Perez v. El Torazo Mexican Restaurant, Inc. et al

Filing 43

MEMORANDUM OPINION AND ORDER by Judge Greg N. Stivers on 12/11/2017 re 26 Motion for Conditional Certification. Plaintiffs' Motion for Conditional Class Certification (DN 26 , 27 ) is GRANTED. The Court ADOPTS the proposed notice form with modifications, and ADOPTS the proposed consent form. A sample of the approved notice form is attached to this Memorandum Opinion and Order. Defendants have 60 days to provide Plaintiffs with the requested listing of potential class members; Plaintiffs will then have 45 days to give notice to potential class members and provide the Court with the consent forms of those wishing to join the lawsuit. cc: Counsel (CDR)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
LOUISVILLE DIVISION
CIVIL ACTION NO. 3:16-CV-00545-GNS
FELIPE CRUZ PEREZ and
MARLIN PALMA, on behalf of
themselves and others similarly situated

PLAINTIFFS

v.

EL TORAZO MEXICAN RESTAURANT, INC.;
and GUSTAVO ORTIZ

DEFENDANTS

MEMORANDUM OPINION AND ORDER
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.]).
II.

JURISDICTION

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).
III.

STANDARD OF REVIEW

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 5461

By this Court’s Order of June 27, 2017 (DN 33), Plaintiffs’ Second Amended Complaint was
permitted.
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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
IV.

DISCUSSION

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

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The second phase occurs when “all of the opt-in forms have been received and discovery has
concluded.” Comer, 454 F.3d at 546 (internal quotation marks omitted) (citation omitted). “At
this stage, the Court has much more information on which to base its decision.” Hathaway, 2012
WL 1252569, at *2 (citation omitted). “For this reason, the Court must employ a stricter
standard and examine more closely the question of whether the members of the class are in fact
similarly situated.” Id. (citing Comer, 454 F.3d at 547). “If the court determines that the
claimants are similarly situated, the collective action proceeds to trial.” Id. (citation omitted).
“If the court determines that the claimants are not similarly situated, the court must decertify the
class and dismiss the opt-in plaintiffs without prejudice.” Id. (citation omitted).
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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.’

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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.

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Plaintiffs filed additional declarations with their reply, providing further details of their
personal knowledge of Defendants’ practices, including, inter alia, seeing pay stubs of fellow
employees. (Perez Second Decl. 2-3; Palma Second Decl. 2).
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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 similarity within the Tipped Employees to conditionally certify the class.
B.

Adequacy of the Proposed Notice

After the class is conditionally certified, the Court must determine if the proposed notice
is fair and accurate to properly inform prospective plaintiffs of the action. Sperling, 493 U.S. at
169. A class action depends “on employees receiving accurate and timely notice concerning the
pendency of the collective action, so that they can make informed decisions about whether to
participate.” Id. “[A] district court has discretion to facilitate notice to potential plaintiffs.”
Bassett, 2010 WL 3092251, at *2-3 (citation omitted). If the proposed notice fails to properly
inform its recipients of the action, the Court may, in its discretion, alter the notice. Sperling, 493
U.S. at 169; Bassett, 2010 WL 3092251, at *2-3.
Defendants have not objected to Plaintiffs’ proposed notice or consent forms as offered.
(Pls.’ Mot. Cond. Cert. Ex. E, DN 26-5; Pls.’ Mot. Cond. Cert. Ex. E-1, DN 26-7; Pls.’ Mot.
Cond. Cert. Ex. G, DN 26-8). The Court finds that the proposed notice form is largely adequate,
but will modify it to reflect that the state law claims being pursued arise under the law of
Kentucky rather than Ohio. The modified notice, as attached, should be provided in both English
and Spanish, as proposed.
V.

CONCLUSION

For the foregoing reasons, Plaintiffs’ Motion for Conditional Class Certification (DN 26,
27) is GRANTED. The Court ADOPTS the proposed notice form with modifications, and
ADOPTS the proposed consent form. A sample of the approved notice form is attached to this
Memorandum Opinion and Order. Defendants have 60 days to provide Plaintiffs with the

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requested listing of potential class members; Plaintiffs will then have 45 days to give notice to
potential class members and provide the Court with the consent forms of those wishing to join
the lawsuit.

Greg N. Stivers, Judge
United States District Court
December 11, 2017

cc:

counsel of record

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December __, 2017
NOTICE OF COLLECTIVE ACTION LAWSUIT
Perez v. El Torazo Mexican Restaurant, Inc., No. 3:16-CV-00545
TO: Putative Class Member
RE: El Torazo lawsuit
PLEASE READ THIS NOTICE CAREFULLY
I.

INTRODUCTION

This Notice informs you of the existence of a collective action lawsuit seeking unpaid minimum
and overtime wages under federal law. This Notice advises you of how your rights may be
affected by this lawsuit and describes how to participate in the lawsuit by joining as a party if
you choose to.
II.

DESCRIPTION OF THE LAWSUIT

Plaintiffs Felipe Cruz Perez and Marlin Palma, on behalf of themselves and all others similarly
situated, seek to recover minimum wages owed to them pursuant to the Fair Labor Standards Act
(“FLSA”), 29 U.S.C. § 216(b) and the Kentucky Revised Statutes, Sections 337.275, 337.065,
337.320, 337.020, and 337.990(1), (5), and (7). Plaintiffs allege that Defendants El Torazo
Restaurant, Inc. and Gustavo Ortiz have violated 29 U.S.C. § 206(a) of the FLSA, which requires
all employers to pay the federally established minimum wage. Plaintiffs also allege that
Defendants have violated 29 U.S.C. § 203(m) of the FLSA, which only allows employers to pay
less than the minimum wage to employees who receive tips when certain conditions are met.
Plaintiffs also allege that Defendants have similarly violated Section 207 of the FLSA by failing
to pay Plaintiffs and the Putative Class members overtime wages equal to one-and-a-half (1.5)
times their regular wage for all hours they worked in excess of forty (40) in a given workweek.
Defendants state that they complied with all required conditions and further deny that they
violated the FLSA.
Plaintiffs seek to certify one primary class of employees (“FLSA Class”). The FLSA Class is
defined as:
All individuals employed by Defendants or their predecessors or successors in the
state of Kentucky as servers, waiters, waitresses, and other tipped employees in
other similar job positions at any time from August 24, 2013, through and
including the present and until the final resolution of the case, and who have not
been paid the statutory minimum and/or overtime wage during their employment.
The Federal Court has not yet decided who will win, and has not taken any position on the merits
of the claims. The Federal Court also expresses no opinion as to whether you or anyone else
should join the lawsuit.

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III.

ELIGIBILITY TO JOIN THE LAWSUIT

If you are receiving this notice, Defendants’ records indicate that you were or are employed by
Defendants as a tipped employee and it is possible that you are eligible to join this lawsuit.
However, the Court will make the final determination of your eligibility.
IV.

HOW TO JOIN THE LAWSUIT

You may join the lawsuit by completing the enclosed “Consent to Join” form and returning it in
the enclosed envelope to the Plaintiffs’ lawyers at the following address:
Barkan Meizlish Handelman Goodin DeRose Wentz, LLP
250 E. Broad Street, 10th Floor
Columbus, Ohio 43215
Telephone: [phone]
Fax: [phone]
Your return envelope must be postmarked by [date – 45 days]. You can also join this lawsuit by
emailing your completed “Consent to Join” form to [e-mail] or faxing it
to 614-744-2300 by [date].
If you do not wish to be a party to this lawsuit, you need not do anything. The decision whether
to join or not is entirely yours.
V.

EFFECT OF JOINING THE LAWSUIT

If you join the lawsuit, you will become a plaintiff in this lawsuit. You will be bound by the
judgment of the Federal Court on all issues. If the Federal Court finds in favor of Plaintiffs or if
the parties reach a settlement that the Federal Court approves, you may receive a money
payment. If the Federal Court finds in favor of Defendants, you will receive nothing.
You should also understand that, as a party to this lawsuit, you may be required to provide
information about your employment with Defendants, answer written questions, produce
documents, testify at an oral deposition under oath, and/or testify at trial.
VI.

EFFECT OF NOT JOINING THE LAWSUIT

If you do not join the lawsuit, you will not be affected by any judgment or settlement resulting
from the lawsuit and relating to Plaintiffs’ federal minimum wage and overtime rights claims.
This means that you give up the possibility of getting money or benefits that may come from a
trial or settlement in this lawsuit if the claims made on behalf of the collective are successful. By
not joining the lawsuit, you keep any rights to file your own suit against Defendants about the
same legal claims in this lawsuit; however, the limitations period on your legal claims will
continue to run until you do.

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VII.

NO RETALIATION PERMITTED

Federal law prohibits Defendants from discharging or in any other manner retaliating against any
employee because that employee joins this lawsuit.
VIII. YOUR LEGAL REPRESENTATION IF YOU JOIN THE LAWSUIT
If you join the lawsuit, you will be represented by Barkan Meizlish Handelman Goodin DeRose
Wentz, LLP (250 E. Broad Street, 10th Floor, Columbus, OH 43215; [phone] or (800)
274-5297; www.barkanmeizlish.com). You have the option to retain an attorney of your own
choice and file a separate cause of action. You will not be required to pay any fees to the law
firm listed above. Barkan Meizlish Handelman Goodin DeRose Wentz, LLP has taken this case
on a “contingency” basis. If the lawsuit is unsuccessful, Barkan Meizlish Handelman Goodin
DeRose Wentz, LLP will receive nothing. If the lawsuit results in a recovery, Barkan Meizlish
Handelman Goodin DeRose Wentz, LLP will ask the Federal Court to award legal fees separate
and apart from your recovery.
IX.

FURTHER INFORMATION

If you would like further information about this Notice or the lawsuit, or if you have any
questions, please call Barkan Meizlish Handelman Goodin DeRose Wentz, LLP at 800-2745297.

THIS NOTICE HAS BEEN AUTHORIZED BY UNITED STATES DISTRICT JUDGE
GREG N. STIVERS. THE JUDGE HAS TAKEN NO POSITION REGARDING THE
LAWSUIT'S MERITS. PLEASE DO NOT CONTACT THE COURT REGARDING
THIS NOTICE OR THE LAWSUIT.

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