ECF p. 3.] The complaint also alleges that Defendants require servers and bartenders to pay Defendants “from their tips for customer walkouts and cash drawer shortages.” Id. In the complaint, Plaintiffs list “sweeping, mopping, vacuuming, and deck brushing restaurant floors; washing glasses, cups, platters, or silverware; slicing fruit; portioning dressings; cleaning the restaurant; and rolling silverware” as the unrelated non-tipped duties. Id. Furthermore, the complaint alleges that tipped employees must “perform [related] non-tipped work for more than 20 percent of their time worked each workweek.” Id. The complaint also alleges the enforcement of laminated checklists of non-tipped duties servers and bartenders are required to perform. Id. at 14.

         Importantly, Plaintiffs' complaint alleges that Defendants train all new managers at their Avon restaurant before assigning them to other restaurants. [Filing No. 1, at ECF p. 14.] Plaintiffs allege that with this uniform training, all servers and bartenders at all of Defendants' restaurants are required to perform the same non-tipped work. Id. Declarants make parallel allegations-that other servers and bartenders experience the same treatment at Defendants' other Buffalo Wild Wings restaurants. [Filing No. 28-1, at ECF p. 7; Filing No. 28-2, at ECF p. 7; Filing No. 28-3, at ECF p. 6; Filing No. 28-4, at ECF p. 6; Filing No. 28-5, at ECF p. 6.; Filing No. 28-6, at ECF p. 6; Filing No. 28-7, at ECF p. 6; Filing No. 28-8, at ECF p. 6.] According to the declarants, servers and bartenders earn a tip-wage and are required to vacuum and mop restaurant floors, clean bathrooms, clean windows, wash walls and baseboards, dust televisions, carry trash bags to the dumpster, sift through trash for silverware, slice fruit and vegetables, and wash silverware, platters, trays, and cups. [Filing No. 28-1, at ECF p. 4-6; Filing No. 28-2, at ECF p. 4-6; Filing No. 28-3, at ECF p. 4-6; Filing No. 28-4, at ECF p. 4-5; Filing No. 28-5, at ECF p. 5-6.; Filing No. 28-6, at ECF p. 4-5; Filing No. 28-7, at ECF p. 3-4; Filing No. 28-8, at ECF p. 4.]

         Based on the declarations and the complaint, Plaintiffs demonstrate they are similarly situated to the servers and bartenders at Defendants' restaurants, on whose behalf they seek to pursue this action. Plaintiffs make a modest factual showing that current and former servers and bartenders of Defendants' Buffalo Wild Wings restaurants were paid a tip-wage while performing non-tipped work in the last three years. Eight former servers and bartenders, who worked at six of Defendants' restaurants in three states, submitted sworn declarations alleging the same FLSA violations, which track the same and similar non-tipped duties alleged in the complaint. Enough similarities alleged in the complaint and declarations exist that the Court finds Plaintiffs are similarly situated to servers and bartenders that worked at Defendants' restaurants in the past three years. Accordingly, the Court conditionally certifies these similarly situated individuals as a class of potential Plaintiffs to receive step-one notice.

         2. Defendants' policy

         Defendants contend that just because these tipped employees allege they spend more than 20 percent of their time engaged in unrelated work does not mean Defendants have a uniform policy that requires it. Defendants submit additional declarations and point out that one server estimates that all servers and bartenders spend less than 20 percent of their time on such duties. [Filing No. 45-5, at ECF p. 20.] Specifically, she states: “While I do not generally track how much time I spend on my various duties which are unrelated to serving guests, I would estimate that I spend less than 20% of my time on duties. In my personal experience, the same also applies to all the bartenders and servers.” Id. Defendants argue this demonstrates that Plaintiffs are not subject to a policy of performing non-tipped work more than 20 percent of their time. However, this declarant's assertion does not fly in the face of Plaintiffs' assertions because it still reflects a policy of requiring tipped employees to perform non-tipped work. Like Plaintiffs, this declarant alleges that she earns an hourly tip-wage. Id. at 18. Even though she does not generally keep track of time, the declarant estimates spending 90 minutes doing opening duties, 15 minutes doing pre-guest duties, 30 minutes during shifts, and 30 to 60 minutes doing closing duties. Id. at 19-20. Like Plaintiffs' declarants, she describes some of this work as cutting fruit, filling condiments, wiping tables, filling ice bins, carrying dishes, rolling silverware, and sweeping the floor. Id. at 19. Depending on the day, she alleges that she performs these duties faster or slower. Id. at 20. Ultimately, when compared to Plaintiffs' declarants, this declarant does not appear dissimilar-aside from her estimated percentage.

         It is difficult to imagine Defendants would maintain an express policy that requires all servers and bartenders to spend more than 20 percent of their time on non-tipped work. For now, how much time servers and bartenders actually spend completing non-tipped work is far from being answered. It is reasonable to believe that some days, servers and bartenders spend less time on non-tipped work than others. But these issues go to the heart of the case, which is why step one is so lenient. At this point, the facts are still developing and discovery has yet to begin. Defendants' evidence demonstrates that not all servers and bartenders have identical experiences, but Plaintiffs' have shown that many had similar experiences, spending more than 20 percent of their time performing non-tipped work.

         Once potential Plaintiffs opt in and the Court moves on to step two, this issue can be revisited and the amount of time employees spend and are required to spend on non-tipped work can be more closely examined. At step one, however, the Court does not need to resolve such issues to decide that these servers and bartenders are similarly situated and conditional certification is appropriate. Despite the different time ...


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