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Melendez v. Poy Loung DC Group, LLC

United States District Court, District of Columbia

September 27, 2018

SANTIAGO CERROS MELENDEZ, et al., Plaintiffs,
v.
POY LOUNG DC GROUP, LLC, et al., Defendants.

          MEMORANDUM OPINION

          COLLEEN KOLLAR-KOTELLY, UNITED STATES DISTRICT JUDGE.

         Plaintiff Santiago Cerros Melendez was formerly employed simultaneously at three restaurants referred to as Kruba, Teakwood, and Regent Thai Cuisine, as a kitchen hand, from November 2014 to December 2015. Plaintiff Luis Eduardo Diaz Argueta was formerly employed at Teakwood, first as a dishwasher and later, a cook and sushi preparer, from February 2013 through December 2016. Plaintiffs allege that the Defendants - the corporate entities affiliated with the three restaurants and an individual who has an ownership interest in all three restaurants - failed to pay them minimum and overtime wages as required by D.C. and federal law. The federal statute relied upon by Plaintiffs is the Fair Labor Standards Act (“FLSA”), which mandates time-and-a-half wages for hours worked over forty each week and a base minimum wage of $7.25 per hour, which may be adjusted upward by the state. See 29 U.S.C. § 207(a)(1), 206(a)(1), 218. Plaintiffs rely further on the District of Columbia Minimum Wage Act Revision Act (“DCMWA”), which requires time-and-a half for hours worked over forty, and a mandatory minimum wage ranging between $8.25 per hour and $11.50 per hour during the time frame at issue in this case. D.C. Code §§ 32-1003(c), 32-1003 (a). Plaintiffs claim damages pursuant to the District of Columbia Wage Payment and Collection Law (“DCWPCL”), D.C. Code § 32-1301, et seq. Furthermore, in response to a Counterclaim by Defendants/Counter-Plaintiffs, Mr. Melendez alleges retaliation pursuant to the DCWPCL. D.C. Code §§32-1311(a)(3), 32-1311(b).

         After reviewing the parties' submissions, [1] relevant case law and applicable statutory authority, the Court GRANTS IN PART AND DENIES IN PART Plaintiffs' Motion for Partial Summary Judgment. A separate Order accompanies this Memorandum Opinion.

         I. BACKGROUND

         Many of the underlying facts in this case are undisputed and will be set out along with the procedural history of this case. The disputed facts will be addressed later in this Memorandum Opinion. Defendant Poy Loung DC Group, LLC owns and operates the restaurant known as Kruba; Defendant Galae Thai, Inc. owns and operates the restaurant known as Teakwood; and Defendant Poy Loung, Inc. owns and operates the restaurant known as Regent Thai Cuisine. Pls.' SOF ¶ 1; Defs.' SOF ¶ 1. Defendants admit that Plaintiffs are covered by the FLSA because the three restaurants are covered enterprises. Pls.' SOF ¶ 3, Defs.' SOF ¶ 3. The business records and employment records for all three restaurants are maintained in one location by the same accountant. Pls.' SOF ¶ 4, Defs.' SOF ¶ 4.

         Plaintiffs have also named as a Defendant Mr. Chuchart Kampirapang, who has a 90% ownership interest in Teakwood and a 100% ownership interest in Kruba and Regent Thai Cuisine. Pls.' SOF ¶ 2, Defs.' SOF ¶ 2. Defendant Kampirapang determined Plaintiffs' pay, signed and tendered their paychecks, fired Plaintiff Melendez, promoted Plaintiff Argueta, and decided how much in “tips” to pay Plaintiff Argueta. Pls.' SOF ¶¶ 2, 25; Defs.' SOF ¶¶ 2, 25. Defendants acknowledge that they did not file any quarterly reports with the Department of Employment Services regarding any “tips” provided to Plaintiff Argueta. Pls.' SOF ¶ 31, Defs.' SOF ¶ 31.

         Plaintiff Melendez was allocated between Defendants' three restaurants - Kruba, Teakwood, and Regent Thai Cuisine - and he worked for Defendants from approximately June 1, 2014 to approximately December 24, 2015. Pls.' SOF ¶¶ 5-7; Defs.' SOF ¶¶ 5-7. Mr. Melendez worked as a kitchen hand whose job duties included washing dishes, cutting vegetables and meat, and cleaning. Pls.' SOF ¶ 8; Defs.' SOF ¶ 8. Mr. Melendez was paid a fixed, semimonthly salary, which varied with how much time he worked, and ranged from $750.00 to $800.00, but Defendants did not retain precise records of the hours Mr. Melendez worked. Pls.' SOF ¶¶ 13, 12; Defs.' SOF ¶¶ 13, 12. Mr. Melendez was paid with one check, issued by Defendant Poy Loung, Inc., for his work at all three restaurants. Pls.' SOF ¶ 16; Defs.' SOF ¶ 16. Mr. Melendez was fired from all three restaurants at the same time. Pls.' SOF ¶ 17; Defs.' SOF ¶ 16.

         Plaintiff Argueta worked at Teakwood from approximately February 1, 2013 to approximately December 16, 2016, first as a dishwasher and later as a cook and sushi preparer. Pls.' SOF ¶¶ 18 -20; Defs.' SOF ¶¶ 18-20. Plaintiff Argueta was paid a fixed, semi-monthly salary, which varied with time worked, and increased over the years. Pls.' SOF ¶ 24; Defs.' SOF ¶ 24. Defendants did not itemize any deductions or credits on Plaintiffs' paychecks. Pls.' SOF ¶31; Defs' SOF ¶ 31.

         Plaintiffs filed their initial Complaint, ECF No. 1, on March 1, 2017, asserting that Defendants failed to pay the Plaintiffs minimum and overtime wages. Defendants/Counter-Plaintiffs answered the Complaint and filed a Counterclaim on April 6, 2017, asserting that: (1) Mr. Melendez conspired with a plaintiff from another wage and hour lawsuit (the “Third-Party Defendant”) that was filed against these Defendants/Counter-Plaintiffs to publicize or share information about that case, which violated the Settlement Agreement entered into in that case (Count II), and (2) Mr. Melendez tortiously interfered with Defendants/Counter-Plaintiffs' contractual rights when he and the Third-Party Defendant violated the Settlement Agreement and/or solicited former co-workers to file suit (Count III). See generally Counterclaim, ECF No. 11.

         On April 17, 2017, Plaintiffs' filed their First Amended Complaint. Plaintiffs allege therein that it was typical that both Plaintiffs worked more than forty hours per week without receiving overtime pay, and when their semi-monthly salaries are divided by the number of hours worked, neither Plaintiff received the applicable minimum wage. See generally First Amended Complaint, ECF No. 14 (Counts I and II). Plaintiffs allege further that Defendants failed to pay wages that were due to them after they left employment (Count III). They also assert a retaliation claim relevant to Plaintiff Melendez (Count IV), in response to Defendants' allegations in its Counterclaim.

         After the close of discovery, Plaintiffs filed the instant Motion for Partial Summary Judgment, Defendants filed their Opposition, and Plaintiffs filed a Reply.[2] In their Motion, Plaintiffs request judgment in their favor on the following issues regarding liability: (1) Defendant Kampirapang is individually liable as an “employer;” (2) the three Corporate Defendants are jointly liable for any violations of the FLSA and DCMWA; (3) Defendants violated the overtime provisions of the FLSA and the DCMWA; (4) Defendants violated the minimum wage provisions of the DCMWA; (5) Defendants' Counterclaim violates the anti-retaliation provisions of the DCWPCL, and therefore, the Court should enter judgment for Counter-Defendant Melendez on the Counterclaim and against Defendants on Plaintiff Melendez's claim of retaliation; (6) Defendants may not take a “tip credit” to partially offset their failure to pay the minimum wage and may not raise this as a partial defense; and (7) Plaintiffs are entitled to one hour of compensation at the then-current D.C. minimum wage for every full workday they worked. Each of these issues will be addressed in turn by this Court.

         II. LEGAL STANDARD

         Summary judgment is appropriate where “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); accord Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986); Holcomb v. Powell, 433 F.3d 889, 895 (D.C. Cir. 2006). The movant must set forth the foundation for its motion and identify segments of the record demonstrating an absence of genuine dispute of material facts. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The mere existence of some factual dispute is insufficient on its own to bar summary judgment; the dispute must pertain to a “material” fact. Fed.R.Civ.P. 56(a). A fact is “material” if it may affect the substantive outcome of the litigation. See Anderson, 477 U.S. at 248 (“Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.”); Holcomb, 433 F.3d at 895. A dispute is “genuine” if, upon considering the evidence, a reasonable jury could return a verdict for the nonmoving party. See Scott v. Harris 550 U.S. 372, 380 (2007); Anderson, 477 U.S. at 248; Holcomb, 433 F.3d at 895.

         In order to establish that a fact is or cannot be genuinely disputed, a party must (a) cite to specific parts of the record - including deposition testimony, documentary evidence, affidavits or declarations, or other competent evidence - in support of its position, or (b) demonstrate that the materials relied upon by the opposing party do not actually establish the absence or presence of a genuine dispute. Fed.R.Civ.P. 56(c)(1); Celotex, 477 U.S. 317, 324 (1986). Conclusory assertions offered without any factual basis in the record cannot create a genuine dispute sufficient to survive summary judgment. See Ass'n of Flight Attendants-CWA, AFL-CIO v. U.S. Dep't of Transp., 564 F.3d 462, 465-66 (D.C. Cir. 2009). Moreover, where “a party fails to properly support an assertion of fact or fails to properly address another party's assertion of fact, ” the court may “consider the fact undisputed for purposes of the motion.” Fed.R.Civ.P. 56(e); see LCvR 7(h)(1) (in resolving summary judgment motions, the court “assume[s] that facts identified by the moving party in its statement of material facts are admitted, unless such fact is controverted in the statement of genuine issues filed in opposition to the motion.”).

         When faced with a motion for summary judgment, the district court may not assess credibility or weigh evidence. See Anderson, 477 U.S. at 255; Czekalski v. Peters, 475 F.3d 360, 363 (D.C. Cir. 2007) (noting that courts must “eschew making credibility determinations or weighing the evidence.”). “If material facts are at issue, or, though undisputed, are susceptible to divergent inferences, summary judgment is not available.” Moore v. Hartman, 571 F.3d 62, 66 (D.C. Cir. 2009) (quoting Kuo-Yun Tao v. Freeh, 27 F.3d 635, 638 (D.C. Cir. 1994)). Ultimately, the district court's task is to determine “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson, 477 U.S. at 251-52. Accordingly, the nonmovant must “do more than simply show that there is some metaphysical doubt as to material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986); see Celotex, 477 U.S. at 324 (the party opposing summary judgment must present affirmative evidence showing “a genuine issue for trial”). “If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted.” Anderson, 477 U.S. at 249-50.

         III. ANALYSIS

         A. Defendant Kampirapang's Individual Liability

         To be liable for violations of the FLSA, the defendant must be an “employer, ” which includes “any person acting directly or indirectly in the interest of an employer in relation to an employee, ” where an “employee” is an individual employed by an employer, ” and the term “employ” is defined as “to suffer or permit to work.” 29 U.S.C. § 203 (d), (e)(1), (g); see Rutherfood Food Corp. v. McComb, 331 U.S. 722, 728 (1947) (finding that under the FLSA, the “definition of ‘employ' is broad”). Similar to the FLSA, the DCWPCL states that an “employer” is “every individual . . . employing any person in the District of Columbia.” D.C. Code Section 32-1301(IB). “Because the DCWPCL and the FLSA contain nearly identical provisions with respect to employers' liability, the DCWPCL is to be construed consistently with the FLSA.” Ventura v. Bebo Foods, Inc., 738 F.Supp.2d 1, 5 n. 2 (D.D.C. 2010).

         The definition of an “employer” is broadly construed to serve the remedial purposes of the FLSA. Morrison v. Int'l Programs Consortium, Inc. 253 F.3d 5, 10 (D.C. Cir. 2001). In analyzing whether a putative employer is an employer under the FLSA, the Supreme Court found that “‘economic reality' rather than ‘technical concepts' is to be the test of employment.” Goldberg v. Whitaker House Corp., Inc., 366 U.S. 28, 33 (1961). Courts examine multiple factors designed to demonstrate “the extent to which typical employer prerogatives govern the relationship between the putative employer and employee.” Henthorn v. Dep't of Navy, 29 F.3d 682, 684 (D.C. Cir. 1994)). The economic reality test considers whether the alleged employer (1) had the power to hire and fire the employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records.” Morrision, 253 F.3d at 11. There is no one dispositive factor, but rather, courts look at the totality of the circumstances. Id.

         “At minimum, an individual who exercises operational control over an employee's wages, hours and terms of employment qualifies as an “employer, ” and is subject to individual liability.” Guevara v. Ischia, Inc., 47 F.Supp.3d 23, 26 (D.D.C. 2014). Individuals who own or manage a business may also be held accountable as employers pursuant to the economic reality test and in consideration of their ownership interest. “To determine whether a corporate officer has operational control, the Court looks at the factors above plus the ownership interest of the corporate officer.” Ventura v. Bebo Foods, 738 F.Supp.2d at 5. In that case, the court found that a restaurant owner was individually liable as an employer because he had “operational control over the corporate defendants insofar as he had a “significant ownership interest” in the business, as well as the “power to hire and fire, control work schedules and supervise employees, determine pay rates, and maintain employment records.” Id.; see also Martinez v. Asian 328, LLC, No. 15-cv-1071 2016 WL 4621068 *4 (D.D.C. 2016) (finding that the sole owner of defendant restaurant who “exercised total control over the operations of the restaurant, including making all decisions to hire and fire employees, set pay rates, set work schedules, and keep employment records” was an employer under D.C. and federal law.)

         In the instant case, Defendant Kampirapang is the sole owner of corporate Defendants Poy Loung D.C. Group, LLC (Kruba) and Galae Thai, Inc. (Regent Thai Cusine), and he has a 90% ownership interest in corporate Defendant Poy Loung, Inc. (Teakwood). Pls.' SOF ¶ 1; Defs.' SOF ¶ 1. Defendants concede that Defendant Kampirapang exercised control over employee promotions and firings, and that he determined pay and signed and tendered paychecks. Pls.' SOF ¶ 2; Defs,' SOF ¶ 2. Defendants do not concede that Defendant Kampirapang supervised Plaintiffs' performance, directed their schedules or monitored their compliance with the schedules, but Defendants do not proffer any evidence or argument to dispute Plaintiffs' contention. Defs.' SOF ¶ 2; but see Pls.' Mot. Ex. B [Kampirapang Deposition] at 23 (acknowledging that he decided that Plaintiff Melendez should work four days at one restaurant, two days at another and one day at another), at 31 (he determined how much Plaintiff Argueta should receive in tips based on his job performance); Ex. E [Defendant Poy Loung, Inc.'s Answers to Interrogatories] at 8 (“Compliance to schedule was monitored by Chuchart Kampirapang . . . and Eduardo Murillo (Chef)”). Accordingly, Defendants' general denial that Defendant Kampirapang supervised the Plaintiffs' performance or directed their schedules is contradicted by Mr. Kampirapang's own deposition testimony and Defendants' answers to interrogatories.

         Plaintiffs assert that Defendant Kampirapang is an employer pursuant to the FLSA and the D.C. Code because of his operational control over Plaintiffs based upon his ability to promote employees, fire employees, direct their schedules and monitor compliance therewith, supervise their performance, and set pay rates, and because of his ownership interest in the corporate Defendants.

         Accordingly, considering the record before this Court and the lack of any genuine dispute as to any issue of material fact, the Court finds that Defendant Kampirapang is an employer for purposes of this case, and Plaintiffs are entitled to summary judgment on this issue.

         B. Joint Liability of the Three Corporate Defendants

         Plaintiffs contend that the three corporate Defendants should be treated as a “joint employer” where “all joint employers are responsible, both individually and jointly, for compliance with all of the applicable provisions of the [FLSA], including the overtime provisions, with respect to the entire employment for the particular workweek.” Pls.' Mot. at 9 (citing McKinney v. United Stor-All Ctrs. LLC, 656 F.Supp.2d 114, 132 (D.D.C. 2009)). Plaintiff cite further to the applicable FLSA regulation, 29 C.F.R. § 791.2, which discusses Joint Employment as follows:

(a) . . . If the facts establish that the employee is employed jointly by two or more employers, i.e., that employment by one employer is not completely disassociated from employment by the other employer(s), all of the employee's work for all of the joint employers during the workweek is considered as one employment for purposes of the Act. In this event, all joint employers are responsible, both individually and jointly, for compliance with all of the applicable provisions of the act, including overtime provisions, with respect to the entire employment for the particular workweek . . .
(b) Where the employee performs work which simultaneously benefits two or more employers, or works for two or more employers at different times during the workweek, a joint employment relationship generally will be considered to exist in situations such as:
(1) Where there is an arrangement between the employers to share the employee's services, as, for example, to ...

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