Lopez v. Real Monarca Inc et al

Filing 41

ORDER denying 26 Defendants' Real Monarca Inc. and Guillermo Cuevas Motion to Dismiss and Motion for an Evidentiary Hearing. Defendants shall file an answer to the Amended Complaint on or before March 14, 2018. Signed by Judge Sheri Polster Chappell on 3/2/2018. (LMF)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
EDUARDO LOPEZ, for himself and on
behalf of those similarly situated
Plaintiff,
v.

Case No: 2:17-cv-442-FtM-38CM

REAL MONARCA INC. and
GUILLERMO CUEVAS,
Defendants.
/
OPINION AND ORDER1
This matter comes before the Court on Defendants Real Monarca Inc. and
Guillermo Cuevas’ Motion to Dismiss the Amended Complaint for Lack of Subject Matter
Jurisdiction and Motion for Evidentiary Hearing. (Doc. 26). Plaintiff Eduardo Lopez has
filed a Response in Opposition. (Doc. 30). For the following reasons, the Court denies
Defendants’ Motion.2

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not affect the opinion of the Court.
2The

Court finds that an evidentiary hearing is not required and will render a decision
based on the documents submitted. See Odyssey Marine Exploration, Inc. v. Unidentified
Shipwrecked Vessel, 657 F.3d 1159, 1170 (11th Cir. 2011) (holding that an evidentiary
hearing is not required to resolve factual disputes in a Federal Rule of Civil Procedure
12(b)(1) motion where “each party had a full opportunity to present evidence”).

BACKGROUND
Lopez brings this Fair Labor Standards Act (“FLSA”) suit against Defendants for
unpaid minimum and overtime wages. (Doc. 1). In April 2014, he began working as a
server and bartender at a restaurant that Cuevas owns and operates. (Doc. 23 at ¶ 16).
Lopez worked there until May 2017, sometimes over forty hours per week. (Id. at ¶ 26).
According to Lopez, Defendants willfully violated the FLSA when they paid him tipped
minimum wage instead of minimum wage, refused to pay overtime, and failed to maintain
proper time records. (Id. at ¶¶ 18-22).
In July 2017, the United States Department of Labor (“DOL”) investigated
Defendants’ pay practices. (Doc. 26 at 1). The agency inspected Defendants’ records
and conducted interviews of employees and management. (Id. at 1, 5). The DOL
ultimately determined that nine employees, including Lopez, were owed back wages. (Id.
at 1). Twelve days after this suit was filed, Defendants paid Lopez $5,980.31 via check.
(Doc. 26-1 at 5). The check’s memo line read, “All Back wages owed.” (Id. at 7).
Defendants may have included an explanation letter with Lopez’s check – a point the
parties dispute – that stated the DOL investigated the restaurant and Cuevas agreed to
pay certain employees back wages.3 (Id. at 9; Doc. 30-2 at 5). Lopez endorsed and
cashed the check. (Doc. 26-1 at 7).
Defendants now move to dismiss the Amended Complaint for lack of subject
matter jurisdiction (Doc. 26 at 4-7).

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Although the parties dispute whether Lopez received an explanation letter, at least one
other opt-in plaintiff did receive such a letter. (Doc. 26-1 at 9; Doc. 30-1 at ¶ 14).

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LEGAL STANDARD
Federal Rule of Civil Procedure 12(b)(1) allows a court to dismiss a suit if the Court
lacks subject matter jurisdiction. See Fed. R. Civ. P. 12(b)(1). A defendant’s attack on
subject matter jurisdiction occurs in two forms: facial and factual. Garcia v. Copenhaver,
Bell & Associates, M.D.’s PA, 104 F.3d 1256, 1260 (11th Cir. 1997) (citing Lawrence v.
Dunbar, 919 F.2d 1525, 1528-29 (11th Cir. 1990)). When there is a factual attack, like
Defendants raise here, the court reviews matters outside the pleadings, such as
testimony and affidavits, to determine if subject matter jurisdiction is present.
Lawrence, 919 F.2d at 1529 (citations omitted).
DISCUSSION
Defendants move to dismiss the Amended Complaint because Lopez waived his
right to sue under the FLSA when he cashed his check for back wages. (Doc. 26 at 4-7).
Lopez responds that he never waived that right because the DOL did not supervise
payment to him, and neither the check’s memo line nor the explanation letter created a
waiver.4 (Doc. 30 at 12-16). The Court will address these arguments in turn, starting with
whether the DOL supervised the settlement between Lopez and Defendants.
A. DOL’s Supervision of Payments
The FLSA authorizes the DOL to supervise the payment of unpaid minimum and
overtime wages to an employee. 29 U.S.C. § 216(c). “If an employee accepts the

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Lopez also argues that he had accrued more than a year of back wages not included in
the settlement and thus he did not waive his right to collect these wages. (Doc. 30 at 89). Because an employee cannot waive claims for unpaid wages accrued outside a
settlement period, Lopez did not waive his claim to pursue these alleged damages. See
West v. Thunder Bay Enterprises Inc., No. 8:15-cv-1606-T-23MAP, 2015 WL 5953282,
at *1 (M.D. Fla. Oct. 13, 2015); see also Moultry v. Cemex, Inc., No. 8:07-cv-453-T26MSS, 2008 WL 1743484, at *1 (M.D. Fla. Apr. 15, 2008).

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payment of back wages supervised by the DOL, the employee waives the right to bring
suit for unpaid wages and liquidated damages.” Niland v. Delta Recycling Corp., 377
F.3d 1244, 1247 (11th Cir. 2004) (citing Lynn’s Food Stores, Inc. v. United States, 679
F.2d 1350, 1353 (11th Cir. 1982)). The DOL “supervises” when it takes affirmative action
to ensure employees receive payment of back wages. Compare Niland, 377 F.3d at 1247
(finding adequate supervision where the DOL entered a written agreement with employer
and spent many hours negotiating, reviewing, and supervising the calculation and
collection of back wages); Sneed v. Sneed’s Shipbuilding, Inc., 545 F.2d 537, 538-39 (5th
Cir. 1977)5 (finding adequate supervision where the DOL investigated a claim for back
wages, determined the amount owed to the employee, presented the check to the
employee on the employer’s behalf, and required the employee to sign a receipt waiving
his right to sue), with Lynn’s Food Stores, Inc., 679 F.2d at 1352-53 (finding inadequate
supervision where the DOL was uninvolved in the employer’s settlement of claims). Mere
investigation of complaints by the DOL does not constitute supervision under 29 U.S.C.
§ 216(c). See Cables v. SMI Security Mgmt., Inc., No. 10-24613-CIV-SEITZ/SIMONTON,
2012 WL 12863144, at *4 (S.D. Fla. Apr. 6, 2012) (citing Niland, 377 F.3d at 1247; Sneed,
545 F.2d at 538-39; Lynn’s Food Stores, Inc., 679 F.2d at 1353-53).
Here, Lopez maintains that the DOL’s mere involvement in the settlement process
does not constitute supervision. (Doc. 30 at 5). Defendants disagree and rely on an
unsigned WH-56 form and the employees’ cashed checks as contrary evidence. (Doc.
26-1 at 5; 7; 11). The Court agrees with Lopez. While there is no binding precedent

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In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), the
Eleventh Circuit adopted as binding precedent all decisions of the former Fifth Circuit
handed down prior to close of business on September 30, 1981.

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factually analogous to this case, the Court is guided by the decisions in Niland, Sneed,
and Lynn’s Food Stores, Inc. Although the DOL was more involved in this case than in
Lynn’s Food Stores, Inc., the evidence does not rise to the level of supervision as in
Sneed and Niland. Here, there is no real evidence beyond the DOL’s issuance of the
WH-56 form to support a claim that the DOL supervised payment to Lopez and other
employees. Accordingly, the Court finds that the DOL did not supervise payment in this
case.
B. Waiver
Even if there was supervision by the DOL, the Court stills finds that Lopez did not
waive his right to sue under FLSA.
For a waiver to be valid under 29 U.S.C. § 216(c), the employee must agree to
accept payment as determined by the DOL and be paid in full. See Sneed, 545 F.2d at
539. But, an employee cannot waive his right to sue if he has no knowledge that his
acceptance of back wages forms a waiver. Cables, 2012 WL 12863144 at *5. An
employee acknowledges his agreement when he signs a waiver statement that says he
relinquishes his right to sue. Sneed, 545 F.2d at 539. A waiver statement can be either
a Form WH-58 or other authorized language.6 “A WH-58 is a standard form used by the
DOL to inform an employee that, although he has the right to file suit under 29 U.S.C. §

Defendants argue that the DOL authorized the language on the check’s memo line to
be a waiver statement. (Docs. 26 at 2, 6; Doc. 26-1 at 2). They provide an affidavit by
Monarca’s manager, Gilberto Diaz, to support this argument. (Doc. 26-1). But, at this
stage, the record lacks any indication that the DOL authorized the language on the
check’s memo line. Consequently, it is premature to decide so. See generally West,
2015 WL 5953282 at *2.
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216(b), acceptance of back wages offered will result in waiver of those rights.” Niland,
377 F.3d 1244 at 1248.
Defendants argue the check’s memo line reading, “All Back wages owed,” and the
explanation letter effected a valid waiver of Lopez’s right to sue. (Doc. 26 at 4-6). They
rely on two circuit cases: Sneed, 545 F.2d 537 (5th Cir. 1977) and Niland, 377 F.3d 1244
(11th Cir. 2004). (Id. at 5).
In Sneed, the employer required the employee to sign a receipt before he received
a check for back wages. Sneed, 545 F.2d at 538. The receipt, which the employee
signed, expressly stated he forfeited any right to sue for back wages under the FLSA by
accepting the back wages due to him. Id. The Fifth Circuit held, “[b]y signing the waiver
statement acknowledging that he had agreed to accept the tendered payment and by
taking the employer’s check for the full amount, the employee here did in fact waive his
right to sue under the statute.” Id. at 539-40 (footnote omitted).
The Eleventh Circuit reached a similar result in Niland. There, the employer sent
each employee a check for unpaid back wages along with a letter and receipt. Niland,
377 F.3d at 1246. Each document indicated that acceptance of payment waived the
employee’s FLSA claims. Id. The receipt also included waiver language directly from the
DOL’s WH-58 waiver form. Id. The Eleventh Circuit held the documents’ language was
sufficient to effect an enforceable waiver of the employee’s FLSA claims. Id. at 1248.
Unlike the employees in Niland and Sneed, Lopez never received written notice
that accepting the check meant he waived his right to sue under the FLSA. Neither Lopez
nor any fellow employee received a Form WH-58 or other document with waiver
language. (Doc. 26-1 at ¶ 6; Doc. 30 at 12); see also Blackwell v. United Drywall Supply,

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362 F. App’x 56, 58 (11th Cir. 2010) (holding the employee waived his right to sue where,
in part, he received the WH-58 form that included express language that his acceptance
of back wages meant he relinquished his right to sue under FLSA). The check’s memo
line reading, “All Back wages owed,” does not persuade the Court to reach a contrary
decision. At this stage, the Court is hard-pressed to find the line that told Lopez he waived
his right to sue by cashing the check. See Flores v. ACT Event Services, Inc., No. 3:14CV-2412-G, 2015 WL 567960, at *8 (N.D. Tex. Feb. 11, 2015) (finding that a check’s
memo line that read, “FLSA settlement 1674494, 1/23/2011-1/27/2013,” did not create a
waiver because it failed to “explicitly inform employees that by cashing their checks[,] they
waiv[ed] any claims”).
Even if Lopez received the explanation letter, that document fares no better in
showing a waiver. The letter, which Defendants’ claim they included with the issued
checks, failed to notify Lopez that acceptance of payment would waive his right to sue.
(Doc. 26-1 at 9; Doc. 30-2 at 5). The letter merely stated that the DOL determined that
back wages were due and Cuevas agreed to pay them. (Doc. 26-1 at 9; Doc. 30-2 at 5).
Nothing in the letter signaled that an employee waived his right to sue under FLSA by
accepting payment. Consequently, because the Court finds that Lopez did not waive his
right to sue under FLSA, it denies Defendants’ Motion.
Accordingly, it is now
ORDERED:
(1) Defendants’ Real Monarca Inc. and Guillermo Cuevas Motion to Dismiss and
Motion for an Evidentiary Hearing is DENIED.

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(2) Defendants shall file an answer to the Amended Complaint on or before March
14, 2018.
DONE and ORDERED in Fort Myers, Florida this 2nd day of March, 2018.

Copies: All Parties of Record

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